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Issue link: https://read.dmtmag.com/i/580366
www.cheersonline.com 33 October 2015 • beer choice with consumers. "Our number-one seller is Miller Lite 30-packs, hands down, out of everything in the store—beer, wine, liquor," says James Campbell, the beer department manager at Bay Ridge Wine & Spirits in Annapolis, MD. "But going over the numbers from previous years, we are noticing a decline in sales on domestic kegs." Perhaps less is more: "A lot of people who are used to grabbing a 30-pack, now they're only getting an 18-pack," Campbell says, "and they're grabbing a six-pack of craft, because craft is just through the roof right now." Large packages with low prices were cited repeatedly by retailers as the big brewers' greatest strength. Hazel's Beverage World in Boulder, CO, caters to both university students on tight budgets as well as fans of the town's 20 craft breweries. "The big brands have defi nitely slowed down," says Derek Ridge, the store's beer manager. "The one domestic that keeps going is Pabst in 30-packs. They're pretty strong." But in smaller package 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," Ridge adds. "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, according to Jamie Piastuch, the beer consultant at the Merritt Island, FL, branch of the ABC Fine Wine and Spirits chain. "Bud Light is still huge," she notes, but Millennials are almost exclusively drinking craft beer. "Millennials like experimenting; they like trying new stuff," Piastuch says. GETTING CRAFTIER 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. Some brew them in-house, in the case of A-B InBev's Shock Top; or in semi-autonomous breweries, such as Coors-owned Blue Moon. Others purchase heritage or craft companies outright, as MillerCoors did with Leinenkugel and A-B InBev did with Goose Island, Blue Point, 10 Barrel, and Elysian. MillerCoors's Tenth and Blake craft and import division in September acquired a majority interest in San Diego-based Saint Archer. "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," says Bay Ridge's Campbell. "People are just gravitating towards better taste. There's a lot of good stuff." Beer sales overall may be down slightly, says MillerCoors' Maloney, but "we have actually seen tremendous growth amongst our own craft families, the Blue Moon Brewing Company and Jacob Leinenkugel Brewing Company." Noting the growth of Leinenkugel's shandy styles, "This is certainly part of a trend in which beer drinkers savor high-end and more fl avorful beverages," he adds. 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 in 2014. The two parent companies, in these cases, seem to have the best of both worlds, moving lots of volume even as most drinkers believe the beers are the products of craft companies. Frustratingly for the big companies, however, many consumers regard the association with A-B 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 purchased Anheuser-Busch in 2008. "They're more likely to be okay drinking Yuengling, because it's still an American company, but they'll try to stay away from anything that's macro—if they know it's macro. Some consumers don't know that Goose Island is owned by InBev, Piastuch notes. "They think it's craft, but once they fi nd out that its owned by Anheuser-Busch, they'll automatically go to craft, because of kind of a 'drink-local, drink-small, don't- drink-big' attitude." 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. At press time A-B InBev was said to be close to making a play to acquire MillerCoors' Britain-based parent SAB Miller. The deal would create a $245 billion brewing powerhouse and probably face intense antitrust reviews. It would also require the company to divest some properties. But for the moment, two massive international companies continue dominate the beer market in the U.S. 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. Julie Johnson was previously the co-owner and editor of All About Beer magazine. She lives in North Carolina and has been writing about craft beer for more than 20 years. "MILLENNIALS ARE ALMOST EXCLUSIVELY DRINKING CRAFT BEER. THEY LIKE EXPERIMENTING AND TRYING NEW STUFF." — Jamie Piastuch, beer consultant at ABC Fine Wine and Spirits in Merritt Island, FL THE STATE of AMERICAN BEER