2017, the Year of Promiscuity, Flop Sweat, and New England IPA

You may not realize this, but it there is an unwritten rule that between Dec 26 and Jan 1, publications (blogs inlcuded) must publish a year-end review. Look, I don't make the rules. If you want me to stop this practice, you have to take it up with the Deep State.

Have You Tried the New...?

Drinker promiscuity--drinking around--is not a new phenomenon by any stretch. I first mentioned it in 2013 in one of my regular defenses of millennials--always be polite to your future overlords--the same year Breakside brewed a (then-) astonishing hundred beers. That was a year after one local brewery decided it would have a standard lineup of exactly one beer and offer everything else on an ad hoc, one-time basis. And that was three years after Karl Ockert coined the phrase "the novelty curve" to describe beer fans' quest for the newest latest. That puts us, for those of you who are poor at math, nearly a decade into this phenomenon.

The trend nevertheless continues to gather speed every year. The number of different beers out there is just staggering. This is true even if you limit the discussion to packaged beer; with seasonals, specialty lines, collaborations, and experimental single-releases, there are hundreds in larger markets each year. This creates a strange sense of dislocation; where once we all had a standard pool of beers to refer to, conversations now begin, "Have you tried the new ... ?" (And usually end with a "no.") It's so far beyond impossible that we no longer try, and the result is a kind of silo-ing, where we focus on a few brands or styles of beer, usually forced to go solo because there is little public dialogue to create meaning or add context. Apps like Untappd, which facilitate inch-deep exploration, are not helping matters.

The whole phenomenon is accelerating in part because of new brewery openings. The number of breweries in the US has doubled since 2013, tripled since 2011, and quadrupled since 2007. Each one of those breweries is trying to attract our attention, and they're all releasing seasonals, specialty lines, collaborations, and experimental single-release. That means more people going out to taprooms to try beers they will, in most cases, only drink once. I think it's a conservative estimate to place the average number of beers produced by each brewery at 25 a year, and if so, that means there were 150,000 separate beers brewed in 2017.

Perspiration on Their Brows

Based on the best guesses we have right now, craft beer will have grown by about 4% in 2017, give or take. ("Craft beer" is a moving target, so those figures will vary depending on which breweries are and aren't included.) I understand a lot more about what happens in the brewhouse than I do on an earnings report, and yet I couldn't help notice that a lot of attention was on the business end of beer this year. Anxiety was everywhere, from tiny breweries to regional giants, from new entrants to old timers, from brewpubs to packaging breweries.

A big part of the anxiety came from that very promiscuity I just discussed. It makes it hard for breweries to keep up with trends, to keep their standard-bearing beers fresh, and makes the whole market feel capricious. It also delivers wins disproportionately. Selling beer has come to look a little like movie making, with a thousand duds for every rain-making blockbuster. And while this is great for brewers of blockbusters, the phenomenon--hoping lightning strikes--is unsettling. The half-life for popular brands is a few years at most. They rise, they peak, and they fall--fast. Even for breweries riding the wave of current blockbusters, the future looks just as uncertain.

The calculations are different for smaller breweries, but equally daunting. The challenge is either breaking through (for newer breweries) or staying fresh (for established ones). In the view from Portland, which functions as something of a future state for the rest of the country to study, even the on-premise model is touch and go. I've seen many a taproom/brewpub half full this year when previously they were packed. Even these ostensibly safe models resulted in two high-profile failures in Portland in 2017, when The Commons and Fat Head's called it a day.

 Graph from Nielsen

Graph from Nielsen

Of course, the other cause for anxiety is an agile assault from big breweries. In a disturbing report from Nielsen, multinational-owned craft now accounts for 38% of the brands from the healthiest 40 "craft" breweries.

The list of elite 40 includes both craft brands run by small, independent breweries as well as 12 that are owned by major brewers. Of these 12, four are among the 10 largest craft beer breweries growing by double digits.

Corporate craft has key advantages: 1) seamless, national distribution networks, 2) large sales forces and ad budgets, 3) production efficiencies, 4) access to large national chain restaurants and grocery stores. They pose a direct threat to regional independents and an indirect one to smaller players, a threat that became wholly manifest in 2017. To come back to Oregon by way of example, the two corporate-owned craft brands, Hop Valley (MillerCoors) and 10 Barrel (AB InBev) used these advantages to become the 4th and 5th best-selling breweries in the state. And, because they constitute about 10% of all sales, they impact all 200+ breweries doing business here.

Needless to say, 2018 is not going to be any easier on any of these scores.

Hazy, Juicy IPAs

Among the beer geek set, no style had a better year than hazy IPAs. As Boston Beer and Sierra Nevada are poised (or have already) brought out national releases of these styles, I guess we're going to find out how much they appeal to a broad audience. As a longtime skeptic--but equally longtime student--of hazy IPAs, I remain entirely confused about their prospects. The broad popularity of hop fruitiness is indisputable. A sea change has happened among IPAs, and it's difficult to even find the low-aroma bitter-bombs of yesteryear. No matter whether an IPA is hazy or bright, strong or weak, the driving characteristic is this juiciness. Whether people really care what they look like remains--perhaps to me alone--a real question.

As a noted terrible prognosticator, I will offer you one prediction going out. (A sub-clause in the unwritten rules demanding year-end posts stipulates the writer must offer a prediction, the more preposterous the better.) I believe we are only in the early stages of this final chapter in IPA evolution. The evidence is in that people like juiciness, but I think that's the only evidence. Levels of sweetness, appearance, strength, and bitterness are all unknowns. My prediction, therefore, is that the New England IPA phenomenon, characterized by ultra-juiciness, nearly absent bitterness, thick mouthfeel, and sludgy appearance, is a transitional style. Like the syrupy, caramel-laden IBU monsters of the early aughts, we will one day look back at NE IPAs as an important step along the way, not an end state. Those of you who think I'm dead wrong can take heart in the fact that, where predictions go, I usually am. (In other words, start buying NE IPA futures now.)

I guess that brings us to the end of the year end review. You've got just four days left in 2017--use them wisely!