THE GIST
As craft breweries look for pockets of opportunity in a challenging sales market where volume growth is hard to come by, several are playing in a brand-new sandbox: Light Lagers designed, to varying degrees, to look like they’re anything but craft.
Call it the Montucky Effect: Following in the footsteps of one of the most ascendent Light Lager brands in recent years, these companies are working to replicate some of the magic of Montucky Cold Snacks. With increasing frequency, craft breweries are making a push into stylistic and packaging realms that were once anathema to the ideals of “craft”: pale, highly carbonated, deliberately familiar Light Lagers sold in six- and 12-packs next to the likes of Bud Light, Coors Light, and Pabst Blue Ribbon.
And it’s with good intention: It’s hard out there for packaged beer (-2.6% volume growth in chain retail in the latest 52-week period) and even harder for craft (-6.7% in that timeframe). Whether people are buying less because of stagnant incomes, spending more on other household goods, or alcohol that isn’t beer, the outcome is the same with less beer is sold. And there’s a hard rock not far below the surface of the soft sand: pricing.
Upstart brands from smaller breweries don’t have the economies of scale that would allow them to compete directly in the Light Lager category with the price for Bud Light or PBR. (Montucky contract brews its beer in Wisconsin and does not operate its own brewery.) But these breweries also aren’t making an argument for the flavor- and ABV-intensive drinking experience that allows certain four-packs of craft IPAs to retail for $20. Because of this, their value proposition varies.
Some are revivals of once-dormant regional lager brands appealing to locality and nostalgia.
Others tout their ingredients and flavor.
A small number bank on bringing newness and attitude to a section of the beer aisle that’s been dominated by the same macro and import brands for a decade.
An analysis by Sightlines+ found in April found that as a collective “category,” craft Light Lager represents about 1% of craft beer sold in chain retail, a percentage that has been steady for a few years. It offers an opportunity for companies who see runway for more, as some early entrants are finding success. In 2022, chain retail volume sales of Light Lagers such as 10 Barrel Pub Lager (flat), Creature Comforts Classic City Lager (+8%), Garage Beer (+4.5%), and Montucky Cold Snacks (-5%) all performed better year-over-year than the craft beer category (-7.6%). These brands will never unseat the country’s top-selling beers, but they could muscle craft breweries into parts of a store’s beer section where they’ve never been before.
“I can’t help but think, is this a bit of ‘If you can’t beat em, join em’?” says Tommy Pacholik, a sales representative at George’s Distributing, a craft beverage distributor in Montana. “It’s craft breweries’ answer to themselves.”
WHY IT MATTERS
Declining sales volumes for distributed craft beer are prompting breweries to look for growth in areas they’d previously ignored. In recent years that’s included 19.2oz cans in convenience stores, and now some companies are turning to a space once seen as the antithesis of craft: the Light Lager section of grocery stores’ coolers.
In the latest 52-week period ending July 16, craft beer volumes declined -6.7% in national chain retail tracked by market research company Circana, while overall beer is -3%. If retailers are wary of expanding their craft beer selections given those trends, craft breweries don’t have as much shelf space to grow into—unless they expand beyond the confines of the craft category.
That’s what is prompting Lexington, Kentucky’s West Sixth Brewing to primarily launch Sixer, a Light Lager, in 12-packs this September. “If you’re trying to gain more real estate with [grocery store chain] Kroger, you need to play in different formats,” says Kelly Hieronymus, West Sixth’s creative and marketing director.
West Sixth has been selling its beer in Kroger stores for a decade and feels it has maxed out its space in sections dedicated to craft six-packs. If the brewery were to ask the grocery chain to add Sixer in six-packs, it would likely mean the store would remove one of West Sixth’s existing brands to make room for it. Launching a new package into the “well”—the space below the shelves where beer in 12- and 15-packs are sold—means West Sixth gains ground without losing an existing slot. Though West Sixth will package Sixer in six- and 12-packs, Kroger has committed only to selling Sixer in 12-packs.
“We’re 10 years old, we’re trying to sing new songs constantly,” Hieronymus says. “If there’s space to sing in a larger format … we’re not competing against ourselves.”
Light Lagers can open up new space for a craft brewery not only in a store’s cooler, but also in terms of geography and appeal. Craft has a variety of associations for shoppers when it comes to beverage: premium ingredients, bold flavors, higher prices, local connections. Some Light Lager producers see an upside in deliberately moving away from those. A craft brewery might be deeply associated with a certain city or state, while Light Lager brands can rely on branding and vibes that travel much more widely.
