What's up with 12-packs? Is on-premise returning to pre-pandemic levels?

Just Tapped

First up, some housekeeping. We recently sent all qualified referrers our 2023 Craft Beer Preview. Now we expand the offer. Refer one friend or colleague to The Taster Tray and you too will learn what important insiders like David Walker (Firestone Walker Brewing), Tomme Arthur (Port Brewing, The Lost Abbey), and others think about the coming year in craft beer. We share an easy way to do it in the referral section below.On to this week's Tray, let's talk about package size. Get your mind out of the gutter, we're talking about beer packaging. Also, we have some good news regarding on-premise sales.

Uh, I was told there would be no math

Bart Watson analyzes mountains of craft beer data so you don’t have to. The Chief Economist for the Brewers Association recently released a report on craft beer packaging trends in 2022. From it, we gleaned some interesting stuff.

Speaking of the tumultuous craft beer market and its impact on packaging, Bart says, “Some of this was due to the pandemic, but more is likely due to the evolving craft category, consumer preferences, and recently perhaps even the changing economy.”

Bart's report notes that some package sizes (packs of cans) are gaining share. This is according to both the Brewers Association's own craft beer data (above) and the larger set of IRI scan craft beer data. It’s not some shocking spike, and the most common package size is still the good old 6-pack, but there is some upward movement for singles and even more for 12-packs.

Watson says it would take a deeper dive to really understand the data. For now, he offers some speculation about this trend in consumer behavior. One theory involves the state of the economy and the application of basic beer math: 12-packs offer a lower “per-can” price, and singles offer a lower “per-trip” cost. There is a flaw in that logic, with one assertion negating the other, but the basic beer math pencils out. Here at The Taster Tray, we've never been good at math but can usually find X when beer is involved.

We think consumers are shopping smarter, but they’ve also gotten over the sticker shock. Even if a pitcher costs a whopping $22, our big human brains recognize that it is still cheaper than four pints at $6 each. Craft consumers recognize the value proposition craft beer offers: cost = quality. That's why they're craft consumers, but we should not take that for granted.

Regarding 12-packs, we are eternal optimists and consider it good news that more consumers are comfortable dropping that kind of coin when purchasing beer. Problem is, not every brewery is equipped to shift gears from 6-ers to 12-ers. Luckily, for now, the 6-pack still dominates.

Our takeaway? We think consumers who recognize craft beer's value proposition are looking for more on the value side of the equation. Find a way to give them a better value as prices rise, either by scale or by rewards. Do the beer math and show your work.

On-premise, on the rise

It's no secret that on-premise beer sales have struggled coming out of the pandemic. It goes hand-in-hand with the struggles of the on-premise industry overall. This week Brewbound reported that velocity at bars and restaurants across the U.S. has increased +20% compared to last year. The happy data comes from CGA, the on-premise data arm of NielsenIQ.

According to the report, "On-premise velocity between January 15-28 also outpaced those two weeks in January 2020, just before the COVID-19 pandemic upended the hospitality industry."

We still need to dig into this data and keep an eye on it moving forward, but it's nice to have some happy news to share. The real question is, how will this uptick in overall on-premise sales translate to craft beer? Read more on Brewbound (paywalled).

Around the Web

• Happy National Pizza Day, which is also National Chocolate Day. Get a chocolate stout to pair with a pepperoni pizza and celebrate!

• Less crypto, more beer. As Bud backs off and crypto stumbles, expect to see more beer ads on Super Sunday. (Story by Quartz.)

• The global market for "small brewery equipment" is projected to grow significantly over the next decade, according to Future Market Insights. (Story by GlobeNewswire.)

Say What?

Feedback from last week, in their own words: "Something about this week's newsletter made it feel like the best to date at least." - Camden@...

Thanks for that feedback, Camden. Also, thanks for pointing out the small grammatical error in last week's newsletter. You're right, "less" should have been "fewer." Our editor is a grammar geek, but also a bit lazy. We'll try to be better.

Feedback

Refer Someone

👉 Here's an easy way to do it. Copy your unique referral code below and paste it into a post or message on Twitter, FB, or Instagram. Text 'em the URL. That works too!

This week's Taster Tray was composed by Kendall Jones.