Winter isn’t just coming for the Top 50 craft breweries and beyond, it’s already here. Keeping pace with the fast-changing demands of today’s customers is a complex game and the zombie breweries are making their way North to claim what they believe to be theirs. Alliances can be formed and chess moves remain in play, but each one comes at a toll that the brewery must understand and be willing to pay. How to innovate without cannibalizing? How to go deeper and expand distribution, without killing freshness? How to successfully build brands, while keeping up with the constant desire for new? What to do with a popular SKU that has little runway left to grow? To answer these questions and stay atop their throne, breweries must play the game of levers. And play it well.
A favorite term that I’ve hearing a lot lately is the concept of pulling a lever. A lever is a strategic move kept in one's back pocket until circumstances dictate that it’s necessary. Pulling a lever isn’t necessarily a bad thing, but once that safety valve is used, it’s gone for good. Kind of like a “Get Out of Jail Free” card, you feel a lot better when you still have it, versus once it’s used up. In the beer world, a lever could be anything really, but I associate the term most commonly as the introduction of a new retail channel, packaging format, territory expansion, or price change.
Beyond the startup phase, finding growth today often requires entering a new category of retail. Examples include sports & concert venues, grocery stores, gas stations, drug stores, convenience stores, club stores, delivery services, etc. Reaching a segment of customers who otherwise may not cross paths with the brand helps expand their audience and increase sales. Whether or not the brewery is adequately prepared for the challenges however, is no guarantee. Each channel has a specific customer base with their own fickle tendencies.
Prior to Three Floyds’ big expansion in Muenster, IN just outside of Chicago, the brand was most often found at smaller, independent stores and in the case of fan favorite Zombie Dust, famously limited to 1 case/week. In both 2017 and 2018 however, they vaulted up the Brewers Association Top 50 craft brewery list, in part by pulling the grocery channel lever. By making brands like Alpha King, Gumballhead, and even Zombie Dust more widely available, where most consumers do their shopping, they were able to expose their brands to a significantly wider audience and grow 41% in Illinois IRI last year. The move makes freshness a more crucial variable because at 1 case/week and sky high demand, freshness controls itself. Alternatively, when beer is getting stacked up and 1-2 months worth are brought in by a retailer at a time, freshness becomes harder for any brewery to maintain.
Another example of a channel that mature brands consider beyond grocery is club stores. Consumers who pay for annual memberships to Costco or Sam’s Club are in search of a price break. With margins on beer being thin already, club stores accommodate a deal by working on a lower margin, but selling in volume (typically by the case) and negotiating deals for buying entire pallets. It’s not a no-brainer for breweries, as fear of price degradation sets in, making it harder to sell the brand elsewhere at the undiscounted price. To compensate, some breweries will design variety packages specifically for club stores in an effort to protect the perceived value of their SKUs sold outside of the club. On one hand it’s a new consumer and a way to push more volume, but on the other hand, they’re training those consumers to undervalue their beer, which can have long term consequences. There’s no right or wrong answer to pulling the club store lever, it just comes down to weighing pros and cons, which vary depending on the stage the brewery is at in its life cycle.
Playing ball in these new channels may require pulling a lever on a new format, introducing an additional size and/or vessel that the customer demands. Sales may be hitting a wall and need a boost, or the brewery may just be putting their foot on the gas pedal. Regardless, new formats have some inevitable, but difficult to predict cannibalization. They’re not going to double sales for the brand just by introducing its second format, not even close, but it's assuredly going to increase sales upon launch. The most successful launches of secondary formats are going to be well thought out, with clear division of which are sold where. The additional format will complicate operations, freshness initiatives, distribution, and sales, so pull wisely.
The 19.2 can is another fascinating lever that I can speak personally to, as it has fascinated me since Revolution launched Anti-Hero in a 19.2oz format back in late 2017. I noticed most craft beer writers and enthusiasts were confused by the extra tall can and thought they were just a gimmick, but that’s really not the case at all. The single-serve beer consumer is a huge segment, they just don’t leave a paper trail on the internet or social media, so we don’t know much about them. Each time I happen to see someone buy a Rev 19.2 at a store, I try to make conversation in the least creepy way possible, and find out why they like that size. It’s always clear that they are very brand loyal and don’t buy the tallboy exclusively, but pick it up on quick stops for a specific, on-the-go occasion. In Chicago and New York, they’re very popular with commuters on the trains heading home to the suburbs or into the city for a concert or sporting event.
