2017 Consumer Beer Sales Analysis

For the beer industry, 2017 was a year of shifting power rather than large-scale growth or declines across the board. Total dollar sales came in at a little more than $34 billion, up 1.2 percent from the previous year, while total volume sales were down 0.4 percent. Our 2017 consumer beer sales analysis provides a pretty clear picture of where the industry is headed, including styles and trends. The key takeaways? People are buying less beer, but they’re spending more for it — and three categories are driving the increase in dollar sales.

The data we’ve examined comes from IRI Worldwide, a market research firm that tracks category-wide sales trends of beer sold in numerous retail outlets and then produces a monthly report of its findings. These findings can be used to provide real-time insight into the ever-changing beer marketplace, both craft and macro. They can also help industry participants adapt to the marketplace, and help you make more informed choices as a consumer. To save you the spreadsheet trawling, we’ve pieced together the most important changes in beer sales over the year of 2017 and will compare them to the prior year. 

Before we dive in, here are a few things to keep in mind – these numbers are on an international scale and may not represent individual brewery or regional sales accurately. The numbers also do not draw a hard line between beer styles within certain categories, which could mask sales trends of smaller brewers. They track sales of packaged beer only and from a few different sources, including convenience stores (think gas stations), a general “food” category (grocery stores, etc.), and a combined multi-outlet and convenience (MULC) store category (a combination of grocery, drug, Wal-Marts/Sam’s Clubs, dollar stores and military stores, among others). We will focus on the MULC category. While not all-encompassing, it’s a great, well-rounded resource.

The relatively flat growth in 2017 isn’t exactly news – craft beer has been taking big bites out of domestic beer sales for years, while evangelizing the merits of quality over quantity. What’s more interesting is which beer categories account for the increase in dollar sales. Hint: craft beer is no longer the most powerful vehicle of change, at least on paper. 

Three beer categories saw an increase in dollar sales this year: Imports, Craft and Domestic Super-Premium (crafty macro beer). Of these three, Imports accounted for over $6.5 billion in dollar sales, or about 19 percent dollar share, which is an increase of 8.4 percent from the previous year.

The Import category’s success has been propelled by Mexican beer, which comprised over 70 percent of total import sales. For comparison, the Import category saw $506 million dollars of sales growth, and the Mexican beer sub-category grew by $492 million. While the proximity, accessibility and cultural ties of Mexican beer to America have long bolstered sales, this still translates to 12 percent sales growth for the year, and an increase of 2 percent in its import dollar share. 

The Craft and Domestic Super-Premium categories combine for roughly the same amount of dollar share as imports, ringing in at 11.8 and 7.4 percent dollar share respectively. Craft sales for 2017 came in at around $4 billion, while Domestic-Super Premium landed around $2.5 billion, but the latter saw a double-digit dollar sales increase of 11.3 percent, compared to a 5.6 percent increase from Craft. 

This is really one of the year’s defining factors: craft beer sales have slowed, while the crafty offerings from macro brewers have really jumped. Big beer has successfully blurred the line of demarcation for all but the most diehard, discerning drinker. For most – if it tastes good, who cares where it’s from?

This becomes far clearer when we compare sales numbers from the biggest SKUs of Craft and Domestic Super-Premium.

Sierra Nevada Pale Ale’s dollar sales are down 8.1 percent; almost $10 million. Blue Moon’s, on the other hand, grew by 6.8 percent, increasing sales by more than $17 million. New Belgium’s Fat Tire sales are down by 10.6 percent, a dollar sales loss of more than $9 million compared to 2016. Likewise, Sam Adams’ Boston Lager is down more than 11 percent, dropping by about $9 million.

The list goes on. Meanwhile, Goose Island IPA is up 29 percent, and Elysian’s Space Dust IPA has skyrocketed up 224 percent. How can this be? There are a couple factors to consider.

One, IPAs are still a thunderous, dominant style and category of beer. Compared to other beer styles, the IPA category grew by 16 percent in 2017, increased its sales by more than $176 million, and brought its dollar share to more than 30 percent, with the next closest category in IRI’s eyes being the catch-all “Seasonals” at 14 percent. IPAs are a household name, and not just for craft enthusiasts.

Sales of a beer such as Founders All Day IPA, somewhat of an outlier in its singular growth, further delineate this point: All Day IPA is up 47 percent, and grew its dollar sales by more than $15 million.

But sheer popularity of the style doesn’t tell the whole story, and doesn’t explain why some brands are outstripping others to such a degree. It comes down to distribution. Brands that are backed with big-time resources and infrastructure are pushing out the “littler guys” like Sam Adams and Sierra Nevada. When you’re competing with Elysian, which is owned by AB InBev, you might as well be competing with Bud Light – at least when it comes to ability to occupy tap and shelf space.

