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Oct 01, 2014

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Craft beer sales surge

Two reports both indicate small brewers' growth rate exceeds that of larger domestics

Mar 21, 2003 - U.S. craft beers sales increased again in 2002, according to figured compiled both by the Association of Brewers and by the Brewers' Association of America. The two organizations do not collect data from exactly the same breweries, nor to they compile the information in exactly the same way — but both clearly show that craft beer sales are growing faster than overall domestic beer sales.

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Growth was 3.4% in 2002, according to the Association of Brewers. It marked the 23rd consecutive year of increasing sales since the AOB, a trade association for the U.S. craft beer industry, began tracking the industry in 1980.

The Brewers' Association of America said that its Small Brewer's Growth Index was up nearly 11% from 2002, following a 9.7% increases in 2001, when the BAA — a trade association for small brewers — began its index.

"Once again small brewery owners have demonstrated the strength of their segment of the domestic beer industry," said Daniel Bradford, president of the BAA. "For almost three decades domestic small breweries have paved new roads for the brewing industry. Their annual growth figure, the SBGI '02, shows their continuing strength."

"The continued growth trend really speaks to the stability of craft beer in a variety of economic environments it has experienced," said Paul Gatza, the director of the Institute for Brewing Studies, a division of the Association of Brewers. "The quality and diversity of American beer has never been better. It's exciting to think about what tomorrow will bring."

- The AOB totaled production data, brewery openings and closings and transition data from more than 900 of the 1,409 craft breweries it reported operating in 2002. Their production represents 83% of the craft beer industry's total volume. The remaining 17% of the unreported data was extrapolated using 2001 data, first hand knowledge and allowing for average industry growth.

The craft beer industry produced more than 6.4 million barrels of craft beer in 2002. One barrel equals 31 U.S. gallons (13.78 cases). Volume was up 216,688 barrels, which amounts to almost 3 million cases. Total U.S. craft beer industry annual retail sales value for 2002 reached more than $3.8 billion.

Strongest growth was by contract brewers, with production growing 13.5% to 1.17 million barrels. This growth of contract brewing companies is attributed to successful new product rollouts as well as industry members working together to solve capacity issues, such as when demand exceeds production capacity or when a brewpub has successful enough products that there is demand for bottled sales off-premise.

Overall, regional specialty breweries (with production between 15,000 barrels and 2 million) sold 59.8% of craft beers, contract breweries 18.2%, microbreweries (those smaller than 15,000) 11.8%, and brewpubs 10.2%.

- The BAA figures showed that its 50 largest breweries recorded 14.1% growth, indicating the enduring strength of the larger small breweries.

"This small part of the beer industry continues to demonstrate it's strength," said Kim Jordan, BAA Chair and president of New Belgium Brewing Co., one of the fastest growing top 50 breweries. "My fellow brewery owners are deservedly pleased with these results."

Among breweries producing more than 20,000 barrels, the growth rate was almost as high.

"Although we are in the shadow of the world's largest breweries, we have a market that wants our types of beers," said Steve Hindy of Brooklyn Brewery. "Our brewery, like hundreds of other domestic breweries, continues to expand."


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