BeverageDaily.com had a report earlier this week that has sent a good-sized ripple around the great Beer Pond. Reporter Ben Boukley reports that Heineken CEO Jean-François Van Boxmeerhas thrown in the towel in the fight against American craft brewers:

“Craft beers have been taking the lion’s share of beer market growth over the last decade – practically exclusively,” he told Societie Generale analyst Jamie Norman on a call this morning.

“You cannot compete with Heineken or any other brand against the craft beer phenomenon. We have elected not to go into craft beers ourselves in the US, but have elected to grow in the cider category,” Van Boxmeer added.

So is that it for mass market beers? All over but the shouting?

Don’t count on it.

It’s perfectly clear that craft brews are on a roll, with volume up 15 percent from 2011 to 2012, according to industry group the Brewers Association, and dollar value up 17 percent. That’s at the same time that overall beer sales were stagnant, growing just 0.9 percent for domestic producers and 1 percent for imports. That means that sales for the big boys, like Bud, Coors, and Heineken are sliding while the little guys explode.

But take a step back for a minute. Despite the unbelievable growth of craft beer in recent years, these upstart breweries still only account of 6.5 percent of all beer sold in the United States in 2012, and about 10 percent of the dollar value (that difference reflecting the premium price a good beer can get compares with mass-produced lager in a can). That means the great big guys – InBev (which owns Anheuser-Busch) and MillerCoors and a hand full of others – still make about 93 percent of all beer that passes the lips of American consumers.

For further perspective, the Budweiser plant in Fairfield, just one of dozens of InBev facilities worldwide, makes more than 4 million barrels of beer, or 124 million gallons. The biggest craft brewer in the whole world, Boston Beer Company, meanwhile, makes only about 2 million barrels of its Sam Adams beer per year. Even if you add No. 2 Sierra Nevada to the equation, at around 1 million barrels, the Fairfield plant alone still wins by about 1 million barrels.

In other words, add together all the craft brew produced in the U.S. – about 13.2 million barrels – and you’re talking about a rounding error on the balance sheets of the world’s mass market producers.

So craft brew may be here to stay, and the big boys may be taking notice, establishing craft-like breweries like Coors’ Blue Moon division, but the fizzy stuff in a can will be the king of the beer market for many, many years into the future.

– Sean Scully

(Visited 1 times, 1 visits today)