The single serve can is a necessary format to enter channels like convenience stores and gas stations, where that’s mostly all that’s carried. Consumers keep their check low, but come at high frequency and only buy one beer at a time. That buying pattern is becoming more common in the grocery channel these days as shoppers are more conscious of freshness in food. Stores are responding with more shelf-space dedicated to grab n’ go and thus, more opportunity for the format. As I was editing, I saw Peter Frost of MillerCoors drop a nice piece on their blog with some research on this topic. One of many challenges for craft with 19.2s is the amount of cans that have to be ordered (and paid for) all up front, which can be over a years worth, or more, depending on the size and distribution a brewery gets out of the format. That’s part of the reason that you don’t see many small breweries dabbling in this size yet. They don’t have the outlets at their disposal to sell that many individual cans, nor the adequate quantities available to them, but soon enough I’m sure this will become a thing will smaller breweries.
New territories make for an obvious lever. Many don’t realize however, just how drastic of a difference the volume is between the brewery’s home market and an away market. Even when located in a smaller city like Richmond, VA and expanding into New York City, a lot more beer will still be sold in the smaller hometown, by a hefty multiple in most cases too. This is even more so the case in today’s crowded market, but the principle dates back to the high growth days of craft, as well.
It’s not as much about the population of the market, but the brewery’s status within it, relationships, and ability to get placements. A strong hometown brewery could earn themselves 5, 10, 15, hell even 20 SKUs at their major Wine/Liquor superstores (Binny’s, Bevmo, Total Wine, etc.), but a few states away, the ceiling is a small fraction. There is truly no place like home in this industry. Even when a global conglomerate gets their hands on a craft brewery and uses their powerful distribution and relationships to set set flight for new lands and breathe fire down upon us all, it's original local market is unlikely to be beat.
When dealing with the 3-Tier system and chain stores, pricing is probably the most complicated decision for a brewery and not something I’m going to dive far into this time around. Changes are a necessary lever to pull and are very common. From the consumers eyes, the pricing lever is most often thought to take take a brewery down in price which triggers more volume, earning you smaller margin percentages but higher total margin overall. This can be a temporary maneuver to speed up the tastings and trials of the beer and hopefully building loyalty along the way, or it could be a permanent approach to repositioning the brand. Many curmudgeons call this the Race to the Bottom. At the capacity and efficiency that the Top 50 have reached and the clout they have locally, they can afford to throw punches with the big guys on their own turf, if they so choose, but it’s usually a battle best avoided.
It’s common for a strong brewery to not just hold the line, aka maintain price, but to go up. This effort to further premiumize the brand against its competition will compensate each tier for the rising costs of doing business. It will also bring economics into play by putting the beer’s elasticity to the test. Under the right set of circumstances, raising price can be an effective strategy to distance a brand from what’s perceived to be lower quality alternatives. Back when Ballast Point first expanded out of San Diego, a big reason for the high price point of Sculpin six-packs ($14.99 - $15.99) was not the cost of ingredients, but instead to distance itself from Lagunitas IPA, its primary local competitor at the time.
Levers aren’t good or bad, they’re simply a sign of the obvious need for breweries to continue evolving as they navigate the market. Pulling too many can result in SKU proliferation, illogical or inconsistent pricing, and over extending a brand beyond what it's back end can support. Pulling just the right amount, at the perfect time, will allow a brewery to meticulously capture more share. You’ll notice I don’t mention innovation as a lever, though many probably would. I prefer to look at innovation as the Yin, and levers as the Yang. A harmonious balance of the two ensures that a brewery is competing to win in the big leagues, while building a successful farm system of new ideas, and levers to pull, to remain on their throne for generations to come.
Thanks for reading. Please consider check out my family's fundraiser for Lurie Children's Hospital and consider sharing the link with your brewery friends: http://foundation.luriechildrens.org/goto/veliky
One of the many reasons we climbed so fast to 7,300+ breweries is because “the big guys” took too long to respond to IPA. By leaving the door wide open from 2011-2015, new breweries saw instant success on the back of that particular style and were afforded the cash flow to expand into some of the strong local/regional players we have today. While AB-Inbev bought Goose in 2011, IPA wasn’t made the priority until 2015, the same year that Lagunitas and Ballast Point were acquired by Heineken and Constellation. Once those and other transactions closed and updated strategies were put in motion, the industry would never quite be the same.
Scale can be a beautiful thing. The term often accompanies terminology that makes number crunchers like me happy such as efficiency, optimization, cost-effectiveness, and great margins. In the first half of the decade, scale wasn’t a threat to small and independent breweries. Sure, regional players like Bell’s could make beer for less than a small operation like Toppling Goliath, but the large formats (22oz bottles) helped even the playing field and allowed plenty of margin for everyone to be wildly successful. Simpler times.
