Beer has had a brutal year: Sales of big brands are down, more young adults are drinking wine and spirits, and new competitive threats loom, including the legalization of pot in some states.
Yet there was plenty of optimism in the air as nearly 4,000 distributors and suppliers gathered in Las Vegas last week for the National Beer Wholesalers Association annual meeting. While volumes are down, the industry remains hugely profitable.
Almost everyone agreed beer won't return to full health until it regains volume, which has been held down by the sluggish trends of bellwethers like Miller Lite and Bud Light.
At a private meeting with distributors, MillerCoors said it plans to meet that challenge with the 2014 launch of the high-end Miller Fortune, a higher-alcohol line extension. Ads will have the look and feel of liquor marketing, with messaging that "your fortune can change in an instant," according to a person at the meeting.
But the most obvious way forward is to pay more attention to blue-collar consumers, the "most loyal drinkers of beer," MillerCoors CEO Tom Long said during a panel discussion. According to a person at the private meeting, the brewer plans to ramp up spending on Keystone Light and Miller High Life and return the brands to national TV.
While the industry has seen an explosion of brands and line extensions, Heineken USA CEO Dolf van den Brink said the pace of introductions "is not sustainable." Craft brands have flooded the market with new beers on an almost weekly basis. The activity is creating some fear that beer is becoming more like wine, in which styles are emphasized over branding. "There has to be a focus on building brands," said Bill Hackett, president of Crown Imports, whose brands include Corona.
There was also chatter about a "craft-beer bubble," with so many regional and local brewers popping up. Still, with craft sales growing at a double-digit rate, that concern seems unfounded. Sam Calagione, president of Dogfish Head Craft Brewery, contrasted the trend with the microbrew boom in the "90s. That era was driven by speculation, but this is "driven by consumer demand," he said.
VIDEO FROM THE MEETING: Heineken USA CEO Dolf van den Brink describes how the beer importer is "reinventing beer marketing."