Fewer Barrels Roll, But 2019 Dollar Sales Increase

Transcript:Fewer Barrels Roll, But 2019 Dollar Sales Increase:
Fewer Barrels Roll, But 2019 Dollar Sales Increase Starting with the good news: The market research firm IRI reported off-premise beer dollar sales increased 5.2% to $37.2 billion for the 52 weeks ending 12/29/19. These included multi-outlet and convenience stores (grocery, drug, mass-merchandisers and military). The overall increase was attributed to increased sales in the seven segments of the larger beer category: imports, domestic sub-premiums, craft, flavored malt beverages (FMBs), domestic super premiums, non-alcoholic and assorted. The bad news is total 2019 beer shipments (165,499,000) as measured by barrels was 0.8% less than 2018, and the decrease was only that small because November and December 2019 shipments increased YOY, 0.9% and 4.7%, respectively. Coronavirus Impacts On-Premise and Off-Premise Sales Differently With most states ordering the closing of on-premise establishments, such as bars, restaurants, etc., the spigot for beer (and all alcohol and food) has stopped entirely. On-premise represents approximately 20% of the annual total US beer volume. As indicated above, the off-premise sector did well during 2019, but it has been doing even better during the coronavirus outbreak. Nielsen data reveals total beer sales increased 14% for the week ending 3/14/20, as customers were increasing their stock of 24-can packs. According to a March 2020 survey from the Brewers Association, 90.9% of craft beer breweries said their businesses had been severely impacted because of the closure of their taprooms, which accounts for approximately one-third of all production volume. Traditional Domestic Brands Battle Growing Competition As the beer market continues to fragment, and with the increasing popularity of craft, hard seltzer and FMB brands, total dollar sales for the domestic premium beer segment decreased 3.1%, and case sales 4.1%, for the 52 weeks ending 12/29/19. Total dollar sales were better for the sub-premium segment, increasing 1.2%, but case sales decreased -0.7%. Conversely, total dollar sales for the domestic super-premium segment increased 13.3%, and case sales +12.4%, during the same period. To combat the fragmentation of the beer market, the major companies are trying to diversify into more popular alcoholic beverages, which has resulted in them damaging their traditional brands’ growth. Imports Remain Very Popular Dollar sales for the import-beer segment increased 6.1%, and case sales 4.3%, for the 52 weeks ending 12/29/19. Industry analysts expect the segment to increase sales through 2025 and at a higher rate than the total beer market. The varying styles and flavors that reflect where they