Look at the hottest IPA in the country as an example, Founders’ All Day IPA, who has held that title for an impressive run. Put aside your opinion of the beer itself or whether it fits IPA style guidelines. The beer flies off the shelf, especially as the price pulses down on sale to $13.99 for a 15-pack. Founders can afford to sell at this price because of the capital investments made in their size, scale and process, each of which contribute to amazing yields.
Yield is a concept that I never thought about once prior to working on the supplier side, but have learned that it's a fascinating topic that technical brewers obsess over. A batch's yield calculates the amount of ingredients that survive the various stages of brewing, often measured as a % of the inputs used. Yield is determined not only by the amount of usable extract that finds its way to the fermenter, post brew, but it accounts for the losses that occur at each stage during fermentation and packaging as well. The larger and more sophisticated the operation, alongside investments in process, the less loss incurred. A high yield means that a lot less beer is going down the drain, instead of the package. Overall cost per barrel goes down and margins go up. Free beer, sort of.
Margin - 3 Tier
Breweries achieving scale require a lot of help to move all that liquid. If you see tanks that are taller than the brewery itself, it’s a safe assumption that significant portions of that beer is being sold in chain stores. Long-term success in that channel will usually require a strong distributor, thus sharing the margin with two other tiers. Exceptions tend to only occur in local markets, like Stone in Southern California and Rhinegeist in Cincinnati. By following this model of scale and efficiency, you have to learn how to make your business work under the following parameters:
Don’t get too hung up on the above graphic as margins vary wildly by brewery/distributor/retailer and each specific beer/style/format, but I believe this is a fair, yet over simplified, way to break down the price paid by the consumer for craft beer passing through the 3 Tier System.
The majority of the price-to-consumer (PTC) is taken up by the input costs, distributor margin, and retailer margin. The brewery relies on volume (and efficiency) to earn the margins required to build and maintain that size of an operation, support it with sales & marketing, run the backend, and service the debt/investors that can come along with running a brewery. None of those are included in the red slice and instead come out of the black.
Margins - Self Distro
The self distribution model provides smaller breweries with the ability to hang onto an additional slice of that pie. By cutting out the distributor, they’re able to compensate for discrepancies in beer costs between them and larger peers, while still running a solid, albeit smaller business. Self-distribution also provides significantly more control to the brewery as to what they brew, package, and sell to retailers. They control the conversation, can move at lightning speed, make beers on somewhat of a whim, and react fast without having to get their distributor on board with the prospect.
Margins - Direct to Consumer
Now it’s time for dessert. Those sweet “own premise” margins that leave you with a pacman-looking portion of the pie, all to yourself. The cheapest and most flexible form of packaging, a stickered can, happens to be the most desired right now. Consumers come directly to you, you maintain complete control of the pipeline, and you keep all the gravy. Sounds amazing, as long as they show up...and continue showing up...
There were days when beer enthusiasts would enter raffles or wait in long lines just for an opportunity to buy a clear, citra-hopped Double IPA. Then the farms grew more citra, everyone got ahold of it, and you could find grocery stores lined with citra IPAs. Though still well-liked, citra is everywhere, and doesn’t necessitate a trip to the brewery to get your hands on it. Citra went mainstream.
Staying more consistent over the years, in terms of consumer interest, is barrel-aged beer. Build a reputation for quality, innovation, and customer experience, and I can tell you first hand that they will come in droves. But the significantly delayed cash flows and other constraints of barrel-aging is going keep it more seasonal or sporadic for small breweries and isn’t something that can keep the lights on and drive the business. Small operations need beers that can be produced and turned quickly until they can afford to be that patient. Finding styles that will keep enthusiasts showing up is the moving target that thousands are trying to keep up with now.
Similar to how macro breweries ignored IPA until 2015, the Top-50 craft breweries mostly ignored New England IPAs from 2015-2017, leaving those big margins to “the little guys” while expecting the buzz to die down. The style represented a threat to their competitive advantages, including scale and process. It threatened traditional techniques, shelf stability, and margin through the 3-Tier system. Heavy losses incurred by multiple aggressive dry hop additions make the costs of New England IPAs very high, given the terrible yields that result from a lot of expensive ingredients going down the drain. When a brewery’s size yields batches too big to sell out of your own building, it’s hard to make inefficient, poorly yielding beers work at the 3-tier margin. For small neighborhood breweries whose consumers flock directly to them, it was the perfect recipe.
