IRI Worldwide is a market research firm which tracks category-wide sales trends of beer sold in numerous retail outlets and then produces a monthly report of its findings. These findings can be used to provide real-time insight into the ever-changing beer marketplace, both craft and macro. They can also help industry participants adapt to the marketplace, and help you make more informed choices as a consumer. To save you the spreadsheet trawling, we’ve pieced together the most important changes in imported beer sales over the year of 2017, and will compare them to the prior year.
Before we begin, here are a few things to keep in mind – these numbers are on an international scale, and may not represent specific countries or regions accurately. The numbers also do not draw a hard line between beer styles in the import category, which could mask growth of smaller brewers which ship their beer stateside. They track sales of packaged beer only, from a few different sources, including convenience stores (think gas stations), a general “food” category (grocery stores, etc.), and a combined multi-outlet and convenience (MULC) store category (a combination of grocery, drug, Wal-Marts/Sam’s Clubs, dollar stores and military stores, among others). We will focus on the MULC category. While not all-encompassing, it’s a great, well-rounded resource.
As a category, 2017 was a great year for imported beer. Total dollar sales grew more than half a billion dollars to a total of over $6.5 billion. That’s 8.4 percent growth. However, it’s important to look at where that growth is coming from.
Unsurprisingly, the year’s import sales were dominated by the Mexican beer sub-category, which comprised over 70 percent of total import sales. For comparison, the import category saw $506 million dollars of sales growth, and the Mexican beer sub-category grew by $492 million. While the proximity, accessibility and cultural ties of Mexican beer to America have long bolstered sales, this still translates to 12 percent sales growth for the year, and an increase of two percent in its import dollar share.
The other star of the import category is Belgium, which grew by 10.4 percent (a sales increase of over $40 million) in 2017, now comprising about 25% of total European import sales. Holland remained stalwart with 1.1 percent growth (increasing sales by $8 million), bringing to about half of total European import sales.
These sub-categories are bringing imports quite close to 20 percent of total US beer sales. This strong growth looks even more favorable when compared to sales of other categories, which saw almost uniform decline aside from Craft and Domestic Super Premium (macro-owned craft).
2017 represents a change in perception for imports and where they rank in the eyes of the consumer. As craft continues to take bites out of domestic sales, imports continue to strengthen their foothold in the US beer market. Their perceived value seems to have risen.
The exceptions to this rule are Germany and the UK.
Germany saw a sharp decline of over $11 million in dollar sales in 2017, bringing its import sales down 10.5 percent and placing it under the $100 million mark ($98 million).
We can attribute this decline largely to the depth which American craft beer has drawn from German beer tradition. Bavarian beer culture, as evidenced by the prevalence of Oktoberfest in America, has been appropriated by American drinkers and brewers, who are now brewing the beer themselves rather than importing it.
If German beer culture can simultaneously learn and adapt from the American brewing way of bolder flavors with more non-Reinheitsgebot flavor additions, we may see some of that share return.
The UK, while comprising around half of Germany’s market share, took an even bigger hit of over $13 million in 2017, dropping its sales 18.5 percent.
It’s also important to factor in the idea that perhaps some international brewers may have lessened interest in the American beer market for personal reasons, either political (trade, international relations) or personal (for example, Germany’s cultural battle of traditional brewing vs. brewing adjuncts).
Canadian imports, which brought in $227 million in 2017, saw a mild decline in sales of 2.4 percent. Similar to Germany, a focus on bigger, bolder and more creative might bolster sales. Canadian brewers might look to distinguish themselves through local ingredients or a renewed focus on what gives their beers a uniquely “Canadian” identity.
For the categories which have seen decline, increasing market viability is certainly more easily said than done, and represents just how competitive the American beer market has become. If you’re not battling big beer, you’re competing with the rugged individuality of American craft.
When combined, import and craft sales ($6.5 and $4 billion respectively) come close to matching sales of domestic premium, or macro beer. And as a singular category, it’s the number two competition. Anyone with stake in imported beer should take heart.
Looking forward to 2018, the big question is: Can imports sustain their growth? Signs point to yes. Despite a $400 billion decline in it’s top selling category, total beer sales grew by 1.2 percent. That tells us that people aren’t buying less beer, they’re just becoming more discerning consumers.
What do discerning consumers gravitate towards? Quality; especially when it it’s backed by a long tradition and a compelling story. Imports outstrip craft in their ability to point to centuries of tradition and authenticity.
We know that Mexican imports are pulling their weight, so for the import category to continue blossoming, growth from smaller import segments are key. The amount which sub-categories such as Asia or Australasia may be able to distinguish themselves in the eyes of the American consumer is greater than Germany or the UK, as these areas have not infiltrated America’s drinking culture to a large enough degree.
In the land of wild, bold, and big, being different is key. If you’re a foreign producer or importer looking to impact the American import segment, dare to be different!