Craft Beer Sales See Double-Digit Jump

First-half volume up 11%

BOULDER, Colo. -- The Brewers Association has reported the volume of craft beer sold in the first half of 2006 rose 11% compared to the same period in 2005.

The rate of growth in the craft beer segment appears to be accelerating, said Paul Gatza, director of the Brewers Association professional division. This is the third straight year we've seen an increase in the craft beer growth rate.

The current surge in growth comes on top of strong performance by the nation's small, independent and traditional brewers over the last two [image-nocss] years. In 2004, the volume of craft beer sold increased by 7% and in 2005 it rose by 9%.

This growth represents strong performance by established craft brewers over several years, said Ray Daniels, director of craft beer marketing for the Brewers Association. Unlike the early days of our industry, newly founded breweries do not add significantly to industrywide production.

The craft beer industry last saw double-digit growth in 1996, a year in which the number of craft breweries in operation increased by more than 35% and volume increased by 26%. By contrast, the number of operating craft breweries has remained relatively constant in recent years as sales growth has come from established craft brewers.

The current trend in craft beer sales increases demonstrates a growing consumer preference for the diverse and flavorful beers made by craft brewers, said Gatza.

Craft beer sales in grocery, convenience, drug and liquor stores for the first half of 2006 as tracked by Information Resources Inc. (IRI) show volume growth of 12% to 13% and dollar sales up 15% to 16%, according to Dan Wandel, vice president of beverage alcohol client solutions for IRI.

I expect the trends we're seeing for craft beer will continue and that this will be a very good year for the segment, said Wandel during a recent Brewers Association teleconference.

Brewers Association craft brewers meet two criteria: 1) classification as a small brewer producing less than 2 million barrels of beer per year, and 2) either their flagship beer or the majority of the beer they produce is all-malt and does not include corn or rice in the recipe. The first-half estimate is based on interviews and public reports for at least 70% of the craft segment volume. IRI uses other criteria in determining craft status and bases their data on retail store checkout scan data.

The Brewers Association annually publishes a detailed industry review that catalogs production for each brewery and tracks industry trends over the history of craft brewing. That report appears in the May/June issue of the association's magazine The New Brewer. The Brewers Association membership includes more than 800 craft brewers.

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