Beverage Dynamics

Beverage Dynamics NovDec 2018

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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Page 9 of 57

10 Beverage Dynamics • November/December 2018 DATA Driven CRAFT BRANDS have captured a large share of consumer and media at- tention during the past fi ve years, but how has the rise of craft beers and spir- its impacted overall industry sales? Are these startups taking share from legacy brands — or adding to overall consump- tion? To fi nd out, we looked at sales of the top ten brands of beer and spirits to see whether their growth (or lack of growth) has been impacted by rising craft sales. In the case of beer, the overall cate- gory is declining even as craft sales rise. Craft brands and mainstream brands are on opposite trajectories. Increasing craft sales may be the cause of declining sales for top-ten brands. Spirits is a different story, since the category has continued to grow and there are a handful of brands in the top ten driving much of that growth (Tito's, New Amsterdam and Fireball). Craft spirits command a smaller share, and their growth doesn't correlate di- rectly with any declines. A DEEPER DIVE The beer market is currently facing its fi fth consecutive year of overall volume losses. Light beers dominate the category with 43.7% of volume, but their sales are consistently dwindling. Total case sales of light beer were down 3.1% in 2017, and Bud Light has averaged 3.2% annual losses over the past fi ve years. The pop- ular beer category has also shrunk over that time – it's been steadily declining since 1988, except for growth in 2008 and 2009 during the recession. Sales of craft beer, however, are char- acterized by consistent growth. After the segment's rapid rise in 2012 and 2013 of more than 20%, growth has continued at a slower rate. It was 4.9% in 2017. Cur- rently, craft beer's share of the category is just over 11%. The distilled spirits category achieved another consecutive year of volume THE IMPACT OF CRAFT BY PAUL SOJA, BEVERAGE INFORMATION & INSIGHTS GROUP FOR MORE INFORMATION TO ACCESS ADDITIONAL DATA AND ANALYSIS AROUND THE BEVERAGE ALCOHOL INDUSTRY, VISIT BEVINFOSTORE.COM. Brand 2017 Sales Avg. % Change '13-'17 Smirnoff 9,249 -0.9% Bacardi 6,867 -3.2% Crown Royal 6,065 9.2% Tito's Handmade Vodka 5,802 49.7% Captain Morgan 5,712 -0.1% New Amsterdam 5,353 31.9% Jack Daniel's 5,231 2.1% Jim Beam Family 4,962 5.7% Fireball 4,902 33.1% Brand 2017 Sales Avg. % Change '13-'17 Bud Light 457,198 -3.2% Coors Light 223,125 -3.2% Budweiser 178,944 -4.5% Miller Lite 168,472 -2.9% Corona Extra 126,300 5.4% Modelo Especial 97,650 18.8% Natural Light 87,582 -3.7% Busch Light 82,231 -2.0% Michelob Ultra 81,831 10.1% Busch 62,524 -3.6% growth in 2017. This was led by increased consumer interest in high-end and super-pre- mium products across various spirit segments. We project that the category will con- tinue to grow as experiential events, tastings and brand ambassador programs attract new and loyal consumers wanting to enhance their entertainment occasions. Sales of craft spirits have doubled in the past fi ve years, but still only represent a 2.8% category share. As a whole, craft is still smaller than Smirnoff or Bacardi, and only slightly larger than Crown Royal (the number-three brand by volume). BD 2017 TOP 10 BEER BRANDS BY CASE VOLUME 2017 TOP 10 SPIRITS BRANDS BY CASE VOLUME Beverage industry insights and analysis

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