The more things change, the more they stay the same. That was the theme of the third quarter industry review by Fintech and the National Beer Wholesalers Association (NBWA).
Hosted by Jim Kallies, Fintech director of distributors, and Lester Jones, NBWA chief economist, the one-hour seminar used Fintech sales to retailers (STR) data to peer into 2021 trends across all beer segments. The data – pulled from 180,000 retailers and 4,500 distributors up until Week 47 (around Thanksgiving) – represented about one in every three beers sold in the on- and off-premise channels, according to the presenters.
Most data trends across segments in 2021 remained similar to previous years (when adjusted to account for a slight calendar shift), with spikes in sales around the Super Bowl, Memorial Day, the Fourth of July, and Labor Day, and valleys around Easter and the weeks immediately following the aforementioned holidays. The exception was Thanksgiving, which had a spike in depletions this year when 2020 did not. Jones credits this to consumers being more comfortable with public and social gatherings this year than the last.
Despite these mirroring trends, there were some outlier segments and brands for the year.
Craft Finds Footing in the On-Premise
Although craft posted less than 1% share growth of total on- and off-premise sales in the beer category (increasing +0.6% to 9.9%), it gained the most share of any segment in the on-premise, growing +7.5% share in the channel to 20.5%. Off-premise, craft gained +0.2% share.
“The dynamic shift in the on-premise is certainly what we’re talking about as we close out 2021 and we plan for what’s going to happen in 2022,” Jones said. “While there’s not much to write home about but that two-tenths of a change in the off-premise, [there’s] a lot to write home about in that 7.5% change in on-premise share, because remember where we stood at the end of 2020 on-premise and with craft: That [it] just wasn’t really doing that well.”
Molson Coors’ craft business accounted for some of that on-premise gain, with its on-premise craft share increasing +2.3% year-to-date in 2021, leading craft in the channel with 22.8% share. However, Molson Coors’ craft share declined in the off-premise (-1.6%) to 14.6% share, for a total craft share change of -0.4%. Anheuser-Busch InBev was the only other company in the top 10 to gain on-premise craft share, increasing +1.2% to 14.5%. Its off-premise share had a slight increase (+0.2%) to 11.8%, for an overall craft share gain of +0.6%.
New Belgium Brewing overtook Boston Beer for the third highest share of total craft, increasing +0.6% to 5.8% of total share, which can be credited to an +1% increase in off-premise share (6.6%), while its on-premise share remained flat. Boston Beer fell to the fourth highest total share, decreasing -0.2% to 5.8% total share. It was hit most in the on-premise, where it fell -0.7% in 2021 to 4.9% share of the channel.
Other top 10 craft craft companies with share losses in 2021 include: Gambrinus (-0.8% in the on-premise, although its total share increased +0.1%); Lagunitas Brewing (-0.4% in the on-premise, and flat in total share); and the CANarchy Craft Collective (-0.3% in the on-premise, and -0.1% in total craft share). All other craft shareholders declined in total share -0.4% to 38.8%, due mostly to a -1.1% decline in on-premise share, to 38.9%.
Overall, the craft segment still ranks fourth in total share of beer, behind FMB/hard seltzer (12.7%), imports (17%) and premium plus lights (36.1%). The rest of the category is filled out by (in order): below premium light (8.3%, -0.5% year-over-year); premium plus (7.3%, -0.2%), below premium (6.7%, -1.3%), cider (0.8%, remaining flat year-over-year), malt liquor (0.7%, -0.3%), and non-alcoholic (0.6%, +0.3%).
Draft Increasing Share, While On-Premise Still in Recovery
While on-premise depletions touched 2019 levels in Week 47, “all in all, we just never really got to full on-premise recovery,” Jones said.
“When we hear news about retailers in on-premise bars and restaurants had a great weekend, remember that there are fewer bars and restaurants today per 100,000 people than in many years,” he added.
In 2021, there were 151 on-premise retail establishments in the U.S. selling beer per 100,000 legal-drinking-age consumers, vs.162 in 2019.
“Places that survived and managed to stay open in the pandemic are seeing more people come in and more activity, which doesn’t necessarily mean we fully recovered our volumes,” Jones said. “It just means those guys that are left standing are the lucky ones, and they’re benefiting from being the strong that remain.”
Draft regained share in total package mix, increasing +2% to 5% year-over-year in 2021. Draft took 1% share each from both cans (64%) and bottles (31%).
“It doesn’t seem like a lot, but it is a lot,” Jones said.
“Although the draft is only 5%, we all know in the on-premises is where you build brands and draft is definitely a huge part of that,” Kallies added. “So although it’s a small share, it’s a big part of building brands in the on-premise.”
However, for package share in the on-premise channel, draft lost share, decreasing -3% to 51%, while cans increased 4% to 22%.
“As seltzers continue to increase distribution on-premise, you’re starting to see more and more craft brands in cans if they cannot capture a handle,” Kallies said. “They’re going in with their 16 oz. draft cans and getting specials that way, feeding that can growth in the on-premise.”
Constellation Brands ‘Kicking Ass and Taking Names’
The top two suppliers – A-B and Molson Coors – both lost share of the total beer category. A-B’s total share declined -0.7%, to 41.4%, while Molson Coors decreased total share -1.2% to 21.8%. The third largest supplier by share – Constellation Brands (Corona, Modelo, Pacifico) – recorded the highest share growth of the top 10 suppliers, increasing total share +0.8% to 11%.
Jones said Constellation is “kicking ass and taking names,” while its top two competitors have slowly lost share over the past several years.
“This degradation of share over time is something that both these companies have been struggling with for much longer periods of time than just the past one or two years,” he said. “This is a long-trend that has been ongoing for a while.”
