Craft Brewers are Beating Big Beer

Craft  Beer and Big Beer On-Premise Trends

After years of depressing declines in sales, the beer industry could really use some good news. Unfortunately, big beer continues to sag on-premise.

Beer volume declines on-premise slowed slightly in October but the category continued to lose share to wines and spirits, depicts the latest figures from research firm GuestMetrics.

In bars and restaurants, volume sales of beer fell by three percent in the four weeks leading up to November 2, according to GuestMetrics. The performance was better than the 3.5 percent decline year-to-date, but beer lost 0.7 points of share of alcohol beverage servings in the four week period as wine volumes fell 1.1 percent and spirits volumes were flat.

Beer has lost 0.8 points of share in the year so far, according to GuestMetrics. Within the category, Premium Light was down 1.8 points, slightly better than the two point share loss during the first half of this year. Craft gained 1.3 points of share, below levels from earlier this year, while IPA’s gained 1.7 points of share and cider gained 0.7 share points.

However, there’s a wide-open market for craft brewers among younger Hispanics, according to Danny Brager, senior vice president of beverage alcohol practice at Nielsen, who spoke recently on a conference call to Brewer’s Association members.

Millennials, drinkers between the age of 21 and 34, already consume more than a third of overall craft volume. But the numbers don’t play out the same among self-identified Hispanic Millennials. This is especially important as the median age of Hispanics 21 or older in the U.S. is 28, according to Nielsen; among non-Hispanics, the median age is 42.

Hispanic millennials are more likely to have a college education than the generations that preceded them, which generally leads to higher income, one of the important characteristics of craft beer drinkers.

“Addressing the gap on Hispanics in particular could be imperative as the face of America changes and changes quickly,” says Brager.

While Hispanic consumers are relentlessly targeted by major brewers, if craft brewers can successfully attract even a portion of the growing demographic, on-premise operators will likely need to follow their lead.

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