Beer Marketer's Insights

Beer Marketer's Insights

WA brewers are also more optimistic these days, recent round-up report from The Lens showcased. "This'll be a make or break summer, and I'm hopeful that we won't make one step forward and two steps back," WA Beer Commission exec director Eric Radovich told paper. But "a lot of folks are looking forward to returning to their neighborhood watering hole," and "I think we'll see people come back to the breweries," he said. One positive early sign: Backwoods Brewing just had "its biggest weekend in its eight years of operations despite scaling back to a 50-percent capacity in its beer garden due to implementing social distancing requirements," according to Seattle Times. Another positive sign: so far only one of WA's 420 breweries closed since COVID-19, according to The Lens. In separate survey by Washington Beer Blog, more than 50% of 1,100 respondents said they were "likely or very likely to visit a brewery or taproom once the establishment reopens." Of course, majority of consumers are also worried about returning to breweries, including 78% "concerned 'about the behavior of other guests' when planning a brewery visit," paper noted, citing another survey conducted by WA's Reuben's Brews. But while many challenges remain, current situation "has strengthened the ties between the industry and their respective communities," said paper, paraphrasing 192 Brewing owner Derek Wychoff.

While BA survey suggests craft breweries are collectively pulling back distribution amid the pandemic, some cos are striking new dist partnerships to either expand beyond previous footprint or service existing mkts further afield. Most recent example: CA's North Coast partnered with Artisanal Imports to become its sales and mktg partner for "central and eastern regions of the United States," including 34 states + DC, cos announced. North Coast already had wide distribution coverage in 48 states, tho co did restructure its sales force thru a round of layoffs last yr (see Oct 11, 2019 issue) and ultimately saw volume decline in 2019, according to BA stats. Artisanal Imports continues to steadily add to its partners both based in US and abroad, including MN's Fulton Brewing, Chicago-based 5 Rabbit Cerveceria, and SFB Imports (La Trappe, Palm and Rodenbach) more recently.

Situation isn't quite as dire among craft brewers as it appeared to be in early April, Brewers Assn found after conducting 3rd COVID-19 impact survey with more than 850 brewery respondents. "Majority" of those brewers are "confident their business will survive in 2020," while just 15-20% are "unsure or actively pessimistic," Bart shared. And "in general, breweries are more optimistic than they were a month ago," said Bart. Recall, nearly 60% of breweries didn't think they could stay in biz for more than 3 mos in 2d impact survey conducted in early Apr (see Apr 7 issue). "There has yet to be a massive surge in brewery closures." But total craft volume continues to take a sizable hit (despite the boon in off-premise sales), down an estimated 20-25%, Bart figures. Revenues are down a bit steeper than volume on avg. Half of brewery respondents have seen sales decline by 50% or more. And if this sample is representative of total brewery count, it suggests 1,400 breweries are unsure if they can survive the yr, with over 450 of 'em "somewhat or very pessimistic." So plenty of "challenges remain."

As total beer sales "slowed" to +22% in latest week of scans, craft segment slowed to +17% in IRI multi-outlet + convenience data for latest week thru May 24 (Sunday of Memorial Day weekend), latest Bump Williams Consulting update shows. Interestingly, craft sales are back to growing faster in c-stores (+20%) vs grocery channel (+15%) this week. Looking at slightly earlier period, craft in c-stores was only up 8% YTD thru May 17 including +24% for 4 wks and +23% for 1 wk. Craft in grocery up 15% YTD, +28% for 4 wks, +23% for 1 wk. Indeed, grocery channel provided most of the boon in off-premise beer sales until more recently.

Mich-based Arbor Brewing Co announced this wk that they're closing original downtown Ann Arbor brewpub (opened in 1995 as "one of the early pioneers in craft beer"), tho co hopes to announce details of a "new Ann Arbor location soon," according to post on co's Facebook page. Arbor Brewing's Ypsilanti and Plymouth locations remain "open for curbside and delivery and will open for dine-in service when it is permitted." Co's Ann Arbor brewpub was reportedly down to "20% of the volume" compared to their other locations, in large part because "people don't want to venture downtown," owner Mike Collins told Mlive. So they made tuff call to close the location with lease coming to an end. "About 80% of the downtown location's employees requested t

Buffalo's Big Ditch Brewing is receiving $1.9 mil in tax breaks for its sizable new brewery project in Cheektowaga, NY, after The Erie County Industrial Development Agency approved tax breaks on Weds, reported Buffalo News. Recall, Big Ditch initially announced expansion plans just as COVID-19 began to hit in mid-March, then expecting to spend $47 mil on 105K sq-ft brewery and restaurant project after nearly maxing out its current 15K bbls/yr brewery in downtown Buffalo last yr, per Democrat & Chronicle (see Mar 13 2020 issue). Total cost of project seemingly was significantly revised to $32.3 mil estimate, according to more recent Buffalo News article, and about 43% of costs are for the restaurant and taproom (not eligible for tax incentives).

Outdoor service is #1 "most encouraging feature" for consumers who haven't yet headed back to on-premise dining and drinking, according to latest survey from on-premise tracker Nielsen CGA. So no surprise that brewers trying to figure out how to make that specific accommodation and welcome back at least some form of taproom biz and those thicker by-the-pint margins. But that isn't always straightforward. In Maine, breweries included with bars and told to hold-off on-premise service til July. Prospect of missing all of June too not exactly welcomed by the state's 150 or so brewers, so they're asking to be included with restaurants and be allowed to serve socially distanced consumers in on-site patios and beer gardens thru June, exec director of Maine Brewers Guild Sean Sullivan explained to local WMTW. About 80% of ME brewers already licensed to sell outdoors under normal circumstances, Sean said. So org pushing to get brewery taprooms cleared for that service starting Monday, like restaurants.

Virtually every top craft beer supplier continues to improve in tracked scan data. Aside from top individual gainers, NBB and Sierra (see last issue), perhaps no surprise to see AB acquired craft cos collectively gaining most of all in latest period. Collectively, AB acquired craft $$ grew 41% in IRI MULC for latest 4 wks thru May 17, gaining 0.8 share of craft $$ to 8.45 total. Improved to +25% YTD. Elysian continues to lead the way, up 51% in latest 4 wks and up 30% YTD, fueled by flagship Space Dust IPA and new Contact Haze IPA, which rapidly became its 2d largest brand in scans. But Golden Road craft brands improved most of all, $$ up 86% for 4 wks vs +46.5%. Golden Road Seasonal became its top selling brand in scans, nearly tripling sales in latest 4 wks. Mango Cart and Fruit Cart mixer pack continue to accelerate at triple-digit rates too, Wolf Pup session IPA back to low-double-digit growth after previously declining, and co getting incremental boosts from newer brands too. Notably, Golden Road craft brands accelerating as its FMBs began rapidly declining - Spiked Agua Frescas were down more than 40% in latest 4 wks.

IPAs remain king of craft when it comes to beer styles, but other styles that were previously losing ground in craft are now gaining share of segment and eating into some of IPA's growth in latest IRI multi-outlet + convenience data. Both Belgian Wits and Variety pks grew 33% in IRI for the latest 4 wks thru May 17, gaining 0.4 and 0.3 share respectively to 9.1 and 6.7 share of total craft $$ for period, outpacing total craft segment growth (+27%). Sales growth drastically improved to +12% YTD thru May 17 for Belgian Wits and +10% for Variety pks vs previously down 7% and down 13% YTD thru Feb 23 (prior to COVID). Both styles are still losing 0.1 to 0.15 share of craft $$ YTD, tho improved from losing 0.7 and 0.9 share thru Feb 23.

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