Hazy interest remains sky-high, but saturation is already peaking its ugly head and the sell-through isn’t quite as automatic as it once felt. Now that you can buy Hazy IPAs at the grocery store, the style will begin to feel more like IPA in general, competitive as hell. Sure there will always be high-end versions, but with delicious hazy beers widely available from national(ish) breweries like Firestone Walker, Bell’s, New Belgium, Oskar Blues and Sierra Nevada for the likes of $9.99, how do the small guys and gals compete with that? They don’t. They swim away from the sharks into shallow waters. A significant subsection have wisely been going after for the younger demographic, heavy on rotation, with eye-catching artwork, visual cues, themes, and a sweet flavor profile.
Enter Milkshake IPA
The latest “spin” on the extended IPA family is typically brewed with lactose, pectin, or oats for a full-bodied, almost chewy drinking experience. Vanilla is commonly added, in addition to fruit and other non-fermentable sugars to build that sweet flavor profile. Like’em? Hate’em? You won’t hurt my feelings either way, but this is how you drive the 20-something, new-school beer enthusiasts to your brewery today. Throw in the heavily fruited, Jamba Juice-like kettle sours, along with pastry stouts, and you’ve got a trio of very different beer styles that have a lot in common. Not only do they all lean sweet, but they’re each a challenge for larger breweries to bring to market.
I’m not in love with Milkshake IPAs myself, but I have had a few recently that I found fun and interesting. I understand why there’s a market for them and think they’re a creative means to build a younger fanbase. They’re keeping a sector of small breweries competitive in a time when large breweries are reacting quicker to trends and acting smaller than they ever have. Unlike a double or triple dry hopped Double IPA, Milkshake IPAs don't require as many hops and yield significantly better. As we saw with Brut IPAs, the largest craft breweries in the country are prepared to pounce quicker than ever to remain in the conversation. Thanks to even better margins and the need to stay on the cutting edge, the same thing will happen with Milkshake IPAs, once we’re past this current stage of denial.
Thanks for reading. Please consider check out my family's fundraiser for Lurie Children's Hospital and consider sharing the link with your brewery friends: http://foundation.luriechildrens.org/goto/veliky
Prior to working in beer and actively using social media, I was a forensic accountant at a consulting firm and held a designation called a Certified Fraud Examiner (CFE). To pass that exam, you have to memorize every known financial fraud scheme, how to detect it, and how to prevent it. The training teaches you how to identify red flags on a company’s financials, reports, & analysis, instilling a natural suspicion. This background is how I ended up working in Internal Audit and eventually running that department for Reyes Holdings. I mention this only to provide context to why this topic jumps out at me:
Breweries of all sizes are feeling the pressure of 7,000+ competitors, a fatigued consumer base, and increased restraint when it comes to drinking and purchasing habits. As Facebook & Instagram have continued limiting how many followers see a post (~10%), breweries are always seeking out alternative means of getting consumer eyes on their newest products. Enter that dirty word that we love to hate, influencer.
An influencer typically generates content that has the potential to steer their audience’s opinions and purchases. They have a sizable, engaged following who trust their tastes and recommendations. Successful influencers are often some combination of smart, honest, creative, forthcoming, funny, interesting, responsive, and most importantly, genuine. An influencer could be Tomme Arthur, founder of The Lost Abbey, who is willing to make time for the biggest and smallest creators, providing sage advice and honest takes through podcasts, articles, etc. Alternatively, an influencer could be a journalist, photographer, world traveler, comedian, reviewer, or industry personality sharing the beer world through their own vantage point.
Proactive breweries have someone reach out to these individuals and offer to send samples in hopes that the beer might make an appearance in their work. It’s pretty harmless from my perspective, which is, “hey, you’re doing something cool that is helping generate interest and/or creativity in beer, can I send you some beers?.” When I’ve provided samples, it’s usually to photographers who do cool shots of the beer, or writers/podcasters whose work I enjoy. If they like it enough to include it in their work, awesome, if not, maybe next time.
Sure enough, over the next few weeks, I saw both of these beers all over my Instagram feed and Explore tab, in some cases from talented individuals whose work I enjoy. That made me a little sad, not because I think they “sold out” or anything like that, but because they don’t value their time, talent, authenticity more than a free beer or a $25 gift card. Writing, photography, editing, and building an audience takes a hell of a lot more time than these offers give credit for.
