Brewers Association

Craft Brewer Sales Growing Rapidly in Convenience Channel

Craft brewers traditionally have underindexed in sales in convenience stores compared to some of the other channels. So while craft has a small base in the convenience store channel, there is big growth starting to happen here as craft gets more distributor support and retailer shelf placement, and convenience store customers are starting to reach for craft. Craft brewers only have a 1 share in convenience stores, but the data shows that craft brewed beers are starting to take off. Craft volumes are up in convenience stores by 11.4% in the rolling 52-week year. Craft volumes are up 14.5% in 2011 year to date. The four-week picture ending June 12 shows craft volumes up in convenience stores by 20.9%. This period included the key beer selling and beer drinking Memorial Day week, so perhaps many people going to Memorial Day weekend cookouts and other events decided to bring a six-pack of craft along to the party that they grabbed in the c-store on the way.

Here's a rundown of some of the other craft figures from the SIG report for food/drug and convenience stores.

4 Weeks to June 12, 2011--13.3% volume growth; 14.5% dollar growth

Year to Date 2011--12.8% volume growth; 14.4% dollar growth

52 Weeks (May 2010-May 2011)--12.4% volume growth; 14.1% dollar growth

Also this week, Lester Jones of the Beer Institute released the May domestic tax paid estimate. Domestic sales are down 1.7% or 1.25 million barrels this year, as large brewers continue to lose volumes in subpremium, premium and malt liquor segments. Even flavored malt beverage sales are down year to date in a segment where some brands are gorwing fast and others declining fast. Wine and spirits continue to gain share over beer. The bright spot for U.S.-produced beers for the large brewers is the doemstic super premium segment, made up of beers at a higher price point. The small continue to lead the large by example.

Craft Pricing

4 Weeks to June 12, 2011--up 33 cents per case

Year to Date 2011--up 44 cents per case

52 Weeks (May 2010-May 2011)--up 47 cents per case.

As I mentioned last scan report, pricing trends will be interesting to watch going forward with growing uncertainty in the ingredient supply situation. Right now they are growing at a slower rate than before (part of that may be due to increased display and retailer sales offers).

Paul Gatza

June 24, 2011

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