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“Better Beer” Cools Down In 2016, As Craft, Imports See Growth Slow In First Half

July 1, 2016

As the July 4th weekend kicks off, the beer business is facing an uphill climb. While the category’s mainstream brands continue to slide, the “better beer” segment has also cooled a bit in 2016.Given those trends, Impact Databank projects that total beer consumption in the U.S. market will fall by 0.2% this year—marking the third decline in four years as beer continues to lose share to both spirits and wine.

According to IRI, which covers multi-outlet and convenience store channels that account for just under half of all U.S. beer consumption, beer sales were up by 0.5% year-to-date through June 12. That growth rate fell short of the year-earlier period, when sales rose by 1.4%.

Progress is still solid for the better beer segment, but growth has slowed considerably. Craft beer is up by around 6% in IRI channels through June 12, compared to a 17% advance a year ago. Imports are up 6.7%, slower than the 8.3% growth rate in the year-earlier period.

Fully half of the top 30 craft beer brands in IRI channels are down in both volume and value this year. However, the vast majority of those 15 brands in decline are either owned by brewing giants like Anheuser-Busch InBev and MillerCoors or by players like Boston Beer Co., Sierra Nevada and New Belgium that have grown so large that they’re no longer viewed as craft brewers by many consumers. Indeed, Boston Beer’s Samuel Adams range alone has four of the top 30 entries, and all are losing ground. Meanwhile, craft’s smaller players are thriving, and newcomers continue to emerge around the country.

On the import side, nine of the top 10 imported beer brands in IRI channels posted dollar sales growth year-to-date through June 12, with only Tecate declining. The Corona franchise’s progress remains solid (Corona Extra’s volume was up 6.4% and Corona Light was up 4.7%), while portfoliomate Modelo Especial is on fire. Modelo Especial, which became the second-leading import brand in the U.S. market when it leapfrogged Heineken in 2014, was up by 22.4% through June 12. Meanwhile, Modelo Especial’s Chelada line extension jumped by 38.2%. The Chelada extension has grown so fast that it’s on pace to become one of the top 10 import brands by dollar sales in IRI channels by year-end. —Peter Zwiebach

 

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