Despite this NOT being a lucrative field, the prospect of being insta-famous and the money, free beer, glassware, tickets, and access that accompanies it has resulted in a vast sea of wannabe influencers. Like authentic versions, the imitators come in all shapes and sizes, each in search of a piece of the action. The time it takes build a strong following by generating meaningful content is too daunting. They look for shortcuts to appear more influential than reality, in hopes of getting noticed by breweries, or agencies working on their behalf. Here’s how they do it:
As a consumer, these tactics are pretty easy to ignore or just roll your eyes at. Where I take exception though is when the fraudulent influencers are initiating the conversation with the brewery and looking to form a partnership or sponsorship. These requests tend to include some stats about their account, which are often manipulated. If this happened once, I wouldn’t be writing about it, but it happens all the time.
Let's Do Better
Here are my takes on how this idea of influencer marketing can be more successful:
It's not influencers we dislike, it's the individuals trying to be called one without putting in the real work. Beer badly needs more voices to rise out of the shadows and continue pushing conversations, education, and interest. There's just so few of them out there. Create something cool, work hard at it, be patient, good things will happen.
Let me know if I can help.✌
I get a lot of questions about my path into the beer industry from folks interested in the same. Many of them work in Logistics, IT, or Data Analytics, so I often share information to get their wheels turning on how the two professions coincide and where their expertise may be able to add value to a brewery someday. I've been meaning to get this all written down and out of my head for a few years, so I thought I'd make a blog entry about it:
The easiest way to achieve fresh beer in the market is to run out. Go dry. Take Hop Butcher for the World for example, a small Chicagoland operation kicking out 2,000 BBL of beer per year. They drop 3-6 unique beers each month, never the same as the last. High demand vs supply leaves their retailers out-of-stock before the next brands drop. A rare exception to my stance on date-coding, Hop Butcher’s model, size, and social media efforts leave the measure almost unnecessary. That luxury is more feasible for self-distributing breweries whose retail partners are small and independent.
The strengths of small breweries like Hop Butcher often represent the challenges of larger breweries, and vice versa. When you’re paired up with a large distribution partner who adds value through scale, depth, and optimization, selling a significant portion of volume through chain stores, running out of beer is not an option and that’s where things get challenging, and fun.
While craft beer was experiencing rapid growth 5 years ago, most breweries were selling everything they could produce, struggling to keep up with demand, often putting their distributions/retailers on allocation. The concept of over-producing a product was less of a concern and fresh beer was easier to find. With growth trends today looking modest at best, larger breweries find themselves with adequate (or excessive) capacity, leaving themselves with a tricky, constantly evolving equation: How do you make enough beer so that you’re never or rarely out-of-stock, while keeping code dates fresh?
Production Lead Time
Beer takes approximately three weeks or more to produce, so you have to be minimally that far ahead with your schedule based on when you expect a particular beer to run out. In reality, you have to be planned out significantly farther given the priorities being juggled, where a last minute change isn’t always feasible. When schedule updates are mission critical and thus accommodated, there’s typically inefficiencies which raise the overall cost of the beer.
Flexibility will vary significantly depending on the time of year. In the Winter, you may be able to let beer sit in the fermenter additional days where its kept cold and has yet to be exposed to oxygen, until precisely when you need it. During the Summer months, that luxury often doesn’t exist as other beers/brands need to move into that precious tank real estate, starting the clock sooner on the life span of the beer sooner. Excess capacity, if used wisely, has the ability to circumvent some challenges around freshness. Without that flexibility, if a brewery undershoots their schedule they’ll be out-of-stock, resulting in lost sales for them, their distributors, and retailers. Those conversations are never fun. Overshoot it, and you’ll have beer with nowhere to go, that isn’t getting any younger.
Despite the brewery’s ability to acquire this crucial inventory/sales data, it’s unfortunately only the starting point for achieving freshness. There’s more limitations to this formula that I can count, each of which must be considered regularly and worked into the formula. Failure to consider or accurately predict these variables, which bounce the ROS around unpredictably, can take freshness off course. To deal with these limitations, breweries and their distributors establish Periodic Automatic Replenishments (PARs) which, put simply, is their safety stock to handle the fluctuations in ROS. The variables that the data can’t always see include.
I read comments from frustrated beer drinkers all the time who live on the other side of the country as their favorite craft brewery and struggle to find fresh dates. In most cases, no matter how great the brewery is, they will only sell a tiny fraction of the beer in that far away city compared to their home market, for a host of reasons. As a result, filling up a truck of beer to send cross-country doesn’t make sense every day or every week because the sales are unlikely to support it.
