The super-premium and premium beer category suffered in 2016 from the same problem as light beer: there’s a Millennial malaise towards it for not being craft beer.
Overall the category — defined as domestic macro brands besides light beer — lost 13.346 million cases in 2016, according to the forthcoming 2017 Beer Handbook from the Beverage Information & Insights Group. It shrunk in volume by 3.3% to finish with 385.854 million 2.25-gallon cases.
This continues a downward trend begun in 2014, when the category receded by 1%, followed by -2.4% in 2015. Super-premium and premium beer actually grew 2.3% in 2013, which turned out to be a high-water mark after successive years of gradual gains.
Which is not to cast utter gloom and doom upon this category. Top-seller Budweiser finished 2016 as the third-best-selling beer brand in America, while Yuengling and Blue Moon both landed in the top 20. The category retained the second largest market share among the overall beer industry in 2016, with 13.6%. That’s just above craft beer’s 10.4%, and down from a 14% market share in 2015.
Super-premium and premium will always help pay the bills, but they certainly face ominous clouds on the horizon.
Just look at the top sellers. Budweiser continued its recent slide with a volume decrease of 3.4% in 2016. The brand lost 8.143 million cases to finish with 190.982 million. As recently as 2011, the brand had 242 million cases in sales volume, declining 26.71% of since that year. Budweiser for the first time in recent years dipped below 50% market share of this category, finishing with 49.49% of all super-premium and premium beer volume.
It’s a long drop off, more than 150 million cases, to the second best selling beer in this category. Yuengling was down 1% in 2016 to 38.345 million cases. The brand has been somewhat volatile in recent time, turning in yearly performances of -2.1%, +6.4% and -2.1% dating back to 2013, respectively. On one hand, the brand has savvy marketing that highlights its claim as America’s oldest operating brewery. You’d think that sort of authenticity and heritage would appeal to Millennials. Yuengling’s flat volume growth, however, tells a different story.
Behind Yuengling was Blue Moon, with 38.345 million cases. The MillerCoors brand, which often masquerades as craft beer, experienced its first negative volume growth in some time, shrinking by 0.4%. This follows three straight years of 8.7%, 1.1% and 12.3% growth, respectively. What gives? Perhaps the ever-savvy customer has caught on to Blue Moon’s parent company, and no longer sees the brand as as authentically craft. As corporations like MillerCoors scoop up more craft producers, consumers have become more sensitive towards what is and isn’t an independently owned craft brewery. Brands like Blue Moon have paid a price.
Coors Banquet definitely does not depict itself as craft. The brand wants to be thought of as a step up from other macro brands, while also appealing to different crowds through its U.S. heritage. That marketing mix seems to work. The beer has kept itself in the positives for years. In 2016, Coors Banquet grew by 1.5% to 22.872 million cases. This follows recent years of 8.1%, 3.8% and 1.7% volume growth, respectively.
Rounding out the top five selling premium/super-premium beer brands in 2016, Miller Genuine Draft was down 6% to 17.366 million cases. The brand has been on steady decline, receding 38.2% in sales volume since 2011, when it totaled 24 million cases.
Rolling Rock continued its recent gains with 8.7% in growth to 15.177 million cases. This brand is the rare positive-trender among the category’s top sellers. The last three years, its sales volume growth was 11.3%, 15.1% and 16.0%, respectively. What’s the secret for Rolling Rock? The brand appeals to Millennials who have less disposable income. It’s proven a successful strategy: at a time when most macro brands have suffered for their non-craft status, Rolling Rock has grown by 45.31% since 2011. Impressive.
Shocktop, on the other hand, seems to have suffered a similar fate as Blue Moon. Once considered craft when the microbrew movement took off, the AB InBev ownership of this brand seems to have caught up with it. Shocktop sales volume dipped 10.5% in 2015, finishing with 12.920 million cases. This comes just a few years from explosive growth: Shocktop achieved a +16.6% in 2013. Following that peak performance, the brand turned in flat results of +1.3% and +2.1%. The word is out: Shocktop is not craft beer. Whether it can appeal to consumers with a different strategy remains to be seen.
Elsewhere in the top ten among this category in 2016, two newer brands have attained success for similar reasons. Redd’s Apple Ale, launched in 2013, has taken off, growing 8.2% to 10.423 million cases. That’s its first time over 10 million. Right below, Leinenkugel’s Summer Shandy grew 10% to 7.020 million cases. Both these brands represent a hot niche right now: the beer alternative. At the same ABV as a typical beer, these fruit-flavored offerings allow consumers a break from all those malts and hops of normal brews. After a few double IPAs, the palate could use a break with sweeter drinks. That this trend appeals to both genders only brightens the future for both brands.