Craft brew has a stalker.
Usually, Anheuser-Busch – the nation’s largest brewer – isn’t one found to be slinking
around in the shadows. But these aren’t usual times.
Beer, that staple of Friday frat parties and Saturday tailgates, is flatlining. According
to Information Resources Inc., a market researcher, total beer sales grew by just 0.7
percent for the 52-week period ending Dec. 3, 2006. That followed similarly lackluster
expansion in each of the previous two years.
Beer’s slump has come, ironically, at a time of near-record consumer spending.
While shoppers have shown an almost insatiable appetite for $5 lattes, $500 shoes
and $5000 televisions, brewers have somehow failed to connect with the nation’s unholy
passion for consumption.
Or have they? One segment of the beer market that has been cruising along is “microcraft,”
or specialty brewing market. Usually sold at a 25 percent premium over most mass
produced brews, micro-craft beers grew by 17.2 percent over the same 52-week period,
to $453 million, according to IRI. In fact, for many craft brewers, 2006 may go down as
the year their sales broke through the copper ceiling: at year’s end, it made up more than
5 percent of the United States’ $8.7 billion in annual beer sales.
“Overall, the beer market is having its challenges, but people are going for high-end
products that offer a more substantial flavor profile,” said Steve Harrison, vice president
of the Sierra Nevada Brewing Co. Founded in 1980 by Ken Grossman and Paul Camusi,
Sierra Nevada is the nation’s top-selling micro-craft beer, at about $53 million.
As trailblazers like Sierra Nevada know well, this isn’t the first craft beer surge.
In 1996, U.S. craft brewers increased output by 26 percent. That year brought the end
to a half-decade of growth that peaked in 1995 at 51 percent, but things ended poorly,
with the industry awash in product and extra brewing equipment, a classic case of
too much to soon.
But this time, brewers agree, something feels different. Not only are survivors like
Sierra Nevada, Boston Beer Co., and Colorado’s New Belgium Brewing Co. more
seasoned and battle-tested, but independent brewers have the sneaking suspicion they
aren’t alone. The big brewers are looking over their shoulder, studying their moves,
looking for a way into the game.
Somebody’s Watching You
Ken Hehir, 42, works for Molson/Coors, not that the company has any interest in
letting you know that. He oversees the brand and marketing promotion of two lines:
Blue Moon Belgian White and Killian’s Irish Red. Neither one is marketed strongly
as a Coors brand, as today’s picky beer drinker doesn’t necessarily associate mass production
with high quality.
In fact, many off-premise and on-premise retailers mistakenly sell Blue Moon
and Killian’s as imports, despite the fact that they have been Coors products for years
(in Blue Moon’s case, from the start).
It’s a legacy of the first microbrew boom: during the mid-1990s the nation’s Big Three
brewers launched a bevy of high-concept specialty beers, many of which were revealed to
be poor imitations of the burgeoning craft scene. One of the only ones that survived was
Blue Moon. It was launched in 1995 by a Coors master brewer who had earned his PhD
in Belgium and wanted to recreate the country’s fruity, almost-sweet wheat beers.