Craft beer’s many headwinds
30% of craft beer sales are in the on-premise channel, which has dropped to a trickle in the past six weeks. Craft beer sales have lost share even in the off-premise channel to the large national brands. It has been reported that the share loss is due to consumers purchasing well-known brands, and the shift towards larger package sizes (30 can case grew 33% while 24 can case grew 38% in the week ended April 11). The lower prices of the largest beer brands in an environment of rising unemployment is also a factor. Less understood is the retailers’ shelf space decisions towards the larger brands. Total Wine & More, one of the largest packaged goods retailers in the U.S., said as consumers made their stockpiling purchases in the middle of March, it focused on the in-stock levels of the largest brands. According to Nielsen,, 1,900 or 8.3% fewer beer and cider products were sold in off-premise retailers in the first six week period ended April 11. The largest craft brewers only saw 28 fewer items YOY, showing the declining diversity was in the smaller craft brewers. The independent brewers saw an 11.3% decline in the number of selling things as their shelf space made way for larger pack sizes and better in-stock levels of the larger brands as well as hard seltzer.
Hard seltzer share gains accelerate
The beer category’s still robust growth of 19.4% in the week ended April 11 kept pace with the previous week while wine sales increased 36.5%, and spirits sales increased 32.4%. Beer category sales have only decreased by 11% from the peak week of sales (the week ended March 21). Mexican import sales grew 16% in the same week. Technically that represents share loss, but the growth exceeds the category’s business plans for the year. Hard seltzers have seen the number of items being sold increase by 54%. Hard seltzer sales grew 321% in the week ended April 11. Hard seltzer has seen its share of the beer/cider category increase from 5% in early March to 7.8%. Last week Boston Beer said with the opening of its plant in Memphis capacity for Truly is a little more than double what it was.
Sysco launches pop-up locations
Sysco has been challenged by the COVID-19 stay at home restrictions and a ban on dining inside restaurants. The company has lent its workers to Kroger, offered its inventory to grocery stores, and launched a click-and-collect program in Canada (where customers can order online and pick up items at a local Sysco location). In Bonita Springs, Sysco built a pop-up grocery store. Customers can order items online and pick them up in the parking lot of the pop-up store. Customers can pick up items in bulk restaurant-style like five-pound bags of salad lettuce for $3.90 or 40 hamburger patties for $33.50. Sysco also has toilet paper for sale, which is probably the most sought after commodity for the past two months. Sysco is planning on opening more pop-up locations around the country. If you would like to host a Sysco pop-up event https://foodie.sysco.com/sysco-pop-up-shop/host-a-sysco-pop-up-stock-up-event/ The sales are incremental, the labor is fixed, and the rent is free after all. For our SYY Black Book presentation: CLICK HERE
