“2022 is going to be a make-or-break year for many breweries,” said Bart Watson, Brewers Association economist. It was a sentence that stuck out in an April press conference focused on the BA releasing its Top 50 biggest craft brewers in America list. 2022 is shaping up to be a make-or-break year for a lot of folks — not just brewers — but at least the overall beer market grew by 1 percent in 2021. Craft brewers collectively produced 24.8 million bbls of beer and realized 8 percent growth in 2021, increasing craft’s overall beer market share by volume to 13.1 percent, up from 12.2 percent the previous year. Of course, sales were being lifted by the easing of the pandemic, the welcome return of at-the-brewery traffic and draught beer. But overall, 2021 production levels still lagged 2019, which meant breweries remained in recovery mode.
2022 continues to challenge brewers and beer professionals — inflation, supply chain gaps, pricing problems, increased competition from both brewers and other alcohol categories and ever onward. The make-or-break momentum might hinge on whether your brewery’s focus is at retail scan or on-premise sales. Watson recently released a teaser to the BA’s upcoming 2022 midyear beer market overview, which will be discussed later this month. You need to be a member to access both, so I highly suggest you member up right here. From Watson:
To frame the data in some context, total beer volume sales were down 6.5% in the first half of the year, and dollar sales down 2.0% versus a year ago (IRI Group, total U.S., multi outlet with convenience (MULO+C) +total liquor). This shouldn’t be overly shocking given that, A) the comps for packaged sales in the first half of 2021 were clearly still elevated (10% above 2019 by volume and 20% in dollar sales), and B) the on-premise in the first half of 2022 was much stronger than the first half of 2021.
Even with this optimistic outlook, retail chain packaged product in particular has been a problem spot for craft beer. Scan continued to struggle in the first part of 2022 (down less than 1 percent), which isn’t surprising when you consider craft beer (we’re using the BA’s definition here) has struggled at scan for a while now. “Chain packaged independent craft hasn’t grown over the past three years,” noted Watson in his report, and don’t get your hopes up:
And with ready to drink (RTD) spirits and a variety of other fourth category products coming for craft’s shelf space, it’s hard to see a lot of momentum for changing that trend anytime soon.
What’s the good news about the first half of 2022? On premise and draught beer, maybe? With the retail shelves so busy, craft brewers can perhaps recoup with a channel shift to draught and on-premise product. There’s not enough info yet, but I’ll encourage brewers to take this BA survey, which will provide even more data into this scenario. From Watson:
We have a few hints from other data sources, such as retail census data, that shows foodservice and drinking places sales up 15% in real terms versus last year (24% before controlling for inflation). Similarly, Open Table reservations were only 6.2% below 2019 in the first half of 2022, versus 30.5% below 2019 levels in the first half of 2021.
That’s encouraging. Watson has argued in the past that it might be good for many breweries that craft is dropping in scan because it means people are going out to breweries. There’s no data showing that yet but on July 28 the BA will share its midyear survey results in a member-only BA Collab Hour webinar. We’ll keep you updated on what we hear. Untill then, here’s a quick review of 2021: