- 2020 Points and 2021 Predictions
- Supply Chain
- Trends Shaping The Craft Beer Industry Outlook In 2021
- 1. Sour Beers Gain a Mass Following
- 2. Lagers Get Respect in the Craft World
- 3. Beers Containing CBD Take Stage
- 4. Rosé Beers Stay in Demand
- 5. Craft Beer Competes with Macro-breweries
- 6. More Beers are Made with Fresh Hops
- 7. Hazy Brews aren’t Going Anywhere Soon
- 8. Craft Malt Steals the Spotlight
- 9. Taprooms Take Over
- 10. Craft Beer Becomes More Diverse
- 9 Trends in the Beer Industry to Watch in 2021 • Hop Culture
- Making Beer More Accessible
- Virtual Victories
- Low Alcohol and Non-Alcoholic Beers
- Brewers As Tastemakers
- Hit The Outdoors
- The Lingering Effects of COVID-19
- Focus On The Customer
- The Blend of Whiskey and Beer
- Variety and Mixed-Pack Deliveries
- Six Beer Industry Trends to Watch in 2021
- 1. Draft Beer Stays Flat as Breweries Turn to Cans and… Bottles?
- 2. Outdoor Spaces Remain Essential to Taproom Success
- 3. 12-Pack Sales Continue to Grow
- 4. Bartenders and Breweries Go Digital
- 5. Subscription Services and DTC Are Here to Stay
- 6. More Nonalcoholic and CBD Beverages
- Five Trends Propelling Craft Beer into 2021
- Pushing Boundaries with IPAs
- Stepping Further into Seltzer
- Adding Low- and No-Alcohol Options
- Settling into Sours
- Leveraging Lagers
2020 Points and 2021 Predictions
This article summarizes some of the key facts and figures of a turbulent 2020, with an eye toward the craft market in 2021. For those who missed it, there is a longer presentation available to Brewers Association members.
Small and independent brewers are on track to see their numbers decline 7-8% in 2020. This could change if on-premise slowdowns deepen in December, traditionally a strong selling period for small brewers. This follows a 10% decline at mid-year and a 5% decline in Q3.
There are large variations by brewer and region in that number. For example, while the total craft number was -5% in Q3, the smallest brewers have been hit harder, due to their reliance on draught and at-the-brewery sales, and so were down closer to 30% during the quarter.
For 2021, my models are showing growth of 6-7% over 2020, but production levels that still fall below 2019, meaning it will take craft until 2022 to recover to its previous levels, and longer to fully return to the growth trend it had been following of 3-4% per year.
The on-premise has borne the brunt of the pandemic’s market disruptions.
While data suggests that things improved between Q2 and Q3, most indicators showed on-premise sales still down a quarter or more year-over-year in Q3.
In addition, near real-time indicators from companies BeerBoard and Nielsen CGA show November and December numbers that are trending downward, suggesting Q4 might look more Q2 than a sustained recovery.
The biggest reason that full recovery is unly anytime soon? Around one-fifth of on-premise consumers are waiting for a vaccine or treatment before they return to the on-premise (source: Brewers Association analysis of Nielsen CGA data). For that reason, it seems hard to believe there will be any significant recovery until late Q2 at the earliest.
In addition, although the second half of 2021 will ly look better, I believe it’s unly we’ll get back to 2019 levels right away. The combination of new customer patterns (not all of those 20% are going to rush back to the way they did things before) and closed accounts will put a cap on the extent of the recovery.
In addition, as you plan for 2021, I urge you to look at how the same level of sales might look different. Urban areas that rely on office workers may come back much slower as people continue to work from home, whereas the suburbs may see increased sales.
Different places, patterns, and businesses will mean similar sales have different winners and losers for the next year or two.
the Brewers Association’s ongoing brewery tracking, we currently are on pace for around 700 openings in 2020. That’s about 30% lower than last year. That said, the trend has been weakening in the past few months, so a number slightly below that mark would not be surprising.
In 2021, expect lower openings to continue if not decline further. Why? For one, most of the decline we’ve seen this year has nothing to do with the pandemic. Openings had been declining for around a year before the pandemic hit, and as much as two-thirds of the decline in openings this year is related to that longer-term trend rather than the impact of COVID-19.
2021 may see openings decline further as fewer breweries in planning enter the pipeline and as other structural factors such as lending make it more difficult to plan and open a brewery until the pandemic passes.
On closings, the numbers are positive and perplexing. Currently, our closing number suggests that 2020 closings may be similar, if not lower than 2019 (about 300 brewery closings in 2019). We will certainly find more in our end of the year sweep, but given the sharp decline in sales, it seems almost unimaginable that closings haven’t risen more.
I fear that 2021 will be a year where the closing number matches the current market reality more closely, and we see closings rise sharply.
We should not confuse the lack of business deaths with business health, and there are numerous signs, from brewery sales and revenue, to broader small business confidence surveys, that small business, particularly those in hospitality, are hurting.
As market conditions return to normal, this may accelerate closings, both as breweries take stock of the hole COVID-19 has dug in their finances, and as other players, such as landlords, end extensions or forgiveness on rent.
