By Andrea Riberi, Senior Vice President, Nielsen, and Erin Erskine, Associate Client Manager, Nielsen
What’s brewing in the beer aisle? India Pale Ales.
While not as brawny on the commercial front as some of the beer industry’s big names, India Pale Ales, commonly referred to as IPAs, have been riding the craft brewery wave over the past few years and hopping up market share by the barrel full. Today, this crafty bunch, characterized by high doses of hops, is driving craft beer growth and accounting for an increasing portion of the overall craft beer stein in the process.
IPAs secured 12.1 percent of U.S. sales among craft beers in 2013, up from 9.1 percent in 2011, helping them move in to the third most-popular craft style behind Seasonals and Witbier. What’s more, IPAs were the second-largest driver of craft growth in 2013, accounting for 16.8 percent of craft growth.
So what’s fueling IPAs’ growth? Much of the credit goes to the country’s retailers, as they’ve been tapping in to the growing popularity and increasing their IPA stock along the way. And today, the shelves are brimming with IPAs, as the number of brands on the shelves in grocery stores has nearly doubled since 2011. Back in 2011, the average grocery store had just more than six IPAs on shelf. In the latest four weeks, there were about 12.
But grocery stores aren’t the only ones tapping the IPA keg. The convenience channel is starting to catch on as well, as many are beginning to stock IPAs for the first time. Back in 2010, only about 11 percent of convenience stores carried IPA. In the latest four weeks, 32 percent carried them. In fact, the convenience channel is now responsible for about 39 percent of IPAs’ growth.
Which sub styles of IPAs are selling best? American IPAs, which are made with American hops like Chinook or Cascade, account for 85 percent of IPA sales and have powered 83 percent of growth in the latest 52 weeks. Imperial (or Double) IPAs, which have a higher alcohol-by-volume level, follow with 9 percent of IPA sales and 13 percent of growth. English, Belgian and Black IPAs round out the rest of the style (at 4%, 2% and 0% of IPA sales, respectively).
Will IPAs continue to grow? Given their continued growth, particularly in the Pacific Northwest, it’s unlikely that the trend will reverse any time soon. The Pacific Northwest has long been the hotbed for IPA activity, where American IPAs singlehandedly account for the most craft sales of any style. IPAs also account for about 22 percent of case sales in this region. What’s more, IPAs have continuously claimed increasing share of craft sales over the past few years in the Pacific Northwest. Four years ago, IPAs accounted for about 16 percent of craft case sales. Today, they claim 23 percent of craft sales. And it’s not just the quantity that’s impressive; speed of sales is notable, too. Notably, most of the top IPAs are selling off the shelves quicker than they were just a couple of years ago.
So are hopheads only buying IPAs? No. In fact, IPAs make up just about one-fourth of IPA-drinking households’ total craft purchases. So in that respect, IPAs don’t account for a much larger portion of their fans’ craft purchases than other styles. And this highlights that hopheads have a passion for all craft styles. While not everyone is jumping on the IPA train, the cars are steadily filling and we expect to see this style stick around and continue to grow overall craft sales.