Craft trends in off-premise channels “remain underwhelming,” but there are “signs of improvement” in Q2, according to Bump Williams Consulting’s (BWC) quarterly craft report.
Craft dollar sales in NIQ-tracked off-premise channels (total U.S. xAOC + liquor plus + convenience) declined -0.3% year-to-date (YTD) through July 1. However, in the last 13 weeks, craft dollar sales increased +0.9%.
Convenience remains the strongest channel for craft YTD, and the only observed channel in which craft recorded an increase in dollar sales (+7.5%). There should also be a watch out for future hard cider trends, as the segment recorded a +15.9% increase in dollar sales YTD in c-stores, the second highest increase in the channel after flavored malt beverages (+24.6%).
Total beer dollar sales increased +2.2% YTD and +1% in the last 13 weeks. The strongest beer segments YTD were non-alcoholic beer (dollar sales +34.7%) and FMBs (+20.1%). Hard seltzer (-17.8%) recorded the largest dollar sales decline YTD.
Craft’s share of total beer declined -0.3 points, to 11.6%. Beer segments to record an increase in share include FMBs (+1.4 share points, to 9.3%), imports (+1.3 points, to 23%) and below premium (+0.2 points, to 11.5%). Beer segments to record share loss other than craft include hard seltzer (-1.8 points, to 7.3%), domestic premium (-0.6 points, to 25.4%) and domestic super premium (-0.2 points, to 10%). Hard cider’s share remained flat, at 1.1%.
National craft recorded the largest increase in dollar sales (+5.6% YTD), “primarily fueled by the incremental gains coming from New Belgium and Sierra Nevada,” according to BWC. Regional craft also increased (+2.3%), continuing to gain momentum and “outpacing its collective performance in 2022.”
Local craft dollar sales declined -2.8% YTD, “although we have seen those declines soften as 2023 carries on,” BWC wrote. Mainstream craft recorded the largest dollar sales decline in the period (-6.7% YTD).
Craft Segment Efficiency Worst Within Beer; Brand Counts Declining
Craft shelves have been overpopulated for some time and brands are reacting to the squeeze. The number of craft brands on shelves so far in 2023 is 17,697, down from 18.281 from the same 7-month period in 2022, suggesting the “universe contracting,” BWC wrote.
The decline follows brand count increases in 2021 and 2022, capping at 20,180 brands. The largest contractions have come from seasonal, hazy IPA and pale ale brands, as well as 6-packs and bottles. Growing styles and packages in terms of brand count include assorted/variety, lager, hazy double IPA, 12-packs and 19.2 oz. single-serve cans.
The contraction will likely continue, as the “segment efficiency” of craft beer is the smallest out of all beer segments. Efficiency is measured by the average dollar sales recorded per segment item per store selling. For craft, that is $287.10.
Craft efficiency increased +0.8% YTD. However, the gap between craft and other high-end segments has widened in the period.
“Stats like this could result in an ongoing purge of slow-movers, making struggling SKUs vulnerable come reset season,” BWC wrote.
‘Shared Success Among Craft Leaders,’ But Distribution Levels Are Squeezed
Fifteen of the top 25 craft brand families recorded portfolio dollar gains year-over-year (YoY) through July 1, a “welcome sight of share success among leaders,” BWC wrote. Athletic (+88.6%), New Belgium (+21.5%), Goose Island (+17.4%) and Georgetown (+11%) all posted double-digit dollar sales increases YoY.
Other brands in the top 25 to record dollar sales gains include Sierra Nevada, Leninekugel’s, Founders, Bell’s, Kona, Stone, Cigar City, New Glarus, Victory, Wicked Weed and 10 Barrel. However, four of those brands – Sierra Nevada, Leinenkugel’s, Founders and Cigar City – recorded volume declines YoY.
Six of the top 25 craft families increased national distribution levels YoY, “leaving most leaders feeling the squeeze on the shelf in terms of reach/representation,” BWC wrote. Those brands include New Belgium, Bell’s, Kona, Goose Island, Athletic and Georgetown.
Six of the top 25 new craft brands recorded increases in dollar sales and volume YTD, “further emphasizing the struggle that many flagship brands are experiencing these days,” BWC wrote.
“Incrementally and innovation still skew toward families and mix packs, sometimes one in the same,” BWC wrote. “Though many anchor brands can struggle amidst ongoing family expansion, we do still see familiar faces such as Hazy Little Thing and Two Hearted still ranking among growth leaders, providing stability for extensions to build off (for now).”
Other brand families to expand and still record growth include New Belgium’s Voodoo Ranger, Goose Island’s Beer Hug and Founders’ All Day.
New Belgium Still a (Juice) Force in Scans
New Belgium’s Voodoo Ranger Juice Force IPA continues to grow dollar shares, ranking the No. 1 craft growth brands YTD. The brand also ranks among the top 5 craft brands overall by dollar sales, passing Leinenkugel’s seasonal shandy and nipping at the heels of Sierra Pale Ale.
New Belgium continues to dominate in scan data, accounting for seven of the top 25 craft brands YTD – more than twice the representation of any other brand family.
New Belgium’s Voodoo Ranger Imperial IPA also continues to grow, increasing dollar sales +11% YoY and volume +6%. Dollar sales for the brand are still less than half the No. 1 craft brand, Molson Coors’ Blue Moon. However, Blue Moon continues to post declines, including a -2.3% YoY decline in dollar sales and -6.5% volume decline.
New Belgium was the ninth largest beer vendor by dollar sale YTD and the third largest craft beer vendor, behind Anheuser-Busch InBev and Molson Coors.
Seven of the top 15 craft beer vendors recorded increases in dollar sales and volume, led by No. 14 Athletic (dollar sales +88.9%, volume +84%), and followed by No. 3 New Belgium, No. 13 Artisanal Brewing Ventures, No. 4 Sierra Nevada, No. 12 Sapporo (including Stone Brewing and Anchor Brewing), No. 10 Bell’s and No. 9 Canal Street Brewing.
New Belgium was one of three of top 15 craft beer vendors to also increase national distribution, with a 3.2 point increase in weighted distribution points, along with Athletic (+9.8) and Bell’s (+1.1). All other top craft vendors recorded a decline in national distribution, except for Artisanal Brewing Ventures, which was flat.