Early in the pandemic, there were numerous voices speculating that COVID-19’s economic damage might cause beer drinkers to trade down, opting for lower priced beer segments. In reality, however, we’ve seen the opposite.
If anything, the pandemic has accelerated beer’s premiumization, as the fastest growing parts of the beer business over the last six months have been its highest priced. Looking at beer, segments priced above premium (including craft, import, and super premium) are all exceeding the growth rates of premium and have seen large bumps in off-premise scan data.
Premium has seen a small bump, and sub premium has actually seen slower dollar sales growth than a year ago (source: IRI Group MULO+C, last 26 weeks’ dollar sales growth).
Going forward, this is ly to continue for two major reasons. The first is that this is a long-term, stable trend. Above premium in beer has steadily grown share for nearly three decades.
This isn’t a cause in and of itself, but the aggregation of numerous factors related to brands, demographics, and consumer choices. The second is that the economics of the downturn are hitting low wage workers the hardest.
So above premium beer drinkers have not seen employment and wages hit as hard as lower wage workers.
Craft has been growing its consumer base steadily over the past decade. Nielsen Harris data (presented to members earlier this year) shows that the percentage of the 21+ population that drinks craft has risen from 35% in 2015 to 44% in 2020.
These demographics are ly to continue improving in 2021—and for the next several years—as an aging millennial population stays in or moves into the core craft age range.
That said, national age trends are not the same in every state or region, and the next generation (Gen Z) is showing signs of different preferences and buying patterns. Consequently, while craft still has run room demographically, in the longer run the industry will need to broaden its core demographics to keep growing its consumer base.
Something that on the surface seems paradoxical has been occurring in our annual consumer survey. The percentage of craft drinkers saying that both “high alcohol content” and “low alcohol content” are important in their purchase decision has been growing.
We can reconcile this disconnect by remembering that the growth is driven by different drinkers and different occasions, but this dual growth has driven much of the style change over the past few years.
On the one hand, stronger flavored beers, primarily IPAs, have seen growth at 6% ABV or higher. At the same time, a range of more sessionable styles, such as blond ales, golden ales, Kolsch, and lagers have seen growth at 5% and below.
The average craft beer is in the 5-6% range, but that middle is shrinking as its own bucket as that average gets pulled on both ends.
In terms of what’s next, I’d highlight three flavor profiles, and the styles that follow:
- Juicy/hazy: This IPA sub style is being driven by numerous demographics. In our annual survey, female drinkers and drinkers ages 21-25, 21-34, and 35-44 all said they were more interested in this style. That’s a recipe for continued growth.
- Crisp: The other end of the spectrum is captured by “crisp” beers, with female drinkers and drinkers ages 21-25 and 21-34 all more interested.
- Tart: Tart doesn’t necessarily fit neatly into the patterns I identified above, partially because IPA, it has the malleability to take on different forms. From session sours to higher ABV smoothie sours with fruit, tart isn’t one style, but has numerous forms. It’s polarizing in consumer surveys, but with 21-24 year-olds more interested in it, it ly has run room to grow driven by the next generation of craft drinkers.
Outside of the hops shortage of 2008, it is possible that 2020 has been the year with the most supply chain challenges in recent history. From CO2 to aluminum cans, as well as items no one would have considered before the year, such as personal protective equipment or propane heaters, 2020 meant more planning and more challenges than ever before.
For 2021, the key message is “plan ahead.” The primary challenge is going to be aluminum cans. Right now, we’re simply demanding more as a country than manufacturers can make.
There are some options abroad, though those may pose quality challenges (we’ll have more resources here coming soon).
That challenge won’t ease in the first half of the year, and even in the back half may only ease slightly, as much of the new capacity is spoken for, so plan accordingly.
More broadly, although the acute challenges may have passed for other items, in a year that will bring more economic swings (some positive this time), expect disruption as shifts in the economy ripple through the supply chain, and spend more time planning for your needs and what happens if those needs change.
If on-premise was the loser of 2020, e-commerce was arguably the winner. Prior to the pandemic, estimates were that 2% or less of beverage alcohol volume flowed through e-commerce, even using a broad definition. Beer was a small portion of that, with Rabobank estimating beer at only $115 million in sales prior to the pandemic — that’s 0.1% of beer’s total retail sales.
total consumer spending, e-commerce took a huge leap forward when the pandemic hit, as clicks replaced bricks in people’s buying patterns. Why visit a store when beer can show up at your doorstep (where legal) for a modest fee?
The data shows that we’ve receded from the peak (where perhaps 8% of beverage alcohol off-premise was flowing through e-commerce), but that e-commerce sales, for both beer and all beverage alcohol, remain far beyond where they were a year ago.
Expect this to continue, and for e-commerce growth to re-accelerate in 2021.
E-commerce was already growing—albeit more slowly—prior to COVID-19, driven by new business models and innovation, younger legal drinking age consumers more comfortable buying everything on their phones, and slowly updating regulation and legislation for a digital economy.
In addition to those forces, COVID-19 has ly set off a cycle of further growth, driven by investments made during the pandemic to up capacity, increased consumer awareness, and then a feedback loop of market growth, consumer demand, and regulatory and legislative changes.
