It's about the beer
Gina Miller and Bill Keeper
I know we're both worried how the strength of the economy, the patchwork of lockdown regulations,
and even ongoing supply chain irregularities will impact the beer industry but I think anyone who's
been following things can reasonably speculate that certain prior and pandemic-era trends, like
virtual conferences, e-commerce and direct-to-consumer sales, will last.
Of course no one really knows how quickly the economy will rebound and when people will feel safe
going out to their local breweries and pubs again but I just read what might be the nation’s most
exhaustive analysis of the outlook for the beer business in 202. I call it the “Back to the Future''
predictive model. It had three main points. First is that people will go back to 2019 consumption
levels and live like they used to live. No complaints from me on that. Second is that off-premises
sales for at-home imbibing will keep growing at least a little bit but not at the levels we saw last year.
That's understandable since 2020 saw records levels of drinking at home. Don't worry Bill, the
report didn't say people will cut back on drinking just that they will start to return to the local
watering holes to do part of it.
Bill we both know that before the pandemic, the majority of wholesalers were responding to a
softening craft beer market by putting brakes on craft brands: no more selling endless beer
newcomers and pushing niche breweries. That's related to the third point in the report. It predicts
that during the remainder of the pandemic and for probably the medium-term future afterwards,
retailers will want to play it safe by buying what they’re confident will sell. At the same time
breweries will try to make up for COVID losses by sending beer to outside retailers that they would
have previously sold through their taproom accounts. I've already seen that happening.
It makes sense, Bill. After all, how do breweries put out five or six new beers, when no one, or just
a fraction of the people who usually come, can sit and drink in their tasting room? They can't and
they won't. They have to have the confidence that what they make is going to sell and that's their
Now before you get upset Bill I have an answer. One way breweries might continue to offer a larger
variety of new beers and different flavors/styles is to take a page out of big beer’s book. We might
see more breweries splitting batches of beer, and then creating two or three different flavored
beers from that one batch. We know many places already do just that. Now you expect more of it.
That's it from me, chug-a-lug, Bill.....see you next time!.
Hello Gina -
Oh my, you really worry too much. As the saying goes "qué será será" , what will be will be.
Having said that I think your insights into what we can expect are right on. However let me give
you a few thoughts that the research report you mentioned seemed to have left out.
On thing I'm sure of is that it will not be Back To The Future for hard seltzer. It will have a
sparkling new, bright future. Part of the reason is that manufactures and breweries large and
small will push it incessantly. Frankly, I see a lot of desperation in that. Seltzers are very cheap
and relatively easy to make. You’re using artificial flavoring ingredients which is an easy way to
expand your audience, mainly because cocktail and wine fans will drink them.
When it comes to NEIPAs I don’t think the craze for haze is going away anytime soon, The main
reason for that, and it's just my minority opinion, is not because people love the style without
equivocation. It's really because there is so much research going on into new hop varietals and
ways to brew with them. New hops means new aromas and flavors that will raise the excitement of
craft beer. From what I've seen the unique flavors that brewers are able to extract from hops is
the exact reason why NEIPAsr style will be sticking around. The hazy IPA is the ‘showcase style’
for hop research. Brewers are not going to stop experimenting. Hop producers are not going to
stop creating new hop varietals. You and I, Gina, will therefore not stop enjoying the style.
Just as important as what is made is how breweries will get their product to we drinkers. I'm fairly
sure that the post-pandemic period will find more craft breweries searching far harder than they
did before for more favorable distribution models. A few states may finally liberalize their
Prohibition-era franchise laws to allow breweries increased autonomy in self-distributing and
getting out of their usually punishing distribution contracts (Massachusetts most recently). That
will allow entrepreneurs to come in to offer alternatives with more flexibility and lower barriers to
entry. Trust me, I know the history of and all the arguments for the three tiered system but If it
was up to me I'd allow every brewery to self-distribute in and out of their home state and ship
anywhere they want.
As to your last point, I too have noticed more mainstream craft breweries' offerings on the shelves
and less from new, smaller and more obscure places. And those mainstream craft breweries are
generally pumping out just their flagship brewss. I agree it's not what craft beer is about nor what
people like us want. That will continue until breweries feel financially comfortable enough to go
back to their original brewing philosophy. Don't worry, Gina. In the interim you can just tell me
what you like and I'll whip up a home brewed batch for you. Of course, then you'd have to drink it.
Here's looking at you, Gina