Here’s a thought I had looking at the beer style popularity data from 2016 again: Is the average craft beer buyer just as boring as the Big Beer consumer? The short answer is no, but let’s start 2017 by waxing philosophical on where the craft beer industry is right now. In 2016, we noted that the largest craft brewers out there may have hit or approached a ceiling on their growth potential. Our takeaway from that was there may just be an inherent limit to the expandability of a craft brand beyond its region in this new era of 5,000+ breweries. But, are we also seeing boundaries on experimentation and variety? Are breweries seeing diminishing ROIs on particular styles (pumpkin beer, anyone)? Buyers are definitely gravitating to certain styles:
The far-and-away popular choice is IPAs, which are delicious to have every day of your life; the next most popular is seasonal beers, which are great for newness and variety. But right after that you have the pale ale, which is certainly different than the IPA, but not exactly a drastic departure from the IPA, especially with the creative uses of aroma hops today.
Let’s dive further into that IPA category:
So again, we see a runaway favorite. People want American IPAs, and when they don’t want that, they want a seriously powerful Imperial version. And when they don’t want that, they want something with just a small amount of alcohol.
OK, so where am I going with all this?
A big part of hardcore craft beer culture is variety and experimentation. All of you reading this provide a ton of options in a ton of styles. There are more than 200 categories of different styles, and that seems to grow and change every year. And all of those styles are important, or so it seems because beer drinkers are sudsy snowflakes — they are all unique, and they like what they like. Maybe you grab your local community with a couple killer porters and stouts. Maybe it’s a great sours program. And so on. That’s one reality.
But some of those 5,000+ craft brewers out there are looking to grow past the hardcore craft beer culture, and those numbers above give the impression that all of that variety only serves a very small percentage of drinkers. Maybe most new craft beer drinkers just want a killer pale ale and, other than waiting for a few seasonals, that’s it. That feels like an important data point when you think about that “20 percent by 2020” market share goal the BA posted on the bullet board a few years ago.
Also, consider what beer styles the BA considers to be the next frontier:
- Golden ales
- Other sessionable styles
I’m certainly not looking down on that list (I especially like the session trend because I like the option to have a few beers around town and not be drunk), but I know those styles being called the “next frontier” cracked a few monocles out there.
The implication here is that for the craft beer industry to maintain its serious growth path, breweries need to add more approachable/mainstream beers to their lineups. Just look at the new brands New Belgium Brewing Co. is releasing for 2017 — a pilsner, a lime-centric golden ale and lots of IPAs. This makes perfect business sense — better for the independent business to be the go-to consumer choice over the corporate robot — but it’s also a bit of a bummer.
My final 2 cents, if you care
To be clear, I don’t think anything noted above is necessarily a problem (at least not yet), but the implications going forward are worth pondering.
Cent 1: The above trends might not matter a ton for a lot of craft breweries. Local craft breweries that are comfortable in their smaller community and footprint will be able to continue to thrive as they always have. We have already seen some great concepts out there with smaller craft breweries staking their claim on exclusivity and experimentation.
But those breweries with much larger distribution plans in mind will need to focus more on that “next frontier,” and possibly compromise the creativity and spirit of what built their success in the first place.
Cent 2: There is some serious irony embedded in the beer market right now: Big Beer companies are growing their “craft beer” divisions and pushing variety, and craft brewers are growing their market share with a more homogeneous, sessionable lineup. Is Big Beer accidentally sowing the seeds of its own destruction by putting its marketing might behind craft beer? Is it going to corner this IPA thirst and make it the new mass-marketed Big Beer eventually? Is the craft beer industry accidentally commoditizing its own product in the pursuit of growth? Are all of those questions absurd? Will I ever stop asking rhetorical questions?
Anyway, a few things to think about when planning 2017 and beyond.