All the talk about beer the past several weeks has been about the pending mega-merger between AB InBev and SAB Miller, a joining that will create an international beer behemoth. But while mergers may drive out costs, consolidate portfolios and streamline the distribution system (simultaneously pleasing Wall Street), changing consumer taste is still the most dynamic factor in the way beer is made, sold and consumed.
According to research firm Technomic's recently released 2015 BeerTAB Report, beer remains the most frequently consumed beverage alcohol type and is still by far the largest adult beverage industry. However, ongoing declines in per capita consumption in most of the developed world along with a booming interest in small brewer output has most major brewers concerned.
In the US, the overall beer industry grew slightly in 2014 (0.4%), an improvement over 2013. Category performance within the industry tells the real tale, as craft and imported beers showed the growth, and most tellingly for on-premise operators, consumers were more engaged with the category at retail than at on-premise locations.
And while import growth is good news for the brewers, a deeper look suggests only some are buoyed by the trend. For example, of the 50 fastest growing beers, 10 were imports but seven of those were made in Mexico.
The big story, once again, is craft beers. The sub-category maintained its year-after-year, double-digit growth trend, up 14 percent in volume in 2014, marking at least 5 consecutive years of double-digit increases.
Domestic light beer, still dominant, is expected to fall below the 50% of volume it has long exceeded, projected to account for just 46.6% of volume by the end of 2015. Imported and craft beer are expected to continue nibbling away, especially on-premise. Projections for 2015 suggest imported beer will hit 15%, the old standbys from premium domestic falling to just under 10% and craft edging closer to parity at 9 percent.
While choice and taste clearly matter, cost is still important: 37% of consumers claim that cost is still the most important factor when determining what to drink, no matter where they buy: at a retail store, or in a restaurant or bar.
For information about Technomic’s 2015 Beer TAB, contact Bart Henyan, bhenyan@technomic.com.