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FASTEN YOUR SEAT BELTS2016 MID-YEAR BEER CATEGORY AND

CRAFT SEGMENT REVIEW

Dan WandelPrincipal, IRIBeverage Alcohol Practice AreaSeptember 1, 2016

Copyright © 2016 Information Resources, Inc. (IRI). Confidential and Proprietary.

CRAFT BEER SUMMARY YEAR-TO-DATE 2016


CRAFT SEGMENT TRENDSTOTAL U.S. MULTI-OUTLET + CONV AND TOTAL U.S. SUPERMARKETS

Source: IRI InfoScan Total US Multi-Outlet + Conv and Total US FOOD, YTD and 4 weeks ending August 7, 2016

Craft is experiencing its lowest Dollar Sales percent increase at +9.6% in Supermarkets since 2004.

Craft sales trends have decelerated further in the latest 4 week period.

9.9%

6.2%5.8%

2.2%

Dollar Sales% Chg YA

Volume Sales% Chg YA

Total US MULC

YTD 08-07-16 4 Wks 08-07-16

9.1%

5.6%

4.0%

0.6%

Dollar Sales% Chg YA

Volume Sales% Chg YA

Total US FOOD

YTD 08-07-16 4 Wks 08-07-16


COMPETITIVE THREATS ABOUND THROUGHOUT BEVERAGE ALCOHOL

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiN_cz2uKrNAhUiHlIKHf-KDYAQjRwIBw&url=http://theconcourse.deadspin.com/the-beer-idiot-mikes-hard-lemonade-1664598888&psig=AFQjCNEFL0n_BpoNJWya5dd0Zq10R74L3A&ust=1466094213250863

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiN_cz2uKrNAhUiHlIKHf-KDYAQjRwIBw&url=http://theconcourse.deadspin.com/the-beer-idiot-mikes-hard-lemonade-1664598888&psig=AFQjCNEFL0n_BpoNJWya5dd0Zq10R74L3A&ust=1466094213250863


BEER CATEGORY & SEGMENT TRENDS AND SHARETOTAL U.S. MULTI-OUTLET AND MULTI-OUTLET + CONVENIENCE

Source: IRI InfoScan Total US Multi-Outlet and Total US Multi-Outlet + Convenience, YTD ending July 10, 2016

Cider sales trends are down significantly from the high double-digit percent sales increases they had during the same period in 2015.

Total US - Multi Outlet Total US - Multi Outlet + Conv

Dollar Sales % Chg YA

Dollar Share of Category

Volume Sales % Chg YA

Volume Share of Category


Dollar Share of Category


Volume Share of Category

CATEGORY - BEER 4.5% 100.00 1.8% 100.00 3.9% 100.00 1.3% 100.00

CIDER -7.3% 1.81 -10.4% 1.12 -8.3% 1.17 -11.0% 0.73

TOTAL BA CRAFT* 11.2% 11.17 7.6% 6.93 12.2% 7.15 8.4% 4.38

CRAFT (IRI DEFINITION) 9.4% 17.23 5.8% 11.11 10.3% 10.94 6.7% 6.97

PREMIUM 1.2% 34.77 -0.4% 41.66 0.2% 40.15 -1.1% 44.64

SUB-PREMIUM -0.3% 12.41 -0.6% 18.97 -1.1% 16.56 -1.6% 23.72

SUPER PREMIUM 8.0% 6.71 7.7% 6.22 9.0% 6.68 8.4% 5.77

FMB's 18.6% 6.35 15.2% 4.20 14.7% 6.63 11.9% 4.42

IMPORT 5.8% 19.84 3.5% 15.95 9.5% 17.45 7.1% 13.37

NA's 1.4% 0.64 -1.4% 0.62 -0.4% 0.32 -3.3% 0.32

*Total BA Craft does not include the following Yuengling brands: Traditional Lager, Light Lager, Black and Tan, Premium, and Premium Light


TOP 15 BEVERAGE ALCOHOL GROWTH SEGMENTS ACTUAL DOLLAR SALES CHANGE YA - TOTAL U.S. MULTI-OUTLET

Source: IRI InfoScan Total US Multi-Outlet, YTD ending July 10, 2016

Craft remains the top overall Beverage Alcohol Growth Segment.

$120,783,939

$103,876,505

$88,323,613

$81,227,527

$54,814,471

$49,816,304

$40,733,056

$36,541,372

$36,166,326

$32,832,622

$29,975,539

$27,391,062

$25,782,926

$19,009,671

$15,685,139

CRAFT - BEER

($11.00 - $14.99) TABLE WINE

IMPORT - BEER

FMB - BEER

WHISKEY

($8.00 - $10.99) TABLE WINE

SUPER PREMIUM - BEER

VODKA

($4.50 +) BOX TABLE WINE

PREMIUM - BEER

($20.00 - $24.99) TABLE WINE

($8.00-$12.99) SPARKLING WINE

($15.00 - $19.99) TABLE WINE

($13.00-$17.99) SPARKLING WINE

TEQUILA

Change vs YA % Change vs YA

Dollar Sales

9.4% $1,406,884,139

14.7% $809,390,823

5.8% $1,620,390,500

18.6% $518,354,008

6.4% $911,347,229

4.2% $1,229,647,595

8.0% $548,201,950

4.6% $834,239,219

22.5% $196,745,741

1.2% $2,839,600,874

27.1% $140,407,729

13.9% $224,167,437

10.3% $274,906,187

24.7% $96,032,618

8.3% $204,170,844


BEVERAGE ALCOHOL SALES TRENDS INDIVIDUAL CHANNELS

Source: IRI InfoScan Total US FOOD, Total US Drug, Total US Convenience, and Sum of Total Liquor Stores RMA, YTD ending July 10, 2016

