Beer sales ail, but craft brews hop
Small brewers tap in to demand as giants find recession more bitter
By ALISON SIDER
LITTLE ROCK — It might be expected that sales of beer in general would be, well, flat in a recession. And they were in the past year.
But sales of craft beers made in small breweries increased in Arkansas and nationwide.
There are four craft breweries in Arkansas. One is Diamond Bear Brewing Co. in Little Rock, the state’s only production brewery. The others are brew pubs attached to restaurants, including Bosco’s, part of a Memphis-based chain.Craft beers are still dwarfed in sales by giants such as Molson Coors and Anheuser-Busch InBev, making up only about 6 percent of the total market for beer by dollars, according to data from the Nielsen Co.
But craft sales increased by 12.4 percent in value and by nearly 9 percent in terms of case sales during the 12-month period ended Feb. 6, while total cases of beer sold fell by 1 percent.
Craft beers have expanded beyond their traditional strongholds in California, Colorado and the Pacific Northwest, popping up in unexpected places nationwide, said Paul Gatza, the director of the Brewers Association, a Boulder, Colo.-based tradegroup. Sales are growing fastest in the South and Middle Atlantic States, he said.
“The whole country is pretty much on board,” he said.
Russ Melton, owner of Diamond Bear, said the company’s 2009 sales volume increased 24 percent, to about 36,000 cases. And he expects bigger things. He is selecting a larger location for the brewery, in Little Rock or North Little Rock, one that will allow it to expand to at least 275,000 barrels. It opened in 2000 and is still at its original location on Cross Street in downtown Little Rock.
“We’re busting at the seams now,” Melton said.
Melton said the move is part of a long-term strategy to become a regional brewery. Diamond Bear signed on with Glazer’s Distributors,one of the largest alcoholicbeverages distributors in the country, this year and is now in stores across the state.
Distribution of Diamond Bear expanded into Mississippi this year and has plans to begin sales in Alabama once it is able to increase production in the new location.
Chris New, general manager of Vino’s Pizza Pub and Brewery at 7th and Chester streets in Little Rock, said tastes have gotten more sophisticated.
“We had the very first Guinness tap in the state of Arkansas. That’s everywhere now. But with that cultivation, you’ve turned people on to things like Englishstyle pale ales, and imperial IPAs,” he said, referring to a type of India Pale Ale.
New said Vino’s increased production of its beers byabout 10 percent in 2009.
“We do a holiday beer that’s got like seven spiced ingredients; those aren’t things people are used to. That’s where you cultivate a following. You’re getting people away from Budweiser, you’re getting them away from Miller Light.”
Last year, Vino’s sold beeron Friday nights at Arkansas Travelers home games. This year the restaurant will sell beer at all home games, but New said there are no plans for further expansion.
Kari Larson, an owner of the Hog Haus in Fayetteville, said that while she sells noncraft beers, the microbrews she makes account for about90 percent of beer sales.
“On the craft-brew side of things, [sales] have been fantastic,” she said. Larson opened the Hog Haus in 2004, in what was formerly the Ozark Brewing Co.
“I think it might be a little bit of a trendy thing right now. It’s forced us to be more creative and make some beers that we haven’t made before,” she said.
Legal changes in the past decade have made it easier to operate a craft brewery in Arkansas, Melton said. Laws that allow “native brewers” to sell beer and give tours on Sundays, as well as permit and tax regulation changes, have made Arkansas one of the most progressive states for small brewers, he said.
“Our craft brewers are Arkansas businesses, obviously, and the most we can do to help make them viable we try to do,” said Michael Langley, the director of the Alcoholic Beverage Control Board.
This article was published 03/13/2010 at 6:22 a.m.
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