Beverage Handbook

Beer Handbook 2015 Teaser

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Beer Handbook 2015 1 National Overview The Beer Market National Overview The beer industry itself continues to evolve along with the other segments of the beverage alcohol industry. It appears that today's younger consumers are more engaged with a brand that offers them a level of distinction when consuming rather than a mass marketed brand that has been on the market for decades. Exclusivity is another factor that plays into the mindset of younger consumers, especially when taking into account how they will use social media to flaunt a limited-release and/or seasonal extension to gain notoriety among their peers. While "drink local" has been an ongoing trend, it has turned consumers into drinking "hyper-local" thanks to the rise in brewpubs, craft distilleries and local wineries. Consumers would rather support their regional area while feeling connected to the people who make the product they're consuming. According to a recent Nielsen poll examining purchasing habits, 67% cited local production as being "important" while 61% of respondents said they would purchase more of a craft brewer's products after visiting the brewery. The industries are also becoming more competitive which bodes well for consumers from a product quality standpoint. The one true notion for any beverage alcohol product is that to remain in the circle of purchased brands, the quality must be second to none. Category lines also continue to be blurred as occasion seems to be the new consumption type. Gone are the days when a consumer, especially a younger consumer, will only drink one beverage type between beer, wine or spirits. Today's consumers look at the type of occasion and then make their choice of beverage alcohol depending on how that product will enhance their occasion. As beverage alcohol marketers acknowledge this, they are bringing to market products that not only blur the lines but tout the fact that the do. For example, Diageo recently launched Thump Keg Brewing Co., which crafts beers inspired by Diageo spirits such as George Dickel Whisky and Peligroso Tequila. Thump Keg Brewing Co. Rye IPA in collaboration with George Dickel Whisky uses the same foundation ingredients as the spirit, and Thump Keg Agave Amber Ale, inspired by Peligroso Tequila, uses its blue agave sweetener. In addition, Heineken brought its tequila barrel-aged lager, Desperados, stateside while AB InBev followed suit with its own barrel-aged tequila beer blend, Oculto. As a way of reacting to the changing times and consumers' taste profiles, big brewers are taking focus away from their once main-stream beers and putting it toward up-and-coming breweries. For example, MillerCoors recently shut down its North Carolina brewery yet purchased a small craft brewery in southern California. AB InBev recently acquired 10 Barrel Brewing Company while Heineken announced it is entering a joint venture with Lagunitas to bring the brand global. All of these examples are proof that big brewers are being committed to what today's consumers believe to be "good beer." Another trend is the rise of "hard soda," which began with Small Town Brewery's Not Your Father's Root Beer. The trend has since caught the attention of other brewers who are releasing their own variants of hard root beer. Small Town Brewery was taken national by Pabst Brewing. MillerCoors is also getting into the game with plans to release Henry's Hard Sodas early next year. Henry's Hard Orange Soda and Henry's Hard Ginger Ale will be the first two products introduced. Overall, the beer industry declined by a mere 0.1% in 2014 to end the year with 2.8 billion 2.25-gallon cases. The advancements of the craft, FMB and imported categories were unable to offset the declines of the remaining categories that comprise National Overview

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