Total US - Food Total US - Drug Total US - ConvSum Of Total Liquor Stores-RMA - Liquor





D ollarSales % Chg YA




CATEGORY - BEER 4.1% 1.4% -1.2% -2.3% 3.4% 0.8% 1.4% -2.6%

CIDER -7.6% -11.1% -10.1% -11.6% -10.5% -12.4% -7.3% -11.0%

TOTAL BA CRAFT* 11.7% 8.4% 4.8% 2.2% 14.6% 10.7% 3.2% -2.2%

CRAFT (IRI DEFINITION) 9.6% 6.2% 4.4% 0.9% 12.7% 9.2% 3.9% -2.8%

PREMIUM 1.1% -0.3% -4.3% -3.9% -0.3% -1.7% -2.3% -4.7%

SUB-PREMIUM -1.7% -1.8% -5.5% -4.5% -1.5% -2.3% -5.5% -5.5%

SUPER PREMIUM 5.5% 5.3% 0.2% -0.1% 9.8% 9.2% 4.3% -0.6%

FMB's 19.1% 15.7% -2.5% -4.7% 11.9% 9.5% 13.0% 7.0%

IMPORT 3.9% 1.5% 5.2% 3.1% 13.8% 11.8% 3.0% 2.1%

NA's 1.5% -1.4% -14.1% -15.8% -13.6% -17.7% 4.5% -0.7%

TOTAL WINE 5.7% 2.7% 3.4% 0.2% 5.6% 3.6% 1.2% -0.9%

SPIRITS 5.1% 3.1% 0.3% -1.8% 10.3% 12.7% 4.3% 1.0%

COOLERS -2.7% 0.2% -11.1% -10.6% 13.0% 16.6% -0.2% -11.6%

*Total BA Craft does not include the following Yuengling brands: Traditional Lager, Light Lager, Black and Tan, Premium, and Premium Light


SEGMENTS’ HISTORICAL DOLLAR SHARE OF BEERTOTAL U.S. SUPERMARKETS

Source: IRI InfoScan Total US FOOD, YTD ending July 10, 2016

FMB’s lead all Segments in Dollar Share growth this year at +0.5.

15.39 17.29 19.27 21.00 21.28

0.91 1.562.27 2.38 2.09

38.34 36.17 34.50 33.02 32.37

14.67 13.45 12.66 11.64 11.27

6.72 6.63 6.22 6.11 6.29

3.53 4.71 5.02 5.42 5.97

19.42 19.15 19.02 19.33 19.61

0.90 0.84 0.81 0.80 0.79

2012 2013 2014 2015 YTD 2016

NA's

IMPORT

FMB's

SUPER PREMIUM

SUB-PREMIUM

PREMIUM

CIDER

CRAFT


TOP 15 BEER VENDORSTOTAL U.S. SUPERMARKETS


Only five of the Top 15 Vendors have managed to gain Share of Total Beer Category Dollar Sales this year.

ANHEUSER-BUSCH INBEV*

MILLERCOORS BREWING

CONSTELLATION BRANDS

HEINEKEN USA INC

BOSTON BEER CO

PABST BREWING CO

DIAGEO GUINNESS USA

MARK ANTHONY BRANDS INC

SIERRA NEVADA BREWING CO

D G YUENGLING & SON INC

NEW BELGIUM BREWING COMPANY

NORTH AMERICAN BREWERIES

CRAFT BREW ALLIANCE INC

THE LAGUNITAS BREWING COMPANY

THE GAMBRINUS COMPANY

Dollar SalesDollar Sales % Chg YA

Dollar Share

Dollar Share Chg YA

$1,951,436,712 2.1% 35.21 -0.70

$1,254,472,257 1.2% 22.63 -0.66

$506,408,977 10.7% 9.14 0.55

$301,991,386 -2.7% 5.45 -0.38

$162,449,756 -7.8% 2.93 -0.38

$128,538,282 17.0% 2.32 0.25

$101,628,137 2.8% 1.83 -0.02

$82,283,582 7.2% 1.48 0.04

$81,318,157 -0.4% 1.47 -0.07

$76,107,341 3.3% 1.37 -0.01

$65,809,941 4.6% 1.19 0.01

$52,234,002 -2.6% 0.94 -0.07

$51,176,170 -2.2% 0.92 -0.06

$48,861,570 14.2% 0.88 0.08

$35,546,909 -6.0% 0.64 -0.07

*Anheuser-Busch InBev data includes Four Peaks and Breckenridge


TOP 15 BEER BRANDSTOTAL U.S. SUPERMARKETS


Michelob Ultra and Modelo Especial continue to be the top share gainers amongst the Top 15 overall Beer Brands.

