Craft Beer News

Craft Beer News

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2014 was another strong year in terms of growth in craft beer, and that growth was spearheaded by more diversity in the population of craft beer drinkers and the expanding geography and rapid pace of new craft breweries. Total number of US breweries are now at historic levels and craft beer is now the fastest-growing alcohol category by revenue in the United States, according to IBISWorld.


IPA’s continue to dominate sales by style with seasonal beers coming in second. Variety packs and session beers were two popular trends that should continue into 2015. Sour beers have also gained in acceptance and availability and that should also carry on into the new year. Could cask beers and firkins be next?


Style is the biggest factor that drives craft purchasing decisions among key demographics. Brand loyalty continues to be a non-factor, especially among millennial drinkers, as they are most interested in trying as many styles of beers from as many breweries as possible and see that as a badge of honor.


Craft beer is looking more and more like the wine and spirits category, with consumers increasingly trading up for premium releases. This has carried over into other areas such as gifting, with craft beer now being just as acceptable as wine to bring as a host or housewarming gift, as well as for pairing with meals.


Households with higher incomes continue to be the main regular craft consumers and they’re willing to pay more for craft. However, affordability could become a bigger factor if the current growth trends are to continue.



More from the Brewers Association Year In Beer:

-U.S. brewery count returns to historic levels. In November, the United States passed the mark of 3,200 brewers in the country and the number of brewery licenses reached the highest ever, topping 4,500 in the first sixth months of the year. Thirteen states (CA, CO, WA, OR, MI, NY, PA, TX, FL, WI, IL, NC, OH) now have more than 100 breweries each.


-Breweries are opening at a rate of 1.5 per day. In addition, there are more than 2,000 breweries in planning.


-Craft brewers were the growth point in the overall beer industry. Through June of 2014, craft brewers enjoyed 18 percent growth by volume. Numerous data channels are showing continuing double-digit growth for craft in the second half of the year.


-India Pale Ales (IPAs) remained the most favored craft beer style. According to retail scan data, IPA is up 47 percent by volume and 49 percent by dollar sales, accounting for 21 percent volume share of craft and 23 percent dollar share of off-premise beer sales. Additionally, the style was the number one entered category at the Great American Beer Festival®.


-Variety packs had a strong year with craft beer lovers. Retail data also indicates that variety packs are up 21 percent by volume and 24 percent by dollar sales, equating to nine percent volume share of craft and seven percent dollar share.


-Craft beer appreciators are becoming as diverse as craft beer itself. Data indicates that 38 percent of households bought a craft beer in the last year versus 29 percent in 2010. Additionally, women consume almost 32 percent of craft beer volume, almost half of which comes from women ages 21-34. Hispanic populations are demonstrating increased craft engagement as well.


-Local craft beer is more accessible than ever before as 75% of Americans live within 10 miles of a brewery



From Mintel’s US Craft Beer Report:

-Sales of craft and craft-style beer will likely eclipse $20 billion in 2014. Of the $20.4 billion in craft sales that Mintel has predicted for this year, the firm believes more than 84 percent ($17.2 billion) will come from Brewers Association-defined craft brewers.


-Survey respondents said that 51 percent of the time, style is the most important factor when they are making their craft beer selections.


“The leading purchase driver among craft beer drinkers is style, pointing to a more discerning consumer base,” said Mintel’s Beth Bloom. “This focus on style and flavor is a major element that differentiates a craft beer drinker from the rest, and points to the future of beer in the U.S.”


-Craft beer drinkers are more likely to try new products and share their experiences. 44 percent of surveyed drinkers say it is a source of pride to try as many different kinds of beer as they can.


-Household income to be the “strongest determiner” of a craft beer purchase. One third of respondents from households earning more than $150,000 annually drink craft products while just 11 percent of those earning less than $25,000 do so.


“Keeping affordable offerings available will be important to engaging a wider consumer base,” the report states. “Where this is not possible, presenting offerings as an occasional worthwhile indulgence should be considered.”


-Conversely, more than half (55%) of respondents report that they are willing to spend more money for craft beer



More on Beer Styles from Mintel and IBISWorld:

Sour beers are gaining interest, Mintel’s Bloom notes. Nielsen affirms this trend. Sour beers are on trend with the popularity of natural, organic and unprocessed foods and beverages, the market research firm says. It adds that demand is high for sour beers because they are difficult to make and expensive.


Also playing off of this trend, cask beer could become a popular form of craft beer in the next five years because of its perceived authenticity, according to IBISWorld’s Craft Beverage Report.


According to IBISWorld data, seasonal beers are the second-most popular craft beer style with a 23.7 percent share of the segment. The No. 1 style is IPA with a 25.2 percent share, it states.



Premiumization of beer from Mintel:

As craft brewers work to deliver a wide range of beers to meet various consumer demands and interests, they typically issue a higher price point to accommodate the quality ingredients they’re using. Luckily, the craft beer segment mirrors the wine and spirits categories in which consumers are trading up to more premium offerings.


This premium positioning also carries over into gifting, as the majority (53 percent) of consumers said that it is just as appropriate to bring beer as a host or housewarming gift as it is to bring wine, Mintel’s Bloom says. Whereas craft beer was more of a casual beverage to drink during sports games in the past, it’s now being elevated to the level of wine, where it is a gift-worthy product and can be paired with meals, she adds.




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