It’s a question that has turned into a near-annual exercise for brewers and beer enthusiast prognosticators alike: What’s the next India Pale Ale? For years, takes hot and cold have provided plenty of opinion and insight, scattered across the internet from Reddit to the Brewers Association’s website, to the Wall Street Journal and more. So common has it become that some, like the blessed Liz Murphy, have told people to stop echoing the question over and over.
The easy answer is short and simple: there is no “next” IPA. The industry-ruling style has become so synonymous and powerful with craft beer that if any other style were to actually replicate its success, we’d need a whole new “independent” seal to represent how the beer industry was turned upside down. And yet, it’s still a fun game to play. In an industry always looking to find new ways to approach flavors and styles, it’s become like a search for the mythical city of El Dorado. It doesn’t exist...but what if it did?
Posing such a question provides sort-of half-answers based on current trends and market conditions. Craft brewers’ increased interest in more “easy drinking” styles is a perfect example. Because the number of craft brands in categories like Pilsner or Golden Ale has grown steadily in recent years, the volume and dollar sales have also ratcheted up. All of a sudden, craft brewers see these styles as a new counterpoint to macro beer.
Could a far-reaching style like Lagers, one that’s already ingrained into the American drinking psyche, eventually overtake IPA as the predominant craft category? If it did, how long would it take? Five years? Ten? Twenty? Realistically, it’s likely to be never. But there’s potential.
In a recent “Power Hour” session hosted by the Brewers Association, industry analyst Bump Williams spoke on the “hard times” awaiting the beer industry. Among the many data points he shared was a breakdown of top craft styles sold in 2017 in IRI's multi-outlet (grocery, Walmart, etc.) and convenience stores. IPA was so far ahead of the pack in terms of off-premise dollar sales it would be laughable to suggest any other style might unseat it. India Pale Ale sold roughly $1.3 billion last year in these IRI channels, essentially the same amount as the next three categories (Seasonal, Belgian Wit, Variety) combined.
In terms of actual styles, there are five that could serve as potential successors to replace IPA: Golden Ale, Amber Lager, Pale Lager, Pilsner, and Light Beer. Separately, these styles would need a herculean effort and a lot of luck to even approach the overall dollar spend on IPA. Even added together, they only represent about a third of the dollar sales and volume of the hoppy leader.
And so here’s where the fun comes in. The silly, nonsensical, this-is-just-hypothetical playtime fun. Hold onto your butts.
Assuming these styles represent the kind of classic “beer that tastes like beer” Americans have adored for decades, they’d have to form some kind of Beer-Style Voltron in order to properly take on IPA. So let’s form that and see what happens.
As a category, IPA dollar sales grew 16% from 2016 to 2017 in IRI MULC channels while while Golden Ale, Amber Lager, Pale Lager, Pilsner and Light Beer grew by a average of 17%. For fun, here’s a projected growth rate for these collections, displayed as IPA and “Easy-Drinking Styles,” which includes those five categories. Each category is matched with different growth rates for IPA (5%, 10%, 15% annually) and Easy-Drinking (10%, 15%, 20% annually).
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In one scenario of IPA's lowest annual growth (5%) and Easy-Drinking's highest (20%) the India Pale Ale category would be surpassed in dollar sales around 2025. Otherwise, good luck.
But that’s dollar sales, and it makes sense that IPA would be bringing in more than a Golden Ale. A sixer of the hopped-up stuff pretty much always costs more. Raw ingredients increase the price for brewers and that’s passed along to the customer. Does the case volume offer a better projection?
LOL.
Average growth of case sales from 2016 to 2017 was about 15% for the five easy-drinking styles and the same for IPA, so here's a simplified projection with the former at 15% and 20% annual growth, with IPA at 10% and 15%:
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There are lots of ways these chart aren’t realistic in expectations, including future price increases, changes in actual category growth, potential aluminum tariffs, nuclear war, you name it. But what it does illustrate in a very basic way is the assumption that we should probably have: IPA is some kind of monolithic beast that can’t be stopped. All we have left to do is worship it as our personal deity by, I don’t know, doing something like standing in lines for hours, waiting for our turn to talk to our Lupulin Leader in tongues, and using strange adjectives with “but in a good way” tacked on, then proclaiming our love through some kind of digital platform about how the beer has changed our life. Wait a second. Uh-oh.
Aside from its utter domination on wallets, one of the craziest things about IPA is that it only has 90.4% category-wide distribution, according to Williams’ presentation. That means that somehow, nearly one in 10 distributors aren’t carrying IPA. Then again, to be fair, there's only one other category above 90%, and that's Belgian Wit—shoutout to Blue Moon!—at 94.9%.
All of which is to say: we’ve got fridges stocked with just about any kind of flavor combo our minds can imagine, but no matter how hard we try, craft drinkers just can’t turn away from that hoppy temptress. What’s the next IPA? It’s probably the one in your glass, tbh.
—Bryan Roth