Beer Marketer’s INSIGHTS:
Craft brewers and small brewers continue to change the beer game in the US. Last week was really a case of the tail wagging the dog. News came fast and furious on heels of Great American Beer Festival, biggest consumer craft event of the yr by far. Some GABF numbers are staggering: 49,000 attendees who scarfed up all the tickets in about 20 minutes, 624 brewers pouring 3100 brands. There were even 460 journalists, for crying out loud.
On Oct 14, New Belgium announced its new distrib network in OH, with a twist that is already causing lotsa ripples and rumbles around the industry (see below). It sought and got big upfront payments of 3x GP or $18 per case. NBB expects to sell near 1 mil cases in OH and over 1 mil in Fla, plus it has already entered several other states in 2013. And its numbers looking strong these days, including 22% gain for 4 weeks thru Oct 6 in IRI multi-channel, 16% for 13 weeks. That’s before Fla even really kicks in, let alone OH.
Very few new suppliers in a state have more initial impact than NBB. But Yuengling is one. So it was big news that Yuengling will be entering Mass next spring, its first new state since, you guessed it, OH in late 2011. Yuengling initially hit OH with great force, getting share into double digits. That has pulled back to under 5. But even if Yuengling averages only what it’s got in most of recent intros, about 3 share, that would mean it will grab another approx 500,000 bbls, as it enters New England and LA, MS and KY in Southeast over next 18 mos or so. That’s another 0.2-0.3 share of entire US industry, likely largely taken from Big 2 and another headache that AB and MC don’t need.
More craft consolidation long forecast, and latest deal “will be a catalyst for some people” said consultant Rob Klugman (longtime beer M&A guy who’s on board of Boulevard adviser First Beverages) following announcement of biggest-ever craft deal and first over $100 mil. Belgian brewer Duvel Moortgat will buy midwest’s biggest craft brewer Boulevard for $110-120 mil, we understand. DM adds big time to its craft presence in US; it already owned NY’s Ommegang and had import arm. Purchase price far higher than earlier Goose Island, Pyramid, IBU, Kona, Anchor deals. All in, Duvel’s import/craft portfolio will be about 260K bbls this yr and it intends to invest to expand brands, export and more.
Amidst all of this, craft sales remain strong. Latest scanner data shows craft up 17.6% for 4 wks thru Oct 6 in IRI multi-channel + c-store data. That’s bang on with yr-to-date trend of +16.4%. So even in a down industry, craft continues its strong double digit growth. Likely will end 2013 near 16 mil bbls, up almost 7 mil bbls, 75% in last 5 yrs even as total beer biz dropped about 10 mil bbls. That’s a growth engine.