Constellation gained share both in the off-premise (+0.9%) and the on-premise (+0.8%). Imports, which make up the bulk of Constellation’s beer portfolio, also increased share of beer in both channels, increasing +1% off-premise, and +1.9% on-premise, with a total share gain of +1%.
Molson Coors posted the largest share loss in the off-premise, decreasing share year-over-year in 2021 -1.5% to 21.5%, followed by A-B, which decreased share -0.6% to 41.5%.
Top 10 suppliers in total beer share are rounded out by: Mark Anthony (4.5%, flat year-over-year); Boston Beer (4.2%, +0.6%); Heineken USA (3.4%, +0.1%; D.G. Yuengling & Son (1.6%, +0.1%); Pabst Brewing (1.3%, -0.1%); Diageo (1.1%, -0.1%); and FIFCO USA (1.2%, +0.1%). All other suppliers increased share across all channels by +0.7%, to 8.6%.
Hard Seltzer Becoming More Seasonal
While domestics, craft, and overall beer posted the aforementioned spike in sales during the Thanksgiving holiday, hard seltzer did not see as much of a bump, according to Jones.
“It’s becoming much more seasonal,” he said. “[The hard seltzer] segment just doesn’t have the momentum in the second half of the year, as it does in the first half of the year.”
“We’re not saying the seltzer category isn’t growing,” Kallies added. “We’re saying it isn’t behaving as well in the back half of the year. One would have to ask itself with all the introductions of the spirits-based cocktails and ready-to-drinks entering the market: ‘Is that influencing seltzer sales as that category continues to grow and mature in the industry?’”
While hard seltzer’s share of the overall beer category nearly hit 10% in the summer of 2021, it fell to around 6% in November — a similar trend to 2020, which ended with the segment at 6% share of the beer category.
Mark Anthony Brands (35.4%) and Boston Beer (26.9%) continued to top the total share of FMB/hard seltzer, with Boston Beer increasing share +4% while Mark Anthony decreased share -3%. A-B rounds out the top three, with 10.2% share, a -0.3% share loss year-over-year.
Diageo (5.6%), Molson Coors (5.5%) and FIFCO (5.3%) competed for the fourth spot, although each lost hard seltzer share year-over-year. Fintech, which breaks out Topo Chico from Molson Coors and lists it under Arca Continental – a multinational Mexican company that produces, distributes and markets the Topo Chico brand under the Coca-Cola banner – was the newest entrant to the top 10 shareholders. Topo Chico claimed 1.4% total share of the hard seltzer segment, with 1.4% share of hard seltzer sales off-premise, and 1.7% share of hard seltzer on-premise.
When it comes to top brands in the segment, White Claw (38.4%), Truly (28.9%) and Bud Light Seltzer (8.5) held the top three rankings.
A run-away fourth place brand is still yet to be determined, which Jones noted surprised him. Vizzy (3.8%), Michelob Ultra Organic Seltzer (3.8%), and Corona Hard Seltzer (3.3%) are each competing for the spot.
“They’re all kind of still jockeying for position,” Jones said. “No one’s come out as a clear winner. I thought maybe, and we got to the end of the year, we’d have at least one of these guys pulling away from the pack, but obviously the data shows that that was not true.”
New entrants to the top 10 brands list are Molson Coors’ Topo Chico (2.2%), Mark Anthony’s Mike’s Hard Lemonade Seltzer (1.3%); A-B’s Cacti (0.6%), Diageo’s Lone River (0.4%), BANG Hard Seltzer (0.3%), and A-B’s Karbach Hard Seltzer (0.2%).
Share of hard seltzer by all other brands decreased -0.7% year-over-year, and -6.9% compared to 2019.
Depletions of FMBs – excluding hard seltzers – followed previous yearly trends, although overall sales increased in 2021 versus 2020. Boston Beer’s Twisted Tea (22%) gained the most share in the segment year-over-year (+3.7% total share versus 2020, and +6.6% versus 2019), second in share to Mark Anthony’s Mike’s Hard/Harder.
“For the most part, we’re looking pretty darn good in terms of all those FMBs that sit out there,” Jones said. “As products that have been developed, we spent a lot of money and a lot of time and a lot of developing, they’re still there. Don’t lose focus on what you have and what you’ve built.”
Fall Seasonals Excel, But Winter Seasonals Fall Flat
Jones said it was a “great fall seasonal” season, with the segment outperforming 2020 and 2019 depletions. The segment peaked between Weeks 33 and 35 (around Labor Day), falling back to average yearly levels around Week 41.
”It’s a very narrow period of time when you have that opportunity [for fall seasonals],” Jones said. “But when it’s here, take advantage of it.”
Winter seasonals had a different outcome. The segment performed below 2020 and 2019, although it followed 2020 and 2019 trends in peaking around Week 44 (Halloween). Although winter seasonals posted an additional spike in sales around Week 47 of 2019, the segment remained flat around that same period in 2020 and 2021.
“As a distributor, what this shows me,” Kallies said, “Is by week 40 to 43 – by Halloween – you need to have your winter seasonal out in the market.”
Great Lakes Brewing Company’s Christmas Ale topped the list of top five winter seasonal beer, with 21.7% share of the segment, followed by Deschutes Brewing’s Jubelale (17.5%), A-B-owned Breckenridge Brewery’s Holidale Christmas Ale (10%), Thirsty Dog Brewing Company’s 12 Dogs of Christmas Ale (9.1%), and Kirkland Signature Winter Variety Pack (7.3%).
Samuel Adams Winter Lager – which held 18% share of the segment in 2018 – has steadily lost share each year, now holding 4% in 2021.