Speaking of regulatory and legislative changes, the pandemic brought an incredible number of changes to market access, for brewers as well as beverage alcohol retailers.
One example is direct-to-consumer sales, which were at least partially allowed in 35 states, up from fewer than a dozen prior to the pandemic.
These changes were a lifeline to connect breweries to consumers while their primary business model of welcoming visitors to their taprooms and brewpubs were on hold.
Although I do think some of these new rules will stick around, my prediction here is that fewer of these rules will be made permanent than many brewers are thinking right now.
It’s easy to confuse the pendulum swing of more market access over the past decade as pure progress, whereas a longer-run look at beverage alcohol in the United States tells us market access often cycles with greater market control.
In addition, even the market access opportunities that get made permanent will ly see additional rules going forward, as freer markets often lead to even more regulation.
That’s why I want to close this piece with a plea for unity in 2021.
Your state guild or Brewers Association (BA) dues are an easy item to cut as you budget for next year, but now more than ever is the time for unity and concerted action.
As conditions improve lawmakers may be tempted to roll back the rules you need to dig the hole COVID-19 has made in your business, and now is the time for your guild and the BA to preserve and expand those rights.
Trends Shaping The Craft Beer Industry Outlook In 2021
Craft beer is more popular than it ever has been. As a matter of fact, there are approximately three times as many breweries opening to replace any that have closed. Twenty to thirty additional breweries are expected to open this year in just Massachusetts alone.
The sheer volume of breweries has led to the solidification of some emerging trends while others have fallen by the wayside. As such, let’s look at the trends that will define the craft beer industry in 2021, as it continues to soar in popularity:
1. Sour Beers Gain a Mass Following
In the last few years, sour brews have become a steady niche product, but, just recently, sales of these unique, tart, fruit-influenced beers have exploded into the mainstream with seriously impressive sales. As of now, they have earned their place on the everyday menus of many bars and taprooms.
Brewers say that sours are actually outperforming other beers as far as growth, but that is only on a percentage basis rather than in total volume.
Part of the reason for the increase in popularity is the fact that the selection of sours is becoming more diverse as time goes on. Some styles are also low in calories and alcohol content while still packing a powerful flavor.
Because they can be smooth and light or bold and fruity, they tend to attract wine and cocktail aficionados. While they can serve as bridges to craft beer consumption as starter brews, sours are enjoyed by beer experts and novices a.
2. Lagers Get Respect in the Craft World
Lagers had a bad reputation for so long as not being considered “real” craft beers, even though they were still a popular choice among micro-brewery beer connoisseurs.
And, while IPAs still reign supreme in the craft corner of the market, their near-monopoly has been dwindling down since those new to craft brews want to enjoy a semi-familiar taste.
After all, double dry-hopped IPAs are not for everyone’s taste buds.
Some micro-brewers are especially-talented at conceiving lagers that are popular and have garnered large followings. As such, lagers have gained favor and fanfare and continue to climb in sales and gain admiration.
3. Beers Containing CBD Take Stage
Since the dawn of legal marijuana is upon us, and CBD oil is super popular, it only makes sense that CBD beer would soon follow.
CBD comes from the part of the cannabis plant that is non-psychotropic, which means it can’t get you high, but it certainly can help you relieve anxiety and allow you to fully relax.
These beers are brewed with both terpenes and oils derived from hemp. Remember, most forms of hemp were legalized on the federal level in 2018. Cannabidiol then infuses the brew with a slight kick.
Many craft breweries are planning to launch CBD beers in a limited run and will continue the lines if they prove popular. That is if the legalities don’t get in the way. After all, some CBD-infused beers were permitted before the 2018 legislation; then, the DEA revoked its approval.
4. Rosé Beers Stay in Demand
It may have seemed the “in” thing to make fun of last year since everyone was drinking it, but rosé beer is going to become an even bigger trend in 2021 and will become widely accepted.
The beer, inspired by the sweet, pink wine, is about to become a stalwart in the craft brewery community.
This is not just about turning macho beer pink. These wine-beer combos are fermented with grapes from the top vineyards in California. In other words, breweries are experimenting with notes of wine within a true beer.
5. Craft Beer Competes with Macro-breweries
While craft beer ballooned to nearly twelve percent of the beer market in the United States, it plateaued in the last few years and has only made single-digit percentage gains.
However, analysts believe the niche potentially could expand its market share in the near future.
They base this guess on the assumption that younger customers are the driving force behind craft beer’s popularity in the first place. As this generation takes over the market, they are ly to stick with their preferences and buying habits. Meanwhile, older generations, which relied more on macro-brewed beer, are buying less beer in bulk as they age.
Younger people don’t look at craft beer as anything special. To them, it simply is beer. And, while larger breweries and their mass-marketed beers have stories and interesting heritages, they are a part of the Millennials’ parents’ traditions, and most younger adults want to carve their own paths.
6. More Beers are Made with Fresh Hops
Did you know that hop acreage in the United States increased by nearly 80 percent, and hop production increased by seventy-seven percent between 2012 and 2018? These statistics indicate greater access to hops directly for breweries, so brewers can knock out a greater number of fresh hop beers if they work hard and fast enough.
