The infographics below are derived from data contained in
BMC's DrinkTell™ Database with Market Forecasts


In stagnant, modest growth or declining markets, digging into the details to find pockets of growth can provide beverage marketers a path to run on to revitalize a segment and keep their offerings fresh and relevant. The premiumization of the beverage market is a case in point. This can be illustrated in the fruit beverage and ready-to-drink (RTD) tea segments as well as in adult beverages, where the craft beer segment outpaces the category as a whole. In this issue of DrinkTelligence, Beverage Marketing shares data and insight found in its DrinkTell™ database to explore the trend from several angles.

In 2016, according to BMC's DrinkTell™ database, while volume in the long-stagnant total fruit beverage market grew by 0.41% (its first gain in over a decade, incidentally), the superpremium juice segment grew by 8.00%. These juices are perceived as more healthy than run-of-the-mill fruit beverages and thus mitigates somewhat the perception of fruit beverages in general as being calorie-laden — an attitude that had begun to form in the 2000s during the Atkins' Diet trend (and which has never fully subsided).

The pattern is even more pronounced with RTD tea. While overall RTD tea volume grew by a respectable 3.40% in 2016, the small superpremium RTD tea segment surged ahead by 14.50%. Again, as with superpremium juices, a growth segment of consumers are willing to "trade up" to products that offer better perceived health benefits, superior taste and badge value.

Next, let's take a look at the beer market. As the chart illustrates, craft beer provides a light in an otherwise stagnant segment. That said, that doesn't necessarily mean clear sailing. With the number of breweries operating in the United States growing year over year, an increase in competition is inevitable. This poses a challenge for the craft segment of the beer industry as it has experienced waning growth over the past few years; this is particularly true for the larger regional craft suppliers. Craft beer, priced at the super-premium end of the spectrum has helped stem the decline of the overall beer industry. In 2016 growth of craft beer outpaced that of the overall beer industry by six percentage points, growth occurring despite average retail price per case for craft beer over 180% that of the average for the overall beer industry.

Despite the slowdown there are still plenty of opportunities for suppliers. From a study of legal drinking age college students conducted with BMC's partners Riddle & Bloom (formerly known as Fluent), Beverage Marketing Corporation sees preference for craft beer increase three percentage points (+13%) from 2016 to 2017. Conversely, preference for domestic beer declined from a 13.4% share to 9.5% in 2017. With more of the students expressing a preference towards craft the question is how do we attract and differentiate from other suppliers to entice these Gen Z millennials?

When we asked college age craft consumers "How would you describe your relationship with craft beers?" the largest increase year over year were in the response "I always choose craft" seeing an increase of 10% and I mostly drink craft on-premise gaining 9%.

For companies with ample capital, one way of combating the slowing of growth has been an expansion of capacity, markets and territories and also the construction of second facilities closer to new markets, as consumers continue to embrace local products. Another way craft suppliers have engaged consumers is through taprooms in these facilities. This gives craft brewers the opportunity to engage consumers through events like food truck events and 5K races where they share their experiences over social media. This is also a huge opportunity for brewers to sell beer on draft and also gives consumers the ability to take cans, bottles or growlers home for consumption (where laws allow) where margins can be 40 to 50 percent greater than if they sold their beer wholesale through a distributor.

While competition has increased and the landscape has expanded, there remain opportunities for craft brewers with favorable consumption behavior among younger consumers and the ability to engage them on their own premises.

Although obviously there are many other vantage points from which to explore the premiumization trend including brand trends, demographic profiles of consumers and consumer brand equity assessment, the statistics and comments offered here provide a taste of the data and insight BMC's DrinkTell™ database offers on the subject. To schedule a demo, contact Charlene Harvey at 212-688-7640 ext. 1962 or via email at

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