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Shipments Ahead of Scans, On-Premise Trends Going into Summer Selling Season; Skewed #s

Total US beer shipments up 1%+ in available data thru May, far better than on-premise and off-premise trends thru Jun suggest. True track for 2016 still murky. Domestic and import shipments for May didn't change yr-to-date picture much. And holiday timing continues to skew off-premise trends. Here's what we know: Domestic taxpaid shipments off slightly in May, -41K bbls, 0.3%, estimates Beer Inst economist Michael Uhrich. So yr-to-date domestic trend up just 64K bbls, 0.1%. But imports still rockin' thanks to Mexican momentum; import shipments +306K bbls, 10.5% in May; jumped 1 mil+ bbls, 7.8% for 5 mos. Put 'em together and 5-mo US shipments +1.1 mil bbls, 1.3%, a bit softer if you include cider dropoff. That ain't bad. But one caution. New "purchasers' index" prepared by NBWA economist Lester Jones based on surveys of distribs show notable dropoff in "beer orders" in May-Jun vs same period last yr. That suggests an inventory build in this period.

At retail, Nielsen all outlet + convenience data shows volume up 0.5% yr-to-date thru Jul 2. Recall, that trend flat thru May 28 going into Memorial Day, which fell later this yr. Volume got big lift, then sagged for 4 wks thru Jul 2. (Same period last yr went thru Jul 4.) So now, it's Jul 4 timing throwin' off short-term numbers, as happened with Memorial Day, Easter, Leap Day and Super Bowl. Never before have timing issues skewed trends so much. Comin' up next: Jul has 2 less distrib selling days, which bodes ill for this month. On-premise remains weak. Beer volume -5.2% thru Jun 30, sez GuestMetrics. Even if taproom biz not tracked by GM still gainin' ground, on-premise still tuff.


Craft Up 8% in 1st Half, Estimates BA Economist Bart Watson; Tail Still Smokin’, Newbies Still Comin’

As scan data shows significant craft slowdown so far this yr and several biggest players flat-to-down in first half, craft segment as defined by BA posted 8% growth Jan-Jun, estimates Bart Watson. Craft scored double-digit gains each of last 6 calendar yrs. Elusive craft definition complicates reported trends. Bart’s growth estimate based on brewers that will be in BA-data set in 2016. That excludes fast-growers Lagunitas and Ballast Point (Founders already out), as they’re not BA-defined craft brewers anymore. Another fast-grower, AB’s Goose Island, ain’t in the number either. Trend would be higher with ’em.

Recall, BA does not include big brewers’ craft brands/acquisitions, nor Craft Brew Alliance. But BA does include Yuengling, which softens trend. So do first-half downturns at Boston, Sierra Nevada and a coupla other big craft brewers. But “long tail of craft continues to smoke,” sez Bart, “there's very little evidence of much of a slowdown there.” Tail and newbies adding incremental and oft-missed on-site/taproom volume not measured by other data services.

Speakin’ of newbies, no slowdown in folks entering the biz. A whoppin’ 917 new operating brewers in US since same time last yr and brewer count now sits at 4,656. Oh yeah, there’s another 2,200 in planning, sez BA. Bart calls this a “maturing” market. Be interesting how aging breweries adapt and how many newbies survive/thrive.