I got a pitch the other day for “hard water.” Not hard seltzer: hard water. Sounds impossibly niche, and it is, but there are actually a few brands out there trying to make “fetch” happen for this pseudo-segment. The underlying thesis, to the extent that one exists, is that drinkers today love flavor and hate bubbles. Hard seltzer minus carbonation equals hard water. I guess? Don’t overthink it.
Whether this is a winning calculus remains to be seen, and with respect to all the water hardeners out there, I don’t particularly care at the moment. I bring up this latest “innovation” — which consumer-package-goods investors on LinkedIn might bucket in the so-called “fourth category” of beverage alcohol — only as a point of comparison to “beer-flavored beer.” The latter beverage is not doing particularly well at the moment, and I don’t think its bubbles are to blame.
Known as “core beer” or “traditional beer” in industry circles, “beer-flavored beer” is what it sounds like — a fermented beverage that hews closely to a familiar, traditional style. Lager, for example, is beer-flavored beer, and a wonderful example at that. But the phrase has also become something approaching a rallying cry for the many craft brewers who yearn for the days when drinkers came to them thirsting for the stuff they wanted to brew. Those days weren’t very long ago! White Claw has been on the market for just eight years; Twisted Tea put up yeomanly sales numbers for a decade and a half before it became the envy of every distributed brewer of a certain size. Compared to beer-flavored beer’s historical record, hard water is but a blip. Drinkers have loved the former for eons, and have encountered the latter only in the past few months — if at all.
Yet here we are. Beer sales struggled over the summer in the aggregate. Both Molson Coors’ and Anheuser-Busch InBev’s standard-bearing light lagers are down year-to-date in volume and dollars in off-premise sales at multi-outlet grocery, mass retail, and convenience stores, as tracked by market research firm Circana. (Solid performance from Michelob Ultra and Coors Banquet have helped the overall picture for the firms, respectively.) Mighty Modelo appears to be cooling off a bit lately, and ditto, Voodoo Ranger. Hardly a day goes by without news that a brewery is closing, merging with a one-time rival to avoid closing, or — if they’re really lucky — selling to one of the few conglomerates or private-equity firms still buying. (Not that that guarantees success selling beer-flavored beer, anyway.) Beer-flavored beer is no longer the alpha and omega of American malt-based alcoholic beverages, and both its sales figures and its acolytes are worse off as a result.
Compounding the issue, the brewing industry has succeeded in defining beer-flavored beer’s “occasions” so well over the years to drinkers that the drink now seems less versatile than it is — and worse, less than its fourth-category competition. A recent analysis of 2024 Brewers Association survey data by Sightlines, a subscription platform that offers analysis of the alcohol, cannabis, and functional beverage industries, shows that despite the incredible variety in the modern American beer aisle, consumers mostly consider domestic, import, and craft beer as highly interchangeable with one another. In other words, if it feels like it’s time for a beer, any kind of beer will do, and if it doesn’t, well, tough shit, brewers.
“While the range of styles and flavors from craft beer may seem more closely connected to many of today’s ‘fourth category’ of RTDs, FMBs, or cider, the survey showed customers saw craft as part of a singular beer realm, where domestic beer, imports, and craft all clustered together,” wrote Sightlines’ director of insights Bryan Roth. “Beer is beer.”
To consumers, at least. Beer is an incredibly flexible beverage “platform” (in the jargon). Kettle sours, pastry stouts, hazy India Pale Ales… I mean, I don’t drink any of those styles regularly as a matter of personal preference, but each has enjoyed considerable commercial success with the American drinking public at one point or another. To traditionalists within the brewing industry, these products represent stark deviations from beer-flavored beer, so much so that each faced a fair amount of sneering criticism as it became popular. Many brewers treated hard seltzer the same way — as an affront to real beer, to be made begrudgingly if at all. (Hell, many brewers treated light lagers the same way, at least before they all started brewing it.)
Rank-and-file drinkers, though, have no such hang-ups. How could they? The average drinker doesn’t even know the difference between an ale and a lager, much less the point at which, say, a fruit-punch radler has brought shame upon the style by deviating too far from it.
Have you ever heard a normie friend say they were in the mood for something fermented from cane sugar, or seek out a “canned cocktail” rather than a “spirit-based ready-to-drink” beverage? Of course not! That’s not how people decide what to drink unless they’re freaks like us, man. They choose based on what the moment calls for — the “occasion,” as the industry likes to say — and more than anything, they sort by flavor.
