In April 2010, craft beer briefly outsold domestic premiums, then fell behind again. But in October, craft passed domestic premium again and hasn't looked back. It's worth adding a bit more context to fully understand these numbers. Keep in mind that Symphony/IRI only tracks supermarkets, not specialty retailers like Whole Foods and New Seasons--where craft beer massively outsells domestic premium. It also doesn't capture draft sales. In other words, the company tracks sales in the place most favorable to the domestic premiums like Bud and Coors.
The other thing to acknowledge is that the NW is way out in front of everyone. The point in preparing the slides is to illustrate craft beer's potential nationally based on their actual numbers here. We tend to think that craft beer will never supplant national light lagers, but these figures show they can.
One final point. In his presentation, Wandel sometimes included A-B's Shock Top and Coors' Blue Moon in the craft segment and sometimes he didn't. But no matter what segment you put them in, it's worth noting that they sell more than any single craft brand. (At the blogger's conference, I asked Blue Moon's Lisa Zimmer how many barrels that brand sold, and I think she said 1.7 million. That's about 10% the size of the entire craft market.)
Some people get freaked by the idea that the macros are co-opting craft beer, and to a certain extent, so am I. The silver lining, though, is that craft is now the tail that's wagging the dog. Macros see charts like the one in this post, and they see the writing on the wall: Americans are increasingly rejecting light lagers. People have been looking at SymphonyIRI's numbers on macros and seeing staggering five-year declines in domestic sales: Budweiser -30%, Miller Genuine Draft -51%, Old Milwaukee -52%, Michelob -72%. The trends are unmistakable: light lagers, though still the dominant player in beer, will continue an inexorable decline in the years ahead, replaced by more flavorful ales. Just look at what's happening in the Northwest.
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CHART: SYMPHONY/IRI
The numbers actually show that around 80% of the light lager loss is to even lighter lagers and to not craft:
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Alan
It's a good point; cannibalization is mainly responsible for those drops. (The best-selling beers are all light beers.) But that doesn't tell the whole story. Sales are down across the board for macros--ten million barrels for the top 20 brands from 2005-2010--when they'd need to be growing just to keep up with population growth.
ReplyDeleteIt's not happening instantly, but it's happening.
'Domestic Premium'? ...talk about lipstick on a pig! How about 'Industrial Tasteless', which more aptly describes everything from Heineken to Coors Light.
ReplyDeleteTo me, a telling moment was the WSJ article where Anheuser-Busch finally admitted they had been "dumbing-down" Budweiser for years - i.e., removing any trace of hop flavor (or "aftertaste" - which of course their marketers tried to turn into a perjorative).
But the big guys still have not learned their lesson, that many more people are looking for more flavor in their beer. No doubt this applies in a big way to new generations of drinkers, college students etc, who are more adventurous & willing to try new things. So i fully expect craft brewers to continue to gain share for many years.
Seen this today?
ReplyDeletehttp://www.entrepreneur.com/article/220319
Shows that while craft beer is way up--15% for the first six months of 2011 compared to same period last year--the overall beer market is down. That means the big boys really must have slumped, continuing the trends Jeff notes in his piece. So even though PDX is a bellwether, clearly around the country there is a shift afoot. Yay!
I just bought a sixer of High Life tallboys to help even things out.
ReplyDeleteSo true! Vigorously nodding my head in agreement!
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