Beer Consumption Trends
There are 10 trends for both traditional and craft beer consumption in the US as identified by 2017 data. The trends were identified from a compilation of industry associations, news outlets, and business and marketing journals.
1. Total beer sales were down 1% in 2017. Overall, fewer consumers were choosing beer as their beverage of choice, whether it is craft or traditional beer.
2. Craft beer sales increased by 5%. While overall sales were down, specialty craft brews saw a growing share of the beer market, gaining a 12.7% market share.
3. Craft beer sales growth rates have slowed down year over year. While still growing, craft breweries are seeing slower growth, and are having to develop new sales strategies. The primary reasons for slowing sales are market saturation and competition at a time when consumers are choosing other alcoholic beverages. However, a slower growth in consumption isn't necessarily worrisome, as it can indicate a stable and maturing market.
4. Consumers between 35-44 years old are not choosing beer when they drink. Instead, this age segment is choosing spirits and wine, which have seen steady sales. In certain markets, these consumers are also choosing legalized marijuana instead of either craft or traditional beer.
5. Millennials are not killing the craft beer industry. In fact, Millennials are driving the growth of the craft beer brands. The lack of unwavering brand loyalty and an adventurous palate makes consumers ages 18-35 much more open to the specialty brew market.
6. Women are drinking more beer, specifically craft beer. Women now represent 32% of craft beer consumption; Hispanic craft beer consumers are also a growing market share. These consumers are attracted to craft beers for the diversity of tastes and flavors that the craft industry provides.
7. Lower alcohol contents are being sought out by consumers. Sampling, festival, and social consumption have driven craft brewers to offer beers with lower alcohol content. As consumers look to make drinking beers a longer social event, they are looking to explore taste with less intoxicating effects. Additionally, beer consumption is happening during the day, when consumers need to be functional after drinking.
8. Lite beer's comeback in the traditional market is slowing. The top 3 traditional beers are all currently a lite beer. However, sales are still declining overall, indicating that while consumers are choosing lite beer, they're still less likely to choose a traditional beer to drink.
9. Smaller packages are more popular among craft beers. Previously, larger growlers were the only sizes available to consumers, which led to product waste due to the higher alcohol content of most craft beers. Additionally, growlers were seen as cost-prohibitive for some consumers. However, the 4-pack with 16 oz cans has been well-received by consumers.
10. Sales are down in the beer industry, but revenues are up as consumers are spending more money on quality product. Premium beer sales rose 9.2%, even as traditional beer sales slowed. In addition to choosing more expensive craft and traditional beers, consumers are also choosing to spend more on experience drinking.
Data on Market Share
While craft beer had a 12.7% market share in 2017, (up from 12.3% in 2016), other domestic beers had a 69.8% market share (136,981,724 bbls/196,278,490 bbls total) with imports accounting for a 17.5% market share in 2017 (34,428,490 bbls/196,278,490 bbls total). The infographic in this report provides craft beer market percentages to 2011.
The craft beer market is still growing, albeit at a slower rate compared to previous years. For example, between 2011-2014, craft beer's market share grew by 5.3%, but from 2014-2017, it grew by only 1.7%. This would put it at a -67.9% growth between the two periods (1.7%-5.3%/5.3%). A slower rate of growth was explained by market saturation, consolidated ownership, and an expected stabilization in supply and demand in several of the sources. The slowing growth rate does not seem to cause concern in the industry, but rather indicates a sustainable and stable consumption.
Lite beer is the top traditional beer seller currently, but it's market share did not grow during 2017; rather, the traditional regular beer market share declined, due to competition from craft beers, spirits, wine, and legalized marijuana, in some markets. From parsing the sources, lite beer is not necessarily attracting more consumers than before, but the consumers that would have chosen traditional beers have instead chosen craft beers, spirits, or wine. The lite beer segment has remained steady because there is not an analogous lite offering from craft beer, wine, or spirits
Both craft and traditional beers are facing competition from wine, spirits, and in some cases, legalized marijuana, leading to changing consumption habits. Consumers are choosing craft beers over traditional beers, and are less brand-loyal and more open to new flavors and experiences. This consumption trend is responsible for the shift in consumer demographics themselves, as women and other non-traditional consumers are choosing unique, flavorful craft beers. Additionally, craft beers allow for more social drinking, as alcohol content can be lower compared to traditional brews. The quality of both the brew and the atmosphere is worth the premium price to consumers as they focus on flavor versus quantity as well.