Good Beer Hunting

We’re Gonna Need a Bigger Pack, Pt. 2 — How 15-Packs Changed the Game for AB InBev’s Craft Segment


Since Founders Brewing Company launched its 15-packs of All Day IPA five years ago, they’ve pretty much owned that packaging category across the beer industry. Co-founder Mike Stevens estimates two-thirds of all craft 15-packs are sold by his company.

“Amber Ale is Fat Tire, Pale Ale is Sierra Nevada, and when you’re quick enough to be the first, there’s a lot of luck out there to be had,” he says.

But it was only a matter of time until imitation came along. Following Founders’ success with 15-packs, other breweries got in on the value play, with many focusing their efforts on variety. 

From 2017–2018, 21st Amendment’s Variety IPA Pack (243%), Magic Hat’s IPA Playlist (132%), and Southern Tier's Overpack'd (111%) all saw huge gains, but only Overpack'd is on pace to show growth in 2019. Oskar Blues Brewery’s CANundrum also made a big leap in 2019. Through the start of June, it moved more volume in IRI stores than brewery portfolios from Modern Times Beer, Heavy Seas Beer, or 4 Hands Brewing Company.

New Belgium's Dayblazer Easygoing Golden Ale 15-pack debuted in a wildly strong position in 2017, and sold almost as much as the entire Victory Brewing Company portfolio of beers in IRI stores, but lost 34% of that volume in 2019, and is on track to decline again this year. But along with Founders’ All Day IPA, which continues to be one of the faster-growing brands in the country, Henry Weinhard's has made a splash in 2019 with an 18-pack of its Private Reserve American Pale Lager. Another big jump was from Goose Island's IPA, which increased sales in IRI grocery, convenience, and other stores by about 200% through mid-June compared to the same time period in 2018.

Goose Island’s IPA has seen the biggest change in this era of value-added, larger-format packages. Outside of Founders, no other brewery has had runaway success with this kind of packaging move. A number of breweries have or are experimenting with a range of packaging formats, but not all have the "production efficiencies" Founders co-founder Mike Stevens has said are the reason his brewery has been able to find success with 15-packs.

With production facilities across the country and financial support for its craft beer producers, however, Anheuser-Busch InBev is set to be the biggest beneficiary of these evolving packaging preferences.

15-packs have seen success across at least five of its Craft Business Unit companies: Blue Point Brewing Company, Devils Backbone Brewing Company, Four Peaks Brewing Company, Golden Road Brewing, and Goose Island Beer Company. 

2018 saw the full multipack launch for several of these breweries’ brands, including Goose IPA, Goose 312 Urban Wheat Ale, Blue Point Toasted Lager, Devils Backbone Vienna Lager, and Golden Road Fruit Cart Mixer Variety Pack. This year is when the movement towards 15-packs became a building block of sales for these brands. At least nine brands across ABI's craft businesses launched 15- or 18-packs that sold more than 100-barrel equivalents in IRI stores through the end of May. For the brands that debuted in 2018, their 2019 sales are far outpacing last year’s.

Through June 9:

  • Toasted Lager outsold all of 2018's 18-pack sales.

  • Vienna Lager more than doubled 2018's 15-pack sales.

  • 312 Urban Wheat Ale is on pace to more than double 2018's sales.

  • Goose IPA moved 82% of 2018's entire volume, selling an equivalent of 11,620 BBLs in IRI stores.

This shift caught the attention of the MillerCoors blog, which broke down AB InBev’s decision to shift more of its craft volume into value-priced 12-, 15-, and 18-packs. In doing so, the article explained, two things are accomplished: more volume is sold in chain stores, and it’s moving at a lower price per unit.

Of AB InBev’s craft beer producers, Golden Road, Breckenridge, Blue Point, and Goose Island had the biggest drops at $2 per case compared to 2018, while Elysian, Devils Backbone, and 10 Barrel were down at least $1.25 per case, according to figures reported by the company blog.

Breckenridge (+54.3%) and Golden Road (+52.1%) were way up in volume sales, while the blog, per Beer Marketer's Insights, reported that Golden Road Fruit Cart 15-packs were selling for $26.75 per case and Spiked Agua Fresca was priced at just $27.80 per case—a “jaw-droppingly low” price.

It's worth noting this cuts both ways. MillerCoors' Blue Moon Belgian White Ale had a successful 15-pack debut in 2018, and represented 11.3% of the brand's total IRI sales (12-packs were the runaway lead with 82%) last year. The volume for 15-packs has taken a significant step forward in 2019: they reached almost 20% of the SKU’s total volume by the beginning of June.

Given the companies who have seen success with this collective shift into 15-packs, past comments from Dogfish Head Brewery's co-founder Sam Calagione seem especially relevant. In a 2018 interview with Brewbound—now even more pertinent, given Dogfish's recent sale to Boston Beer—he commented that now is the time for breweries to either get really big or stay small and locally focused.

“If you’re a top-80 brewery, you better get ready to build a great sales force, add a lot of people, add a lot of strong marketing plans, or you’re going to go down your distributor’s totem pole and be forced to either go back and retrench and be local and small, or go out of business,” Calagione said on the 2018 Brewbound podcast.

Devils Backbone is the smallest of AB InBev's breweries to sell a 15-pack, and that brewery made 80,000 BBLs last year, which would make it easily a top-50 "craft" brewery if it were recognized as such by the Brewers Association. Blue Moon produced 2 million BBLs in 2018.

Magic Hat (60,000 BBLs), Southern Tier (100,000+ BBLs), 21st Amendment (113,623 BBLs), and Oskar Blues (200,000 BBLs) are all some of the largest breweries in the country based on last year's production volume. Founders, which helped popularize this packaging craze, made 563,179 BBLs in 2018.

Size and efficiency of scale play a significant part in allowing these companies to take advantage of this kind of packaging and the potential sales benefits it provides. Many 15-packs (or larger) are sold for nearly the same price as 12-packs.

But that doesn’t mean small businesses are out of luck, or being forced out of beer aisles. In the same way that large packages and their price-per-ounce advantage may catch the eye of shoppers, there’s plenty of change in packaging across the board that can be helpful to the “small and independent” set, too.

In part three of this series, we’ll look at the continued shift from glass to aluminum.

We’re Gonna Need a Bigger Pack, Pt. 1 — How a Volume Play Changed Founders’ Trajectory

We’re Gonna Need a Bigger Pack, Pt. 3 — How Cans Became a Centerpiece of Modern Brewery Sales

Words by Bryan Roth