A third quarter report from Information Resources Inc. tells a very good story for craft beer as tracked in off-premises sales outlets including grocery, drug, liquor and convenience stores.

Craft beer sales rose by 17% in January-September 2006 year-on-year, The Brewers Association said November 15. At the same time, the overall beer category grew by 1.9% in the same period while beer imports were up 10 percent.

According to the report, analysts attribute this trend to consumers continuing to trade up and demanding variety in beer flavor. Consequently, craft beer takes the lead in growth in all channels (grocery, drug, liquor, convenience.). Imported beer followed the craft beer segment in growth.

Craft sales growth in previous years:

2005 - 8%,
2004 - 5%
2003 - 2.3%

Most popular craft styles (with dollar share of total craft):
Pale Ale - 17.9%
Seasonal beers - 12.5%
Amber Ale - 11.2%
Amber Lager - 11.0%
Wheat Beers - 8.8%
IPA - 6.1%
Others - 32.5%

Domestic beer consumption of Bulgaria increased by 13.1% year-on-year to 4.3 mln hectoliters in the first 10 months of 2006, Dnevnik.bg communicated on November 12th. However, October sales fell 21.1% month-on-month to 340,900 hectoliters, shows data released by the Union of Brewers in Bulgaria (UBB).

The data published by the UBB does not include the business of locally-owned non-member Ledenika&MM.

Heineken-owned Zagorka AD continue to outsell competing brands year-to-date, moving 1.36 mln hectoliters for the market-leading position. The company also notched up the best performance for the month of October with 114,600 hectoliters.

Carlsberg Bulgaria, the runner-up in October with 93,028 hectolitres, is catching up to Kamenitza in the YTD rankings with 1.024 mln hectolitres but has still some way to go to overtake the 1.3 mln hectoliters sold by its InBev-owned rival in the first 10 months of the year. Kamenitza was no.3 in October with sales of 91,364 hectolitres.

InBev, Heineken and Carlsberg Bulgaria own 76% of the total beer market.

According to the Grains and Oilseeds Outlook released on November 10th, the Canadian barley production for 2006-2007 decreased by 20%, due to lower area and yields, resulting in a 16% decrease in supply. Exports are forecast to fall by 23%, as higher malting barley exports only partly offset lower feed barley exports.

Despite lower exports and domestic use, carry-out stocks are forecast to fall sharply. The average off-Board feed barley price is projected to rise by CA$30/t. The CWB PRO for No. 1 CW feed barley for Pool A in 2006-07 is CA $170/t, vs. CA$131/t for 2005-06 Pool B. The PRO for SS2R malting barley is CA$200/t vs. CA$171/t for 2005-06, due to lower exportable supplies from major competitors and strong import demand from China and the US.

Analysts reported October 31 that China's malting barley imports in January-September were 1.777 million t, of which almost 1.4 million t from Australia, the balance from Canada. The annual demand of malting barley is 4 million t.

After the Australian crop failure China will be obliged to draw its supplies from its own crop, from Canada and maybe from Europe after the harvest of 2007. There is a danger that the lack of supplies and high barley prices will drive Chinese brewers to further increase the already high percentage of adjuncts.