Nielsen: Craft Beer Drinkers Exploring Non-Beer Options Regularly

More legal drinking age consumers than ever before are drinking craft beer, market research firm Nielsen found in its sixth annual Craft Beer Insights Poll (CIP), conducted on behalf of not-for-profit trade group the Brewers Association (BA).

Nielsen VP of beverage alcohol practice Danelle Kosmal presented the results during the BA’s weekly Collab Hour, a new educational webinar series for members that has replaced the “Power Hour” series.

This year, 44% of survey respondents said they drink craft beer several times a year, up 1% from last year and up 11% from 2015, when the survey was first conducted. Of that 44%, a third were women, which represented an 8% increase over last year. More than half — 55% — of male respondents said they drank craft beer several times a year, an increase of 9% over 2019.

The age group with the largest increase in craft drinkers was 35-44-year-olds, with a 16% increase, to 56%. The 21-34 age group had the highest rate of craft drinkers at 60%, a 10% increase from last year. Older respondents, ages 65 and up, had the lowest rate of craft drinkers, at 21%.

Of all survey respondents, 45% said they drank craft beer weekly. Those weekly drinkers tend to be younger men with higher incomes. Almost 60% of respondents ages 35-44 said they drank craft beer weekly. In the highest income bracket — $100,000 and up — 86% of respondents drank craft beer monthly and 56% drank it weekly.

However, weekly craft drinkers tend to include different alcohol segments in their drinking habits. On a weekly basis, they drink domestic non-craft beer (65%), wine (68%), spirits (61%), imports (65%), FMBs (48%), hard seltzer (51%) and cider (44%).

“Yes, craft beer drinkers are promiscuous,” Kosmal said. “Weekly craft beer drinkers are even more promiscuous and really engaged in other types of alcohol segments, so it’s becoming more and more difficult for us to really identify that competitive scope and set of who are the competitors to craft beer, to your particular brewery and brand.

“It obviously isn’t just other craft beer brands and breweries, and it isn’t just alcohol types. It’s nearly every type of alcohol across beer, wine and spirits,” she continued.

Beer Sales Growth Trails Wine and Spirits at Retail

Although off-premise beer sales have topped $1 billion in every week but one since Memorial Day weekend, dollar sales growth of beer has trailed wine and spirits in multi-outlet and convenience stores.

Between March 7 and July 4 — which covers the COVID-19 period in the U.S. — dollar sales of beer, FMBs and cider have increased 19.9%. However, dollar sales of wine increased 27.6% while dollar sales of spirits increased 33.8% during that same period. Kosmal attributed the sales growth of spirits in off-premise channels to shutdown of on-premise retailers.

To compensate for the closure of bars and restaurants, Nielsen determined that beer, wine and spirits would each need to increase volume sales by 22% in the off-premise. Wine (+23%) and spirits (+29.3%) both have; the beer category (+15.9%) has not, although some segments are delivering considerable growth.

“When we look across the segments, it’s really most of the above premium segments that have been driving the growth, and seltzers in particular have been driving a lot of the growth,” Kosmal said.

Dollar sales of both the super premium segment and BA-defined craft beer have increased 9% since March. Dollar sales of total craft beer (including brands owned by larger brewers such as Molson Coors’ Blue Moon) have increased 12%. Mexican import dollar sales are up 15%; premium light dollar sales are up 23%.

Also of note, cans represented 50% of craft beer dollar sales in off-premise channels in the 13 weeks that ended June 13. Cans have steadily increased their dollar sales share since 2016, when they accounted for just 16% of all craft beer dollar sales for the 52 weeks ending in mid-June 2016.

Craft Beer Drinkers’ Changing Behavior

The vast majority of weekly craft drinkers told Nielsen they are drinking the same amount (43%) or more (44%) craft beer as they did a year ago. Half of other craft drinkers (those who drink it several times a year, but not as frequently as weekly drinkers) said they’re drinking the same amount (50%), and 29% said they’re drinking more. One fifth of those drinkers said they’re drinking less, and 13% of weekly craft beer drinkers said they’re drinking less.

Infrequent craft drinkers are mostly (62%) drinking the same amount of craft beer as they were last year; 30% are drinking less.

Drinkers who are consuming more craft beer than they were last year cited drinking less of other adult beverages. Those consumers cited their desire for better quality, more variety and more flavor options as their top reasons for doing so.

Those who are drinking less craft beer said the reasons they are doing so is because they are drinking more of other adult beverages, opting for healthier lifestyles, visiting fewer brewpubs and tasting rooms or they have less disposable income.

“Given the timing of when this survey was fielded, that’s not surprising,” Kosmal said. “People are just not doing visits to pubs and tasting rooms as much as they were in previous years.”

Weekly craft drinkers who are drinking less craft beer because they’re drinking other beverages are opting for wine (24%), hard seltzers (21%), other beer (21%), spirits (20%), FMBs (22%) and cider (16%). Weekly craft beer drinkers are opting for other alcoholic beverages at higher rates than non-weekly drinkers in every segment: wine (20%), hard seltzers (18%), other beer (17%), spirits (14%), FMBs (13%) and cider (11%).

When choosing a craft beer to buy, both weekly and non-weekly craft drinkers cite flavor and freshness as the most important attributes to consider, as they have in past surveys. Three attributes gained ground over last year for both groups: that the beer is made by an independent brewery (selected by 72% of weekly drinkers and 64% of non-weekly drinkers), that the beer is locally made (selected by 70% of weekly drinkers and 64% of non-weekly drinkers) and that the beer has a lower alcohol content (selected by 44% of weekly drinkers and 34% of non-weekly drinkers).

Craft drinkers ages 21-25 said they were most interested in beers that were crisp, juicy or hazy, fruity and tart. This age group was the only to show interest in fruit and tart beers. All age groups (21-25, 21-34, 35-44) were interested in juicy/hazy beers. Survey respondents ages 21-34 flagged crisp beers, dark beers, juicy/hazy beers and hoppy beers as being of interest.

Styles bifurcated along gender lines, with female craft drinkers being most interested in crisp beers and juicy/hazy beers, and male craft drinkers being interested in dark beers, malty beers and hoppy beers. The only beer profile that no group expressed interest in was spicy beers, which the survey defined as “yeast ester forward beers, typically Belgian-style beers.”

Local Breweries Remain Important to Drinkers

A beer being made locally is “essential or very important” to 51% of weekly craft drinkers and 39% of non-weekly craft drinkers. Kosmal noted that Nielsen has asked drinkers how important locally made beer is to them over several years and its importance to them increases each year.

“Local is always one of the top factors that come up as something that’s important to consumers right now,” she said.

However, their proximity to the manufacturer of a purchased item may be more important to consumers than ever before during the COVID-19 pandemic.

“People really are interested in purchasing products that are passing through as few hands as possible,” Kosmal said.

Dollar sales of local craft beers have increased 6.8% in the past year; however, these local beers account for just 10.7% of all craft beer sales. They sell at a premium price compared to non-local craft beers: the average off-premise price for a 6-pack of local craft is $14.75, compared to $9.31 for overall craft 6-packs.

Brewery visits continue to influence post-visit purchasing, with 58% of craft beer drinkers reporting that they purchased more of a brewery’s beer after visiting. And some craft drinkers plan to resume these visits with gusto once they’re able to do so. A third of weekly craft drinkers said once breweries and taprooms fully reopen, they plan to visit more frequently than they would have under normal circumstances. A quarter of non-weekly craft drinkers said the same.

In both groups, 22% said they will visit less frequently. Just 6% of weekly craft beer drinkers and 13% of non-weekly craft drinkers said they don’t visit breweries.

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