BUD LIGHT

COORS LIGHT

MILLER LITE

BUDWEISER

CORONA EXTRA

MICHELOB ULTRA LIGHT

MODELO ESPECIAL

HEINEKEN

NATURAL LIGHT

BUSCH LIGHT

STELLA ARTOIS LAGER

CORONA LIGHT

MILLER HIGH LIFE

BUSCH

BLUE MOON BELGIAN WHITE ALE

Dollar SalesDollar Sales %

Chg YADollar Share

Dollar Share ChgYA

$649,171,043 1.1% 11.71 -0.36

$356,878,081 2.6% 6.44 -0.09

$308,708,380 3.0% 5.57 -0.06

$240,945,777 0.6% 4.35 -0.15

$229,286,804 3.0% 4.14 -0.04

$191,889,027 20.1% 3.46 0.46

$128,746,884 20.6% 2.32 0.32

$112,113,195 -2.2% 2.02 -0.13

$105,926,920 -1.2% 1.91 -0.10

$98,419,779 0.3% 1.78 -0.07

$83,357,643 14.4% 1.50 0.13

$77,884,905 6.1% 1.41 0.03

$68,255,517 -1.2% 1.23 -0.07

$61,007,443 -0.5% 1.10 -0.05

$60,746,494 3.2% 1.10 -0.01


BEER VENDORS WITH NEW PRODUCT SALES > $1MMTOTAL U.S. SUPERMARKETS


New Beer Products Case and Dollar Sales have both increased this year compared to the 2.5MM Cases and $82.4MM Dollars generated through mid-year 2015.

$24,004,526

$16,589,106

$11,077,421

$6,356,511

$5,903,071

$3,234,056

$2,499,394

$1,492,546

$1,465,003

$1,368,329

$1,031,715

MILLERCOORS BREWING


BOSTON BEER CO




SIERRA NEVADA BREWING CO

DIAGEO GUINNESS USA

BELLS BREWERY INC

PABST BREWING CO

NORTH AMERICAN BREWERIES

Dollar Sales

Total New Beer Products:

Case Sales = 2.8MM

Dollar Sales = $100.7MM



TOP 16 NEW BEER BRANDSTOTAL U.S. SUPERMARKETS


12 of the Top 16 New Beer Brands have a flavor element to them.

$14,018,409

$6,539,325

$5,616,099

$4,759,123

$4,341,787

$3,425,877

$2,477,481

$1,888,779

$1,883,308

$1,634,659

$1,558,801

$1,411,624

$1,346,743

$1,287,649

$1,049,296

$1,004,192

HENRYS HARD SODA ORANGE

HENRYS HARD SODA GINGER ALE

NEW BELGIUM CITRADELIC TANGERINE IPA

BEST DAMN CHERRY COLA

SAMUEL ADAMS REBEL GRAPEFRUIT IPA

ESTRELLA JALISCO

SIERRA NEVADA OTRA VEZ GOSE STYLE ALE

BALLAST POINT PINEAPPLE SCULPIN IPA

BUD LIGHT LIME STRAW BER RITA SPLASH

CERVEZAS CLASICAS

MIKES HARD PEACH LEMONADE

SAMUEL ADAMS NITRO COFFEE STOUT

BUD LIGHT LIME LIME A RITA SPLASH

SAMUEL ADAMS NITRO WHITE ALE

GOOSE ISLAND FOUR STAR PILS

SMIRNOFF ICE ELECTRIC BERRY

Dollar Sales

Year # of New

Brands

Total New Beer Brand Case Sales

Top New Beer Brand (Based on $ Sales)

YTD 2016 665 2,240,595 HENRYS HARD SODA ORANGE

2015 1150 4,881,824 Coney Island Hard Root Beer

2014 612 7,403,257 Bud Light Lime Mang O Rita

2013 530 5,473,905 Bud Light Lime Straw Ber Rita

2012 415 6,953,181 Bud Light Platinum Lager

Note: Includes brands with sales in December 2014 of $10K or less. Top seller Henry's Hard Soda Orange was given an exception given a December release but slightly over $10K in sales.


TOP 15 NEW BEER BRANDS (EXCLUDING FMB’S)TOTAL U.S. SUPERMARKETS


IPA’s continue to dominate the top new beer brands ranking.

Note: Includes brands with sales in December 2014 of $10K or less.

$5,616,099

$4,341,787

$3,425,877

$2,477,481

$1,888,779

$1,634,659

$1,411,624

$1,287,649

$1,049,296

$977,382

$851,290

$655,304

$554,711

$526,111

$517,662

NEW BELGIUM CITRADELIC TANGERINE IPA

SAMUEL ADAMS REBEL GRAPEFRUIT IPA

ESTRELLA JALISCO

SIERRA NEVADA OTRA VEZ GOSE STYLE ALE

BALLAST POINT PINEAPPLE SCULPIN IPA

CERVEZAS CLASICAS

SAMUEL ADAMS NITRO COFFEE STOUT

SAMUEL ADAMS NITRO WHITE ALE

GOOSE ISLAND FOUR STAR PILS

SAMUEL ADAMS NITRO IPA

BALLAST POINT WATERMELON DORADO DOUBLE IPA

BALLAST POINT MANGO EVEN KEEL SESSION IPA

NEW BELGIUM GLUTINY PALE ALE

ORCHARDS EDGE KNOTTY PEAR

FIRESTONE WALKER LUPONIC DISTORTION IPA

Dollar Sales


NEW BEER PRODUCT SALES BY SEGMENTTOTAL U.S. SUPERMARKETS


New Craft Products account for over half of Beer’s total new product Dollar Sales. This is up from 42.6% in mid-year 2015.

