“North Coast craft breweries adapt to consumer shift away from hops, to lower alcohol.”
“‘Huge growth’ in lower alcohol brews and beer in cans.”
“How Low-Alcohol Beers Became Brewing's Next Big Thing.”
If you didn’t know any better, you’d assume that a neo-temperance movement is upon us. Today’s market has seen a constant trickle of “better-for-you” beers filling up shelves, which showcase lower calories, carbs, and ABV. But what if the narrative we’ve been hearing is wrong?
By sheer volume, it’s impossible to ignore the fact that there are more beers available in the lower-ABV space, but that’s actually counter to how consumers are behaving—and have been buying for years. Through the first half of 2019, Brewers Association-defined craft beers at 7% ABV and up grew 10.5% in volume sales across grocery, convenience, and other outlets tracked by IRI, a market research firm that compiles scan data from chain stores. As a group, the more “sessionable,” low-ABV brands that have been getting so much attention aren’t growing at all.
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As noted in an analysis by the Brewers Association’s (BA) chief economist, Bart Watson, sales growth isn’t just coming from IPA (although that style is still responsible for the majority of sales increases). “Barrel-aged, tripels, and imperial versions of other styles are also showing growth,” Watson writes, noting that drinkers “are clearly still looking for flavor and higher ABV,” and that competitors like hard seltzer could be “pulling calorie- and carb-conscious consumers away from beer altogether.” But even in the hard seltzer space, Natural Light (6% ABV) and Four Loko (14% ABV) have released higher-octane versions specifically made to offer more of a punch.
In our own analysis of IRI data, Good Beer Hunting broke out the ABV sections even further, and found that IRI-defined "craft" SKUs tracked by the market research company (which include breweries owned by multinationals like Blue Moon, Lagunitas, and others) showed strongest volume growth in the 7%–9% range.
This isn't just a new trend. From 2012–2017, the average ABV of BA-defined craft beer increased from 5.78% to 5.92%. It holds when you look at all beer, with the National Beer Wholesalers Association (NBWA) tracking an uptick in ABV from 4.51% to 4.69% from 2005–2017. That might not sound like a lot over 12 years, but the NBWA set includes Light Lager, which makes up a lot of what’s sold to beer drinkers.
To emphasize this even more, GBH pulled two sets of IRI data to represent the top-20-selling IPAs and non-IPAs. In the five-year span from 2014–2019, the average ABV of these bestseller lists both increased. The IPAs went from 6.7% to 6.9%, and non-IPAs grew 4.9% to 5%.
In GBH's analysis of six months of IRI sales data, IPA brands easily led movement of volume through the first half of 2019. While IRI's "craft American Lager" category showed the largest growth percentage (18.25%) when comparing the first halves of 2018 and 2019, that group features far fewer brands than other styles, including IPA, which grew by 13.38% and sells about 7.5 times more in volume than American Lager.
“Yes, there are low ABV styles and brands that are doing well in the marketplace,” Watson wrote in his analysis. “But when you look at the group collectively, that growth disappears.”
To be fair, Watson isn’t suggesting brewers should give up low-ABV beers, but adds that “there’s ample evidence that just lowering the ABV isn’t really going to resonate with craft consumers, who generally come to the category wanting something more.”
What that "more" could be was explored this year by C+R Research, a market insights agency that has delved into the world of beer in 2019. In a March 2019 online poll of 2,000 Americans, the top-five responses for "factors drinkers look for in craft beer" were: taste, style, price, the brewery that produced it, and alcohol percentage.
When participants were asked: "What reasons or factors have attributed to craft beer's popularity?", alcohol was cited by about a quarter of respondents. Of note, "Support for independently-owned businesses/brewers" was offered as an answer but finished last in responses, a finding that tracks with previous analysis that shows the Brewers Association's push toward promoting "small and independent" as the calling card of its members has a way to go until the public agrees on that value.
Around the same time as the C+R polling, Stone Brewing executive chairman and co-founder Greg Koch lamented on Twitter how lower-ABV beers earned critical praise, but never translated into hits with consumers. Citing Stone Session Ale, Heat Seeking Wheat, Lee’s Mild, and Levitation Ale, he wrote that his brewery’s White Geist Berliner Weisse (4.7%) was the most recent attempt to seek success in the low-ABV space. But with hindsight at this point in 2019, IRI sales show the beer never took off.
