Craft Beer Growth's Inevitable Slowdown

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It was inevitable that the craft beer boom would slow. But now, for the first time in more than 10 years, the category didn’t make double-digit growth, according to a report from the research firm IRI Worldwide.

Based on supermarket figures, IRI noted in its report on craft beer sales that craft dollar sales were still robust in the retail space. Up nearly 7% in value in 2016 to exceed a value of $2.28 billion, that volume growth had slowed to about four percent. This is a significant drop from 2015’s performance, when dollars were up more than 20% and volume more than 15 percent. The last year growth was below 10% was 2005.

Some brands in IRI’s top 30 craft beers did well, but other brands showed strong growth: Founders Brewing Co. All Day IPA, Firestone Walker 805 and Goose Island IPA experienced high double-digit growth, for example. (IRI includes in their craft beer tallies brews that the craft beer trade organization, the Brewers Association, does not. As an example, Goose Island, owned by international brew behemoth AB-InBev, doesn’t make BA’s list.) Beer companies growing in the middle double-digits include Founders Brewing and Firestone Walker.

Amongst IRI's top 30 ranked craft brands, 17 brews – including Sierra Nevada Pale Ale, Samuel Adams Boston Lager and Rebel IPA, New Belgium Ranger IPA, and Widmer Hefeweizen – slumped in sales at US supermarkets in 2016.

Blue Moon Belgian White is the leader among other beers that are considered craft by IRI, with an increase of slightly more than 2%, marking more than $115 million at supermarkets.

These supermarket figures provide broad stroke data not always applicable to on-premise operations, where regionality matters and where style churn doesn’t necessarily disrupt sales much. But it is yet another sign that the craft market is approaching a point where confusion over the plethora of brands and some shaking out of over-extended players is possible. The Brewers Association counted more than 5,000 US breweries in operation in November 2016, a sizable gain over the 4,000-plus operating in 2015, previously the highest figure since 1873.

Still, the five highest selling craft beers overall still included brews on the list above, like Sierra Nevada Pale Ale and Sam Adams Boston Lager, as well as Sam Adams seasonal offerings, New Belgium Fat Tire, and Shiner Bock. While the seasonal market, particularly pumpkin brews and highly-seasoned winter brews are said to be in decline, some of the beers will remain behind and do well when the trend tide recedes.

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