BOSTON -- Craft beer is big business. And a recent slowdown in volume growth has one of the biggest names in the category treading carefully.
“We are disappointed with our depletion trends in 2016, which have remained weak so far in 2017," Jim Koch, founder and chairman of the Boston Beer Co., said during a recent earnings conference call. "These trends are affected by the general softening of the craft-beer category and cider category, and a more challenging retail environment with a lot of new options for our drinkers."
The number of craft-beer brewers in the United States topped a record 5,000 in 2016, giving consumers a growing number of craft-beer options. This leaves longtime brands like Boston Beer's Samuel Adams and the category as a whole slightly overwhelmed.
"Fourth-quarter depletion trends were driven by a decline in Samuel Adams, largely due to increased competition in the craft-beer category," said Martin Roper, CEO of Boston Beer.
In convenience stores, craft-beer sales were up 8% during 2016, compared to 26% growth a year earlier, according to IRI data. The beer category in all channels was down 3%, per Nielsen data. For Boston Beer Co., shipment volume in 2016 was down 6% compared to the previous year.
"There continues to be a flood of new entrants into the craft space," Koch said. "I think the last quarter or two in craft has begun to change the attitudes of people in the industry; that slowdown has come faster than pretty much anybody expected. But the shakeout is going to take a couple of years. And we intend to continue appropriate levels of support for Sam Adams, so that we emerge from this transition period with the strongest or one of the strongest brands in the craft industry."
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