“Better Beer” Cools Down In 2016, As Craft, Imports See Growth Slow In First Half

As the July 4th weekend kicks off, the beer business is facing an uphill climb. While the category’s mainstream brands continue to slide, the “better beer” segment has also cooled a bit in 2016. Given those trends, Impact Databank projects that total beer consumption in the U.S. market will fall by 0.2% this year—marking the third decline in four years as beer continues to lose share to both spirits and wine.

According to IRI, which covers multi-outlet and convenience store channels that account for just under half of all U.S. beer consumption, beer sales were up by 0.5% year-to-date through June 12. That growth rate fell short of the year-earlier period, when sales rose by 1.4%.

Progress is still solid for the better beer segment, but growth has slowed considerably. Craft beer is up by around 6% in IRI channels through June 12, compared to a 17% advance a year ago. Imports are up 6.7%, slower than the 8.3% growth rate in the year-earlier period.

Fully half of the top 30 craft beer brands in IRI channels are down in both volume and value this year. However, the vast majority of those 15 brands in decline are either owned by brewing giants like Anheuser-Busch InBev and MillerCoors or by players like Boston Beer Co., Sierra Nevada and New Belgium that have grown so large that they’re no longer viewed as craft brewers by many consumers. Indeed, Boston Beer’s Samuel Adams range alone has four of the top 30 entries, and all are losing ground. Meanwhile, craft’s smaller players are thriving, and newcomers continue to emerge around the country.

On the import side, nine of the top 10 imported beer brands in IRI channels posted dollar sales growth year-to-date through June 12, with only Tecate declining. The Corona franchise’s progress remains solid (Corona Extra’s volume was up 6.4% and Corona Light was up 4.7%), while portfoliomate Modelo Especial is on fire. Modelo Especial, which became the second-leading import brand in the U.S. market when it leapfrogged Heineken in 2014, was up by 22.4% through June 12. Meanwhile, Modelo Especial’s Chelada line extension jumped by 38.2%. The Chelada extension has grown so fast that it’s on pace to become one of the top 10 import brands by dollar sales in IRI channels by year-end.

Campari America Adds Ultra-Premium Grand Marnier To Portfolio

Campari America is starting off the second half of 2016 with one of the U.S. spirits market’s leading high-end brands newly added to its portfolio. Just days after Gruppo Campari secured control of Grand Marnier owner Société des Produits Marnier Lapostolle (SPML), Campari America has added the upscale liqueur brand to its lineup, effective today. With annual sales of nearly 500,000 cases and offerings ranging from the core Cordon Rouge ($39.99) to the high-end Quintessence ($899), Grand Marnier generates retail sales value of more than $230 million, according to Impact Databank. The addition of Grand Marnier will push Campari America’s yearly aggregate retail sales well beyond the $1 billion mark. Along with the Grand Marnier range, Campari America will also be handling SPML’s Kappa Pisco, which retails for around $30.

News Briefs:

•Moët & Chandon has introduced Moët Ice Imperial Rosé, a new rosé Champagne intended to be consumed over ice. According to the Los Angeles Times, the new product is composed of Pinot Noir, Pinot Meunier and Chardonnay, and will begin by targeting select accounts in Los Angeles, Miami and other key markets. It joins Moët’s existing Ice Imperial Champagne, which has been showing strong growth in outdoor spring and summer on-premise venues, according to Moët Hennessy USA CMO and EVP, brands, Rodney Williams.

•Mendocino Wine Company, known for its Parducci Wine Cellars brand, has acquired the wine portfolio of Offbeat Brands for an undisclosed sum. The purchase includes the Zin-Phomaniac, Tie-Dye, Jellybean and Slices Sangria labels. Offbeat founder Mike Kenton, a former Artesa Winery and Gallo executive, will join Mendocino Wine Company, taking a “senior leadership role…to drive new innovation and lead strategic channel management.” In addition to Parducci, Mendocino’s brands include Paul Dolan Vineyards and Moniker Wine Estates.

•Frederick Wildman & Sons is adding to its import roster with the Barossa Valley’s Hewitson winery. Made almost exclusively from single vineyard sites, Hewitson’s premium lineup includes Baby Bush Mourvedre, Falkenberg Shiraz, Gun Metal Riesling, Lu Lu Sauvignon Blanc, Miss Harry Rhone Style Blend, Ned and Henry’s Shiraz and Old Garden Mourvedre. Wildman president John Sellar said the addition of family-owned Hewitson bolsters the company’s position as “the Australian category at the premium level is showing the beginning of a trend up.”

•William Grant & Sons’ Drambuie whisky liqueur has partnered with Austin-based Chameleon Cold Brew Coffee for the launch of Drambuie X Chameleon cocktail kits. The collaborative recipes include the Java Royale, Highland Sour, Sand and Smoke, Spark & Stormy and Great Pretender cocktails. The collaboration’s signature Java Royale ready-to-make kit is available now from delivery service Cocktail Courier through September. William Grant & Sons acquired Drambuie from Scotland’s MacKinnon family for an undisclosed sum in 2014.

•Provence rosé star Chateau d’Esclans is debuting new packaging for the 2015 vintage of its Rock Angel estate-bottled rosé. The new design is meant to present an edgier alternative to popular portfoliomate Whispering Angel, with a smaller Chateau d’Esclans icon and more prominent Rock Angel imagery. Previously known as Chateau d’Esclans rosé, the estate-bottled wine was rebranded Rock Angel just over a year ago. Rock Angel ($35) is part of a portfolio that includes Whispering Angel ($22), as well as prestige cuvees Les Clans ($60) and Garrus ($100). Imported by Shaw-Ross, the Chateau d’Esclans range currently sells about half its 415,000-case volume in the U.S. market, accounting for roughly 20% of overall Côtes du Provence rosé sold in the U.S.

Craft Brewing and Distilling News:

•Seattle-based Redhook Brewery is extending its year-round lineup with the launch of a new American Pale Ale. Rolling out nationwide this month, Redhook’s American Pale Ale is made with Chinook and Cascade hops and Pale, Munich and Caramel malts. The 4.7%-abv expression joins the ESB, Long Hammer IPA and Extra Special Lager labels in the brewer’s existing year-round range. Redhook, which operates breweries in Woodinville, Washington and Portsmouth, New Hampshire, is part of the Craft Brew Alliance portfolio.

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