Changes to DOT laws and an overall shortage of truck drivers have caused freight rates to skyrocket over the last couple years, meaning cross country shipments have to be efficient (full truckloads) in order to make any sense financially. Since breweries can’t package every beer each week, usually just their top seller(s), there’s likely some beer going on the truck that’s already 1, 2, 3, or 4 weeks old before it even arrives in the far away market. This is mostly unavoidable. When there’s a big brand launch, like a year-round hazy IPA, breweries wisely try to time those shipments around the canning of that key new brand so it arrives fresh the first time. Keeping up with this year-round for all brands is a big challenge and a big contributor to why fresh is so difficult the farther you are from home. Breweries who built second facilities in North Carolina, Virginia, etc. did so for reasons well beyond production capacity. In addition to fresher beer, the retail opportunities you get from a second home market and the drastic reductions in freight costs are huge factors to consider as well.
To keep beer as fresh as possible, you’ve got to make sure that you’re always selling the oldest product first. This has to be emphasized as part of standard operating procedures at the brewery, the distributor, and the retailer. If there’s a few 6-packs left of a SKU on the shelf when it’s restocked with fresh product, those older ones are ideally pulled off, and the fresher product loaded behind them. Basically the same idea as milk. Mistakes can still happen at any of the three tiers, which can throw off your actual freshness, or customer’s perception of it, depending on which dates they see.
This overview barely scratches the surface of why freshness isn’t easy, especially the larger you get and the farther the beer travels. I get to watch the effort put into this every day and salute the men and women fighting for freshness everyday. Imagine trying to not only manage this process with all these variables, but with 50 different distributors across your region, or 300+ distributors across the country, each with different answers to the equation. It requires a lot of smart people, an abundance of data, and most importantly, great communication across departments.
Slightly Off Topic Q & A:
When I asked for questions via twitter on this subject, everything that came back was outside the scope of what I planned to talk about, but here's some thoughts:
"Sour" beer is a difficult category to measure, which is why you don't hear a lot of statistics about it. When it comes to sales data tracked in major retailers, a significant portion of ''sours'' are incorrectly classified, or they cross over into another style and are housed there instead. In IRI, these crossovers include Seasonal, Special Release, Belgium Ale, IPA, etc., instead of the "Wild or Sour Ales" bucket. Lagunitas' Aunt Sally for example, falls under Seasonal. So a significant chunk of data gets lost, leaving you with a painful exercise to truly understand how well sour is actually selling in the US.
The American Wild Ale (AWA), barrel-aged/mixed fermentation, component is even more of a mystery, with most of its sales traditionally taking place direct-to-consumer through taprooms, or in small, independent stores not tracked by Nielsen or IRI. As a long time fan and someone who keeps close tabs on AWAs, I feel confident in saying that these high-end sours are hurting in sales, both in attracting new fans and maintaining the ones who bought so many cork & cages from 2012-2015. To confirm or deny my suspicions, I reached out to my friend Dave Hawley who owns The Beer Cellar in Glen Ellyn, IL. Dave and I met in 2014 while sharing a bottle of Veritas 014 from Lost Abbey, an oak-aged golden ale with cherries, so he was the perfect friend to team up with on this topic.
So what happened to the long lines and quick sell-through of AWAs? After polling a beer forum full of current and former sour drinkers, and retracing my own steps from the past 5-6 years, here were the most common themes:
So how do we turn things around and ensure that enthusiasm for American Wild Ales continues to grow?
"I think we need more approachable sour beers available," Hawley suggests. "Let's go back to Orchard Wit from The Bruery. Every novice beer drinker knows what a German Weiss or Belgian Wit is, even if they only know Blue Moon or Hacker Pschorr. I believe that lower price point, smaller format single bottles of fruited Gose, Berliners and Wheat beers will help the newer sour drinkers get into the category with a slightly different take on the styles they are comfortable drinking already."
Earlier, I mentioned Veritas 014 from Lost Abbey, which I shared with Dave nearly 5 years ago. Well, my interest in that series has continued all these years and just last weekend I opened a Veritas 021. This batch caught my eye because it deviated from their typical single fruit versions, or familiar combinations like Peaches/Apricots/Nectarines. V021 introduced two new flavors to the series, featuring raspberries, with vanilla and cinnamon. This blend knocked my socks off and rekindled my love of the series, which was beginning to feel a little stagnant. The last few blends had shown significant restraint on the acidity side, with 021 achieving another level with its evolution of flavor.
I understand anyone's skepticism around the concept of a "pastry sour" and how it may be construed as bastardizing the style and traditions. I also understand the doubt that fans of these "crazy" versions will venture into the more orthodox, traditional examples that many seek to brew. However, as Proximo said to Maximus in Gladiator: "Win the crowd. And you will win your freedom." Earn their respect, and they'll lend you their attention, visit your taproom and try other offerings that you're passionate about. Cave a little to the evolving tastes of the latest crop of beer enthusiasts that we are all still trying to figure out.
