The old saying goes, “There’s no ‘I’ in team.” It’s not too hard to apply that saying to the U.S. beer market as analysts recognize the role different tiers and segments play in the category’s efforts to bring its case and dollar sales positioning back to pre-recession levels. “What we have found is that the multiple tiers that are available in the beer category have helped the overall industry hold dollar sales performance steady, but volume still continues to ride a recession-related roller coaster,” says Jennifer Zegler, beverage analyst with Chicago-based Mintel.
Zegler notes that the U.S. beer industry sold 2.9 billion 2.25-gallon cases of beer for $71.5 billion in 2008 compared with unit sales just shy of 2.8 billion 2.25-gallon cases for $78.1 billion in 2012.
“They’ve increased the dollar sales but not necessarily the volume in between those four years, which is kind of continuing what we’ve seen during the recession that people are buying either more premium-priced beers or just buying less beer,” she says. “And with some of the price adjustments that brewers have made, it has made it so the dollar sales continue to rise but not necessarily the volume sales.”
According to Chicago-based SymphonyIRI Group, the overall beer category accounted for more than $29.1 billion in sales for the 52-week period ending Dec. 30, 2012, in total U.S. multi-outlets including supermarkets, drug stores, mass merchandisers, gas and convenience stores, military commissaries, and select club and dollar retail chains. This was an increase of 5.7 percent, the market research firm reports. In that same time period, the overall beer category sold more than 1.4 billion cases for an increase of 2.6 percent in SymphonyIRI-measured channels.
The largest brewers, Anheuser-Busch InBev (AB InBev), Leuven, Belgium, and Chicago-based MillerCoors, experienced moderate growth in dollar sales at 5.6 and 2.6 percent, respectively, according to SymphonyIRI data. For case sales, performance was moderate to flat with AB InBev registering a 2.1 percent increase while MillerCoors case sales were flat during that same time period.
For overall beer vendors, eight of the Top 10 companies reported dollar sales growth with The Boston Beer Co., Boston, and D.G. Yuengling & Sons, Pottsville, Pa., posting double-digit growth at 18.6 and 24.4 percent, respectively, according to SymphonyIRI. Among the No. 11 to 20 beer vendors, the following also experienced double-digit growth: Sierra Nevada Brewing Co., Chico, Calif.; New Belgium Brewing Co., Fort Collins, Colo.; Gambrinus Co., San Antonio; Deschutes Brewery, Bend, Ore.; Vermont Hard Cider Co., Middlebury, Vt.; and The Lagunitas Brewing Co., Petaluma, Calif.
Among the respective segments — domestic, import and craft — the craft beer market continued to outpace the overall category with a 16 percent increase in dollar sales and an approximately 12 percent increase in case sales for the 52-week period ending Dec. 30, 2012, according to SymphonyIRI.
The more established segments — import and domestic — also had some bright spots in 2012. Import dollar sales increased 6 percent while case sales were just shy of a 5 percent increase in SymphonyIRI-measured channels. The domestic segment also saw increases with dollar sales up approximately 5 percent; however, case sales increases were more moderate at a 2 percent increase during that same time period.
These increases are a positive turnaround for the category, which had experienced contraction in previous years, experts say.
“Total on- and off-premise volume combined was plus 1.7 percent, so all in all, a turnaround from the past four years of decline,” says Bump Williams, chief executive officer and president of Bump Williams Consulting, Stratford, Conn.
Although the domestic beer category found itself on more stable ground in 2012, its respective tiers experienced a mixed bag of results.