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Craft Beer Needs to Get Out More

Stocks in this article: BUDSTZSAM

PORTLAND, Ore. ( TheStreet) -- As the small brewers who make up the "craft" community already know, their fan base is expanding. It's drawing more of the exact same type of person, but it's expanding.

The brewers the Brewers Association craft beer group considers "craft" saw sales grow 15% in volume and 17% in dollars last year even as the entire beer industry grew by less than 1.5% after years of post-recession losses. Craft beer's retail dollar value surpassed $10 billion for the first time in 2012, while the more than 2,480 craft breweries in the U.S. make up the overwhelming majority of the nation's 2,538 breweries.

That growth and much of the craft beer industry in general is built on a foundation of white, male Millennials and Gen Xers, according to data released in April by Nielsen (NLSN). Men make up 72% of the beer market, according to Nielsen, with their drinks of choice increasingly turning to craft beers and cider. While beer-drinking women -- who make up just 28% of all beer drinkers -- are just about on par with men in their love of cider, they're about half as likely to pick a craft beer.

Meanwhile, whites are 65.6% of all beer drinkers and are two to five times as likely to pick up a craft beer as folks from any other race or ethnicity. We've already mentioned the economic divide between craft beer drinkers and the rest of the beer-drinking U.S., but the Nielsen numbers show craft beer as a cultural niche far more segregated from the average alcohol-consuming market than its surging numbers indicate.

In the world outside craft, beer has lost U.S. alcohol market share to liquor and wine for 13 of the last 14 years and dipped below a 50% share for the first time in 2011. It's also watched demand for spirits grow from 28% of the overall alcohol market in 2001 to 34.3% just last year.

That's driving huge gains among flavored malt beverages including Mike's Hard Lemonade and Smirnoff Ice.

According to Nielsen, African-American beer drinkers are 75% less likely to reach for a craft beer than the average drinker, but more than twice as likely to seek out a flavored malt beverage. Hispanic beer drinkers, who make up 14% of the overall population but 16.2% of all beer drinkers, are 17% more likely to go for a flavored malt beverage but 62% more inclined to go with an import. That Anheuser-Busch InBev (BUD) purchase of Grupo Modelo and Constellation Brands' (STZ) winning battle for full U.S. distribution of those brands earlier this year were a direct reflection of that buying pattern.

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