If you ever drank a fresh hop brew, you’d know how great they taste, and you’d definitely crave more. Local breweries have released their own editions in cans, and customers can’t stop raving about them. Any brewery lucky enough to be in the proximity of a hop farm is sure to jump on the bandwagon.
7. Hazy Brews aren’t Going Anywhere Soon
The New England haze craze has taken the country by storm, and there is no turning back.
Hazy beers are easy to drink, juice-forward, and for those that are not otherwise fond of beer’s typical bitter taste. As a matter of fact, they can be a starter brew for those just getting into drinking craft beer. The opaque “juice bombs,” as they’re often called, even resemble orange juice and, as such, photograph well.
Hazy beers are now being bifurcated much in the same way as traditional IPAs, with hazy pale ales, hazy session IPAs, and hazy imperial IPAs. However, the core hazy IPA style is still gaining steam.
Experts believe there is no reason to believe that the hazy craze will end anytime soon. Over time, however, fruity brews may wear out their welcome with the masses. You will probably see breweries attempt to strike more of a balance between the more typical hoppy flavor of beer and the newer fruity tones.
But, for now, the trend shows few signs of slowing down. However, since almost every craft brewery is in the game, it is unly for the trend to blow up any more than it has further down the road.
It seems that a subtler take on the flavor is where hazy beers are destined to go.
Since all trends come to an end, breweries are looking to take the idea yet build their own lanes in an overcrowded niche.
That said, good brews will always find their own market. So, while customers may shy away from hazy beers over time, they will always exist in some way.
8. Craft Malt Steals the Spotlight
While hops bring spices to beers that can make them taste a bit exotic, these flavors can’t stand alone. That is why many brewers are beginning to understand that all raw ingredients matter, not just the green favorites. As the industry becomes more powerful, brewers are using their resources, energy, and time to focus on other components; specifically barley.
As of 2021, American barley farmers have been predicted to increase their production in anticipation of new brewers that will need the crop to perfect their craft.
9. Taprooms Take Over
The category of craft beer, which has shown steady growth, owes a lot of that expansion to taprooms.
After all, retail shelves cannot possibly feature all the new craft brands crowding the market, and even the choices that are being featured in stores are so diverse that the plethora of choices often confuse potential customers.
However, taprooms and breweries allow IPA shopping to become an easier, less intimidating experience. Focusing on taprooms and forgoing broader retail distribution is also something that many customers treasure. As such, most breweries report that the largest portion of their sales occur onsite, though they may distribute to local stores.
Taprooms are what the neighborhood bars used to be to the previous generations. The only difference is that they don’t serve anything but the brewery’s products. That said, many Millennials spend lazy Saturday afternoons hanging out in taprooms and developing tastes for beers that they may never have had any other opportunities to taste.
Taprooms are fun for customers, but they are crucial for any craft brewery getting its feet wet in the industry. They are critical for getting their names out there and drawing in customers for years to come.
These taprooms also give breweries a chance to try out new brews through trial and error in real-time. They can make up smaller batches and see how customers react to a new recipe without wasting ingredients if the beer is not particularly a hit.
10. Craft Beer Becomes More Diverse
The industry doesn’t necessarily need a revamp, but the face of craft breweries is still changing. Brewers across the planet are clamoring to be a part of festivals Beers without Beards and Fresh Fest, bringing their unique cultures along with them.
This diversity is great, and the changes it brings allow the industry to grow accordingly. Craft brewing will continue to become more inclusive and diverse, as any space in 2021 should.
In conclusion, the craft beer industry is still growing and changing as it cruises into this new decade. As long as space continues to evolve, it should be around for many years to come.
9 Trends in the Beer Industry to Watch in 2021 • Hop Culture
There are so many armchair pundits. Log onto social media and you can see and hear exactly what strangers think about anything, whether or not they actually have any relevant experience or education.
Thanks to the rise of ubiquitous and near-instant communication, anyone with an opinion is suddenly an expert.
And so over the past dozen months, all sorts of opinions have been formed and disseminated about what craft beer trends we might see in 2021.
And yet, when we want an opinion, we find it far more interesting to seek out actual experts — i.e., the people who have invested the time, energy, and resources to form an objective point of view. Sure, Joe Smith in your local craft beer group probably has a lot of things to say about Pliny the Younger, but… who cares? We’d rather hear about the product from brewer Vinnie Cilurzo.
It should be noted that experts aren’t always right. And sometimes, it takes a fresh perspective to see something that the experts miss.
But in general, the experts have a much better chance of being right about future craft beer trends than a novice, or someone who waited in line at Hudson Valley one time, so we tapped a couple of them to see what beer trends might evolve or continue over the next year.
Making Beer More Accessible
Submitted by Tara Nurin, Writer, Forbes
I see a continuation and expansion of several COVID-related trends. DTC/online sales, bigtime. Hopefully more and permanent take-out/delivery and lobbying for that. Cans over kegs but shortage may force some to bottle.
Maximizing available outdoor space where possible for visitors. QR code menus. Table over bar service but with limited contact.
Some limited food offerings at places that didn’t previously do food because of some states’ COVID mandates.
