“… even if craft isn’t rebounding, overall growth isn’t weakening.” – Bart Watson, Brewers Association.
It’s a bit early into 2020 to get a comprehensive look, that’s coming in a couple more months, but the Brewers Association just released a brief, high-level first peek at craft beer industry growth in 2019. The shortest synopsis: industry growth was slow and not universal.
While many craft beer drinkers and enthusiasts seem to think the sky is falling, the bubble is bursting, and the end is nigh, data seems to prove otherwise. It may not show skyrocketing growth, but it doesn’t suggest that the industry is imploding either. (While I’d love to share the entire report, it was available for Brewers Association members only, so I provide a very brief summary here.)
Bart Watson, the Chief Economist for the Brewers Association, put together a quick report based on some initial data. “Like any year in this industry, it was a unique one, with the flood of brewery openings continuing, an explosion in seltzer sales, conflicting style trends, and more,” said Watson.
Much of the information in this initial, preliminary report points to what is referred to as scan data, which basically measures what was scanned at grocery stores, big-box stores, and convenience stores.
Referring to the scan data, Watson said, “This is a good partial picture of what happened in distributed craft, particularly for brewers with a distribution footprint large enough to be in at least a few chain stores. At the high level, growth was actually a tiny bit stronger in 2019 than in 2018…”
“… volume sales for small and independent brewers grew 2.1 percent. That’s a tiny bit better than 2018, where a comparable set of brewers grew 1.9 percent. It’s slower than 2017 and the few years prior, but suggests that even if craft isn’t rebounding, overall growth isn’t weakening.”
Another measurement that Watson points to, the National Beer Wholesalers Association‘s (NBWA) Beer Purchasers Index (BPI), also shows a fairly similar year between 2018 and 2019.
“Delving deeper than just that headline number, numerous storylines emerge,” says Watson. “Some show continuity with previous years. Others show changes, or at least contradictory evidence emerging… Starting with continuity, it’s clear that most of craft growth is still coming from smaller brewers.”
Watson concludes, “So small and local is still growing as a group, but at least in distribution, the typical brewer isn’t moving the needle much, and most growth is being driven by a minority of cases. We’ll see how much those breweries are making up for that challenge via at-the-brewery sales, but this is just another sign of the growing competitiveness in distributed channels.”
As we’ve reported in the past, the “at-the-brewery sales” Watson mentions are an increasingly important part of the craft beer industry. In 2018 we posted a story about the changing way in which people consume and purchase craft beer: more of it is consumed at, and purchased at, the source.
Like I said at the top of this story, it is still too early to get a comprehensive look at 2019, but Bart Watson’s preliminary report suggests that things are not as dire as some might believe. Growth isn’t skyrocketing, but it is still growth. What growth the industry is experiencing isn’t widespread, or unanimous.
To me, all of this speaks to the way the industry is evolving, though for mid- to large-size craft brewers that are finding it harder to get their beer onto grocery store shelves, that is probably very little solace.
We will learn a lot more when Watson’s comprehensive report comes out in a couple months