“Flavor has always been No. 1,” Sightlines’ Roth tells Hop Take in a recent phone interview. “Even if we want to go back 20 years ago, think about the [international bitterness units] race, that was a value proposition of flavor.” People sought out IPAs as a style, but what animated most of them was the beers’ piney, citrusy flavors, not the degree to which they were true to form. Before juice bombs, there were hop bombs, and a lot of brewers rolled their eyes at those, too.
In 2022, Roth conducted an analysis of scan data to measure how fruited wheat beers and Kölsches performed compared to their respective styles. “In every case, there was an increase of share for flavored collections within those styles,” he says. He saw a clear lesson for brewers in those data. “You have to start thinking more about what you’re making as a vehicle for these flavor experiences, and not as a representation of what the beer [style] is.” Put another way, brewers have to stop thinking like brewers, and start thinking like customers.
That’s a hard pill to swallow for folks who got into this business when customers were enthralled by the more esoteric aspects of beer, taking it upon themselves to get schooled up on styles, provenance, and process in hopes of drafting off brewing’s then-surging cultural cachet. “It’s a challenge, especially for the people who’ve been in the industry for a long time, to maybe think about what you do in a very contemporary sense,” says Roth, referencing “existential” conversations he’s had with brewers. (I’ve had some of those, too.)
Nobody goes to Siebel so they can pump out swill they’re not proud of — or if they do, I’ve yet to meet ‘em. But balancing the vagaries of the market against the predilections of the producer has always been part of the game. Savvy breweries have already realized they have no choice but to try. Voodoo Ranger is the most obvious and most successful example of what happens when a brewer (in this case, New Belgium Brewing) pushes the boundaries on beer-flavored beer, but there are plenty of other fruity, juicy IPAs following its lead, as we recently discussed. It’s not just IPAs, either. Firestone Walker’s Cali Squeeze Blood Orange and Dogfish Head’s Citrus Squall are both golden ales (the latter, a double), but you’d have to be looking closely at the can to figure that out; at a glance, it just looks like something refreshing and orange. 10 Barrel’s Crush series signals “flavor experience” first, and kettle sour second. Want an exception that proves the rule? Fireball Cinnamon was, for a time, a top-50 best-selling “beer” in the off-premise. “Cinnamon” screams a lot louder than “ersatz malt-based version of whiskey liqueur” ever could.
Toward the end of our conversation, Roth points approvingly to Firestone Walker’s recent introduction of “turbo radlers” (not a thing, as far as the Beer Judge Certification Program is concerned) under its Mind Haze brand family as another instance of prioritizing flavor experience over style. Does Lemon Rage Turbo Radler qualify as beer-flavored beer? I’ve yet to try it, but I suspect probably not. Which is fine! People like to drink stuff that tastes good, and beer can taste good even if it isn’t marketed as such. Convincing people to want beer-flavored beer is a vocation; brewing them the flavors they want in a beer is a business.
🤯 Hop-ocalypse Now
Recall that earlier this year, Tilray Brands acquired four craft breweries from Molson Coors — Atwater, Hop Valley, Revolver, and Terrapin. Recall also that the Canadian cannabis conglomerate turned Brewers Association-defined craft brewing heavyweight scooped up a whole gaggle of brands from Anheuser-Busch InBev last year — seven beer marques, plus Hiball Energy. The latter deal cost the firm around $85 million. Now that Tilray’s latest public filings are in, we know the former deal cost it $23 million. Beer Marketer’s Insights crunched the numbers: All in, Tilray chief exec Irwin Simon and co. bought around 10 million cases’ worth of volume between the two yard sales, at an average price of $140 a barrel. Recall finally that Constellation Brands acquired Ballast Point Brewing Co. for $3,600 per barrel less than a decade ago.
📈 Ups…
Higher Calling is the name of a new cause beer launched to fundraise for the NC Craft Brewers Foundation in the wake of Hurricane Helene… Congrats to all the winners at the 2024 Great American Beer Festival… Ace Cider’s founder Jeffrey House is back at the helm after being hired by its new, post-bankruptcy owners… In spite of it all, craft breweries still made more revenue per barrel in 2023 than 2018, per new Brewers Association analysis…
📉 …and downs
California’s ban on THC seltzers survived its first legal challenge… Tilray’s latest earnings call raised the (not-so-surprising) specter of consolidation across its many brewing facilities… Hi-Wire Brewing closed its Birmingham, Ala., taproom this week, citing the impact on Hurricane Helene on its Asheville, N.C., headquarters…
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