Submitted by Grace Weitz, Head of Partnerships, Hop Culture
Words Zoom, Google Hangouts, and GoToMeeting have become a part of our daily lexicon. With large gatherings suspended and many taprooms across the country forced to limited-capacity, figuring out new ways for breweries to connect with their communities are crucial.
This year, we’ve seen large scale festivals go virtual, from GABF to Fresh Fest to our own women in craft beer festival Beers With(out) Beards. And I don’t see that trend slowing down in 2021.
At Hop Culture, we plan to host at least one quarterly digital event next year (first up is Juicy Brews Saturday Morning!) and I’ve already seen a host of local breweries roll out their own online programming, from digital trivia nights to virtual tasting hours. Our reality next year will be virtual.
Low Alcohol and Non-Alcoholic Beers
Submitted by Latiesha Cook, CEO and Co-Founder, Beer Kulture
I definitely see low alcohol and non-alcoholic beers leading the charge in 2021. With more and more people becoming health conscious adding low to no alcohol options is looking a big win!
I’ve also seen lots of conversations about alcoholism within our industry, a topic many stray away from.
Whether some of us believe we have issues with alcohol or not, I believe that if given the option during brunch to choose from an alcoholic beverage or a non-alcoholic beverage, many are going to begin going with the non-alcohol version. Makes the drive home from lunch with friends or an evening on the town a lot safer!
I also think we are going to see a lot more hard seltzer options. I can see them competing with the light beer offerings. They’ve got a broad range of flavors and few calories. Sounds a win-win to me!
Brewers As Tastemakers
Submitted by John A. Paradiso, Managing Editor, Hop Culture
If you wanted to sum up the most recent epoch of craft beer, it would take two words: “hazy IPAs.” Turbid, opaque, citrus-forward IPAs dominated the craft beer landscape for the past few years. (And, for the record, I don’t think they’re going away.
) A lot of the conversation around hazy–or New England–IPAs was about hype, and breweries “selling out” or “cashing in” on the rising trend.
Many brewers happily brewed the crowd favorite style while even more bemoaned the fact that they were forced to make beer that they themselves didn’t want to drink.
As we enter a new period in the craft beer industry, I expect more fervent craft beer drinkers to follow the lead of their favorite brewers.
While the hazy IPA is here to stay, I’ve seen close brewer colleagues release saisons that taste more natural wine. Or exceedingly simple and subtle lagers.
I don’t think taplists will suddenly abandon hazy IPAs or fruited sours, but I think we’ll ly see brewers innovate and create products that they themselves are excited about.
Hit The Outdoors
Submitted by Joshua M. Bernstein, Writer, New York Times
Author of Drink Better Beer and The Complete Beer Course, @joshmbernstein
Outdoor spaces will be critical to breweries’ success in 2021. Look for beer gardens, souped-up outdoor seating, ice rinks, fire pits and more as breweries court customers with cold beer and fresh air, no matter the temperature or season.
The Lingering Effects of COVID-19
Submitted by Andy Crump, Freelance Writer, Hop Culture
I’m not sure this is a “trend” so much as an “inevitable economic consequence of a pandemic,” but I’m really curious to see how breweries continue to evolve — or even just survive — as we head into 2021 with hope of a vaccine (and hell, a new administration that actually cares about the virus), on the horizon.
Will they continue to do curbside pickup and delivery? Will laws allow them to as circumstances change and hopefully go back to normal? How many breweries will end up having to shutter for good if nothing changes?
Focus On The Customer
Submitted by Dr. J Jackson-Beckham, Equity & Inclusion Strategist
While it’s always fun to speculate which new and innovative products and techniques will define beer in the year ahead, I think 2021’s most important trends are going to be in relation to customer experience and human resources. “Craft beer is all about the people” is a common enough refrain that, at times, lacks substance.
In 2021, as we recover from the impact of COVID-19, integrate the lessons that the “big pivot” of 2020 taught us, and continue to grapple with polarization and civil unrest, I expect to see industry leaders continue to make groundbreaking strides in welcoming, empowering, and listening to the people that make craft beer possible.
The Blend of Whiskey and Beer
Submitted by John A. Paradiso, Managing Editor, Hop Culture
There’s a small yet passionate subset of craft beer drinkers that collect. They photograph, catalog, rate, and conquer rare and hard to acquire beer. Ultimately, though, these collectors evolve past beer and naturally progress to distilled beverages.
Take a peek at enough beer groups, or scroll through the comments beneath @dontdrinkbeers, and you’ll find that whiskey–and often specifically bourbon–has replaced beer as the next product to be chased. I’m not here to pass judgment on these folks. I’ve just noticed this evolution and brewers have too.
Kyle Harrop of Horus Aged Ales is, in my humble opinion, an expert on barrel-aging. So, it’s no surprise that he’s gotten involved in the bourbon game. Just recently I tried a rye wild ale from Cellador Ales that I would’ve gladly used in an Old-Fashioned.
I anticipate more breweries will experiment in this world and innovate beyond simple barrel-aging, making a product that truly mimics whiskey.
Variety and Mixed-Pack Deliveries
Submitted by Grace Weitz, Head of Partnerships, Hop Culture
Obviously, delivery has played a huge role in mitigating the effects of taproom closures due to COVID-19.
