Craft brews hit major milestone in 2016
For the first time in 2016, craft brews accounted for one in every 10 cases of beer sold in the United States, according to a new report, even as overall beer sales dropped slightly from the year before despite gains by importers.
U.S. beer sales decreased 0.3 percent to 2.83 billion cases in 2016, according to this year’s edition of the Beer Handbook published by the Norwalk-based Beverage Information Group, with revenue trends a function of both consumer preferences as well as the economy.
Imports led the U.S. market with 6.7 percent growth year-over-year, accounting for 16 percent of all beer sales in the United States, above the 13.8 percent market share imports had at the peak of the last economic cycle in 2007.
Norwalk is home to the North American headquarters of Diageo and its U.S. beer division selling Guinness. In July, CEO Ivan Menezes told analysts the company’s underlying business is coming back, though beer sales are being outpaced by spirits.
“This business doesn’t turn on a dime,” Menezes said at the time. “In the U.S., we grew marketing faster than sales and we will continue to do that going into next year, so I’m feeling good about the U.S. business. It will improve. ... Our innovation continues to be really strong.”
It is the craft beer segment that is turning heads for innovation, however, maintaining its 6 percent growth rate of a year earlier as sales hit 300 million cases to boost the segment’s market share to 10.4 percent from 9.8 percent in 2015. Still, Beverage Information Group sees signs the craft beer is “losing steam” in its words, given Millennials’ demonstrated penchant for experimentation.
As of 2016, Beverage Information Group tracked cases sold by more than 5,200 craft breweries in the United States. In Stratford under CEO Brad Hittle, Two Roads Brewery launched last week an expansion of its facility that produces beers under its own label as well as for other brewers in the region on an outsourced basis.
The “super” and premium beers produced by big breweries suffered the most, with Beverage Information Group researchers citing “a general malaise towards them for not being craft beer.” Sales were down 13.3 million cases last year or 3.3 percent, leaving the segment with a 13.6 percent market share that trailed imports.
Light beers also slipped 2.6 percent in 2016, while remaining the runaway leader in market share at 44.5 percent with 1.26 billion cases sold. Among 23 brands tracked by Beverage Information Group, only Michelob Ultra raised sales, at an impressive 18.4 percent.
Sales of flavored malt beverages slowed last year to 2.4 percent growth, four years after a boom induced big beer makers to invest heavily in the then-emerging category. Malt liquor and “ice” branded beers were also down roughly 4 percent verses 2015.
Includes prior reporting by Caitlin Mazzola Bagley.
Alex.Soule@scni.com; 203-842-2545; www.twitter.com/casoulman