New Product Dollar Sales by Segment

Share of Total New Product Dollar Sales

$52,947,652

$37,517,056

$5,699,529

$2,606,966

$1,314,014

$538,823

$92,319

CRAFT

FMB's

IMPORT

CIDER

SUPER PREMIUM

SUB-PREMIUM

PREMIUM

CRAFT

52.6%

FMB's

37.3%

IMPORT

5.7%

CIDER

2.6%

SUPER

PREMIUM

1.3%

SUB-

PREMIUM

0.5%

PREMIUM

0.1%


INFUSED BEER, WINE & SPIRITS DOLLAR SHARETOTAL U.S. SUPERMARKETS

Source: IRI InfoScan Total US FOOD, Calendar Year 2012 and YTD ending July 10, 2016

31.2 32.5

7.312.2

1.3 0.90.0

10.0

20.0

30.0

40.0

2012 YTD 2016

Dollar Share of Infused within respective Category

Infused Spirits

Infused Beer

Infused Wine

• Infused Beers include FMB, Cider, and Fruit/Veggie/Spiced/Infused Brands across other beer segments.

• Infused Spirits include Flavored Vodka, Gin, Whiskey, Brandy, Rum (including Spiced), Cordials and Premixed Cocktails.

• Infused Wine includes Beverage, Chocolate and Fruit Flavored Wines

Infused Beers share of Total Beer Dollar Sales has increased by +4.9 since 2012. Infused Spirits share has increased by +1.3 since 2012.


TOP INFUSED SPIRITS VENDORSTOTAL U.S. SUPERMARKETS

$130,330,673

$57,493,206

$55,247,402

$52,554,745

$37,993,485

$19,883,904

$19,664,370

$18,930,958

$17,838,356

$17,427,951

DIAGEO

PROXIMO SPIRITS

SAZERAC CO

PERNOD RICARD

BEAM SUNTORY

HEAVEN HILL DIST

BACARDI USA

SIDNEY FRANK

BROWN FORMAN

MOTTS LLP

Top Vendors - Dollar Sales

0.5%

0.5%

0.4%

0.3%

0.2%

0.2%

0.2%

0.1%

0.1%

0.1%

PROXIMO SPIRITS

DIAGEO

BOSTON BEER

E & J GALLO

BOATHOUSE BEVERAGE

AMER BVRG MKTR

LEVECKE CORP

HEAVEN HILL DIST

TRES AGAVES

ZING ZANG CORP.

Top Dollar Share Gainers

Boston Beer is the #3 Spirits Vendor Dollar Share Gainer due to its Truly Spiked new hard seltzer products.


Dollar Share Chg YA

0.5%

0.5%

-0.1%

-0.4%

-0.3%

0.1%

-0.6%

-0.2%

-0.1%

-0.3%

Infused spirits include Flavored Vodka, Gin, Whiskey, Brandy, Rum (including Spiced), Cordials and Premixed Cocktails.


TOP 10 INFUSED BEER VENDORSTOTAL U.S. SUPERMARKETS



$165,838,449

$131,618,865

$82,269,874

$77,116,784

$43,939,207

$42,671,063

$13,341,786

$12,092,706

$11,770,076

$5,617,533


MILLERCOORS BREWING


BOSTON BEER CO

PABST BREWING CO

DIAGEO GUINNESS USA


HEINEKEN USA INC

ALCHEMY AND SCIENCE


Dollar SalesDollar share of Infused

Dollar Share Chg YA

24.6% -4.4%

19.5% 0.9%

12.2% -0.8%

11.4% -2.4%

6.5% 2.3%

6.3% -1.0%

2.0% 1.0%

1.8% 0.1%

1.7% 1.1%

0.8% 0.8%

Infused Beers include FMB, Cider, and Fruit/Veggie/Spiced/Infused Brands across other beer segments.

Pabst Brewing is the top gainer this year relative to share of Total Infused Beer Dollar Sales.


TOP 15 HARD SODA BRANDSTOTAL U.S. MULTI OUTLET + CONVENIENCE

Source: IRI InfoScan Total US Multi-Outlet + Conv 4 Weeks Ending August 7, 2016

Total Hard Soda Dollar Sales thru YTD 2016 are $208,991,137 Total Hard Soda Dollar Sales in CY 2015 were $145,806,084.

