Changes in Distribution Drive Market Share in Beer Category
According to GuestMetrics, changes in distribution are a critical factor driving the share gains and losses in the beer category in the on-premise space over the course of the past two years.
“In analyzing the over 10,000 unique beer brands sold in our system since the beginning of 2012, changes in distribution coverage across full-service restaurants and bars is one of the most important factors determining success and failure in the beer category,” says Bill Pecoriello, CEO of GuestMetrics. “Based on our POS data, comparing the first half of 2013 against the same period in the prior year, the two beer brands with the largest gains in the percentage of locations carrying them have been Sam Adams Angry Orchard and Bud Black Crown, which are the only two brands we track that achieved a double-digit gain in distribution. While the beer category as a whole has been experiencing very challenging trends thus far in the year, the dynamics in terms of distribution coverage are far from static, with fairly large shifts taking place in which brands restaurant operators are choosing to carry.”
Based on data from GuestMetrics, Angry Orchard experienced the largest year-over-year increase in distribution coverage during the first half of 2013 (+15 points), followed by Bud Black Crown (+11 points), Goose Island (+9 points), Redd’s Apple Ale (+7 points), Coors Batch 19 (+5 points), Coors Third Shift Amber Lager (+4 points), Leinenkugel’s Summer Shandy (+3 points), and Lagunitas IPA (+2 points).
“We also looked at the impact of the distribution increases among those brands in terms of their share gains, and found some interesting results,” says Peter Reidhead, vice president of strategy and insights at GuestMetrics. “For all those brands, with the exception of Lagunitas IPA, nearly 100 percent of the share gains the brands achieved was due to increased distribution. Lagunitas on the other hand, had a slightly more balanced growth profile, with 30 percent of its gain in share coming from increased sales per point of distribution, and 70 percent from increased distribution.
“Conversely, we also analyzed which of the 10,000 brands saw the largest year-over-year declines in distribution in the on-premise space, which were Amstel Light, Miller Genuine Draft, Bass, and Newcastle,” continues Reidhead. “Looking at the cumulative share loss experienced by those brands, 40 percent of those losses can be attributed to decreases in distribution among restaurants and bars.”
“While overall beer sales in on-premise during the first half of 2013 are flat compared to the prior year, and volumes are down about 3.5 percent, it would be incorrect to think the dynamics in the space are even remotely static,” concludes Brian Barrett, president of GuestMetrics.