August 2020 TTB results for US beer production have been released and are in line with expectations, 2020 vs same month 2019 shows 2% increase . August 2020 production in barrels was 15,733,232 compared to 15,411,347 in the same month of 2019. For the YTD period, January-August 2020 compared to 2019, the aggregate decrease in production was 1.9% . The reality is: the impact of COVID began to be felt in February 2020 and that precipitated a slight shift from barrels to bottles and cans: people weren’t going out to breweries and taprooms.
The loss of barrels produced seems to come from the big producers, not from the craft beer segment.
Having mentioned bottle and can packaging, August 2020 versus 2019 “Bottled and Canned” August 2020 saw a 10.4% increase in the number of barrels delivered in bottles and cans. Obviously, that as a significant impact on off-premise distribution. The barrels are the pure sight of taverns and breweries. January-August 2020 versus 2019 had an increase of 4.8%. Comparing two normalized years, 2019 versus 2018, 2019 had a 2.5% decrease in bottle and can volume.
A good guess is that COVID-19 has really impacted distribution strategies for the craft beer industry. However, August 2020 versus 2019 saw a 58% decline in barrel sales.
Brewers Association indicates, using 2019 data, that craft beer had a 13.6% share of the total US beer market. Craft beer market segments are made up of: regional producers, taproom, microbreweries, breweries and contract producers. As a whole, the craft beer market had a 3.6% increase in keg production in 2019 over 2018, while the industry as a whole had a 1.6% decrease in 2019 over 2018.
Using TTB data and assuming less than 60,000 barrels produced, 2019 versus 2018 (2019 is the last year of full-year data), that group of brewers was 6,113 and 5,847 respectively. Comparing those years there was a 7.7% increase in production, 60,000 barrels and less.
However, growers in roughly the same number, producing between 60,001 and 6,000,000, only achieved a 4.1% increase in output. The 6,000,001 barrel producer category above is considered the large company (multinational producers) and is not considered in the craft beer producer category.
The Brewers Association has defined the categories of craft brewers, but no brewer considers craft to produce more than 6 million barrels. The categories are: regional growers, taprooms, microbreweries, and contract growers.
YTD 2020 has seen a decline in the industry’s total beer production. This also applies to craft brewers.
Tavern operators have seen the biggest drop in sales due to the lockdown and that is also reflected in reduced draft beer sales and increased can and bottle sales.
As with wine sales, the move to the premium brand has been the bright spot.
Moving forward to 2021 will require digging a deep hole that some small craft beer producers externally say the hole may be too deep; according to BA, that could reach 20% of small brewers leaving the industry.
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