Off-premise craft beer sales through the first three quarters of 2022 are in the red (-5.1%), although trends have “slowly [creeped] toward break-even” through the summer months (July, August, September), according to the latest craft breakdown from Bump Williams Consulting (BWC), citing NielsenIQ data through October 1.
Through the first nine months of 2022, craft beer retail dollar sales topped $4.276 billion, according to NielsenIQ total U.S. XAOC, plus liquor and convenience data shared by BWC. Sales have declined in both the grocery (-4.5%) and convenience (-2.8%) channels.
In Q3, craft dollar sales improved to -1.7%, while sales in the most recent four-week period were -2.1%, a downgrade from the summer but better than the first half of 2022.
Here are a few takeaways from the 30-page report.
Regional and Local Brands Hit with ‘Steepest Declines;’ Craft Brands & SKUs Declining
Local (-7.6%) and regional craft brands (-6.6%) – at least in grocery and convenience stores – have “suffered the steepest declines” in sales, although both have trended toward stabilization in recent weeks, according to BWC.
National craft brands (+2.5%) were the only tier “above break-even” and have posted “an uptick in the rate of growth as the year wears on.” Notably, though, NielsenIQ data does not factor in at-the-brewery sales.
Still, craft’s struggles at retail and the emergence of so-called “fourth-category” offerings are leading to a thinning of the herd on retail shelves as brand and SKU counts have declined between 2% and 3% through Q3, BWC reported.
The number of craft brands at retail in 2022 – which peaked at 17,925 in 2021 – has declined -2.2% year-to-date to 16,929, BWC reported. At this same point in 2021, there were 17,308 craft brands in NielsenIQ-tracked stores.
As the number of craft brands thins out, so too are craft SKUs, which have declined from the 2020 peak of 23,333 to 21,576 so far in 2022, according to BWC. The pace in 2022 is off compared to 2021 when there were 22,296 craft SKUs and eventually 23,113 for calendar year 2021.
Most of the declines are in craft bottle SKUs, which are down 1,102 through Q3 2022, while the number of craft can SKUs are up 354.
“These declines are likely the result of a more dialed-in focus as not all styles and/or pack types are created equal (IPAs, cans still up),” BWC wrote.
Cans Now 65% of Craft Dollar Share; Bottle Sales Down More than $286M
Craft brewers’ reliance on can packaging over the last four years also bears out in the numbers as cans’ dollar share of craft is now at 65%, up 20 points compared to 2019 levels, BWC shared.
Cans did decline at mid-year 2022 but the package format is now up +2%, to nearly $2.8 billion in sales, through Q3. Meanwhile bottles have declined -16% in NielsenIQ tracked channels, to $1.488 billion. The increase in craft can sales (+$56.48 million) was not enough to offset the more than $286 million in lost bottle sales. BWC speculated consumers could be “trading down … or trading out.”
Craft can 12-packs increased sales +10.5%, to $677.4 million, and now hold a 15.8% share of craft dollars (+2.2 share points).
Single-serve 19.2 oz. cans also continue to grow, increasing sales +55.4%, to $201.85 million. Their dollar share of craft has also increased +1.8 share points to a 4.7% share of craft dollars.
Craft’s two biggest package formats, 12 oz. can 6-packs and 12 oz. bottle 6-packs, declined -4.2% and -15.7%, respectively. Despite the declines in craft can 6-packs in dollar sales, they have gained 0.3 share points, increasing to 26.5% craft dollar share.
Craft 16 oz. craft can 4-packs have declined -4.2%, and hold an 8% share of craft dollars.
Growth Styles Beyond Imperial IPAs
Growth styles beyond imperial IPAs range from hazy pale ales, non-alcoholic hop waters, light lagers, and German bocks and marzens, BWC pointed out.
Between 30% and 40% of craft brands competing in American lagers and pilsners posted “some degree of growth (vs. 28% craft average),” the firm added. Pilsners are “one of the least top-heavy styles for craft,” with the top five brands in the space making up less than 25% of dollar sales compared to hazy imperial IPA, with the top five brands accounting for 90% of dollar sales.
Of the top 10 craft styles, only IPAs (+1.8%) and wheat ales (+0.2%) gained dollar share through Q3, with the other eight styles either down or flat.
IPAs continued to hold an outsized share of craft beer dollar sales at 45.7%. The next closest styles were wheat ales (10.5%), seasonals (9.3%) and lagers (8.6%).
Nevertheless, traditional IPA off-premise dollar sales have declined -6.1%, while hazy IPAs dropped -2.7%. Imperial/double/triple IPA (+8%) and American wheat (+2.8%) were the only two of the top 10 craft substyles to grow compared to last year. Meanwhile, seasonals dipped -10.7% and witbier/Belgian wheat/white declined -4.3%.