Friday, October 28, 2016

Craft beer sales down (slightly) in 3rd quarter; brewery taproom sales (way) up.

Bart Watson —the economist for the [U.S.] Brewers Association (BA)— has examined the craft beer sales figures for the third quarter (July, August, September) of 2016 and compared the results with those of the third quarter of 2015. He's used a bit of legerdemain because the BA has removed several breweries from the ranks of 'craft' since last year.

Brewers Association

Making those adjustments, here's what he saw:
  • Off-premises sales
    • 14.825 million barrels
    • +6.1% growth (over 2015)
  • On-premises
      6.475 million barrels
    • -2% growth (!)
  • Premises-use
    • 1.2 million barrels
    • +62.1% (!) growth
    • [I would assume this includes taproom sales at production breweries and at brewpubs.]
  • Other beer sales at breweries
    • 0.55 million barrels
    • +40% growth [Growlers, cases, 6-packs, kegs, etc.]
  • Craft Exports
    • 0.45 million barrels
    • -11.1%
Brewery taprooms, while still a small part of total sales, have increased their sales numbers by 61% this quarter over last. But 'craft' beer sales at non-brewery pubs and restaurants (i.e., most on-premises sales) have decreased. Watson blames wine and 'craft' cocktails.

Overall ...
Based on what we can see, my estimates are that growth did slow a bit in the third quarter, but the error bars on that estimate are big enough that it’s tough to say definitively. I’m using a base of 23.5 million barrels, pulling out an estimate of the barrels the craft data set will lose due to the acquisition of formerly independent brewers.

  • Sales of pumpkin beers? Not so gourd. Here's Mr. Watson again:
    For fall seasonals, it’s pretty clear that the bloom is off the pumpkin. Seasonals have been behind trend pretty much all year, culminating over the eight weeks through October 2, when BA craft seasonals were down -8.5 percent in IRI Group scan data versus the previous year. To put that in some context, if seasonals had even been flat, overall scan growth would be a whole point higher, and total craft sector growth approximately a half point higher. A lot of weakness clearly stems from pumpkin beers, which weren’t ordered by distributors at the same level as previous years and are clearly generating less interest than in recent years.
  • Read more of Mr. Watson's analysis at the [U.S.] Brewers Association (behind a members-only firewall).
  • For reference: A barrel of beer (31 gallons) is the approximate equivalent of 13.7 cases of 24 bottles or cans of 12-ounce beers.

  • There are other bad augurs for overall 'craft' beer sales growth for 2016. And most can be seen in the off-premises category, primarily with the larger 'craft' breweries.
    • Citing slower growth and an increasingly more competitive craft beer landscape, San Diego’s Stone Brewing Company today laid off nearly 75 employees as part of what it termed a “restructuring.” The cutbacks come on the heels of completing of two capital expenditure projects — a $25 million Berlin brewery and a $75 million Virginia brewery. Read more: here.
    • The Craft Brew Alliance has laid off at least a dozen of the production employees working at its Woodinville, Washington facility, 10% of its total workforce. Craft Brew Alliance, the 9th-largest brewing company in the United states, produces Kona, Omission, Red Hook, and Widmer. Widmer and Red Hook are two of the original 'craft' breweries from the 1980s. The [U.S.] Brewers Association does not consider CBA to be a 'craft brewing company, not because of the beers themselves, but because Anheuser-Busch InBev (and now Pabst) holds an interest in the company. Read more: here.
    • Sierra Nevada Brewing —the 3rd largest BA-recognized 'craft' brewery and the 7th largest American brewing company overall— is predicting a 4.4% drop in sales this year. Read more: here.
    • Sales at Boston Beer, maker of Sam Adams beers, etc., are down 4% from last year; its profits are down 11%. Boston Beer is the 2nd largest 'craft' brewery and the 5th largest American brewery overall. Read more: here.
    • Ninety percent of the 6,720 breweries currently with operating licenses produce fewer than 100,000 barrels of beer annually. But, combined, they account for less than 2 percent of all beer brewed in the U.S. To look at that another way, the [U.S.] Brewers Association's data show that (as of 31 December 2015) 178 'craft' breweries, out of a total of 4,225 'craft' breweries (thus only 4% of the total number), produced 77.8% of all 'craft' beer.

  • For more from YFGF:

No comments:

Post a Comment

Comment here ...