Craft brewers’ growth is on-premise (SAM)
The Brewers Association, the organization representing small and independent craft brewers, reported that craft beer production increased 8% to 24.8 million barrels in 2021. In 2020, craft beer production fell 10% from 2019’s peak level of 26.3 million barrels. Craft beer’s volume share rose 90bps in 2021 to 13.1%. Craft’s dollar sales grew 21% to $26.9B in 2021, reaching 26.8% market share. The overall beer market grew 1% in volume in 2021. Including flavored malt beverages and hard seltzers, volumes grew 2%. The number of craft breweries grew 4% in 2021 to 9,118, but the number of openings decreased for the second straight year. When factoring in the growth in the number of craft breweries during the pandemic the volume data points to a decrease in production per brewery for the industry. The number of closings decreased to 178 compared to 346 in 2020. The growth in craft brewers has been from microbreweries and taproom breweries while regional craft brewers that have a high mix of off-premise sales have been minimal. Craft brewers will benefit from a rebound in traffic to on-premise locations, but the industry proved more resilient to the pandemic challenges than restaurants.
Spirits-based seltzers and RTDs lead growth (SAM)
Spirits-based seltzers and RTDs are the fastest growing in the category but are still considerably smaller than hard seltzers. The “beyond beer” category is also driven by innovation and trial leading to considerable turnover among the top brands. From 2019 through January 8, 2022, off-premise sales of RTDs and hard seltzers have grown 155%. In 2021, off-premise sales of spirits, wine, and malt-based RTDs as well as hard teas and hard kombucha were $9.6B. Hard seltzers accounted for $4.6B, followed by $3.4B for flavored malt beverages, $800M for spirits-based RTDs, and $300M for wine-based RTDs according to NielsenIQ for the year ended January 8. Spirits-based seltzers grew 142%, spirits-based RTDs grew 115%, and wine-based RTDs grew 35%. In comparison, canned wine sales fell 5%, traditional FMBs fell 5%, wine spritzers fell 16%, and wine seltzers fell 26%. Compared to 2019 there are now seven new brands in the top 12 for hard seltzers, four for wine RTDs, and six for spirits RTDs. The frequent churn in market share is a concern for projecting the sustainability of the category in the out years.
Spot trucking rates fall (UTZ)
Spot trucking rates have fallen in recent weeks while diesel prices have surged. Numerous shippers accepted substantial price increases in Q1 to secure truck capacity. Fewer spot market loads have translated into lower spot rates. Spot rates were up 14.1% YOY in March and were down 2% from February. For the week ended April 3, van spot rates decreased 0.9% from the previous week.
Contract rates were up 24.7% YOY in March. Fuel prices were up 62% in March YOY and up 26.6% in February. The rates for refrigerated trucks have fallen the most, down 5.3% in March from January. The number of loads for every van truck on DAT’s load boards fell 37.7% to 4.6 in March from the month earlier, showing easing capacity conditions. Fuel surcharges on the other hand have moved in the other direction and averaged $.46 per mile in February up from $.41 in January. At the current trend, spot rates would fall YOY by the middle of the year. Lower spot rates would then lead to lower contract rates in 2023. Truck freight costs have been a sizable margin headwind for the CPG companies and relief will take some time to flow through the P&L.