Garage Beer, originally a Light Lager brewed by Covington, Kentucky’s Braxton Brewing, was spun off a year ago into its own company with new ownership. (It’s still contract brewed by Braxton.) New owner Andy Sauer says that separating Garage Beer from Braxton will allow the Light Lager to expand to multiple states rather than being pigeonholed as a local craft brand. It’s currently for sale in five states—Kentucky, Indiana, Illinois, Ohio, and Tennessee—and will soon launch in Pennsylvania.
“To me, that experience of drinking in your garage with your friends is universal whereas Braxton maybe isn’t,” Sauer says. “When a craft brewery is presenting to a retailer, [the buyer] asks, ‘Can this brand travel?’ I wanted to remove some of those assumptions.”
He also hopes Garage Beer can shake off some of the flavor expectations with which drinkers associate the term “craft beer.” Research Sauer conducted in partnership with the marketing department at Miami University in Ohio found that the top characteristics respondents linked to craft beer were “hoppy” and “heavy.”
“If [Garage Beer] is in the craft section, consumers’ entire assumption of that third of the shelf is ‘heavy or hoppy beer’ and we don’t want to be associated with those elements,” Sauer says.
Other brands have tried to create distance between a craft brewery and its Light Lager. When DC Brau launched retro-inspired Old Time lager in April 2022, it did so with a separate website and marketing material that made no mention of the brand’s connection to DC Brau.
“We don’t want it in the cold box next to DC Brau,” DC Brau cofounder Brandon Skall told the Brewing Industry Guide. “That’s the last place we want it.”
But managing a sub-brand is difficult for a small brewery with limited resources. It’s a major reason why Bent Water Brewing in Lynn, Massachusetts, launched its Light Lager, Chill, this May as a seasonal beer within its standard portfolio.
“The sub-brand is tough to do well if you don’t have a lot of people. … We don't have a lot of redundancy in our skill set and our people, so it makes it really tough to actually carry multiple websites, multiple social media, multiple marketing streams,” says Bent Water co-founder and president Aaron Reames. “It’s about being practical. We need to focus on the liquid and make sure there’s continuity across our beer brand.”
As a sales rep for a craft distributor, Pacholik says he hasn’t seen many small breweries try to take on the Light Lager segment. Mostly, he says, that comes down to the fact that small breweries can’t get their Light Lagers priced anywhere near Coors Light or Bud Light.
“You can’t underbid Budweiser. You can’t do it,” he says. “Even competing with New Belgium [on price], you can’t do it. Mom-and-pop shops can’t do it.”
West Sixth expects Sixer to retail for $17.99 per 12-pack and $8.99 per six-pack, a price that Hieronymus says “intentionally undercuts what’s on the market in the craft space.” But lowering prices also means lowering margins, and volume can make up for that: Sixer uses two-row base malt, which West Sixth buys in bulk and stores in its silo. The hope is that placements in enough Kroger stores will allow the brewery to buy a full truckload of printed cans for Sixer, reducing costs. (Hieronymus says printed cans cost as much as blank ones, which then require additional money for the labels.)
Likewise, Garage Beer isn’t trying to beat Coors Light or PBR. At $16.99 per 15-pack, it’s more expensive than a 12-pack of Coors Light ($13.49) or Busch Light ($12.99), and is on par with a 12-pack of Modelo Especial ($16.99), per Drizly prices.
“It doesn’t make sense to try to price-fight larger companies,” Sauer says. Instead, he hopes that drinkers are willing to spend a few dollars more for a beer they think is worth it. “At the foundational level, there’s a trust that consumers can have with a smaller, independent company. I think that has resonance with consumers. If we make things with slightly better quality, ingredients, and a better process, the customer will taste that.”
There’s some tension here: Garage Beer touts its “small and independent” bona fides, but has actively distanced itself from the world of craft beer and from the craft brewery that launched it.
At Tasty Beverage Co. bottle shop in Raleigh, North Carolina, owner Johnny Belflower says his store has had trouble selling 12-packs of craft beer, no matter the style. There, dollars and cents matter, even to a customer who buys craft beer.
“People who are grabbing a 12-pack from me are grabbing a budget beer. We do sell a couple of macros in 12-packs for that reason,” Belflower says. “Craft beer nerds will drink Miller High Life, if they’re looking for that type of beer.”
At Tasty Beverage, a 12-pack of High Life sells for $12; a 12-pack of Coors Banquet is $15. Sierra Nevada’s Oktoberfest 12-packs are $19, and Hardywood’s Pilsner costs $20 per 12-pack, which Belflower says is a “good deal” for a local craft lager.
“If you’re going to cost 50% more, you’ve got to taste 50% better in the mind of a lot of consumers,” he says. “I’m not envious of [craft breweries’] position of trying to figure out how to make that work.”
Words by Kate Bernot