Beer Today, Gone Tomorrow?
With a staggering 9,500+ craft breweries operating in the United States, and more than 550 new openings in 2023, it might seem like craft beer is still crushing it.
I hate to be a Debbie Downer, but there were also over 200 brewery closings and 2023 is forecast to have the slowest opening rate of new breweries in over a decade. In the U.S., beer volume is relatively flat or trending slightly negative. That may seem inconsequential, but these stats include many beer-based hard seltzers in the market, which means that real beer is taking a serious hit. Ten years ago, those millions of cases of hard seltzer might have been macro or craft beer. All this tells us that people are drinking less traditional beer. But why?
Blame the Next Generation
Some describe the incoming generation as a unique, unknown creature watched from afar, with David Attenborough’s voice in our heads narrating their next potential move. In truth, Gen Z is coming of drinking age. Their drinking habits appear to be much different from Generation Y (Millennials) at the same time in their lifecycle. When Millennials were reaching drinking age, craft beer was blossoming – it was innovative and not what their parents were drinking. A wave of enthusiastic young evangelists, paired with old-school Gen X purists, paved the way for experimentation and expanded craft beer sections across the U.S.
First, Gen Z isn’t drinking as much as previous generations. With their entire adolescence and early adulthood captured in detail on social media, there’s a lot more awareness about the long-term potential ramifications of public intoxication. When they do drink, they over-index dramatically in hard seltzers, ready-to-drink cocktails and spirits. Yes, they are drinking beer, but not as consistently as previous generations. They’re also less drawn to “craft” than Millennials and will consume mainstream or import brands more often.
There are other macro trends driving consumers all over the place. The big green elephant in the room is marijuana. With legal and medical cannabis now widely available, some consumers are moving away from alcohol and switching to THC. The verdict is out on how this industry directly affects alcohol, but it’s likely taking dollars and volume away from beer producers.
Health and well-being are also top of mind for many consumers. People are eating healthier foods and seeking beverages like hard seltzers, hard kombuchas and clean cocktails like vodka-sodas that offer fewer calories or other functional benefits. While beer has been a clean option in the old country for generations, many craft beers do have some additional calories.
And let’s not forget about inflation. Beer, like everything, has gotten more expensive. This influences drinking habits, what consumers purchase and how often they do so.
Is Beer Dying?
It’s hard to say what comes next. There are several reasons to not freak out – yet. Beer remains one of the most consumed beverages on the planet. It has been around for thousands of years. Hard seltzers came onto the scene like a giant bubbly wave, but they’re already losing momentum. If the biggest sellers in the category are variety packs, do customers want to keep drinking the same thing? Everything comes in cycles. I do believe that as Gen Z consumers mature, they will visit more breweries and discover more beers, and they may change their tune.
There are more breweries now in this country than there have ever been. Some are closing, others are opening. While many breweries are doing great things, some are producing sub-par product, offering a mediocre experience at a premium price. The cream will rise to the top and the breweries that do it right should be the keystones to certain communities, serving as a place for people to congregate.
Beer has some challenges ahead of us, but I wholeheartedly believe that beer has an integral place in society. Let’s remember that our forefathers drafted The Declaration of Independence and the Constitution raising a stein. The uncertainty of the future can always be a little stressful, but nothing helps settle those anxieties better than a cold beer in hand.
