Craft Brews Jumping

The Brewers Association, which tabulates industry growth data for U.S. breweries, announced that today’s small independent craft brewers are gaining alcohol market share due to a shift toward full flavor beer and increased support for local breweries.

From 2007 to 2008, estimated sales by craft brewers were up 5.8% by volume and 10.5% in dollars. Overall share of the beer category from craft brewers was 4% of production and 6.3% of retail sales. More than 1 million new barrels of beer were sold in 2008, and close to half were beer from craft brewers.

“Overall, 2008 was an historic year for beer with the large brewers consolidating and imports losing share, while the top ten selling beer brands dropped in sales. At the same time, small independent craft brewers continued to gain share and attention,” said Paul Gatza, Director of the Brewers Association.

With total U.S. beer being more than a $100 billion industry, the Brewers Association estimates the actual dollar sales from craft brewers in 2008 were $6.34 billion, up from $5.74 billion in 2007. Taxable barrels of the total beer alcohol category were 1,210,018 more in 2008 with craft brewers producing 473,364 of those barrels. Total craft brewer barrels for 2008 was 8,596,971, up from 8,123,607 barrels in 2007.

Beer’s popularity as America’s favorite fermented beverage continued in 2008 with Gallup stating “beer is back to a double-digit lead over wine.” Taking into account the challenges in today’s economy, BevincoNielsen released a survey showing beer was faring better than spirits, with wine lagging. The Brewers Association emphasized trading across from wine and spirits to beer continues, with some of today’s wine drinkers discovering the affordable enjoyment and rewards of craft beer.

These increases in share and barrels for craft brewers come at a time when, according to the Brewers Association, the cost of operating a small brewery increased over 39% from November 2007 to November 2008. The Brewers Association states that today’s craft brewers face many challenges including:
* Access to ingredients and raw materials. * Increased pricing for materials and supplies. * Access to market (competition for shelf space at the retail level).

A more extensive analysis will be released April 22 during the Craft Brewers Conference in Boston.

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