$6,095,443

$5,205,734

$3,153,381

$2,090,292

$1,720,248

$1,346,613

$1,034,009

$602,204

$441,549

$417,765

$201,134

$164,087

$131,377

$56,811

$51,671

SMALL TOWN NOT YOUR FATHERS ROOT BEER ALE

HENRYS HARD SODA ORANGE

BEST DAMN ROOT BEER

BEST DAMN CHERRY COLA

HENRYS HARD SODA GINGER ALE

CONEY ISLAND HARD ROOT BEER

SMALL TOWN NOT YOUR FATHERS GINGER ALE

SMALL TOWN NOT YOUR FATHERS VANILLA CREAM…

CRABBIES GINGER

CONEY ISLAND HARD ORANGE CREAM ALE

CONEY ISLAND HARD GINGER ALE

HENRYS HARD SODA VARIETY PACK

SEAGRAMS HARD SODA VARIETY PACK

ROOT SELLERS ROW HARD ROOT BEER

THOMAS CREEK ISLANDER GINGER BEER

Dollar Sales

Share of Hard Sodas


4 Wk 08-07-16

4 Wk08-07-16

YTD 08-07-16

26.4% -43.2% 151%

22.5%

13.6%

9.0% 100018047%

7.4%

5.8% -35.9% 589%

4.5%

2.6%

1.9% -23.6% 13%

1.8%

0.9%

0.7%

0.6%

0.2% -58.2% 17%

0.2% 913.9% 1476%


INFUSED BEERS BY SEGMENTTOTAL U.S. SUPERMARKETS


Infused Craft Beer passed Cider in Dollar Sales earlier this year during the four-week period ending March 20, 2016.

$331,087,638

$130,330,610

$116,233,345

$80,890,279

$16,879,913

FMB's

CRAFT

CIDER

ALL OTHER

DOMESTIC

IMPORT

Dollar Sales

Infused Beers include FMB, Cider, and Fruit/Veggie/Spiced/Infused Brands across other beer segments.


INFUSED CRAFT BEER SALES CONTINUE TO RISE TOTAL U.S. SUPERMARKETS

Infused Craft Beers have increased their share of Total Craft Dollar Sales by +2.1 to date.

Source: IRI InfoScan Total US FOOD, 13 week periods April 1, 2012 through June 26, 2016 and YTD ending July 10, 2016

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

Dollar Sales and Share of Total Craft Dollar Sales *

Infused Craft beers are comprised of Fruit/Veggie/Spiced brands from Craft. Seasonals, Variety Packs and Special Releases are excluded from this analysis, except where all items are known to be flavored

*Share is based on 52 week data by year and YTD Ending July 10, 2016

6.7% 7.3% 7.5% 8.9%YTD

11.0%


334MUSA Population 2020

THE U.S. SHOPPER IS BECOMING MORE DIVERSE

309MUSA Population 2010

3MWhite

10% growth

33MHispanic

53% growth

4MBlack

16% growth

4MAsian

15% growth

1MOther

5% growth

Hispanics will account for 53% of population growth


GROWING FMCG PURCHASING POWER OF MILLENNIALS

$290B

% of FMCG Dollar Volume

B

O

O

M

E

R

S

M

I

L

L

E

N

N

I

A

L

S

+70% -16%17%

29%

2015 2020

38%

32%

2015 2020

*FMCG = Fast Moving Consumer Goods


Millennials

Gen X

Baby Boomers

Seniors

28%

19%

27%

20%

33%

45%

13%17%

% US LDA POPULATION % BWS DOLLARS

INDEX

131

136

74

68

BABY BOOMERS REPRESENT MORE THAN THEIR FAIR SHARE OF BEV ALC DOLLARS, MAKING THEM A CRITICALLY IMPORTANT SEGMENT


SOURCE: IRI BWS Survey | July, 2016

66%

70%

75%

76%

26%

24%

26%

23%

Millennials

Gen X

Baby Boomers

Seniors

% DRINKING ONCE A WEEK OR MORE

THERE ARE LOTS OF OPPORTUNITIES TO CONNECT ACROSS GENERATIONS


5556

55

35

Millennials Gen X Baby Boomers

Seniors

ALL BUT SENIORS ARE IN-STORE MORE THAN ONCE A WEEK

AVG. # TIMES BOUGHT PER YEARIN A PHYSICAL STORE



Both Millennials and Gen X’ers …

Love trying all kinds of different alcoholic beverages.

Prefer bars & restaurants that put a creative spin on the alcoholic drinks they make.

Are always trying the newest alcoholic beverages/trends.



21%Changed mind in-store

50%Bought a different brand than planned

SOURCE: IRI BWS P2P Survey | January, 2015

60%

Planned their BWSpurchases

IN-STORE IS IDEAL FOR CREATING ENGAGEMENT AND INFLUENCING AND ALSO FOR CREATING DISRUPTION


HOME INVITES GREATER VARIETY AND CREATIVE EXPERIMENTATION

4.3

3.6

2.9

3.2

3.5

2.8

2.01.9

Millennials Gen X Baby Boomers Seniors

At Home | On Premise

AVERAGE # OF DIFFERENT TYPES OF ALCOHOL CONSUMED IN PAST 3 MONTHS



42%40% 41%

35%

58%60% 59%

65%

Millennials Gen X Baby Boomers Seniors

I make my alcoholic drink decisions based on price

I make my alcoholic drink decisions based on quality

QUALITY IS CHOSEN OVER PRICE ACROSS ALL GENERATIONS

% Agreeing Very Much/Somewhat


PRICE

QUALITY


57% 52%

23%


73%

BEER IS STILL KING AT HOME…

% Drinking Alcoholic Beverage type at home in the past 3 months


IN RESTAURANTS AND BARS, MILLENNIALS’ EXPLORATORY NATURE REALLY SHINES

37%

24%

33%

13%

17%

13%

27%

16%

25%

8%

12%

6%

Craft Beer

FMB's or Cider

Vodka

Bourbon

Sparkling Wine

Champagne

Millennials | Gen X

% CONSUMED ON PREMISE IN PAST 3 MONTHS



CRAFTING SUSTAINED SALES GROWTH


THE LONG TAIL

• 1,045 Craft Vendors actively selling in Supermarkets• Top 46 Craft Vendors--based on Dollar Sales account for 80% of

