As Craft Beer Gets Bigger, Will It Become More Like Big Beer? Or Perhaps Wine?

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After another year of huge growth, it’s clear that craft beer is big business—perhaps too big, or at least too snobby.

The Brewers Association, which represents “small” American breweries that produce less than six million barrels annually, proudly announced that craft beer had a terrific 2012. Across the board, craft beer numbers were up: 18% more breweries in the U.S., 15% more beer produced by volume, a 17% increase in sales, and a whopping rise of 72% in American craft beer exports.

Overall, beer sales by volume increased just 1% in 2012. Sales of traditional mass-produced beer in the U.S. have basically remained flat for several years, giving the impression that if consumers are drinking more beer, they’re probably turning to craft beverages. Drinkers even seem to be shying away from the usual beer options on chug-happy holidays like St. Patrick’s Day, when beer sales declined by 4% over the weekend at bars, compared to last year.

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All that said, craft beer still accounts for a small portion of the market. A little over 10% of all U.S. dollars spent on beer is directed to craft brews, and in 2012 6.5% of the total volume of beer purchased in the U.S. was craft, up from 5.7% in 2011.

Yet as the craft beer movement gets bigger, will it come to resemble “big beer”? Already, the definition of craft beer is blurring. In 2010, the Brewers Association tweaked its definition of a craft brewery from one that produces a maximum of two million barrels annually, to one that brews no more than six million barrels per year. That change allowed the Sierra Nevadas and the Samuel Adams of the world to be able to still claim the craft beer label, probably for some time to come. Still, these aren’t exactly the kind of tiny mom-and-pop companies one normally associates with the term “craft.”

What’s more, the beer industry’s true giants have been muddling the market further by producing “crafty” beers like Blue Moon and Shock Top. They’re made by MillerCoors and Anheuser-Busch InBev, respectively, though you’d never know it based on their craft-beer-like labels—which don’t state prominently the huge corporation responsible for the brand.

(MORE: Trouble Brewing? The Craft Beer Vs. ‘Crafty Beer’ Catfight)

Going forward, indie brewers may struggle if they get too big and start losing their funky, artisanal appeal, or just if the giant beer corporations manage to steal their thunder by producing brews that win over drinkers with decent “crafty” taste and affordable prices.

Speaking of which, another risk for craft beer is that it becomes too expensive. The New York Times recently reported on the trend to sell craft beer in 750-milliter bottles. Not because the beer tastes better that way, but because marketers think consumers are more willing to pay more for beer if it comes in a wine-like bottle:

“A wine consumer in general accepts pricing stratification for 750 milliliters,” [Dogfish Head CEO Sam] Calagione said. “They understand that an amazing bottle of merlot can cost three times as much as a bad bottle of merlot.”

But if they do the math, they’ll also realize that the price-per-ounce in a bigger bottle can be double that of beer purchased as a six-pack. The bigger bottles also turn some beer drinkers off because they don’t necessarily want to drink that much in one sitting, especially not if it’s a dark, heavy brew.

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Most likely, the mainstream will stick with mainstream, working-class, easy-drinking beers that are reasonably priced, as one industry insider told NPR:

“This is a very middle-class beverage, [a] working-class beverage,” says Chris Thorne, a spokesman for the Beer Institute, the largest beer industry trade group. “So what a lot of people are looking for is what’s affordable.”

What else are drinkers look for in a beer nowadays? The answer’s very subjective, which hopefully means that beer drinkers will continue to have a huge number of options to select from, from the palest Coors Light to richest small-batch stout. There are even new beers based on the HBO show “Game of Thrones,” and on the input from legendary heavy metal band Iron Maiden. Rock (and drink) on.

