Craft Beer Keeps Climbing

Beer

Craft beer continues its steady climb in the US, and within a week of a positive update on the state of the craft biz from its trade association, Big Beer’s A-B InBev reported business heading in a different direction.

The craft brewing industry has continued a strong pace of growth in the first half of 2015, according to new mid-year data released by the Brewers Association (BA)—the not-for-profit trade association dedicated to small and independent American craft brewers. American craft beer production volume increased 16 percent during the first half of the year.

From January through the end of June 2015, approximately 12.2 million barrels of beer were sold by craft brewers, up from 10.6 million barrels during the first half of 2014.

“Industry growth is occurring in all regions and stemming from a mix of sources including various retail settings and a variety of unique brewery business models,” said Bart Watson, chief economist, Brewers Association. “The continued growth of small and independent brewers illustrates that additional market opportunities and demand are prevalent, although competition in the sector is certainly growing and the need for brewers to differentiate.”

As of June 30, 2015, 3,739 breweries were operating in the U.S, an increase of 699 breweries over the same time period the previous year. Additionally, there were 1,755 breweries in planning. While this year’s first half increase is less than 2014, when craft brewers boomed 2.9 million barrels year to year, it is still greater than the two previous years’ performance, when each increase was just under a million barrels.

Meanwhile, Anheuser-Busch InBev said its net profit fell in the second quarter, as did revenues. The brewer attributed the decline to poor weather and weak economic conditions in a number of key markets, as well as a tough comparison with a year-earlier period that included the soccer World Cup in Brazil.

The brewer's performance in the U.S., which accounted for around a third of total revenue last year, continues to weigh on profit. Several of its flagship brands, including Budweiser and Bud Light, are still losing market share here, as the brewer has been struggling for years to adjust to changing tastes as American consumers increasingly favor craft beers over their mass-market lagers.

"In the U.S., the high-end segment is growing faster than the overall" beer market, Felipe Dutra, Anheuser-Busch InBev's chief financial officer, told reporters on a conference call. He said the brewer has around 16 percent of the premium U.S. beer market, which is "materially lower" than its roughly 48 percent share of the wider U.S. market.