According to an impact study from the Brewers Association in just over six weeks after the pandemic hit, brewery delivery sales jumped by 31.8%.
Breweries changed their business model in just a matter of weeks and will need to continue to leverage these new distribution platforms into the new year.
But beyond that obvious observation, I’m seeing breweries think inside the box, leveraging delivery to diversify their products by offering special holiday gift boxes, mixed packs, new subscription clubs, and more. In 2021, it won’t just be delivery itself that sets the trend. But rather what breweries can put inside the box will be the hallmark of the year.
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Six Beer Industry Trends to Watch in 2021
Confronted with shuttered taprooms and closed bars, restaurants, and sports stadiums, breweries made many devastating choices last year. Some were forced to dump draft beer or ship off IPAs and pilsners to distilleries that created hand sanitizer.
But those economically destabilizing first months led to a wellspring of adaptation and creativity. Breweries found innovative ways to connect with customers and place cold beer in palms. “It’s always been said that beer is recession-proof, and now we’ve proven that it’s pandemic-proof,” says Ryan Bandy, sales director for Indeed Brewing in Minneapolis.
As we say good riddance to 2020, here are six trends that will have staying power in the new year.
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1. Draft Beer Stays Flat as Breweries Turn to Cans and… Bottles?
Draft beer is dependent upon on-premise consumption, and this channel could take many years to fully recover.
“We’re going to be extremely challenged for a long time on-premise,” says Jack Hendler, a founder of Jack’s Abby, a lager-driven brewery in Framingham, Massachusetts.
The brewery is focusing on packaged beer, primarily cans, as it focuses on off-premise sales. “You’re going to see long-term shifts that draft sales will be converted to can sales,” he says.
Restaurants and bars are rightfully wary about taking on draft beer, which can molder in tap lines left fallow by closures. Paused and reduced indoor dining capacity in New York City has caused a “serious uptick in sales and requests for canned beers,” says Kyle Hurst, the president and a founder of Queens’ Big aLICe Brewing.
The 2021 challenge will be sourcing enough cans. “Many breweries that were not packaging at all are now canning to meet consumer demands,” says Shawnee Adelson, the executive director at the Colorado Brewers Guild. This has led to a 2020 shortage of roughly 10 billion cans, according to Ball Corp., the global leader in can manufacturing.
The shortage should lessen by the end of 2021, when can makers will expand capacity. Until then, the shortage of cans has resulted in breweries returning to bottles, including Colorado’s Left Hand Brewing and Odell Brewing and Baltimore’s DuClaw Brewing.
It temporarily shifted three core brands back into bottle format as it deals with an uncertain supply chain.
Smart breweries will stay nimble. “We are continuing with production mostly as planned, while leaving the option open to put certain brands into bottles if the can supply starts to dry up,” says director of brewery operations Chris Wood.
Photo by DuClaw Brewing.
2. Outdoor Spaces Remain Essential to Taproom Success
As state governments closed and reduced indoor capacity of brewpubs and taprooms, breweries created outdoor seating where customers could sip fresh beer in the fresh air.
This year, Jester King, a farmhouse brewery outside Austin, Texas, turned its 165-acre ranch into a nature preserve, and Solemn Oath Brewery in Naperville, Illinois, retrofitted its parking lot as a 4,200-square-foot beer garden.
Weather is the great variable, and breweries in hot climates responded with misters and fans, while breweries in cold climates invested in heaters and other shelter structures.
Solemn Oath transformed its beer garden into a wintery wonderland filled with mulch, trees, and geodesic domes.
Since June, the brewery has invested about $60,000 in outdoor operations, viewing the cold-weather move “as much a service to our community as it is a lifeboat for our brewery,” says John Barley, the brewery’s president. Though early, the ROI “already checks out,” he says.
For the foreseeable future, an “outdoor component will become critical” to financial success, says Pete Ternes, a founder of Chicago brewpub Bungalow By Middle Brow, which has a large patio. “Who knows when something this will happen again, or when Covid will end? Will it be five years or five months?”
Brooklyn Brewery brewmaster Garrett Oliver also sees the importance of the outdoors. “I think you’re going to see community beer gardens open in a big way, and that may presage a return to lighter pilsner-type beers that people can enjoy outside for a long time,” Oliver says.
Photo by Collective Projects.
3. 12-Pack Sales Continue to Grow
The pandemic brought about a widespread consumer shift to buying in bulk—in toilet paper and beer a. Drinkers increasingly bought 12-packs of beer, returning to trusted lagers and IPAs. People don’t buy 12-packs of new beers for trial and experimentation, says Bandy of Indeed. “If people buy a 12-pack, it’s something they at all times of day and occasions.”
Twelve-packs remain the most popular beer size sold on ecommerce platform Drizly, accounting for 42 percent of overall beer sales in 2020. In particular, sales of canned 12-packs have increased nearly 15 percent through November, according to Nielsen.
Breweries are betting big on the bulk format in 2021, as well.
Industrial Arts, in Garnerville, New York, now offers its popular hazy IPA Wrench in 12-packs of cans, and Great Lakes Brewing, in Cleveland, Ohio, put its cultish Christmas Ale in canned 12-packs for the first time this fall. Schlafly Beer, in St.
