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Tuesday, August 22, 2006

Craft Beer Sales Jump 11% in First Six Months of 2006

Craft beer has found its place in the American tavern and supermarket as a growing number of beer drinkers want an alternative to bland pale lagers. The latest statistics released earlier today clearly indicate the craft beer movement is as strong as it has ever been and picking up momentum.

According to the Brewers Association, which is based in Boulder, Colo., and has a membership of 800 craft brewers across the U.S., the volume of craft beer sold in America during the first half of 2006 rose 11 percent compared to the same period in 2005. This surge is even more impressive when you consider that craft beer sales increased by 7 percent in 2004 and by 9 percent 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."

"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 industry-wide production."

The last time the craft beer segment experienced double digit sales gains was in 1996. That was a time of rapid growth in the number of microbreweries and brewpubs across the country. In 1996 the number of craft breweries in operation increased by more than 35 percent, while overall volume increased by 26 percent. The number of operating craft breweries has remained relatively constant in recent years as sales growth has come from established craft brewers. Basically this means that in the mid-1990s, the growth in the industry came from expanding distribution of craft beer. The movement rapidly matured and a number of breweries closed and other labels were acquired by major national brewers. Now the craft brewing market is relatively mature, but the growth spurt since 2004 shows that consumer interest is still growing.

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 percent and dollar sales up 15 to 16 percent, according to Dan Wandel, Vice President of Beverage Alcohol Client Solutions for IRI.

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 percent of the craft segment volume. IRI uses other criteria in determining craft status and bases their data on retail store checkout scan data.

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