"A lot of the breweries are coming out with really sessionable
beers … because I think they are recognizing that if they
want to grow their share, if they do want to double it or triple
it, they are going to have to make those 'bridgeway' beers to bring
more drinkers into the fold," said Jennifer Litz, editor of Craft
Comprising nearly 2,000 mostly mom-and-pop brewers, the craft
industry is a small portion of the $101 billion U.S. beer industry,
capturing 7.6% of all dollars, according to the Brewers
Association, a craft trade group that defines craft brewers as
making 6 million barrels or less a year. (By contrast, Bud Light
alone accounts for more than 40 million barrels.) But craft is
beer's fastest-growing segment, with dollar sales up 12% in 2010,
compared with an overall industry decline of roughly 1%, according
to the Brewers Association.
There is no single style that defines craft. Top sellers have
moderate levels of alcohol, including Sierra Nevada Pale Ale (5.6%
alcohol by volume), Sam Adams Boston Lager (4.9% ABV), and New
Belgium Fat Tire (5.2% ABV), but still more than the dominant U.S.
beers, Anheuser-Busch's Bud Light (4.2% ABV), and Coors Light
(4.2%), which is MillerCoors' top brand. In recent years, crafts
have pushed the alcohol envelope with new offerings such as Flying
Dog Brewery's "Raging Bitch," a Belgian-style IPA at 8.3% ABV, and
"Hellhound" a super-hoppy ale by Dogfish Head at 10% ABV.
Some in the industry are saying enough is enough. "There's a
myth that high-quality needs to be wrapped around high alcohol and
that 's just not the case," said Chris Lohring, an 18-year veteran
of the craft industry. Mr. Lohring, who sold his brewery in Boston
in 2004, recently got back in the game, launching a brewery called
Notch that specializes in session beers under 4.5% ABV. The beers
are sold in Massachusetts, with plans to expand to New York
MillerCoors Chief Marketing Officer Andy England hammered home
the point that people will drink more of lower-alcohol beers to
distributors at a recent meeting. He plugged Miller Lite in favor
of crafts, which he called higher in price, calories and alcohol.
Quoting a MillerCoors survey, he said the average mainstream
light-beer drinker had 11.8 servings per week, compared with 8.5
for crafts. "The same guy who used to stay at the bar drinking
premium lights all evening is kind of done after a couple of craft
beers," he said. By offering crafts, the retailer's "intent is to
make his establishment more interesting and unique. The unintended
consequences of his strategy are that the product he's touting
encourages drinkers to have a couple and go home."
Craft supporters disagree. Although crafts are more expensive,
they also tend to produce higher-profit margins. And craft drinkers
are typically more affluent and eat more while drinking, analysts
said -- in other words the type of folks you want walking into your
bar. Indeed, the average craft drinker spends $60.16 per bar and
restaurant check on food and drinks, compared with $44.18 for the
average premium light-beer drinker, according to Nielsen.
Perhaps because of this, chain bars and restaurants are warming
to crafts. A total of 1,133 craft brews appeared on the menus of
169 of the top 250 beverage-selling chains in 2010, up from 803
beers and 154 chains in 2008, according to industry consultant
Big brewers are well aware of these trends, which is why they
are seeking to carve out their own craft space: MillerCoors with
its Tenth and Blake division, which markets the fast-growing Blue
Moon brand (5.36 % ABV) among others, and Anheuser-Bush, with its
plans to buy Chicago craft brewery Goose Island for $38.8 million.
(A-B already had a 32% stake of the Craft Brewers Alliance, which
has a stake in Goose Island and owns Redhook.)
Still, some experts doubt craft beers will ever grow to become a
real threat to big brands. "For whatever reason, Americans just
aren't particularly interested in drinking full-bodied, flavorful
beers," said beer historian Maureen Ogle, author of "Ambitious
Brew: The Story of American Beer." "There's clearly room for craft
to move. But until craft figures out how to market itself, it's not
going to move very far. I'm constantly amazed at how many people
have never heard of craft beers."
Indeed, with their small marketing budgets, craft brewers mostly
rely on word-of -mouth buzz, rarely advertising to any large
degree. (Boston Beer Company, which makes Sam Adams, is an
exception.) Of the $1.2 billion in measured media spent on beer in
2010, 86% was by Anheuser-Busch, MillerCoors and Heineken,
according to Kantar Media. "I call it the mouse that roared," said
Bruce Forsley, VP-sales and marketing for Shipyard Brewing Co. in
Maine. "There's a lot of publicity being given to brewers who are
making groundbreaking styles of beer," he said. "But ultimately,"
he added, "the core market is looking for balanced, flavorful,
affordable, moderate-strength, session beers."
His company's strategy is to still pump out big beers for
hard-core enthusiasts -- such as the newly released "Smashed
Blueberry" beer, a Porter and Scotch Ale hybrid with 9% ABV -- but
balance them with lighter brews, like the forthcoming "Sea Dog
Blonde Ale," a 4.2% ABV beer he described as one level above light
beer and a level below pale ale. "I think ultimately we all want to
be able to sell a beer that a consumer can drink three, four, five
of and still be able to get themselves home," Mr. Forsley said.