Hunting for New Markets? Check These Out

Dear Client:

We all know craft growth is getting harder to come by, and depending on where you sell your beer, growth may be even more difficult to muster. So where are the opportunities for craft these days?

We reached out to the good folks over at Nielsen to figure out just that.

Caitlyn Battaglia, a manager at the firm’s Bev Alc practice, equipped us with some regional, divisional, and market level insights for a better understanding of where craft has the most opportunity to develop. (Note: We’re not advocating that craft brewers necessarily expand far from their backyards in this climate. But if you’re a brewer looking to expand, consider the stats below).

Basically, Caitlyn shared a list of where craft dollar growth stands in the grocery channel (divided by geographic segmentation) in the 52 weeks ending April 20, and another list detailing craft dollar share in food for certain areas over the same timeframe.

Having the two lists is key, of course, because as you’ll soon find out – low share doesn’t necessarily mean opportunity, and high share doesn’t always mean a market is tapped out. For example…

At first glance, Nielsen’s East South Central Division (AL, KY, MS, and TN) looks like low-hanging fruit for craft growth: Out of the ten divisions that make up the entire U.S., craft’s dollar share (of the total beer/fmb/cider category) in East South Central’s food channel ranks second to last (17.4).

So yes, theoretically, there is tons of “room” for growth here, only problem is — craft ain’t growing in this division. The East South Central Division ranks dead last for dollar sales growth in the food channel, down 9.2%.

On the other hand, you look at a division like New England (CT, MA, ME, NH, RI, and VT) where craft’s dollar share in food tops all divisions, at 32.6. With craft making up nearly a third of sales in the food channel here, some may conclude that this region has exhausted its growth, but that ain’t the case, either.

The New England Division has the second highest dollar sales growth in food, up 3.4%.

So where is the sweet spot when it comes to divisions (low share in food, and high growth)? That honor would go to the Mountain Division (AZ, CO, ID, MT, NM, NV, UT, and WY).

Craft accounts for 19% of the beer category dollars in food for this particular division, which ranks sixth, and it holds the highest dollar sales growth in food, up 8%, the highest percent change for any division.

Looking for a tighter sweet spot? We have you covered.

There’s two specific markets (we’re talking single market now, rather than division) where the combination of share and growth look pretty promising, at least for now. Those two would be: Oklahoma City Tulsa and West Texas.  

Craft’s dollar share of food in Oklahoma City Tulsa, 7.7, is the second lowest of any market in the U.S., but the segment’s dollar sales growth in the channel there is the second highest of any market, up 124.1%. Of course, these shocking numbers in OKC Tulsa are almost entirely the result of the state’s changing alcohol laws. Recall, the state put an end to its 3.2 beer mandate late last year, allowing stronger beer to be sold in grocery as well as convenience stores, and thus opening the floodgates for craft. Get it while it’s hot, we guess.

We’d note that the only market experiencing higher dollar sales growth in food is Denver, up 134.1%. Again, the result of another law change. Recall at the start of this year Colorado too did away with 3.2 beer in grocery and convenience and allowed the sale of full-strength beer.

Meanwhile, in West Texas, craft’s dollar share of food is 8.2. It ranks right behind OKC Tulsa as third lowest in the nation. Yet, craft is apparently catching on in the market, as its dollar sales are up nearly double digits in food (up 9.9%), which ranks as the fifth highest percent change in food for U.S. markets.


One of the main players in the hard kombucha segment, Full Sail Brewing Co.’s Kyla Hard Kombucha, has closed a capital raise, the company announced today. The round was led by San Francisco PE firm, Encore Consumer Capital, and Dan and Angie Bastian, who founded Boomchickapop and sold it to Conagra for $250 million in 2017.

While Kyla was “established under” Full Sail Brewing Co., it is now expanding as a standalone entity, the company said. With Kyla’s new funds, the brand will build out a Kyla-focused sales and marketing team. It will also start searching for a location for “a kombucha innovation lab and tasting room where its brewers can experiment and incorporate consumer feedback into new flavors and variations.” It might go in Portland.

Meanwhile, Full Sail is “consolidating” some office space in order to “reinvest back into the business.” However, Full Sail will “build out additional office space in its main Hood River brewery building.”

The building for sale, at 408 Columbia, “is a stand-alone building located in a highly desirable area of downtown Hood River, zoned for a range of options including office, residential and light industrial use,” it said.

Full Sail and Kyla CEO Cory Comstock said they are “happy to be at the forefront of [kombucha growth] while also continuing to brew our award-winning beers.

“Raising capital, growing the KYLA footprint and consolidating our Full Sail office space will allow us the opportunity to make both the beer and kombucha brands thrive,” Cory said.


“Sufferfest has officially moved its brewing operations to parent company, Sierra Nevada’s Chico, CA headquarters,” per company announcement. “The strategic move starts with a major expansion of Sufferfest’s footprint in California, enabled by Sierra Nevada’s robust distribution network.”

“Effective immediately,” per release, Sierra Nevada will “brew and distribute Sufferfest’s consolidated all-star lineup starring Repeat Kolsch, Flyby Pilsner and FKT Pale Ale.”

It added that Sufferfest’s footprint would “grow materially” in California in the back half: “Moving into Q3, Sufferfest will become widely available in new and existing California regions, including Los Angeles, Orange, San Bernardino, Inyo, Ventura, Santa Barbara, Humboldt, Shasta and beyond, with larger goals in mind by the end of the year.”

Last we reported on Sufferfest’s California network, it included Reyes, Classic and Beauchamp, blanketing a “huge footprint” from Ventura to San Diego. In San Francisco/San Mateo, they were with Matagrano, with more NorCal distribs promised.

Recall that Sierra Nevada announced the acquisition (its first ever) of the better-for-your beer brand earlier this year [see CBD 02-04-2019]. More details from founder Caitlin Landesberg soon.

Until tomorrow,

Jenn, Jordan, and Harry

“Look for the ridiculous in everything and you will find it.”

– Jules Renard

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