Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: https://read.dmtmag.com/i/565520
American Whiskeys & Beer www.beveragedynamics.com September/October 2015• Beverage Dynamics 53 "The big brands have defi nitely slowed down. The one domes- tic that keeps going is Pabst in 30-packs. They're pretty strong. Thirty-packs are the ones that are really doing pretty well." However, in smaller pack- age sizes, Ridge has noticed that some craft brands can compete with American lagers even on price—within limits. "You can get a good 12-pack of Sierra Nevada or Avery for pretty much the same price as Budweiser," he notes. "Sure, it's a little bit more, but it's not much of a difference any more. The price is competitive and people like the 12-packs of craft a lot." If low prices appeal to budget-minded consumers, many of them young, this is also the same audience that gets credit for leading a shift from American domestics to craft beer, accord- ing to Jamie Piastuch, the beer consultant at the Merritt Island branch of ABC Fine Wine and Spirits, a Florida-based chain. While admitting that "Bud Light is still huge," she has noticed, "It's defi nitely people my age, Millennials, who are almost exclusively drinking craft beer. Millennials like experi- menting; they like trying new stuff." THE RESPONSE FROM AMERICAN BREWERS The big brewing companies have struggled for years with the craft beer insurgency. In past decades, they have ignored craft beer, mocked it, or tried to elbow it off the shelves. Gradually at fi rst and now increasingly, the strategy has been to add craft-style selections to their portfolios, either by brewing them in-house, in the case of AB's Shock Top; or in semi-au- tonomous breweries, such as Coors-owned Blue Moon; or by purchasing heritage or craft companies outright, as MillerCoors did with Leinenkugel and AB has done on four recent occasions (Goose Island, Blue Point, 10 Barrel, and Elysian). Bay Ridge's Campbell said of the strategy, "I think they're recognizing the way to keep their heads above water is by offering distribution to these smaller craft beers because of the decline in sales of Bud, Miller and Coors. People are just grav- itating towards better taste. There's a lot of good stuff." "While beer sales overall are down slightly, we have actu- ally seen tremendous growth amongst our own craft families, the Blue Moon Brewing Company and Jacob Leinenkugel Brewing Company," explains MillerCoors' Maloney. Noting the growth of Leinenkugel's shandy styles, he adds "This is certainly part of a trend in which beer drinkers savor high-end and more fl avorful beverages." Blue Moon and Shock Top, both brewed in the Belgian wit beer style popularized by craft brewers, actually rank numbers 14 and 21 in brand sales overall, and the brands have grown by 3 and 4%, respectively. The two parent companies, in these cases, seem to have the best of both worlds, moving lots of vol- ume even as most drinkers believe the beers are the products of craft companies. Frustratingly for the big companies, however, many consum- ers regard the association with AB or MillerCoors as a minus. "People are away from Bud because it's InBev, you know?" says Piastuch, referring to the Brazilian-Belgian giant that pur- chased Anheuser-Busch in 2008. "They're more likely to be okay drinking Yuengling, because it's still an American com- pany, but they'll try to stay away from anything that's macro - if they know it's macro. Some people don't know that Goose Island is owned by InBev, they think it's craft, but once they fi nd out that its owned by Anheuser-Busch, they'll automati- cally go to craft, because of kind of a 'drink-local, drink-small, don't-drink-big' attitude." Ridge at Hazel's is blunt about the advice he'd give the big brewing companies if he could: "They'd have to lower their price, that's for sure. They have already on their 30-packs, and that's key. They're having price wars, Budweiser and Coors, and that's really helped sales a lot. But the prices of 12 packs and 18 packs go up every year. It's like—you're kidding me. It's not every two years; it's every year. What are they thinking? Their advantage is price." But for all the talk that craft beer is in the ascendancy and that the days of the big American beers are over, the truth is that brewing clout is more concentrated than ever before. Two massive international companies dominate the beer market in the US. Their acquisition of smaller breweries and addition of diverse styles allows them satisfy beer consumers' every taste, while their lower-priced brands deliver the volume. BD JULIE JOHNSON was for many years the co-owner and editor of All About Beer Magazine. She has been writing about craft beer for over twenty years. She lives in North Carolina, where she was instrumental in the Pop the Cap campaign that modernized the state's beer laws.