I've seen this work firsthand at Revolution, where we prefer our barley-aged stouts, barleywines, etc. to let the base and barrel do the talking. By still being willing to dabble in occasional single adjuncts like coffee, vanilla, and fruit, interest in the barrel program has grown exponentially while leaving the majority of the offerings adjunctless. In turn, our fans have seen how excited we get about the barrel-focused projects and have quickly grown to appreciate them as much as we do. Sour beer is a niche, American Wild Ales even more so. It doesn't take much for the style to fall into or out of favor with craft beer enthusiasts. As someone who desperately wants these barrel programs to continue to expand, I'm advocating for the following changes to become even more so the norm:
Big thanks to Dave Hawley for chatting sours with me. You can check out The Beer Cellar's great selection of packaged beer and drafts in the beautiful town of Glenn Ellyn, and just announced, his second location coming soon in Geneva.
Instagram has received a lot of well-deserved credit (and blame) for igniting the New England-style IPA trend, in part thanks to its bright, colorful, juice-like appearance that's typically accompanied by very attractive and 'gramable can art. We were brought up understanding that beer should be clear, but Instagram has been slaying the fundamentals of beer, one after another. We shouldn't be surprised, as Instagram has become a key source of advertisements, inspiration, and [gulp]...influence for all industries. We're watching a lot less TV these days, which is where we used to get our style and pop culture trends, whether intended or not. I wouldn't have gone through that baggy pants phase in 6th grade if it weren't for a combination of Joey Gladstone and MC Hammer. In those days, it was all in the hands of the largest corporations with the heftiest advertising budgets. Today there are few barriers-to-entry into the realm of content creation, whether you're a business or a fan. Instagram has become the epicenter for its simplicity and visual component, including trends well beyond just the Hazy IPA in beer. I point to this Facebook-owned App for pushing most trends in beer, for better or worse. Here are five reasons why Instagram is the cause of, and solution to, most of beer's problems:
Your Flagship Lost its Sizzle? Blame Instagram
Not into Appearance-Driven Beers? Blame Instagram
Missin' those margins from 22oz Bombers? Blame Instagram
Sexism in Beer? Definitely Blame Instagram...
Okay, let's end on a high note. Well, a high-calorie note at least...
Frustrated that Pastry Stouts Get All the Attention? Blame Instagram
During the Summer of 2013, Goose Island announced that it would be releasing a new brand extension of their Bourbon County Brand Stout (BCBS). Proprietor's (aka Prop) would be a rotating variation each year, only being sold in the Chicago market. The concept would keep the "home" audience and retailers engaged, while generating a new level of enthusiasm for the overall brand. "Prop 13" was a rye whiskey barrel-aged version, aged on toasted coconut and released on Black Friday of 2013. It wasn't just good, it was great, still ranked #4 on Untappd's World Rankings, with the following years' Prop '14 sitting at #1. There was only one problem...99% of the bottles were seemingly gone after the first day.
"As the craft beer industry has grown, word has gotten out about the ingenuity of BCBS, and its popularity has expanded, making these beers even harder to come by. On top of that, stores sell out fast, they limit the amount you can purchase, the prices are high and some of us simply canât get to the beer store by 5am," Stein wrote. "If you are one of the many who missed out on this years variants, or just cannot wait âtil next year rolls around, why not try replicating the variants yourself, or better yet, coming up with your own version? "
By 2015, Instagram had taken off as a popular medium to share beer experiences and engage with other members of the beer community. It provided more of an open canvas than Untappd and allowed users to incorporate other interest into their feed. Recreating allusive BCBS variants eventually evolved, as Stein suggested, into creating and sharing your own unique recipes. The French press experiments became a common segment at bottles shares, where groups of friends would create their own variants, then share with their followers.
I reached out to Jason, who now writes for HopCulture.com, to ask his thoughts on why we love sharing experiments like this to Instagram. "We are in a state of beer where excess is celebrated," Stein explained. "People want to show what else is possible and push the limits." The boundaries indeed continued to be pushed throughout 2015 and into 2016, which is when we saw a lot of breweries respond with commercial versions of what used to originate in a french press. The "pastry stout" as Don't Drink Beer coined it, was born and is still humming today. Thanks Instagram.
I hope it's clear that I'm using the word blame tongue-and-cheek. And when i say Instagram, I'm referring to all social mediums, though I find Instagram to be the clear winner. It has generated more enthusiasm for craft beer than any other tool out there, favors the younger demographic that the category badly needs, and squeezes the most creativity out of its users. It's not all rainbows and carebears, as there are egos and assholes lurking in the dark corners, but Instagram remains a positive outlet overall. As Stein said, its where excess is celebrated and the limits are pushed. The ability to show off what you've creatied, are drinking, or the brewery you are visiting helps spread interest, inspire new ideas, and keep consumers aware of that new new new that drives breweries crazy, but keep them relevant during this new era: the Golden Age of the Consumer.
