Premium Beers Down 5%, Lost 2.5 Share of $$ for 4 Weeks to May 25 in Nielsen

Not getting easier for industry’s largest brands as premium beer volume down 5% and lost 2.5 share of $$ in Nielsen all outlet data for 4 weeks thru May 25 or Saturday of Memorial Day weekend. Subpremiums down 4.4% and lost 1.1 share of $$. Trading up continued apace heading into 1st key holiday weekend. Craft up 17%, FMBs up 49% and cider up 110% for 4 weeks. But superpremiums dropped 5%.

Caution: Lots of Craft Traffic Ahead

Craft growth is going to be significantly more challenging on-premise in next 3-5 yrs and will “likely” lead to consolidation according to analysis by GuestMetrics. Currently “the pace of expansion in the number of craft brewers is outpacing growth of the craft beer segment, calling into question the sustainability of the craft expansion and the likelihood of consolidation ahead,” alerted GuestMetrics. The number of craft brewers on-premise grew around 17% in 2012 and was up “at that clip” in Q1 and the number of craft brands on premise was up 22% yet craft volumes grew “high single digits” in 2012 and slowed to “mid single digits” in Q1, noted ceo Bill Pecoriello. “While we don’t necessarily see a shake-out in near term, looking out at the next 3-5 years the question will be the sustainability of the economics of a lot of the new entrants given the declining volume per brand,” he added.

It’s a surprise to no one that the market is getting more crowded by the day. To illustrate that, GuestMetrics calculated the avg # of units sold per brewer and set that index at 100 starting with Q1 2011. “The overall index for 2011 was 95, then decreased to 88 in 2012,” and declined further to 82 in Q1 2013, “implying that the overall attractiveness of the economics for the average craft brewer has diminished fairly significantly over the course of just two years,” said Peter Reidhead, vp of strategy and insights. GuestMetrics also estimated that craft brewers sold an avg of 3.6 brands in 2011 and that increased 4% to 3.75 brands in 2012. “Looking at the 22% expansion of craft brands being sold in on-premise, approximately ¾ of that is due to larger number of craft brewers, and about ¼ due to a larger number of brands beings sold,” per brewer, added prexy Brian Barrett. e in coming yr as well. Meanwhile, Goose sales rockin’. It passed 200K bbls in 2012 and on track to hit 300K in 2013.

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