According to GuestMetrics, the third quarter wasn’t great for alcohol on-premise sales. In fact, the West Coast food and beverage data company said Q3 2013 was the weakest of the year thus far for all three of the alcohol categories, and the fourth quarter is likely off to a poor start as well. Despite the beer drinking slowdown overall, craft beer consumption increased.
First the overall stats: On-premise beer volumes were down 5.2 percent for the four-week period ending Oct. 6. This compares to volumes down 3.7 percent year-to-date (YTD). In the most recent four weeks, beer lost 50 basis points (bps) of share of total alcoholic beverages, in line with the 50 basis point share loss YTD. Wine share is up 30bps and spirits share is up 20bps. From a value stand point, beer share is down 40bps while wine share is flat (due to lower price increases) and spirits value share is up 40bps.
GuestMetrics said beer volumes in bars/clubs have been particularly difficult, declining 8.1 percent in the most recent four weeks vs. -4.7 percent YTD. Beer is losing the largest y/y share of alcohol mix in bars/clubs, down 80 basis points year-to-date. Beer volumes in casual dining are down 5.3 percent in the latest four weeks vs. -4.1 percent in YTD, and beer is losing 30 basis points market share YTD. In fine dining, beer volumes are down 1.5 percent in the latest four weeks vs. -0.8 percent year-to-date and is losing 40 basis points market share YTD.
The Premium Light category has had a difficult year, going from -10 percent in Q1 to -9 percent in Q2 to -12 percent in Q3. Premium Regular volumes were -6 percent during the first half of the year, but decelerated to -8 percent in Q3, and imports have been down mid-single digits for most of the year.
Now the craft news: The only two beer segments with positive volume growth in third quarter compared to the prior year are craft at +3.4 percent and cider at +52 percent. GuestMetrics said both are growing significantly slower than in off-premise due to the overall traffic declines in on-premise, as well as the higher share base both enjoy in the on-premise vs. off-premise.
Despite the moderating volume growth in craft, its year-over-year gain in beer volume share has steadily increased throughout the year, from 150 basis points in the first quarter to 170 basis points in the second quarter to 190 basis points in the third quarter. Cider has gained about 40-50 basis points of y/y share during each of the quarters, while imports lost 70 basis points in Q1, 60 basis points in Q2, and only 40 basis points in Q3.
From a style standpoint, IPA continues to gain the most share (up 110 bps) along with Bitter Ale (up 40 bps), and Belgian Wit Ale (up 30 bps) and the seasonal Pumpkin/Fruit (up 60 bps).
In the latest four weeks, the brands with the greatest share gains are Angry Orchard, Redds Apple Ale, Lagunitas IPA and Dos Equis. Brands gaining the greatest gains in distribution in the latest four weeks (percentage of locations carrying) are Angry Orchard, Redds Apple Ale, Bud Black Crown, Goose Island, Lagunitas and Third Shift.