Press Release:

(Leesburg, VA) – According to GuestMetrics, the pace of expansion in the number of craft brewers is outpacing the growth of the craft beer segment, calling into question the sustainability of the craft expansion and the likelihood of consolidation ahead.

“The number of craft brewers in on-premise grew by nearly 17% in 2012 compared to 2011, and continued to grow at that clip during the first quarter of 2013 versus year ago,” said Bill Pecoriello, CEO of GuestMetrics LLC. “Similarly, the number of craft beer brands sold in on-premise grew about 22% in 2012, and continued at that growth pace during 1Q13 compared to the prior year. Given craft beers sold in on-premise grew high single digits during 2012 and mid-single digits during the first quarter of this year, the expansion of the number of craft brewers and brands significantly outpaced the underlying volume growth of the segment. While we don’t necessarily see a shake-out in the near term, looking out at the next 3-5 years, the question will be the sustainability of the economics of a lot of the new entrants given the declining volume per available brand. We will likely see consolidation within the segment”

“To put these figures into perspective, we calculated the average number of units sold per craft brewer across the overall system of craft brewers, and indexed that against 1Q11,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “While by definition the index was 100 during 1Q11, the overall index for 2011 was 95, then decreased to 88 in 2012, and during first quarter of 2013, the average number of craft beers sold per craft brewer declined to an index of just 82, implying that the overall attractiveness of the economics for the average craft brewer has diminished fairly significantly over the course of just two years.”

“We also evaluated the average number of brands being sold per craft brewer,” said Brian Barrett, President of GuestMetrics. “In 2011, each craft brewer sold on average almost 3.6 brands, and by 2012, that had increased about 4% to around 3.75 brands. Looking at the 22% expansion in craft brands being sold in on-premise, approximately ¾ of that is due to a larger number of craft brewers, and about ¼ due to a larger number of brands being sold per craft brewer, which is also putting pressure on the sustainability, particularly for the newer entrants in the segment.”. Please call or email GuestMetrics for more details on our craft segment studies.

About GuestMetrics LLC

GuestMetrics, LLC is revolutionizing how the hospitality industry operates. Despite the dawn of the Digital Age having begun more than three decades ago, the hospitality industry essentially functions the same way it did centuries before. GuestMetrics has cracked the code by collecting billion dollars in sales from tens of thousands of restaurants, and turning billions of raw transactions into intelligible data that is fundamentally transforming the business operations of everyone from the independently-owned bar/restaurant on the corner, to multi-national chains, to the food & beverage companies that supply them. Please visit www.GuestMetrics.com for more information and to arrange for a free demonstration.