Total Craft Dollar Sales

• 5,521 Craft Brands actively selling in Supermarkets• Top 397 Craft Brands account for 80% of Total Craft Dollar Sales

• 7,489 Craft Packages actively selling in Supermarkets• Top 684 Craft Packages account for 80% of Total Craft Dollar Sales

• 51% of Craft’s Dollar Sales Growth this year is attributed to New Products. This compares to 28% for the same period in 2015.

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjRybLF3__NAhXKpYMKHaioCM0QjRwIBw&url=http://www.birdzilla.com/6things/pick-6-birds-with-long-tails.html&psig=AFQjCNEvAiNUkDbs753YhqBXKTXprA5xKg&ust=1469025142131423

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjRybLF3__NAhXKpYMKHaioCM0QjRwIBw&url=http://www.birdzilla.com/6things/pick-6-birds-with-long-tails.html&psig=AFQjCNEvAiNUkDbs753YhqBXKTXprA5xKg&ust=1469025142131423


CRAFT VENDORS VOLUME SALES BREAKDOWNTOTAL U.S. SUPERMARKETS


*Vendor Tiers assigned based on 52 week data for Total US FOOD. Actual data based on YTD ending July 10, 2016

Tier 1 Vendors collectively have lost 4.5 Volume Share points to date this year. Tiers 2 & 4 have been the beneficiaries of this share loss.

Craft Tiers*Volume Sales

Volume Sales Chg

YA


Volume Share

Volume Share Chg

YA

> 1MM Cases (Tier 1) 19,406,259 261,538 -1.3% 58.7% -4.5%

500K - 999K Cases (Tier 2) 3,874,454 921,362 31.2% 11.7% 2.2%

100K - 499K Cases (Tier 3) 5,299,354 295,608 5.9% 16.0% 0.0%

< 99K Cases (Tier 4) 4,456,176 979,136 28.2% 13.5% 2.3%


TOP 15 NEW CRAFT VENDORSTOTAL U.S SUPERMARKETS


Emerging new Craft Brewers continue to be more widely dispersed across the country in IRI tracked Supermarket sales.

$610,371

$338,057

$300,408

$154,361

$151,539

$102,415

$100,192

$70,265

$64,352

$63,841

$58,165

$37,639

$36,391

$36,235

$33,010

AUSTIN BEERWORKS

LIVE OAK BREWING COMPANY

8TH WONDER BREWERY

PLATFORM BEER CO

MELVIN BREWING COMPANY

TENNESSEE BREW WORKS

WOLFS RIDGE BREWING

SUNKEN CITY BREWING COMPANY

M I A BEER COMPANY

FORT POINT BEER CO

CRANE BREWING COMPANY

PUYALLUP RIVER BREWING COMPANY

HUSS BREWING COMPANY

TW PITCHERS BREWING COMPANY

PHILIPSBURG BREWING COMPANY

Dollar Sales

Location

Austin, TX

Del Valle, TX

Houston, TX

Cleveland, OH

Alpine, WY

Nashville, TN

Columbus, OH

Hardy, VA

Doral, FL

San Francisco, CA

Raytown, MO

Puyallup, WA

Tempe, AZ

San Francisco, CA

Philipsburg, MT


TOP 15 IRI DEFINED CRAFT BRANDSTOTAL U.S. SUPERMARKETS


Almost half of the Top 15 Craft Brands are experiencing Dollar Sales declines vs Year Ago. Only four have managed to gain share this year.

BLUE MOON BELGIAN WHITE ALE

SIERRA NEVADA PALE ALE

LEINENKUGELS SHANDY SEASONAL

NEW BELGIUM FAT TIRE AMBER ALE

SAMUEL ADAMS SEASONAL

SHOCK TOP BELGIAN WHITE ALE

SAMUEL ADAMS BOSTON LAGER

LAGUNITAS INDIA PALE ALE

SHINER BOCK

SIERRA NEVADA TORPEDO EXTRA IPA

SAMUEL ADAMS VARIETY PACK

SIERRA NEVADA SEASONAL

FOUNDERS ALL DAY IPA

BELLS SEASONAL

FIRESTONE WALKER 805 BLONDE ALE


Dollar Share of Craft

Dollar Share Chg YA

$60,746,494 3.2% 5.1% -0.3%

$33,174,237 -2.9% 2.8% -0.4%

$32,886,795 -2.4% 2.8% -0.3%

$25,318,507 6.9% 2.1% -0.1%

$24,783,667 -17.4% 2.1% -0.7%

$24,020,767 -2.7% 2.0% -0.3%

$23,823,625 -7.7% 2.0% -0.4%

$22,003,663 12.7% 1.9% 0.1%

$18,216,387 6.0% 1.5% -0.1%

$16,719,650 -6.5% 1.4% -0.2%

$13,338,447 -10.5% 1.1% -0.3%

$11,230,572 5.7% 1.0% 0.0%

$10,797,146 92.3% 0.9% 0.4%

$10,628,115 29.1% 0.9% 0.1%

$10,587,195 94.9% 0.9% 0.4%


TOTAL CRAFT KEY PACK SIZE DOLLAR SALES TRENDSTOTAL U.S. SUPERMARKETS


Cans continue to increase their share of Total Craft Dollar Sales and are now up to a 15.4 share. This represents a +4.5 share gain vs year ago.