Louis, has expanded its offerings of 12-packs, says head of marketing Wil Rogers, catering to “consumers wanting to get the most bang for their buck and make a quick purchase when they’re in the beer aisle. I really think this is something that’s here to stay.”
Photo by Arryved Mobile.
4. Bartenders and Breweries Go Digital
Breweries and bars have swapped paper for digital menus via scannable QR codes, often linked to contactless ordering and payment systems. “Who knew that the QR code was going to be so popular in 2020?” says Adelson of the Colorado Brewers Guild.
Jeff Smith, a founder of LUKI Brewery in Arvada, Colorado, doesn’t plan to revert to paper menus, which can be a pain to remove, update, and reprint. “Making it as easy as possible for your customer to consume your product will be the key to success in 2021,” he says.
Technology companies are also developing new digital tools. In June, BeerMenus launched QR Code Menus, since used by more than 800 businesses. The menus include beer descriptions, which “often increase check size by helping customers order faster,” says CEO Eric Stephens.
The Boulder, Colorado, software company Arryved, has more than doubled its customer base of taprooms, brewpubs, and other craft beverage businesses during the pandemic, and 100,000-plus customers have downloaded its app that lets customers start a tab and pay via phones. “Covid-driven shutdowns and regulations have forced brewery owners to embrace technology in a manner that many had not previously considered,” says David Norman, the founder and CEO.
5. Subscription Services and DTC Are Here to Stay
The pandemic accelerated the brewing industry’s nascent trend toward ecommerce and home delivery, as breweries such as Brooklyn’s Other Half and Boston’s Trillium began bringing their cultish IPAs to customer’s doorsteps for the first time.
Since January, Tavour, a platform to connect craft breweries with consumers, has started working with more than 115 new breweries, shipping their beer to 47 states. For Tavour, business has increased around 300 percent since February, and subscriptions have more than doubled.
Breweries, too, have seen success with subscription services launched during the pandemic. This summer, Threes Brewing in Brooklyn started offering a range of delivery subscriptions for IPA fans and lager lovers, sweetening the deal with a 5 percent discount per case and letting customers renew every two, four, or six weeks.
“The people who already love Threes have a chance to replenish their favorites, while others who are new to the brand have a chance to try our beers for the first time,” says Joshua Stylman, CEO and a founder.
East Brother Beer Company in Richmond, California, launched its succinctly named Beer Box in November, a monthly shipment of two ($20), four ($40), or six ($80) four-packs that lets customers customize selections.
“The subscription box makes a ton of sense by allowing fans to put their East Brother beer on redial,” says Rob Lightner, a founder, adding that subscribers receive discounts on merchandise and access to special events.
While breweries must contend with shipping restrictions, laws can change quickly. In 2020, New York State temporarily permitted breweries to ship to residents.
Going forward, “the reduction or elimination of long-standing alcohol-related laws in the areas of to-go sales and shipping will continue to improve to the advantage of the consumer,” says Colin Jones, the CEO and a founder of WeldWerks Brewing, in Greeley, Colorado.
Urban South Brewery, which has locations in Houston and New Orleans, is avoiding the shipping issue completely, launching its 4-Pack of the Month Club in January as an in-person pick-up subscription. Customers pay $175, then receive an insulated cup and a year of monthly four-packs that are redeemed in person at an Urban South.
IPNA Hoppy Flavor. Photo by Lagunitas.
6. More Nonalcoholic and CBD Beverages
This difficult year did not drive everyone to drink too much alcohol. The nonalcoholic sector thrived during the pandemic, “with more consumers second-guessing their normal drinking habits,” said Emree Woods, the founder of Atlanta’s Rightside Brewing. The nonalcoholic beer brand launched in December with Citrus Wheat, followed by an IPA in January.
In particular, nonalcoholic IPAs are poised to break big as some of America’s largest brewers enter the game. Lagunitas Brewing just released the pungent IPNA, while early next year Samuel Adams will offer Just the Haze, an alcohol-free riff on the hazy IPA, and Brooklyn Brewery will debut its Special Effects IPA.
Expect more nonalcoholic CBD beverages, too. Rogue Ales in Newport, Oregon, offers the Rogue Recreational CBD Seltzer Water, and Connecticut Valley Brewing makes CBD-infused sparkling water flavored with hops.
Collective Arts Brewing, located outside Toronto, also created Collective Projects, a series of cocktail-inspired sparkling teas and juices infused with CBD. Feel free to crack a can at 9 am, says Collective Projects CEO Matt Johnston.
“We wanted to create really innovative drinks that would fit in any part of the day.”
Contributing editor Joshua M. Bernstein is a beer, spirits, food, and travel journalist, as well as an occasional tour guide, event producer, and industry consultant.
He writes for the New York Times, Men’s Journal, New York magazine, Wine Enthusiast, and Imbibe, where he’s a contributing editor in charge of beer coverage.
Bernstein is also the author of five books: Brewed Awakening, The Complete Beer Course, Complete IPA, Homebrew World, and Drink Better Beer.
