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Sunday, August 06, 2006

Micro Market Grows; Beervana Leads the Way

An article caught my eye this morning with the depressing title "Beer sales falling flat while wine, other beverages grow in popularity." The lede was equally depressing:
"U.S. beer shipments last year were flatter than a stale ale, falling 0.1 percent according to the Beer Institute. The industry group says shipments to the U.S. market -- which accounted for about 86 percent of overall business -- declined 2.2 percent to 178.8 million barrels."
I did a little digging, though, and it actually looks like macro sales are falling flat--micros (many of which are no longer micro) are posting robust growth. And Oregon is leading the way. In 2004, according to Modern Brewery Age (.pdf), the big four (AB, Miller, Coors, and Pabst) brewed 171 million barrels of beer; in 2005, they brewed 169 million. Larger regional breweries* also saw their sales decrease from 5.47 million barrels in 2004 to 5.26 in 2005.

Conversely, the top ten craft breweries saw their sales increase rather substantially from 3.29 million barrels. in 2004 to 3.52 million barrels. That's nearly 7% growth. More impressively, all but one of the top ten showed growth in 2005. (Because Pyramid absorbed Portland Brewing in 2004, I threw it out for this calculation.) Here are the big 11 (including Pyramid), with total barrelage and growth in parentheses--and I'll toss in a couple of other Oregon bigs for comparison:
  1. Boston Beer Co. (1.4 million, +7.2%)
  2. Sierra Nevada (612,640, +3.9%)
  3. New Belgium (350,000, +5.7%)
  4. Matt Brewing [Saranac] (251,800, +8%)
  5. Redhook (234,200, +7.1%)
  6. Pyramid (230,500)
  7. Widmer (226,500, +13.8)
  8. Deschutes (144,422, +7.1%)
  9. Alaskan (105,300, +16.5%)
  10. Boulevard (103,584, +16.3%)
  11. Mass Bay [Harpoon] (90,333, -4.5%)
13. Full Sail (85,756, +3.8%)
23. BridgePort (43,432 , +2.2%)
24. Rogue (43,000, +12.%)
Finally, Oregon led all states in growth in 2005, up 100,000 barrels and 3.9%. Washington grew more marginally--36,000 barrels, just .9%, but good enough for 14th place.

To put some context to this, when I first started writing professionally about beer back in 1997, we watched the first major contraction in microbrewing since it got started a couple decades earlier. That slump was a harsh reality for a lot of breweries that had over-extended themselves on unrealistic expectations of growth. Saxer and Nor'wester were early casualties, and Portland Brewing eventually got absorbed from the wound that slump caused. It was a long time before people came back to craft beer, and we're seeing a nice little renaissance now.

Predictably, Beervana leads the way...

These are traditional regional breweries producing more mainstream beers. Some have been purchased by the big three, but are still regional in nature and distribution. They include: Yuengling, City Brewery, Latrobe (recently purchased by AB), High Falls (Genesee), Pittsburgh (Iron City), Leinenkugel, and Spoetzl (Shiner).


  1. I understand what you mean when you type, "no longer micro", but Spoetzl's barrelage is similar to New Belgium's, so I was curious how it missed the list of craft breweries. And is the number right on Full Sail? I bet they produce a lot of Henry's & Session, so I imagined they'd hit 6-digits.

  2. Your points are astute, but I didn't want to go into a bunch of minutiae about how I was distinguishing between regional breweries and micros. At this point, Boston Beer Company (Sam Adams) is the sixth-largest brewery in the country. It is larger than established regionals like Leinenkugel and Latrobe (Rolling Rock).

    My system was to try to separate the breweries out by class rather than size. Obviously the big three (Pabst is actually brewed at Miller plants) produce tasteless macro lagers, and so are their own class. I distinguish regionals from craft breweries partly for their age--they predated the micro revolution--and also by what they produce, which is more characterful, but still mainstream, pilsners. Craft breweries produce a variety of beer styles, ranging far beyond traditional light pilsners.

    These lines will always be squishy, but the thing I was mainly trying to look at was whether all beer was slumping or just the sale of traditional light pilsners. All evidence says good beer sales are growing, crappy beer sales aren't.

    (I only know what the stats say about Full Sail. Though they started out by only brewing part of the Henry's portfolio, so maybe that's why the numbers are still relatively low.)

  3. Actually, I just looked at the numbers again, and apparently this doesn't include any of Full Sail's contract brewing--which is odd. Dunno.

  4. 2005 was also the first year that the Portland Brewing plant pushed out 100,000 barrels (courtesy of Pyramid's closing their Seattle plant's bottling and racking lines). 2006 should show a big jump for them, as the company is posting record quarterly sales.

  5. the beginning of your article clashes slightly with this new Gallup poll:

    "Americans are drinking alcohol more often, and beer is back on top as the beverage of choice, according to a new Gallup Poll."

    but perhaps that just means they're drinking better beer. how long before Anheuser Busch starts buying up micro breweries?

  6. actually, i'm make the same statement in the second paragraph.

    that's good news for micros.