Micros Horning In On Majors' Market Share

Brooklyn Lager Last year was something of a watershed for the $100 billion-plus U.S. beer business. The year saw historical consolidations like Anheuser-Busch's absorption by the InBev combine.

But it was also a year where those whimsical brands with names like "Dogfish," "Magic Hat" and "He'brew" began nibbling away in earnest at the majors' market share in suds.

That's one of the conclusions from the Brewers Association, a Boulder, Colo.-based industry group. The organization, which keeps "taps" on industry growth for U.S. breweries, said that a review of 2008 data shows that independent craft brewers--brewers ranging from microbreweries to larger regional brewers with annual volume under 2 million barrels--are growing share because consumers now want full-flavor beer and have a growing penchant for local breweries like Brooklyn Beer, for those of us on the wrong side of the Brooklyn Bridge.



The group says between 2007 and 2008, craft-brew sales grew 5.8% by volume and 10.5% in dollars, while overall share of the beer category from craft brewers was 4% percent of production and 6.3% of retail sales. Of the more than 1 million new barrels of beer sold last year, close to half were from craft brands. By contrast, import brands saw sales drop 3.4% and the big domestic brands experienced a slight uptick in sales.

The association says there were 1,483 craft breweries in the U.S. in 2008--up from 1,420 in 2007--and domestic craft beer sales increased from around 8.1 million barrels in 2007 to around 8.6 million last year. The association says craft brewers sold $6.34 billion worth of brew last year, up from $5.74 billion in 2007. The firm also says that beer is back to its traditional double-digit lead over wine in the U.S.

Paul Gatza, director of the Brewers Association, says the majority of share for craft is coming from imports--"particularly where people would, in years past, buy an import for special occasions; but crafts have caught up to and exceeded imports in perception of quality," he says.

Also, he says, while both craft and imports have gained in shelf space, the imports have benefited from distribution rights through major U.S. brewers like MillerCoors and Anheuser-Busch.

And those brewers, cognizant of the growing popularity of craft beers, have been aggressively marketing their own lines of premium craft brands, such as Budweiser's American Ale and Michelob, which has been remade as a multi-style craft brand, and MillerCoor's Blue Moon and Henry Weinhardt Private Reserve.

Says Gatza: "I think to some degree, imports may have been losing to the super-premium beers of large brewers, but I think that in general craft is taking share from them." He said that import brands, including marques like Stella Artois and Peroni, had their first down years since 1991.

Craft beers are also benefiting from new cost-consciousness among restaurant patrons. "People are still going to restaurants, but they are spending less while they are there, so they are less likely to buy that bottle of wine and more likely to buy a craft beer for a fraction of the cost."

As for the major breweries' offerings, Gatza thinks that labels like American Ale will serve as gateway brands to smaller craft beers. "I don't really know what is going to happen but I do believe that one of the reasons people are attracted to craft brews is that they are small, authentic, and to a lot of beer drinkers out there, that's very important," he says.

Next story loading loading..