Sales of craft beer are officially slowing, according to new data from market research firm IRI Worldwide, but a closer look shows an important distinction: the biggest brewers and their craft brands are the ones facing the slowdown.
While category-wide beer volume sales remain flat across IRI’s measured multi-outlet and convenience channels (MULC — which comprise grocery, drug, club, dollar, mass-merchandiser, Walmart and military stores), up just 0.7 percent through May 15, growth in the craft beer category, which was growing double-digits at this time last year, has slowed considerably.
Craft beer volume sales are up just 6.5 percent year-to-date through May 15, according to IRI, down from more than 17 percent gains a year ago.
But, like any data set, the latest information doesn’t show the entire picture.
As Brewers Association chief economist Bart Watson noted via Twitter, year-to-date craft volume gains would actually be closer to 9 percent if you removed non-Brewers Association-defined craft brand families like Blue Moon and Shock Top, which Watson estimates are down 4 percent and 9 percent year-to-date, respectively.
But in differentiating between BA-defined craft offerings and those the trade group does not consider to be craft, Watson didn’t remove brands like Goose Island IPA (+175 percent), Founders All Day IPA (+108 percent), Lagunitas IPA (+17 percent) and Lagunitas Little Sumpin Sumpin Ale (+49 percent), which are owned (wholly or partially) or produced by larger domestic and international companies.
Reached for comment, Watson provided some additional color.
The idea of a “craft slowdown” is real, he said, but it’s mostly because of sluggish sales from larger brands. In addition to Blue Moon and Shock Top, if you removed Boston Beer, New Belgium and Sierra Nevada from the data set, Watson said, craft sales would actually be up 16 percent.
In the last four weeks, he added, the largest four BA-defined craft suppliers — Yuengling, Boston Beer, Sierra Nevada, and New Belgium — were down a combined 4 percent.
“I don’t think IRI has Yuengling in their craft, but the other three are 33.9 percent of IRI’s craft cases right now,” he wrote in an email. “Add in Blue Moon and Shock Top and you’re looking at 48 percent of IRI ‘craft,’ which is down 8 percent in the last four weeks. That’s going to pull hard on any number.”
Indeed, volume sales of mainstream craft flagships like Sierra Nevada Pale Ale, Boston Lager, and New Belgium Fat Tire were down 5.9 percent, 13.8 percent and 5 percent through May 15, respectively.
In fact, more 16 of the top 30 craft brands in IRI’s MULC chart are in decline.
BA-defined craft, Watson tweeted, is up 10.4 through May 15 percent in IRI scans.
Volume sales of cider in MULC are also down 11.2 percent.
The off-premise declines noted by IRI are consistent with first quarter insights from GuestMetrics, a data analytics firm tracking on-premise sales, which last month said total beer sales were down 3.1 percent and that “several major brands declined.”
Volume sales of flavored malt beverages, meanwhile, propelled by the growth of Pabst Brewing’s Not Your Father’s Root Beer brand, which is up more than 760 percent over the last 12 weeks, have increased 12.2 percent year-to-date.
Total beer dollar sales, which topped $12 billion year-to-date, are up 3.4 percent in MULC and craft dollar sales are up 10 percent, according to IRI.
Slower overall volume growth is also consistent with domestic tax paid estimates through April, released today by the Beer Institute, which peg year-to-date beer shipments at 55.7 million barrels, an increase of 0.3 percent over 2015.
Additional Highlights:
- Dollar sales for Alchemy & Science, Boston Beer Company’s craft beer incubator, are up 443 percent year-to-date. Dollar sales for Boston Beer Company, however, are down 2.7 percent.
- Dollar sales for Firestone Walker are up 56.5 percent year-to-date.
- Dollar sales for Pabst Brew Company are up 24.7 percent year-to-date.
- Dollar sales of IPA are up 28.5 percent year-to-date. At this time last year, sales of IPA were up 37 percent.
- Vermont-based Lawson’s Finest Liquids popular Sip of Sunshine IPA cracked the list of top 30 selling brand in convenience stores with more than $2.3 million in sales year-to-date.