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/379477
34 Beverage Dynamics • September/October 2014 www.beveragedynamics.com Beer: State-of-the-Industry Report Jordan of New Belgium Brewing Co. threw an audacious challenge to her fellow craft brewers: build the segment until it comprises 10% of the U.S. market. This year, with craft claiming 7.8% of the volume, the stakes have been raised to "20 by 2020": that is, 20% by the year 2020. Watson says the goal is possible, if growth continues at the current ten-year average of 10.9%—even more so if mainstream numbers keep declining. Jim Koch, founder of Boston Beer, the largest craft brewing company in the coun- try, says, "It will take a lot of work by a lot of people, but it's good to have a vision. The nice part is that it won't be easy." How- ever, he adds ,"Numbers are simple-minded things. More important is that craft beer is changing the beer culture in America and ex- citing and energizing beer drinkers in a way we haven't seen in our lifetimes." Koch, whose company produces the Sa- muel Adams brands, is celebrating Boston Beer's 30th anniversary this year. He takes a bold view of the potential of craft beer: "That's pretty cool that America today is cre- ating classic beers that in a century people will look back on and go 'Wow. I wonder how something so amazing as that beer came into existence?' Every beer in history had a starting point. Somebody created it. It came out of human passion and imagination." Among American craft breweries, Abita Brewing Co. in Louisiana is ranked number 15 by volume, according to the Brewers As- sociation, yet their reach and portfolio range is very different from the seemingly ubiquitous and cutting-edge Boston Beer. This may be changing, with Jaime Jurado recently hired as Director of Brewing Operations. With decades of experience, Jurado will oversee the comple- tion of a new brewhouse, the fi rst step in creat- ing the infrastructure for planned growth. Jurado sees craft beer trends heading in two opposite directions: highly drinkable session styles, and the big IPAs and their ilk. Abita excels in the former. "We're famous for our Purple Haze and other easy-drinking beers, like our Louisiana Dark Amber and our Turbodog, Jurado says. "But we're much more than easy-drinking beers." New developments will include "more 'boutique-y' beers that cater more to the specialty drinker," as he puts it, adding "We've got the chops." More experimental beers will always be at the fringe of craft brewing, generating ex- citement, but not the bulk of sales. "Brooklyn [Brewery] is a great example," Jurado says, "because 85% of their beer is still contract brewed [mainly their more commercial styles], but it's their 15% of unusual beers that helps to propel them." But if it's the "easy-drinking" craft that pays the rent, those are also the styles that are vulnerable to appropriation by compa- nies that are not "sanctioned" craft brewers. Blue Moon, MillerCoors' 20 year-old wit beer, is referred to by Cat Corrigan as "a pi- oneer of craft brewing in the U.S.," and "the largest craft beer in the nation." A new offer- ing from Guinness, Blonde American Lager— launching their Discovery Series of "fusion brew" beers—makes a point of naming the hop varieties used, details more typical of a craft beer promotion. And AB looks to its expanding Shock Top family and the Goose Island and Leinenkugel brands to give cred to its own craft beer claims. Some craft brewers take an oppositional view of Big Beer; Jim Koch is much more conciliatory. "What I'm hoping is that the mass domestic beers get their mojo back," he says. "Because when we all started paying attention to beer 30 or 40 years ago, the big brewers were part of the fabric of American culture, with "Whazzup!" and "Yes I am," and "Tastes great, less fi lling." I certainly hope that they're able to reclaim that position. It would be good for the entire beer industry." BD (Thousands of dollars) Brand Brewer 2012 2013p % Change Bud Light AB InBev 244,333.4 247,311.4 1.2% Miller Lite MillerCoors 136,079.7 137,263.4 0.9% Coors Light MillerCoors 106,431.0 106,186.8 -0.2% Corona Crown Imports 42,744.8 61,899.3 44.8% Heineken Heineken USA 57,316.5 58,477.8 2.0% Budweiser AB InBev 91,064.0 68,250.1 -25.1% Michelob Ultra Light AB InBev 47,875.8 38,609.8 -19.4% Samuel Adams Boston Beer Co. 29,672.9 31,621.4 6.6% Budweiser Black Crown AB InBev -- 25,050.2 --% Bud Light Platinum AB InBev 32,425.0 23,727.3 -26.8% Redds MillerCoors 59.8 24,106.1 ++% Stella Artois AB InBev 31,285.1 24,165.2 -22.8% Dos Equis Heineken USA 22,567.7 22,907.3 1.5% Miller 64 MillerCoors 31,122.2 22,333.1 -28.2% Modelo Especial Crown Imports 5,143.2 6,506.6 26.5% Coors Banquet MillerCoors 31,203.0 19,514.2 -37.5% Leinenkugels MillerCoors 3,021.7 18,044.2 ++% Blue Moon MillerCoors 8,993.8 13,487.7 50.0% Smirnoff Mixed Drinks Diageo-Guinness USA 4,319.5 10,953.2 ++% Guinness Black Diageo-Guinness USA 13,274.3 13,071.1 -1.5% Tecate Heineken USA 3,012.5 1,893.6 -37.1% Bud Light Lime AB InBev 19,154.3 9,064.2 -52.7% Bud Light Lime-A-Rita AB InBev 2,633.4 8,863.1 ++% Becks Sapphire AB InBev -- 8,966.9 --% Third Shift MillerCoors -- 8,194.9 --% Total Top 25 $963,733.6 $1,010,468.9 4.8% Others $162,601.2 $150,441.9 -7.5% Total Advertising Expenditures $1,126,334.8 $1,160,910.8 3.1% (++) Greater than 100%. (e) Estimates based on nine-month data for 2013 plus fourth quarter of 2012. Source: Kantar Media | Intelligence. ADVERTISING EXPENDITURES FOR TOP 25 SPENDING BEER BRANDS