Did the pandemic really cause a bump in sales of so-called tried and true flagship brands in 2020?
Not really, writes Brewers Association chief economist Bart Watson in his latest members’ only column. Watson had previously touched on the question in mid-November and found some evidence that larger brewers got a bump but they weren’t outperforming smaller brands.
Watson poked holes through the “flagships succeeded in 2020” narrative, which he believes is coming from the same sources who pushed that beer had a stellar 2020. That wasn’t the case, as the loss of on-premise sales led the overall industry to be about flat (up just slightly to about 0.2%) in 2020, as Beer Marketer’s Insights (BMI) recently reported during a webinar.
In fact, according to BMI president Benj Steinman, craft brewers’ volume declined about 8% in 2020, a loss of around 2 million barrels, which he attributed to the on-premise closures and the loss of at-the-brewery sales.
In his latest analysis, Watson — using a definition of flagship as a brewery’s best-selling brand in a calendar year — looked at IRI scan data (total U.S., multi-outlet and convenience) for every brewery and brand in the set from 2015 to 2020, including BA-defined craft and all other beer.
“What I found, simply put, is that flagships did almost exactly as well in 2020 as they did in previous years, which is to say they lost share at about the same rate,” he wrote. “Now, I’ll note that saying flagships lost share is not the same as saying all small brands did super well … but that flagships themselves didn’t see any stronger trends.”
Flagship offerings lost 0.8 share points in 2020, and, on average, have shed 0.7 share points from 2016 through 2019.
Zeroing in on craft, Watson found that flagships’ share of beer declined 0.5 share points in 2020. After gaining 0.72 share points in 2016, craft flagships have declined in each of the last four years. Those trends mirrored the overall category, Watson wrote.
Watson then examined flagships’ share of scan sales by craft brewery size. He found that as craft brewers grow — and get more brands on retail shelves — their largest brand tends to make up less of their scan sales.
“I do find it interesting that craft brewers with more than one million case equivalents (CEs) in scan used to be more flagship heavy – while their largest brands have trended down in share over time, the rest of the size groups have stayed steady or gained share in flagships,” he wrote. “We also see that the groups where the flagships have gained share are the smallest brewers, which if anything, probably runs against the ‘tried and true’ narrative that is circulating, since many of those brewers are fairly new.”
Read Watson’s full report, available to BA members, here.