Slow growth is better than no growth, especially for craft beer
There’s plenty of bad news out there, so I am happy to focus on some good news, however minor that good news might seem. A recent report by Draftline Technologies and CGA (the on-premise branch of market research firm NIQ) compared the performance of draft beer at on-premise establishments to packaged beer at those establishments. The study shows that draft beer outperforms packaged beer in on-premise sales. No surprise, if a bar has beer on tap and a reasonable selection of it, that’s what most beer drinkers will choose. The study also shared some happy news for the craft beer segment.
One of the big stories in the post-pandemic beer world involves declining draft beer sales. Craft breweries, for instance, report that it is increasingly difficult to find outlets for their kegged beers. There’s no disputing that. The study states, “After all the challenges of the COVID-19 pandemic, the BevAl [Beverage Alcohol] outlet universe is back in solid growth.”
There are now more places selling beer, so there are more places selling draft beer. The report estimates that there are now 1.5 million draft lines in the US—more than triple the number available in the 1980s. As of March 2024, there were over 300,000 licensed outlets across the US—1.4 percent more than 12 months earlier. More than 99% of these venues are licensed to sell beer, and approximately 180,000 specifically sell draft beer. Sure, 1.4 percent growth isn’t a lot, but we’ll take it at this point.
The draft beer market is particularly important for craft beer. At pubs and bars, patrons are often exposed to new brands and different styles of beer. The taplist at the local taproom is where people explore beer and expand their beer universe. The grocery store, on the other hand, is often where people grab the same familiar, safe beers.
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Craft Draft Rules the Roost
Among the draft offerings, craft beer captures nearly 50 percent of every dollar spent: 47.2 cents of every dollar spent on draft beer is spent on craft beer. Craft beer drinkers might categorize beer into two simple segments: craft beer and non-craft beer. However, the industry has further divided it into the following segments: craft, domestic premium, domestic super-premium, below-premium, and import.
With five segments, it is impressive that craft beer accounts for 47.2 cents of every dollar spent on draft beer. In general, craft beer accounts for about 24 percent of the overall beer market in the USA, but the study shows that it accounts for nearly half of the draft beer sold in the USA. Regarding volume share, craft beer captured 43.4 percent of draft sales, heartily leading the other segments, as illustrated below.
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This study has loads of information to unpack, and I have only touched on one of its key points. The good news is that draft beer is starting to make a comeback, albeit just a trickle at this point. For craft beer, this is particularly good news because where there’s draft beer, there’s craft beer. And where there’s craft beer, it outsells other types of draft beer. You can view and download the complete report here.
