Yours for Good Fermentables ™: How beer as a whole fared in the U.S. in 2014.

Sunday, March 22, 2015

How beer as a whole fared in the U.S. in 2014.

Two reports on the state of beer in the United States in 2014 were delivered this month.

One came from the Brewers Association —founded in 2005 to advocate for 'craft' brewers— that showed a continuing double-digit rate of growth for 'craft' beer. Read that: here.

The other was from the National Beer Wholesalers Association (NBWA) —founded in 1938 as a trade association representing beer distributors in the U.S. (currently numbering just under 3,000).

The purpose of the National Beer Wholesalers Association is to provide leadership which enhances the independent beer distribution industry; to advocate before government and the public; to encourage the responsible consumption of alcohol; and to provide programs and services that will benefit its members.

The NBWA's report showed that:

U.S. taxable beer volume as a whole —factoring in mainstream beers, 'craft' beers, imports, and flavored malt beverages (FMBs)— increased by 0.4% in 2014, to a total of 2,843,141,000 'case equivalents' (CEs ^*).
One barrel of beer is the equivalent of 13.78 cases. So, doing the math, the total volume of beer produced in the U.S. in 2014 was 206,323,730 barrels (two-hundred six million, three hundred twenty-three thousand, seven hundred thirty barrels).
Mainstream beer sales, by volume, were down slightly (-0.6%).
Imports were up (+6.9%).
'Craft' beer sales were up dramatically (+18% over 2013), to 22.2 million barrels. But, at 11% of the total beer sales, 'craft' beer gains were still not enough to offset mainstream beer's losses. The NBWA didn't break down 'craft' beers' numbers. For that, read: here.
Can beer sales continued to exceed bottle beer sales.
Draft beer sales were down slightly (-0.4%).

Final December numbers from the Alcohol and Tobacco Tax and Trade Bureau (TTB) on national domestic beer shipments were released Monday. This release from the TTB closes out the last 2014 report for total industry accounting. The combination of domestic tax paid and imported volumes represent the total amount of beer available for sale in the United States. This is the only measure we have of total industry volumes that cover all domestic brewers, brewpubs and importers of malt beverages.

As previously reported, domestic volumes were down slightly (-0.6% CY), but import volumes rose significantly (+6.9% CY) to bring total industry volumes (+0.4%) into positive territory. While looking relatively flat, the industry saw some significant shifts in package mix between cans, bottles and draft. The table below shows combined domestic and import volumes for 2013 and 2014 with volume changes and shares.

The data above show that the can segment was the big winner in 2014, growing more than 30 million cases and gaining almost 1 share point of total volumes from 2013. Bottle packages lost almost 18 million cases and subsequently lost almost all of their share to can packages. Draft, on the other hand, continues to hold a 10 share of the market, losing only about 1.2 million case equivalents (CEs). The shift between can and bottle packages in the marketplace was seen in both import (+18%) and domestic (+1.1%) volumes. Clearly, the can package has managed to break into the high-end beer business where glass has traditionally had a hold for both craft and imported beers. Craft beer’s expansion into more channels from convenience to airlines over the past few years also has helped increase can packages share of total business.

The conundrum for the beer industry is draft beer. Despite significant growth in brewpubs, taprooms and festivals driven by smaller brewers with a heavy draft mix, the total share of draft beer continues to be stuck at around 10 percent share of market and actually declined in 2014.

The graph above shows draft beer share grew from 9 percent in early 2005 to more than 10 percent in 2011; however, share growth slowed from 2011 to 2014 despite significant growth in the number of small brewers and brewpubs.

In fact, the volume of draft beer shipped in 2014 at 287 million case equivalents is about the same volume that was sold back in 1954 at 255 million cases.

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Read the original press release from the NBWA: here.
Read the BA's report on 'craft' beer in 2014: here.
^* What's a CE? That, and other beer volumes: here.
Caveat lector: I am representative for Select Wines, Inc. —a beer and wine distributor in northern Virginia (which is a member of the NBWA). Any opinions here are mine alone.