Report: IPAs are fastest growing on-premise beer

According to GuestMetrics, IPAs are the fastest growing on-premise beer – and we believe this report makes sense, even though the No.1 beer on the list is out of production.

You know that India pale ales (IPAs) are a craft beer staple, but did you know that it is the fastest growing beer style on-premise at restaurants and bars? Well, it is, according to one restaurant data company.

GuestMetrics LLC collects data from tens of thousands of restaurants and turns that data into regular reports. According to its most recent report, based on POS sales in restaurants and bars, IPAs displayed the strongest growth and market share gains of all the various types of beer in 2012 in the on-premise channel.

Of more than 25 different types of beer classifications GuestMetrics has in its system, IPAs showed 39 percent growth compared to the prior year, and in terms of share of the overall beer category, it also displayed the largest gain at about 55 basis points.

“While IPA is still quite small at just 1 percent of all beers sold in on-premise, our data indicates thus far in 2013, India Pale Ale’s strength has actually picked up some additional strength, growing units at 40 percent compared to the prior year, and achieving around a 70 basis point share gain,” said Bill Pecoriello, chief executive officer of GuestMetrics.

Now, these results may require a grain of salt because, based on its data, GuestMetrics said the IPA brands with the largest share gains last year were Widmer Broken Halo IPA, Lagunitas India Pale Ale, Sierra Nevada Torpedo Extra IPA and Ballast Point Sculpin. Widmer Broken Halo is no longer in production – so there is that. Nevertheless, the info from the company’s report results could generally reflect the broader trends being seen in the industry.

“At the other end of the spectrum are the pale lagers, which are the largest of the different beer types with a 33 percent share of all beers sold.  Pale lagers saw unit sales contract by 5 percent in 2012 compared to the prior year, and as a result, experienced by far the largest share loss at about 170 basis points in 2012,” said Peter Reidhead, vice president of strategy and insights at GuestMetrics. “Additionally, in analyzing the quarter of 2013, the picture does not appear to be improving for pale lagers, with units contracting 6.2 percent against prior year and the share loss accelerating slightly to 180 basis points.”

Based on data from GuestMetrics, the pale lager brands with the largest share loss last year were Miller Lite, Bud Light and Budweiser.

“It’s important for restaurant and bar operators to understand the rapidly changing dynamics in the beer category to ensure their offerings are on-trend and optimize sales and profits,” said Brian Barrett, president of GuestMetrics. “While it’s important to have a balanced offering that includes mainstream beers, the strong growth in India Pale Ale and the other ales should prove to be a positive, particularly given the difference in pricing.  The average ale is priced at $5.62 versus $4.51 for the average lager, and the pricing specifically for an IPA is even more favorable, at $5.88.”