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.
Issue link: http://read.dmtmag.com/i/143145
PRETTY CRAFTY THE GROWING CRAFT BEER THE GROWING CRAFT BEER SEGMENT HAS BECOME AN SEGMENT HAS BECOME AN IMPORTANT PART OF THE ANT PART OF THE IMPORT CONVERSATION FOR EVERYCONVERSATION FOR EVERYONE INVOLVED IN THE U.S. ONE INVOLVED IN THE U.S. BEER MARKET. . BEER MARKET BY JULIE JOHNSON T en years ago, Kim Jordan, co-founder of New Belgium Brewing Co., challenged her fellow craft beer professionals to picture a future where their creations comprised 10% of the beer market. At the time, the entire craft beer segment owned only 3% of the American market, a smaller share than that held by a single brand—Busch Light—brewed by the country's largest brewing company, Anheuser-Busch. In her keynote address to the annual Craft Brewers Conference, Jordan told the audience they would succeed as a united industry—"we have a collective brand, the Craft Brewers of America"—if they emphasized quality, distinctive flavors and compelling stories that fostered a unique connection to their consumers. "Our niche as an industry," she said, "is small, American, distinctive, well-made, fun beer." This past spring, Jordan returned to the conference podium again to look back at a decade that has seen craft beer's share more than double to 6.5% of volume, and over 10% of dollar sales. Once again, she lauded the industry's collaborative culture, the attention to quality, and the innovation that keeps consumers engaged. By every measure, craft beer is cool. At a time when overall beer sales have been near-flat, craft beer sales volume has grown by 12%, 13%, then 15% over the past three years. Data from GuestMetrics reports that craft JULIE JOHNSON is contributing editor and co-owner of All About Beer Magazine. beer has a 26% share of on-premise beer sales (and over 50% of draft sales), as big as Anheuser-Busch's share and bigger than MillerCoors'. NUMBERS ARE GROWING A ccording the Brewers Association, the trade association for craft brewers, there were 2,347 craft breweries operating in 2012, 409 of which opened that year; just a few years ago, the industry marveled when the number of American breweries passed 1,200, roughly the number that existed in the United States before Prohibition. And the expansion hasn't slowed: another 1,254 new breweries are in the planning stages. The growth of the craft category and the continuing recruitment of newcomers mean relatively large and small companies coexist under the umbrella of "craft." The largest and oldest of the craft breweries, while still tiny compared to brewing's behemoths, are still larger by many orders of magnitude than the small start-ups. Boston Beer, maker of the Samuel Adams beers and the largest craft brewery, produced 2.7 million barrels last year. Twenty-seven breweries now produce over 100,000 barrels annually. But across the entire category, the average production by a craft brewery is a mere 500 barrels per year. Paul Gatza, director of the Brewers Association (BA), likes to apply the concept of the "Long Tail" to craft beer. It was proposed by Chris Anderson in a 2004 Wired article to explain the internet's ability to make Beverage Dynamics • www.beveragedynamics.com • July/August 2013 • 27