In a presentation at the annual Beer Business Daily Summit, held Monday in San Diego, analysts from Nielsen, CGA Strategy and CM Profit Group broke down the latest beer trends and noted that consumers are increasingly seeking out lower-alcohol beer offerings.
About 45 percent of craft drinkers who responded to a Nielsen CGA on-premise survey, conducted last year, said they want to drink “sessionable beers” that were less than 5 percent alcohol by volume (ABV).
In fact, 13 of the top 25 fastest growing brands tracked by Nielsen in 2016 all checked in at less than 5 percent ABV, said Danelle Kosmal, the vice president of Nielsen’s beverage alcohol practice.
Despite trends pointing toward a growing consumer affinity for sessionable products, only 28 percent of drinkers who responded to a recent Nielsen Harris survey, conducted in January, said they were familiar with the term “sessionable,” Kosmal said. What’s more, only 34 percent of drinkers associated the term with alcohol content. That’s compared to 42 percent of respondents who said they defined sessionable as “flavored beer.”
Only 53 percent of consumers between the ages of 21 and 34 said they paid attention to ABV when purchasing beer.
“This is a big education opportunity,” said Tom Fox, a partner at CM Profit Group.
Beyond session statistics, the presenters also shared broader alcohol category trends from 2016: off-premise beer dollar sales increased 2.2 percent last year while wine and spirits dollar sales grew 4.4 and 4.9 percent, respectively.
Since the beginning of 2015, however, the 10 largest beer brands — which accounted for 47.4 percent of total beer dollar sales on-premise — declined 2.9 percentage points.
Most of those declines were concentrated to older beer companies, however. Since January 2015, on-premise dollar sales for “mature” breweries declined 1.9 percent while maturing and “newbie” breweries grew sales 6.8 percent and 11.8 percent, respectively.
On premise sales for “standard-priced beer” have also declined 5.6 percent over the last two years, the presenters shared, while sales of premium-priced beer increased 10 percent.
But are those on-premise declines being driven by a sub-optimal retailer assortment? A Nielsen audit of on-premise outlets at the end of 2016 found that 58 percent of retailer dollar sales on craft products came from 45 percent of their tap handles in 2016. Imports, meanwhile, generated 21 percent of dollar sales while only receiving 16 percent of the tap handles. For their part, domestic premium products claimed 17 percent of dollar sales and 29 percent of retailer tap handles.
Nielsen also found that consumer loyalty to individual brands is waning, as most drinkers who responded to the Nielsen CGA survey claimed an average of 15.7 alcohol brands among their go-to drinks. Craft beer drinkers had an even deeper bench, claiming 20.3 brands.
“The competition for share of throat” is real, Nielsen CGA president Jon Collins said.
Another challenge for breweries is the decline in neighborhood bars; Over the last decade, about 16 percent of neighborhood bars have shuttered, Nielsen found. That’s a hit for the beer industry in which 56 percent of consumers say they prefer to drink beer in a neighborhood bar, Collins added.
Kosmal added that 38 percent of millennial males, and 15 percent of baby boomer males, drink across three or more different beverage alcohol segments within a single drinking occasion outside of a bar or restaurant.
Some of those consumers are still up for grabs, at least on-premise. Collins said 27 percent of drinkers do not decide what beverage they will purchase prior to entering a venue. The question, he said, is whether or not beer is doing a “good enough job” marketing to those undecided drinkers, either on restaurant menus or through bar staff education.