6 CT 11-12 OZ BOTTLE


6 CT 11-12 OZ CAN

SINGLES 22 OZ BOTTLE

12 CT 12 OZ CAN


4 CT 16 OZ CAN

15 CT 12 OZ CAN

SINGLES 25 OZ BOTTLE

SINGLES 11-12 OZ BOTTLE

24 CT 12 OZ BOTTLE

4 CT 12 OZ CAN


$529,651,426 7.4%

$346,851,142 -0.9%

$88,251,708 66.2%

$65,711,960 4.8%

$55,226,320 25.1%

$23,688,276 4.6%

$19,882,559 59.8%

$10,975,200 164.2%

$9,762,945 -3.6%

$9,671,922 21.2%

$3,866,319 9.0%

$2,614,421 101.7%

TOTAL CRAFT CAN

$ Sales % Chg YA

$181,596,331 54.86%

TOTAL CRAFT GLASS

$ Sales % Chg YA

$997,669,323 4.10%

$13,902,766

$10,411,005

$9,706,861

$9,472,450

$7,514,093

MILLERCOORS BREWING

FOUNDERS BREWING CO

SIERRA NEVADA BREWING…

BOSTON BEER CO

OSKAR BLUES BREWERY

Top 5 Craft Can Vendors YTD 2016


TOP 10 CRAFT BEER STYLESTOTAL U.S. SUPERMARKETS


IPA’s account for over 28 percent share of Total Craft Dollar Sales in Supermarkets.

$332,485,547

$185,578,552

$115,451,357

$94,284,305

$82,673,205

$47,179,488

$43,102,484

$43,062,612

$35,301,265

$31,618,892

CRAFT IPA

CRAFT SEASONAL

CRAFT VARIETY

CRAFT BELGIAN WITS

CRAFT PALE ALE

CRAFT AMBER ALE

CRAFT AMBER LAGER

CRAFT FRUIT/VEGGIE/SPICED

CRAFT WHEAT BEER

CRAFT GOLDEN ALES



22.8% 28.2%

-3.2% 15.7%

2.0% 9.8%

3.4% 8.0%

0.7% 7.0%

3.5% 4.0%

-1.3% 3.7%

41.7% 3.6%

-0.1% 3.0%

42.9% 2.7%


CRAFT IPA SUB-STYLES OVERVIEWTOTAL U.S. SUPERMARKETS


Fruit/Veggie/Spiced IPA’s remain the fastest growing IPA Sub-Style.

$205,404,963

$60,604,301

$23,256,891

$22,806,069

$10,248,716

$6,793,466

$1,987,378

$1,383,763

American

Imperial

Session

Fruit/Veggie/Spiced

English

Belgian White

Other

Black

Dollar Sales


Dollar Share of Craft IPA

Dollar Share Chg

YA

15.8% 61.8% -3.7%

6.9% 18.2% -2.7%

32.4% 7.0% 0.5%

662.8% 6.9% 5.8%

55.3% 3.1% 0.6%

6.7% 2.0% -0.3%

33.3% 0.6% 0.0%

-15.6% 0.4% -0.2%


CRAFT IPA SUB-STYLES # OF BRANDS SELLING TOTAL U.S. SUPERMARKETS


Total number of Craft IPA brands selling has exceeded 1,400. Session IPA’s are over 100 and Fruit/Veggie/Spiced IPA’s are over 60 brands.

439594

7851065

1353 1426

2011 2012 2013 2014 2015 YTD 2016

Total Number of IPA Brands

2011 2012 2013 2014 2015 YTD 2016

American 261 340 441 577 727 767

Imperial 117 160 209 277 330 336

Session 5 8 21 46 90 107

Fruit/Veggie/Spiced 5 18 43 62

Black 15 24 33 43 46 43

Belgian White 10 18 23 36 40 38

English 24 28 32 37 38 37

Other 7 16 21 31 39 36

TOTAL 439 594 785 1065 1353 1426


TOP CRAFT IPA MARKETS MINIMUM $3MMIRI DEFINED MARKETS – FOOD CHANNEL

Source: IRI InfoScan IRI FOOD Markets, YTD ending July 10, 2016

The continued success of Craft IPA sales in its top markets appears to indicate that IPA’s have plenty of runway left to grow their share.

47.5%

37.7%

37.6%

35.3%

34.7%

33.6%

30.6%

30.5%

29.6%

28.8%

San Diego, CA - Food

San Francisco/Oakland, CA - Food

Portland, OR - Food

Seattle/Tacoma, WA - Food

Sacramento, CA - Food

Los Angeles, CA - Food

Philadelphia, PA - Food

Miami/Ft. Lauderdale, FL - Food

Baltimore, MD/Washington D.C. - Food

Raleigh/Greensboro, NC - Food

Craft IPA dollar share of Total CraftShare of Craft

Chg YA

4.7%

2.6%

3.3%

3.0%

2.8%

4.6%

3.5%

4.6%

2.9%

4.0%


CRAFT STYLE PROFILE: GOLDEN ALESTOTAL U.S. SUPERMARKETS


Golden Ales are the #10 Ranked Craft Style based on Dollar Sales and are up +43% compared to year ago or +$9.5MM.

