Craft Beer Growth Leads All Adult Beverages for Second Year; Volume Up 9 Percent in 2005, Says Brewers Association.

BOULDER, Colo. -- America's craft brewers sold 9.0 percent more barrels of beer in 2005 versus 2004, making craft beer the fastest-growing segment of the U.S. beverage alcohol industry for the second consecutive year, according to the Brewers Association, the Boulder, CO-based trade association for U.S. craft brewers.

"Craft beer volume growth far exceeded that of large brewers, wine and spirits in 2005," said Paul Gatza, Director of the Brewers Association. "And even though imported beer grew nicely in 2005, craft beer grew at a faster rate."

The Brewers Association estimates 2005 sales by craft brewers at 7,112,886 31-gallon barrels, up from an adjusted total of 6,526,809 barrels in 2004, an increase of 586,077 barrels or 8.1 million case-equivalents.

Compared to craft beer volume growth of 9.0 percent, spirits volume increased at 3.3 percent in 2005 and wine volume was up 2.9 percent. The import segment of the beer industry rose 7.2 percent in 2005 while non-craft domestic beer volume declined slightly for the year. This establishes craft beer as the fastest growing segment of the U.S. beverage alcohol business for the second year in a row.

"Consumer enjoyment of the flavor and diversity of craft beer continues to fuel healthy, steady growth in this segment," said Ray Daniels, Director of Craft Beer Marketing for the Brewers Association. "Small brewers lead the entire industry by offering flavorful, interesting beers."

The craft beer segment includes more than 1,300 small, traditional and independent breweries which produce primarily all-malt beers. It includes both brewpubs which sell beer primarily at their own pub or restaurant and packaging breweries that distribute beer in kegs, cans and bottles to a wide range of retail outlets. The Brewers Association has tabulated industry growth data for these breweries annually since 1985.

One year ago, the Brewers Association reported craft segment growth of 7.2 percent for 2004, a year in which wine (2.7%), spirits (3.1%), imported beer (1.4%) and non-craft domestic beer (0.5%) all reported substantially smaller growth rates.

"The strong growth by craft beer in 2005 is especially impressive because it comes on top of strong performance in 2004," said Gatza. For each of the last two years, craft beer growth has been stronger than in any year since 1996. He also noted that 2005 is the third year craft beer growth rates were stronger than those for imports. "Craft beer clearly leads the beer industry in consumer appeal."

For further information on the craft beer industry and these estimates, contact Paul Gatza at 303-447-0816 x122 or Ray Daniels at 312-203-8383.