What better way to get back into the beer blogging spirit than with some 2019 predictions to kick off the year! I remain positive on the beer industry and its future, but "the pinch" happening right now as a result of 7,000+ breweries and a seemingly flat consumer base cannot be ignored. So while some of these predictions may have negative undertones, I remain excited about what we're going to see moving forward as the cream rises to the top. I invited some industry friends from around the country to contribute a prediction of their own. So thank you to Chris, Kenny, Kate, and Danny for letting me include yours. And here we go...
1) Brewery openings continue to outpace closings, but barrels produced by 2019 closures will exceed barrels produced by the new openings
2) Criticisms for "chasing trends" die down as Survival Mode becomes an industry-wide theme
3) The "craft" lager/pilsner 6-pack will become an endangered species at retail
4) Reports of a quick death for the Brut IPA prove premature
A number of the larger, top 50 breweries were either late to the Hazy IPA trend, or skipped it entirely. Some may have underestimated the level of interest in the style, it's consumer, or the positive impact it could have on their business. Difference in brewing philosophy likely slowed down many larger craft breweries, while some may have flat out been asleep at the wheel. As beer sales slow and the demand for new continues to rise, everyone appears to have been ready for the Brut IPA to come along, and were quick to react. Their growth likely depends on it.
I've had quite a few Brut IPAs now and I'd give a strong advantage to the cleanness of examples produced by the larger breweries. Unlike a 6-pack of a salty Gose, Triple IPA, or Imperial Porter, the last few of these well-made Brut IPAs don't linger in the back of your refrigerator for months. Examples that were done right go down easy, aren't filling, and make it difficult to have just one. This will help significantly with re-buys, versus consumers buying just to try it, then moving on.
With the larger breweries jumping all over this trend, the smaller breweries are forced to take the style further in order to move enough 16oz cans at the margins they're accustomed to. You'll see them creating more Imperial and fruited versions as a point of differentiation. The few in this realm that I've had were not as desirable, or at least didn't leave me wanting a second pint. So while I agree that Brut IPAs will not be a beer geek or Instagram phenomenon in 2019, I do believe that they're about to penetrate the mainstream customer.
5) More variety packs, from the places you least expect...
6) Hazy penetrates further into mainstream, starts seeing some push-back from enthusiasts, balance of power begins tipping back to retailers
Celebrity Guest Contributions
7) Death of the All Sour House
8) "More of the same Hazy IPAs will open doors for those bold enough to do something different."
Those breweries that were daring enough to not put all their eggs in the juicy basket, and offered a variety of hoppy styles will be well positioned to fill tap handles at bars looking to supplement their existing NEIPAs on draft. I tend to think of a larger regional or nation breweries in this regard, who may reap some (much needed) benefit of a "retro" flavor profile that they will be seen to have been authentically sticking by all along. Breweries such as Odell, or Bell's, would fit this bill nicely. Or it could come from some contrarian newcomers who boldly stick their necks out from the get-go and zag while others zig.
Sadly, I can't immediately think of anyone who fits this bill - although I'm sure they are out there. Finally, if this type of stylistic return to form is to occur, I'm curious how it will be received when breweries known for haze start to dabble in "retro" IPAs. Will they be see purely as opportunistic, as many elder statesmen of craft beer were seen when pivoting to juicy styles? Or will their cache only enhance the growth of a retro resurgence, and perhaps even be credited to them?"
9) Further decline in prominence of the formerly ubiquitous flagship line-up of packaged beers
"Yes, there's still a place for really good and really reliable, but I bet in 2019 we see a further decline of the 5-6 packaged flagship beer line-up (the IPA, the pale ale, the golden ale, the porter...) offered by small to mid-sized packaging breweries. With the exception of maybe 1-2 core beers, agility and variation may continue to win over tested and true. In 2019, I'm anticipating even more style specialization coming from newer breweries."
"There were many complex sourcing factors that may have led to moments in 2018 when can-focused small to mid-sized breweries experienced bottlenecking when it came to procuring aluminum cans to package their beers in. Some breweries even took to wrapping labels over pre-printed cans. I wouldn't be surprised if this sourcing unreliabillity continues and encourages more breweries to return their focus to bottles for small batches and special releases."
Kenny Gould - Founder, HopCulture.com