5:15am

Thu August 8, 2013
Business Report

Colorado Beer Sales Flat Despite Rise In Craft Brewing

Despite strong growth in the last several years for Colorado craft brewers, overall beer sales are down statewide -- and it appears the state's behemoth brewers are dragging down the numbers.

The amount of craft beer produced in the state last year jumped 9 percent, to 40 million gallons. The percentage of the overall sales volume made up of northern Colorado’s largest craft breweries has jumped from 15 percent in 2008 to 24 percent in 2012.

By contrast, in the last year, both Anheuser-Busch in Fort Collins and MillerCoors in Golden have seen flat or declining sales by volume.

Northern Colorado Business Report publisher Jeff Nuttall says because the two brewing giants are responsible for most of the state’s production, they impact overall sales disproportionately.

"Small decreases in their production can offset large increases in the production of small and independent brewers," Nuttall says.

Although sales by volume are down, Nuttall says revenues for Anheuser-Busch and MillerCoors are up in some cases. That’s because the companies are focusing on specialty brews – higher-quality products such as Budweiser Black Crown and Bud Light Platinum – that produce higher dollar amounts for lower volumes.

Interview highlights:

What sparked the deeper look at this?

"Data from the Colorado Department of Revenue’s 2012 annual report show a decline in the taxable gallons of beer sold in the state from 2011 to 2012. More than 112 million gallons of beer were sold in Colorado in 2011, but last year that number declined by more than 1 million gallons.

Meanwhile, the number of manufacturer permits issued to breweries statewide has more than doubled from 26 in 2008 to 60 in 2012."

Given that sales for Colorado’s microbrews are strong and growing, those numbers seem counterintuitive…

"If you only look at craft beer sales, the picture is much different. There has been a 9 percent increase in the amount of craft beer produced in Colorado – from 36 million gallons in 2011 to more than 40 million gallons in 2012. Northern Colorado’s largest [craft] breweries' contribution to the total sales volume has jumped from 15 percent of statewide sales in 2008 to 24 percent in 2012."

Is this trend unique to Colorado?

"Not according to the Brewers Association. Craft beer production was up by 13 percent across the nation in the first half of 2013, while total beer production decreased by 2 percent."