Craft beer may be toppling top 25 beer brands on-premise share

According to GuestMetrics, the beer, wine and spirits categories have evolved in markedly different manners in the on-premise channel since early 2012, with dramatic differences in growth rates and share changes when analyzing the top 25 brands in each category versus all other brands.

…the trends in the beer and spirits category may be largely reflective of the momentum of the craft brands in each category coupled with the growth driven by innovation…“In analyzing the thousands of unique spirits, beer and wine brands sold in our on-premise system since the beginning of 2012, we see that there are dramatic differences in how the roll-up of the top 25 brands in each category as of the start of 2012 has performed over the course of the last year and a half,” said Bill Pecoriello, chief executive officer of GuestMetrics LLC. “Looking specifically at the beer category, we see that while the top 25 brands at the beginning of 2012 accounted for around 57.5 percent of total beer sales, as of the most recent quarter, those same brands saw their share fall to around 53 percent, for a decline of over four points.

“In spirits, there was a similar though less dramatic trend taking place, with the top 25 brands going from a 51 percent share of spirits sales at the beginning of 2012 to around 48.5 percent as of 2Q 2013 for the same brands, for a decline of about 2.5 points. In wine, however, we see some stark differences, with the category being vastly more fragmented. As of the beginning of 2012, the top 25 brands only accounted for about 6.9 percent of total wine sales, and as of the most recent quarter, the share for those same brands had actually increased slightly to about 7.1 percent, for a gain of about 0.2 share points.”

GuestMetrics believes the trends in the beer and spirits category may be largely reflective of the momentum of the craft brands in each category coupled with the growth driven by innovation, while in the wine category, the out-performance of the top brands could be indicative of marketing and advertising that is finally starting to create some brand loyalty in a category which historically has had less compared to beer and spirits.

“To put this in a different perspective, we also looked at the relative difference in year-over-year growth rates between the top 25 brands in each category versus the thousands of smaller brands,” said Peter Reidhead, VP of strategy and insights at GuestMetrics. “In beer, while the top 25 brands as of the beginning of 2012 saw their sales decline about 4.2 percent during the first half of 2013 versus the same period in the prior year, the long tail of the next 10,000 brands saw sales grow +5.7 percent, netting out in the +0.1 percent growth in sales for the overall beer category.”

In spirits, the top 25 brands saw their sales decline 1.1 percent, while the long tail of the next thousands of brands saw their sales grow +4.5 percent during the same period, netting out in the +1.7 percent growth for the overall spirits category thus far in the year. In contrast to the beer and spirits category, however, GuestMetrics sees that in the wine category, the top 25 brands as of the beginning of 2012 have seen their sales grow +4.8 percent thus far in 2013, while the long tail of the next thousands of brands saw their sales grow a more modest +1.8 percent, netting out about a +2 percent growth overall in the wine category thus far in the year.

“Despite the relative under-performance of the roll-up of the top 25 brands in beer and spirits, this does not mean that all of the largest brands from the beginning of 2012 in beer and spirits have seen their sales contract,” said Brian Barrett, president of GuestMetrics. “Looking at beer, the most notable exceptions among the top 25 brands are Blue Moon, Stella, Dos Equis, Corona Light, Shock Top and Negra Modelo, which have seen robust growth despite being among the top 25 brands.”