Craft beer is filling more mugs than ever
Higher-priced beer defies market slump
I know this is going to make all you craft beer haters groan, but the upscale end of the suds market is the only sector showing significant growth in these dreary times. Perhaps it’s driven by a new philosophy: hey, if you’re gonna drown your sorrows in beer, why not make it a good one?
Craft beer still only represents only 5 percent of the total market share nationwide. But according to the National Beer Wholesalers Association, its year-over-year growth now stands at 14 percent. (The beer market overall declined 3.1 percent in 2010, according to the Beverage Information Group.)
And that’s not just a one-year bump. Craft beer sales have grown an average of 12 percent a year over the last half-decade. They now stand at $7.65 billion annually, compared to $2.88 billion in 2000. And sales in the first nine months of this year are up about 15 percent over 2010.
The Brewers Association counted 1,753 breweries in the U.S. last year. That’s the highest total since the 1800s, when difficulties of preservation and transportation meant every town of any size had its own brewery.
“Of course there is a theoretical limit (to the number of breweries the market can handle) and it is going to separate more out into winners and losers over time. But this is a trend that right now has the wind at its back,” said Ben Steinman, president of Beer Marketer’s Insights, in Advertising Age.
At a convention of beer distributors held earlier this month in Las Vegas, the most popular corner of the trade-show floor was the Craft Brewer’s Pavilion. Along with bona fide regionals such as Allagash and Stone Brewing Company, the big boys were showcasing their pseudo-craft brands: Shock Top by Anheuser-Busch, Blue Moon by MillerCoors.
Still doubt that craft beer is making inroads? Consider this: the biggest beer seller in the nation is about to market them aggressively. Who would that be, you ask? Also the nation’s largest retailer: Walmart.
Former Walmart CEO Lee Scott, who still serves on the company’s board, told distributors at the Las Vegas convention that the company is planning to allot more space to smaller, boutique-style beers.
What’s behind the trend? Perhaps it’s because Americans like to think they’re able to buy the best, even in cash-strapped times.
“Craft beer is an affordable luxury,” said Paul Gatza, director of the Brewers Assocation, in an interview with the Denver Post during last month’s Great American Beer Festival in Denver (the nation’s largest such gathering, it featured 466 craft breweries and 49,000 attendees). “People are willing to spend a little bit more for something they really want to drink.”
What’s your opinion of craft beers – worth the extra bucks, or just a bunch of overpriced froth?