9 comments
farlieonfootie
farlieonfootie like.author.displayName like.author.displayName 2 Like

The fact that there are opinions masquerading as research in this article is surprising, especially given that it was written by a supposed journalism professor.   Rather than celebrate craft's undeniable recent successes -- among the few facts offered in the article are the statistics on craft beer's growth -- the author seeks to play devil's advocate by offering his theories on what "might" happen in the future-- e.g., "big beer" could "steal [craft's] thunder," "indie brewers may struggle" and craft beer may "become too expensive."  And if the point of the author's article is that "...the mainstream will stick with mainstream, working-class, easy-drinking beers that are reasonably priced," let's at least identify that knowledgeable "industry insider" who offered that opinion -- and not be surprised when we find out that he or she likely works for one of the big breweries that are being threatened by the guys who are producing all that "expensive stuff" in "big bottles" that people actually want to drink -- as evidenced by the fact that sales of 24-25 oz. bottles are up 30% this year.

WarrenWills
WarrenWills like.author.displayName like.author.displayName 2 Like

I think his point here is that the line between the multinational brewers, who feebly attempt to gain market share by buying up and creating craft-like beers, and the bigger craft brewers, is getting blurred. The argument is specious since craft brewers stick to their recipes and methods to ensure quality while mass-marketed bland brewers will always rely on money and media saturation to sell theirs. It comes down to economics and what drinkers want - now if we can only get more money in the hands of workers. Tastes are changing and as those who are the biggest purchasers of craft beer (25 to 40 yr olds) raise children, perception and interest in home brewing will only continue this trend toward the artisanal, back to where American brewing started long ago.

hegesias
hegesias like.author.displayName like.author.displayName 2 Like

Hooray, another corporate media article trying to support the corporate oligarchy by muddying the waters between good beer and macro crap.  I'm shocked, I tells ya.  

thealwayswinning
thealwayswinning like.author.displayName like.author.displayName 2 Like

Craft brewers will never replace wheat and malted barley with rice and other cheap, adjunct grains; you can't fake quality. It's not about "funky, artisanal appeal," or any other marketing buzzwords you can come up with as there's a material difference in how "craft" beer is produced. Consumers buy it because it's a premium product. Forget about packaging, if you compare % alcohol/dollar, or any other all-else-equal metric, premium beers are competitive with high-quality wine and spirits.  If anything, the large brewers -- really we're only talking about Miller-Coors and InBev in the U.S. -- will go back to using premium ingredients in order to stay competitive. This was a good read but I'm afraid you have this whole story backwards and have a shallow understanding of the craft beer industry if you think its success revolves around something like, "funky, artisanal appeal." There's more to the U.S. beer market than marketing and quantity produced.  Honestly, I expect more from Time. 

padgettsemi
padgettsemi like.author.displayName like.author.displayName 2 Like

I don't think drinkers of, say, Bell's here in Michigan would ever stop drinking their favorite beer just because it got too popular.

thealwayswinning
thealwayswinning like.author.displayName 1 Like

@padgettsemi Exactly: you can boil Brad's entire argument down to craft beer drinkers being "snobs." That line of reasoning doesn't put his argument on solid footing. 

AaronS.Zaslow
AaronS.Zaslow

@thealwayswinning @padgettsemi a lot of them ARE snobs. their the people the look down on breweries like Guiness, Shiner, Boston Beer Company, and any micro owned by a macro company as being terrible.


I think that more beer drinkers are open minded, but you cant deny a portion of the beer drinking community ARE rather snobbish.

thealwayswinning
thealwayswinning like.author.displayName 1 Like

@AaronS.Zaslow @thealwayswinning @padgettsemi Anecdotes and ad hominem attacks aren't the basis for a well-reasoned argument. How do you define, "a lot" when you say, "a lot are snobs?" 10 people you know? 20 people? 10 million people?

The bottom line is people want beer brewed with quality ingredients. Guinness, Shiner and Sam Adams all produce a quality product made from quality ingredients. You may know someone who stopped drinking Guinness because they're owned by Diageo but their choice seems irrational to me and hardly sheds any light on the overall beer drinking market.  

Will there always be unreasonable beer drinkers? Yes. What does that expose about the true nature of the beer market? Very little.