“The low alc beer dartboard’s bullseye is tiny and doesn’t always stay in the same place,” Koch further explained on Twitter. “Thus, hitting it is tough.” He went on to agree with a statement that, while some enthusiasts believe beer is “only about flavor, art, and supporting local, it's also about delivering alcohol to people's brains,” noting that Stone’s internal data confirms the challenge of increasing interest in lower-alcohol options.
Nielsen, a market research company that tracks sales of beer, also agrees, noting in a recent presentation for Brewers Association members that the highest year-to-year weighted dollar sales for BA-defined craft brands were at the 7% and 7.5% marks.
"While consumers might be looking for the lower-ABV options, it's important to keep in mind that it's a small percentage of the population, and you can still make a mindful drinking choice and opt for a higher-ABV option," Caitlyn Battaglia, a manager in Nielsen’s Beverage Alcohol Practice Area, said during the event. She added that a factor like the use of local ingredients or being locally produced may influence choice as part of “mindful drinking,” regardless of ABV. So, a consumer could still consider their choice “mindful” even if it has an above-average alcohol content because “mindful” is related to far more than just ABV.
In one way, a relatively new brewery has found strong evidence to support this claim.
“It’s really about standing out, and it’s very hard for a Pilsner or a Brown Ale to stand out in a way that a 14% hazelnut, bourbon barrel, double Stout, or a super-intensity, tropical, dry-hopped Hazy IPA, or heavily-fruited, barrel-aged sour beer can,” says Michael Tonsmeire, a writer and co-founder of Maryland’s Sapwood Cellars.
In March 2019, Tonsmeire put this hunch to work, and cross-checked Sapwood’s lineup of beers with their Untappd scores. He found that 71% of scores correlated with the alcohol content of beers made by him and co-founder Scott Janish. In short: the higher the ABV, the higher the score. Pale Ales hovered around scores of four out of five, while IPAs (about 4.2), and Double IPAs (4.3 or 4.4) were higher. Looking at 13 different hoppy beers, he found a linear line up and to the right.
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It’s not just a hunch, either. Tonsmeire formerly worked as an economist for the Bureau of Labor Statistics, so he’s confident in what he saw—as the data applied to beer enthusiasts using Untappd, at least. The results have stayed consistent throughout 2019, representing preferences toward higher-ABV beers that also feature higher dry-hopping rates, more sweetness, and bolder flavors. When examining the top-10 and bottom-10 Sapwood beers on Untappd with a minimum of 50 check-ins, the difference looks just as stark.
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Still, this doesn't mean that Sapwood is becoming a strict IPA-only brewery pumping out high-ABV beers. The taproom usually has three or four Double IPAs on tap among 10, but Tonsmeire gets what's going on with the ratings, even if he's not chasing them.
"I really think it’s a symptom of a larger issue, that is beer ratings are very much based on hedonistic wow factor," he says. ABV may not typically apply to something like sour beers, he notes, but the same principle applies to what Tonsmeire half-jokingly describes as a rate of "fruit per gallon." Indeed, Sapwood's Guava Salzig, the lone Gose among the brewery's top-10, highest-rated beers, has an addition of 200 pounds of pink guava puree to 90 gallons of a base Gose.
In the case of those tart or sour beers, Tonsmeire and Janish have actually adjusted the profile to have more acidity "because that seems to be where the consumer is," Tonsmeire says, adding that if there's an ingredient a drinker knows about in the beer, "they don't want to have to look for it."
When drinkers opt for a big IPA right away when arriving at Sapwood’s bar, Tonsmeire knows anything that comes after just won’t be as exciting, and it’ll reflect in any ratings that get logged: “It’s like eating two jars of extra-hot salsa, then having medium and saying it has no spice at all,” he says.
Still, that hasn’t prevented Sapwood from offering a diverse tap lineup: it recently boasted beers from 5.4%–9%, including a 3.8% hoppy Session Beer waiting to be tapped. It’s indicative of both The Narrative and The Reality of today’s ABV assumptions. Tonsmeire and Janish walk a well-understood line between variety, flavor experiences, and what a lot of drinkers may simply prefer as a tasty vehicle for a buzz.
Words by Bryan Roth