The midyear numbers are out, and things couldn’t look better, which is especially wonderful under the circumstances. The Brewers Association released sales through the first half of 2008 and growth of craft beer by dollars is up a very healthy 11%.
According to their press release, “The Brewers Association attributes this growth to a grassroots movement toward fuller flavored, small batch beers made by independent craft brewers.” I’m all for that, but since it’s dollars one must at least speculate that higher prices for craft are driving that number, at least to a certain extent. Since others (admittedly with an agenda of showing craft in not the best light) have suggested that craft sales are slowing, it’s tempting to worry about the absence of where volume of sales is for the first half of the year. But as the Nielsen Company, points out, “beer sales are affected the least by the economic downturn, with wine sales showing the most impact. Additionally, craft beer is gaining customers from across all segments of beverage alcohol.” So perhaps I’ve no reason to worry after all.
More from the BA’s press release:
“Newer brands by the larger brewers, like Belgian style wheat beers, have huge distribution advantages over beers by independent craft brewers,” said Paul Gatza, Director of the Brewers Association. “These brands can grow when the large brewers decide they want them to grow with the ability to impact what brands get shelf space and tap handles. At the same time, beer from craft brewers is being requested by the customer, which encourages distributors and retailers to make the beer available.” According to the Brewers Association, 1,420 of the 1,463 U.S. breweries are independent craft brewers.
The Brewers Association reports that in the first half of 2008 volume of beer sold by craft brewers grew by 6.5% totaling an estimated 4 million barrels of beer compared to 3.768 million barrels sold in the first half of 2007. Harry Schuhmacher of Beer Business Daily stated, “Crafts have really taken pricing this year given high input costs, and yet it is still driving volume gains faster than the beer category.”
But if the numbers all bear this out, then it’s very good news indeed. With rising prices across the board for all manner of food and beverages, there has been much speculation about whether consumers would continue to be willing to spend more for craft beer or would retreat back to the cheaper stuff from the big beer companies. The initial anecdotal evidence I’d been hearing suggested to me that sales by most breweries had not suffered significantly from higher prices at retail and at the tap. More than a few people I’ve talked to in the last several months have said demand is still rising unabated. The BA’s stats do appear to bear that out, so hopefully what initially seemed like a brick wall staring us down in the near future might in reality be another hurdle, but one which can be jumped over with a good business plan and, most importantly, a good-tasting, full-flavored beer.
What was the growth by sales volume, though? Pretty much everything grew by dollars this year thanks to inflation.
(Spoken like someone who wasn’t alive for more than a couple months during the Carter administration.)
Maybe I’m being an optimist (which is quite rare for me), but I’m of the mind that inflation/recession is and will continue to be a good thing for craft beer. As many people have noted in the past, beer – even more expensive craft beer – is an affordable luxury. So people who may have splurged on a nice bottle of wine or spirits every couple of weeks but can no longer afford to do so may instead start buying better beer, as it costs less than wine/spirits but is still a high quality product.
In addition, the slow/local food movement continues to gain steam, and many craft breweries have wisely been hitching their wagons to that movement.