October 16, 2017 – Major breweries, think Budweiser, Coors et al, have been bedeviled by sluggish sales for a while but now, even craft beer is slowing down.
Craft beer sales are actually up but the accelerated growth the category was enjoying is definitely declining. The numbers prove it. In 2016, craft beer expanded by six percent and it actually reached more than 10 percent market share. That was something to celebrate. But in 2015 the growth rate was 8.5 percent and 2014 it was close to 13 percent. So something is going on.
A recent article in Beverage Dynamics, a trade magazine pointed out that “the number of regional breweries, microbreweries and brewpubs in America eclipsed 5,000 for the first time ever last year, topping off at 5,234. There were as few as 1,986 as recently as 2011.” Is it reaching saturation point?
So there is more variety to choose from and this might be a part of the problem. The market has changed for the current generation of influencers – millennials. Not only are they not brand loyal, they are not category loyal. They may love a local craft beer one day but the next day they are drinking bourbon cocktails or maybe wine. Call them adventurous or call them unreliable. Either way, marketers are trying to cope with the new rules (there aren’t any) and aspirations.
There are other trends that are seriously affecting craft beer. The pioneers of the craft movement are being punished for being successful. Two brands that mentioned with regularity are Sam Adams Boston Larger and Sierra Nevada Pale Ale. Their sales are dropping as craft beer aficionados move to newer micro breweries where sales are expanding. However, the craft brewers that were acquired by AB-InBev, Heineken or Miller-Coors are going gangbusters because of their owner’s distribution power. Goose Island, for example, has increased by 22.4 percent thanks to the backing of distribution powerhouse AB-InBev (formally Anheuser-Busch) while Lagunitas IPA grew by 17.1 percent thanks to Heineken.
Then there’s a whole other twist affecting the big guys. It turns out Americans are clamoring for Mexican beer. The Wall Street Journal reports that Corona and Modelo increased 13 percent over the summer. The brands are distributed by Constellation Brands in the U.S.