$10,587,195

$6,049,332

$1,331,714

$752,952

$643,309

$571,905

$505,979

$498,619

$437,765

$348,706

FIRESTONE WALKER 805 BLONDE ALE

KONA BIG WAVE GOLDEN ALE

REAL ALE FIREMANS #4 BLOND ALE

SAINT ARNOLD FANCY LAWNMOWER ALE

DESCHUTES RIVER ALE

RHINEGEIST COUGAR BLONDE ALE

ATWATER DIRTY BLONDE ALE

SOUTHERN STAR BOMBSHELL BLONDE ALE

DEEP ELLUM DALLAS BLONDE ALE

SAINT ARCHER BLONDE ALE

Dollar Sales

$6,037,375

$1,755,045

$1,604,309

$1,327,945

$1,076,133

Los Angeles, CA

Houston, TX

San Fran/Oakland, CA

San Diego, CA

Sacramento, CA

Top 5 IRI Markets - Food Channel

$163,223

$159,242

$151,521

$110,278

$71,600

NEW BELGIUM GLUTINY GOLDEN ALE

8TH WONDER DOME FAUXM CREAM ALE

AUSTIN BEERWORKS PEACEMAKER ANYTIME ALE

APPALACHIAN MNTAIN BOONE CREEK BLNDE ALE

GRIFFIN CLAW CLUBHOUSE CREAM ALE

Top 5 New Golden Ales


BEER AND CRAFT DOLLAR SALES TRENDS IRI FOOD REGIONS

Source: IRI InfoScan IRI FOOD REGIONS, YTD ending July 10, 2016

Craft Dollar Trend

10.7%

4.3%

12.1%8.9%

11.8%

9.9%

11.4%

11.3%2.1%

4.2%7.4%

10.2%

3.6%

4.2%

4.6%

0.9%

Beer Dollar Trend


TOP 10 MARKETS FOR CRAFT SALES IRI DEFINED FOOD MARKETS

Source: IRI InfoScan IRI FOOD Markets, YTD ending July 10, 2016

San Diego has the largest share gain amongst Craft’s Top 10 Markets this year.

Top 10 IRI Tracked Food Markets for Craft

Dollar Sales Dollar Share of Category

Current Change vs YA CurrentChange vs

YA

Los Angeles, CA – Food $65,449,768 $8,553,366 15.75 2.03

Portland, OR – Food $47,592,575 $2,133,219 44.61 1.14

Seattle/Tacoma, WA – Food $46,718,800 $428,478 40.92 0.78

San Francisco/Oakland, CA – Food $41,873,458 $1,945,234 35.81 1.20

New England – Food $35,456,525 $1,677,037 29.89 1.02

Chicago, IL – Food $33,520,938 $2,196,450 23.09 1.25

San Diego, CA – Food $33,124,957 $5,081,559 37.42 3.83

Baltimore, MD/Washington D.C. – Food $29,478,786 $2,968,216 33.94 1.50

Houston, TX – Food $26,377,923 $2,740,622 16.11 0.45

Detroit, MI - Food $23,092,101 $3,638,459 27.52 2.11


LOCAL CRAFT VS OTHER CRAFT VENDORSMICHIGAN STATE SUPERMARKETS

Source: IRI InfoScan IRI Michigan State FOOD, Quad weeks January 25, 2015 through July 10, 2016

Local Craft Vendor sales continue to outpace Other Craft Vendor sales.

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Dollar Sales

Total Michigan Local Craft Total Non-Michigan Craft


LOCAL CRAFT VS OTHER CRAFT VENDORSMICHIGAN SUPERMARKETS

Source: IRI InfoScan IRI Michigan State FOOD, Calendar Years 2012 through 2015 and YTD ending July 10, 2016

Local Craft Vendors have gained 17.5 share of Total Craft Dollar Sales since 2012.

38.4% 39.9%

47.1%

51.4%55.9%

61.6% 60.1%52.9%

48.6%44.1%

2012 2013 2014 2015 YTD 2016




LOCAL CRAFT VS OTHER CRAFT VENDORSMICHIGAN SUPERMARKETS

Source: IRI InfoScan IRI Michigan State FOOD, Calendar Years 2012 through 2015 and YTD ending July 10, 2016

Local Craft Vendor Dollar Sales continue along at a very healthy double-digit percent increase clip.

36.8%

22.1%

38.6%

27.5% 26.4%28.5%

14.8%

3.3%

7.5% 9.1%

2012 2013 2014 2015 YTD 2016

Dollar Sales % Change Year Ago



• Craft Brewers: Please continue to send me your new UPC information and high-resolution product images to insure your products are being tracked by IRI.

• Please E-mail me at [email protected]

FASTEN YOUR SEAT BELTS - Brewers Association · FASTEN YOUR SEAT BELTS 2016 MID-YEAR BEER CATEGORY...

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