Beer Marketer's Insights

Beer Marketer's Insights

Brewer 2018 2019 Chg (Bbls, 000) (%) Firestone Walker 347 406 60 17.3 Lagunitas 381 385 5 1.3 Sierra Nevada 356 364 8 2.2 Stone 199 190 -9 -4.4 Ballast Point 132 113 -19 -14.1 Golden Road* 46 61 16 34.6 Bear Republic 59 54 -5 -9.0 21st Amendment 47 49 2 4.4 Karl Strauss 49 45 -4 -8.5 Modern Times 42 43 1 1.9 Pizza Port 40 42 3 6.9 Saint Archer* 39 41 2 5.6 Russian River 21 40 19 89.8 Lost Coast 35 40 5 14.0 North Coast 45 39 -5 -12.2 Anchor 52 38 -14 -26.2 Drake's 37 32 -4 -12.0 Fort Point 34 31 -3 -9.4 Gordon Biersch 28 31 3 9.2 AleSmith 24 27 4 15.7 Green Flash/Alpine 29 27 -2 -5.4 Coronado 24 25 1 2.2 Belching Beaver 22 25 2 9.4 Trumer 21 23 2 9.3 Figueroa Mtn 17 22 5 28.6 Hermitage 15 18 3 20.1 Fieldwork 17 17 0 -2.0 The Bruery 9 15 6 69.9 Knee Deep 19 15 -4 -20.7 Top 29 2,185 2,261 75 3.5 Total In-State Craft* 3,010 3,025 15 0.5 Data: California Board of Equalization, Beer Marketer's Insights *Notes: in-state total is a BMI estimate, while all brewer totals from state reports; Golden Road, Saint Archer does not include volume brewed elsewhere by AB, MC, respectively Golden Road Glows, Russian River Rushes Upward, But Anchor Drops State reports show over 60K bbls brewed at the Golden Road production facility also sold in Calif. That's up near 33% from comparable figure in 2018. Note again, however, that these figures don't include any volume of Golden Road brands produced at larger AB facilities, so actual Golden Road in-state figure could be bigger. Same caveat goes for MC's Saint Archer, however, big new brand launch Saint Archer Gold wasn't tested in CA late last yr. Contract volume could be missing from some more brewer totals here or included in others. Notably, recall that Latitude 33 sold its facility to a kombucha-maker, starting a production agreement with Green Flash last yr. Those bbls not broken out in reports, tho.

There's a new top in-state player in California craft. In year Firestone Walker topped a half-mil bbls overall, it sold over 400K bbls in its home state. The co's in-state shipments grew by an impressive 17%, according to state reports, representing the vast majority of Firestone's growth in 2019. So it flew past both Sierra Nevada and Lagunitas in Calif, despite each co shipping total of twice Firestone Walker's overall volume. Expansive growth of its 805 brand allowed Firestone to more than double its in-state biz in just last 5 years. It also became the first California craft brewer to ever sell over 400K bbls in the state. Neither Sierra nor Lagunitas previously passed that milestone. Lagunitas got close in 2017, at about 395K bbls in the state.

Lots more tuff beer news (among other industries) being reported across the country these days. As more state orgs survey the brewing landscape, WA's 420 breweries are "getting 25% of your normal business, if you're lucky," Washington Brewing Commission's Eric Radovich told MYNorthwest. "I'd say about half of our full-time staff and nearly all of our part-time workers at these breweries are out of work," he added.

The threat of COVID-19 may have reversed longtime craft consumer interest in "new" and "next," boosting flagship brand trends at least in the short-term (see above). But that didn't slow the pace of new craft brand releases (much). Recent launches headed into broader distribution by key craft players almost all fall into familiar style and flavor trends that drove releases before coronavirus pandemic, too: craft takes on seltzer, other low-ABV, low-calorie, low-carb entries, hazy IPAs and pale ales, lagers.

With its massive Craft Brewers Conference cancelled and more upcoming revenue-generating events in jeopardy due to COVID-19, Brewers Assn "made the difficult decision to lay off 23% of our staff," org announced on its website yesterday. Indeed, BA's "fortune mirrors that of our craft beer community," and decision was made "in order to maintain the long-term viability of the Brewers Association," org wrote. BA "continue[s] to work with all affected individuals, to the greatest extent that we're able, to help them navigate this transition" and "enacted tiered salary reductions for our management team. These steps are in addition to the operational budget cuts made earlier this month."

While hard seltzers are stealing the show in beer (and total alc bev) biz by virtually every other measure, IPAs and ales are the fastest growing beer styles on Drizly's platform for ordering beer online since COVID-19 hit, Drizly CEO Cory Rellas shared on webinar hosted by Evercore ISI analyst Robert Ottenstein. Lookin' at yr-over-yr sales trends on Drizly (bolstered lately by influx of new users and retail accounts), IPAs accelerated from +333% on Mar 16 to +823% on Apr 13. And pale ales accelerated from +342% to +870% in that time. Liquor, Cordials, and Schnapps catch-all segment was the only other segment among all alc bevs that grew faster in that time, pickin' up to +953% on Apr 13. Hard seltzers accelerated to "just" +555% on Apr 13. Indeed, "our consumer over-indexes craft" by 2X, Cory noted. Suggests craft has over 20 share of Drizly beer sales. "Higher price point beers" are "taking further and further share from the macros," he added.

Onset and spread of COVID-19 threw a lot in the air, but "the biggest question hanging over the craft beer industry right now," in view of BA chief economist Bart Watson, is "what will the on-premise look like in the months following the easing of stay at home orders," he wrote in most recent blog post. He takes close look at at policy/legislation, consumer behavior, economics and epidemiological (disease control) aspects. Ultimately, while he acknowledges up front that "my crystal ball is in the shop right now," referencing our Beer Marketer's INSIGHTS founder Jerry Steinman, Bart is willing to conclude that "getting back to 50% onsite sales in May and June would be an optimistic scenario." Craft brewers should "plan for a summer with weak onsite and distributed draught sales."

Craft $$ up 10.4% for 1 wk thru April 19 in IRI multi-outlet + convenience data provided by Bump Williams Consulting. That's slowest 1-wk trend since before COVID-19-related restrictions. But with on-premise still largely shut down, off-premise continues to benefit from inflated sales. Craft segment now up 9% yr to date. But it ain't gainin' share. Craft lost 0.55 share of total beer $$ for 1 wk to 11.74, off 0.4 to near 11.5 YTD. We all know why: hard seltzer still on fire, up by over 4X YTD and barely slower in last wk. Gobbled up close to 8 share of beer $$ for 1 wk. Just one other beer segment gained share. Non-alc +22% for 1 wk, +40% YTD gain, around 0.4 share both periods. So, seltzers and non-alc beers: same trends many small craft brewers already started following in 2019 (see below).

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At same time, some brewers are even finding ways and means to expand distribution. NC's Hi-Wire will enter VA statewide with Sheehan Family Cos' Specialty Beverage, with "full lineup of flagships, seasonals and specialty releases," co announced. Launch is set for Apr 27; package-only for starters, natch. "As crazy as it may seem to expand distribution with the national market currently turned on its head, we want to get our beer in the hands of our northern neighbors who have long been requesting it."