This year was a year of consolidation of power on retail shelves: the bargaining power of AB InBev, MillerCoors, Heineken and others has manifested in more shelf space for Domestic Super-Premium offerings and less for local and regional craft. And from the retail perspective, why shouldn’t it? Again, the Domestic Supers can beat craft on pricing while matching its high margins. 

Really, the only loser is the craft industry, or if you’re a diehard fan of craft, the consumer. For true craft to compete with Domestic Super-Premiums, we can expect more “independent consolidation,” or sales of big names to third parties, like Ballast Point’s sale to Constellation Brands, which has spurred huge success.

Shifting gears, let’s take a look at styles that fared well – and those that did not – within the Craft category of total beer sales. In general, these shifts are subject to greater fluctuation, as sales from just a few brands can have a large influence on a category. 

Aside from IPAs, Golden Ales had a good year, increasing dollar sales by about 39 percent for a total of about $140 million. Stouts grew a hearty 12 percent, adding up to about $70 million in sales, and the “Other Pale Lagers” category grew by more than 25 percent, totaling about $75 million in sales for 2017.

Conversely, Amber Ale had a rough year, dropping 9.3 percent and losing about $14 million in dollar sales. Amber Lager followed suit, dropping about 6 percent and declining in dollar sales by about $8 million. Most other styles remained relatively stagnant.

Zooming out to consider entire beer categories and segments, Cider saw a 3 percent decline in sales, accounting for a dollar sales loss of more than $12.5 million. Similarly, the Flavored Malt Beverages category dropped by 3.5 percent for a total loss of about $77 million. The latter category is one subject to high rates of fluctuation due to more trend-based sales, often propelled through marketing pushes. For instance, Small Town Brewery’s Not Your Father’s Root Beer sales are down over 60 percent from 2016, and dollar sales have plummeted by $50 million. These losses are compounded by rapid market saturation, as these trends bloom quickly, and hot sales are quickly dispersed among multiple channels. AB InBev’s copycat Best Damn Root Beer sales are also down 60 percent.

For AB, sales of both Bud Light and Budweiser dropped more than 5 percent, while its Michelob Ultra performed admirably, seeing an increase of 23.6 percent and bringing total sales to $1.6 billion. Bud Light still remains the top-selling beer in the U.S., clocking in at $5.6 billion in dollar sales. 

Across its entire portfolio, AB InBev’s sales dropped by 1.2 percent ($187 million), for a total of $14.9 billion, while the MillerCoors portfolio posted a decline of 1.4 percent, bringing total sales down to $7.7 billion. 

Though a distant competitor in dollar share, Pabst Brewing Company’s portfolio of beers also had a rough year in 2017, with dollar sales decreasing 9 percent, down to $564 million.
If awards were to be given out, Constellation Brands would take home the 2017 Beer Sales Title. The company was the only manufacturer to see double-digit growth in dollar sales (14.1 percent) and volume sales (12.5 percent), clocking in at just under $4 billion in total sales. Its portfolio includes top imports such as Modelo and Corona, along with acquisitions Ballast Point and Funky Buddha.

Honorable mentions would also be given out to many of the larger but not-quite-conglomerate-level brewing operations, which saw almost uniform growth in dollar sales. Bell’s Brewery Inc., Stone Brewing Co., Sweetwater Brewing Company LLC, Firestone Walker Brewing Co., Dogfish Head Craft Brewery, New Glarus Brewing Co. and Artisanal Brewing Ventures all saw between 10 and 20 percent growth in 2017. 

Founders Brewing Co. also gets a trophy for increasing total dollar sales by 42.6 percent, for a total of around $79 million. These numbers are largely attributable to the phenomenal growth of All Day IPA, which accounted for more than half of Founders’ total sales. 

The unwritten tale of the tape here is the effect that craft beer has had on the perceived value of domestic beer, and vicariously, imports. As consumer interest shifts away from the standard macros of old, we find a new battleground based not so much on what is being offered, as any emergent trend will rapidly be duplicated and saturated, but how it is being delivered. Distribution infrastructure and (to a lesser degree) marketing will dictate sales. And it doesn’t hurt to be backed by a multi-billion-dollar empire. 

Booms and busts are an inevitable element of any large industry. Though 2017 saw many stalwart brands decline in sales or remain stagnant, it’s important to factor in that overall, beer is thriving. The bubble isn’t bursting so much as being blown about by the winds of big business and consumerism, and taking a new shape.