Tuesday, March 7, 2017

2016: The Year of The IPA

2016 was the Year of the IPA. Not necessarily
a bad thing!
Beer Connoisseur magazine recently published some figures from IRI Worldwide about retail beer sales in 2016 (retail meaning beers sold by liquor stores, convenience stores, grocery stores, etc--not bar sales or tap-room sales). Being the data nerd that I am, I went to work in Excel to glean all insights I could from the sales figures (with the spreadsheet embedded at the bottom of this post if you're also a data nerd like me). And wouldn't you know, 2016 was the Year of The IPA. I think most of us felt this intuitively, but the sales figures were still rather shocking to me.

Overall, retail craft beer sales were up 8.2% in the US and topped $3.5 billion. And IPAs accounted for nearly 1/3 of these sales. The total retail sales of IPAs in the US in 2016 was just over $1 billion. Yes, we bought over a billion dollars worth of IPAs at bottle shops in 2016.  And not only that, but IPAs accounted for over 70% of all of the growth in retail craft beer sales in 2016.

Most of this is definitely because consumers are really liking more hoppy beers and drinking more IPAs. However, I think part of it because brewers are just using "IPA" as a catch-all branding term for anything hoppy. Of course you can see this easily since we now have IPAs, Session IPAs, Double IPAs, Triple IPAs, Imperial IPAs, Black IPAs, Brown IPAs, White IPAs, Belgian IPAs, Brett IPAs, Rye IPA, Red IPA, and more. (My favorite, of course, is the "Session IPA". How is a Session IPA different from a Pale Ale? Answer: Marketing.)

This is also evidenced by the dying styles--4 of the 6 styles on their way out in 2016 are interchangeable with IPAs--Barleywine, ESB, Strong Ale, and Red. Barleywine saw almost a 40% decline in sales from 2015 to 2016. Speaking from a strict style-guideline perspective, Barleywines are nearly identical to Double IPAs. But who actually knows that besides beer judges? Whereas, even the most casual craft beer consumers now recognize what an IPA is, and the logical leap from an IPA to a Double IPA is an easy one. The other dying styles have similar problems with consumer understanding.

The only problem with using IPA as catch-all name and then indiscriminately applying it to any moderately hoppy beer is that the craft beer industry is going to quickly dilute the meaning of "IPA". I recently had this problem when I wanted to drink an IPA and try something new. I bought a beer that said IPA front and center on the label from a great brewery, only to realize after popping the cork and reading the fine print on the back of the label that it was a "farmhouse/brett IPA" that resembled more of a traditional saison than any IPA I've ever had. The beer was good, but I was still disappointed because I just wanted an IPA.

Another interesting thing I see in the data is that "Seasonals" seem to be on their way out, and "Special Releases" are in. Overall, retail sales of beers classified as seasonals was down nearly 8% in 2016, whereas special releases were up 18%. The absolute number of seasonal sales is still far above special releases, but if we continue on the craft beer path we're on right now, all beers will be "special releases" before we know it.

Here are the trends from the numbers:

Top styles represented 3/4 of all retail sales led by IPAs:

  1. IPA (38.4%)
  2. Wit (13.5%)
  3. Pale (10.0%)
  4. Amber (5.3%)
  5. Amber Lager (5.0%)
  6. Fruit/Veggie/Spice (4.4%)

Top growth styles represented 95% of all growth led by IPAs:

  1. IPA (71.2%)
  2. Golden Ale (9.9%)
  3. Fruit/Veggie/Spice (5.0%)
  4. Stout (3.7%)
  5. Wit (3.0%)
  6. Pilsner (2.0%)

Up and coming styles with more than 20% growth and less than $100 million in sales:

  1. Golden Ale (48.2%)
  2. Saison (44.1%)
  3. Rye (30.3%)
  4. Stout (26.9%)
  5. Scottish (21.2%)
  6. Pilsner (19.3%)

Dying styles with more than 4% decline and less than $25 million in sales:

  1. Barleywine (-39.3%)
  2. Malt Beverage (-30.9%)
  3. ESB (-17.2%)
  4. Light Beer (-8.0%)
  5. Strong Ale (-4.9%)
  6. Red (-4.6%)

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