Five Trends Propelling Craft Beer into 2021
By Matt Hall, Director of Innovation and Pilot Services, The Lab–Powered by BevSource
It’s been a year of challenges and change for craft breweries. Despite the difficulties, brewers are doing what they do best—creating and releasing innovative beverages that keep consumers engaged and coming back for more. Here are some of the trends propelling the imagination and resilience of the craft brewing industry in 2020.
Pushing Boundaries with IPAs
India Pale Ales (IPAs) are still the “king of craft,” and brewers continue to add innovative offerings to the hop-filled category.
The dry, brut-style IPAs seem to be fizzling out with a growing appetite for softer, less bitter, juicier IPAs.
Citrus IPAs Stone Brewing’s Tangerine Express Hazy IPA, and stone fruit-forward flavors, those in Anchor Brewings San Franpsycho® release, are appealing to beer drinkers who previously might not have considered themselves to be IPA lovers.
Brewers also continue to experiment with sour/tart IPAs and milkshake and smoothie IPAs containing lactose. IPAs are still showing up strong, and we expect to see more IPA-innovation on the horizon.
Stepping Further into Seltzer
Love them or not, hard seltzer offerings don’t seem to be slowing down anytime soon. It’s no longer just big national players who are getting in on the action.
Regional, state and microbreweries are throwing their hats in the ring, along with non-breweries distillers, wineries, and soft drink companies.
As seltzers step further into the spotlight, more breweries see seltzer as a viable threat to the light beer segment (sub 100 calorie) in the competition for limited shelf and cooler space. As the light beer and seltzer markets expand, they will ly begin taking away space from traditional beer.
Innovation in the hard seltzer market continues to accelerate with a broader range of flavors, more low-calorie and functional formulations, and a wide range of cocktail-inspired seltzers. From the ingredient side, more suppliers, from traditional beer to non-alcoholic flavor houses, are throwing their hat into the ring.
Adding Low- and No-Alcohol Options
Non-alcoholic beers have evolved significantly since their inception.
As more people cut out or cut back on alcohol for health and other reasons, the market is responding with a wider range of offerings with little or no alcohol. From non-alcoholic (less than 0.
5% alcohol by volume or less) to low-alcohol options that contain less alcohol and usually fewer calories than a traditional beer, there are a growing number of exciting brews to try.
Budweiser launched Budweiser Zero, an alcohol-free, zero-calorie beer, in 2020. Boston Beer Co.
, the maker of Samuel Adams, recently announced they will be rolling out their non-alcoholic beer, Just the Haze, in 2021.
Deschutes Brewery in Bend, OR, included their Teensy Hazy IPA with 2% ABD and a strong, hop and fruit-forward flavor with a light body as part of its 2020 year-round offerings.
Based in Stratford, CT, Athletic Brewing Company, has been making headlines with their suite of solely non-alcoholic craft beers. According to a recent Forbes interview with Athletic’s founder, the company has grown 500% year-over-year for the past two years.
Brewers are also rolling out non-alcoholic non-beer beverages that contain hops, including soda, sparkling water, and tea. In addition, some brewers, OutBound Brewing, are releasing non-alcoholic brews infused with CBD or THC.
As demand for alcohol-free beverages and more healthy alcohol alternatives grows, we expect to see even more no- and low-alcohol craft beers emerge on the scene.
Settling into Sours
Sour beers’ distinctively sour taste profile comes from organic acids, primarily lactic acid produced by naturally occuring bacteria and yeast such as Lactobacillus, Pediococcus, and Brettanomyces .
While once unique to Belgian and northern German breweries, sour beers have found a foothold in craft here in the US as more people have discovered their distinct flavor.
Sours appeal to beer drinkers who are eager to try something new, as well as people who wouldn’t normally consider themselves beer drinkers but the sweet acidity and tartness of a sour.
In a recent article in WineEnthusiast, Bart Watson, chief economist at the Brewers Association, estimated that sours are up by 25% or more in volume and sales in each of the last two years. Regional and national breweries are creating a host of sour options with varying flavors and levels of sweetness.
From The Gadget, by Urban Artifact, that is sweetened with 1,280 lbs of blackberries, 1,280 lbs of raspberries & 30 g of vanilla beans per 30 BBL batch, to New Belgium’s Sour IPA, a dry-hopped hazy IPA blended with wood-aged golden sour, there is a sour option for nearly every palate’s preference.
There are some distinct differences between ales and lagers, and most of them are related to yeasts. Ale yeasts usually ferment while sitting on top of the beer in a tank, whereas lager yeasts are bottom fermenting, ferment more slowly, and prefer cooler temperatures.Ales are typically easier to make, turn quicker and have more yeast-derived flavors.
Because of those properties, ales have become the dominant style for craft. Lagers, however, are the most widely drank beers in the world and they are playing an important part for brewers and consumers in 2020.
Many consumers have opted for comfort and familiarity over innovation and excitement in their beer choices during times of uncertainty, making them more ly to spring for a traditional American style lager.
With industry taprooms taking a hit, some brewers are finding capacity for lager production. Though we’re seeing an increase in traditional offerings, craft is putting their unique spin on the style, and we expect to see more breweries adding lagers to their lists for 2021 and beyond.
As craft brewers push through one of the most trying years in recent history, they can lean on the creativity and innovation of an industry fueled by passionate, talented people who are striving to be the best at what they do.