The Wallpaper Phase For Craft Beer
The Craft Brewers Conference is wrapping up today (I think), and you may have seen some of the real-time reports. New President/CEO Bart Watson* made some news yesterday with a data-rich presentation to attendees. The Brewers Association has already announced the most salient facts about their segment of the market (closings outpacing openings, volume down 4%), but Bart offered one very interesting new detail: “The percentage of legal drinking age adults who drank craft beer in the past 30 days continues to rise from 9.1% in 2023 to 9.8% in 2024.”
To me, this is actually one of the most important findings I’ve heard in years. The beer market and its various segments will wax and wane, as all markets do. However, the health of a segment within a market (mini-vans within autos, golf shoes within athletic gear, craft beer within beer) has less to do with the number of products sold than whether the trend is growing or shrinking. For 40+ years, the craft segment’s main barrier has been widespread acceptance. It’s a more complex and less intuitive product than a margarita in a can or blue-flavored alcohol water, so progress has been uneven and slow. People have been slow to adopt craft beer because it’s strongly-flavored and they don’t really understand it. But once they get past that initial hurdle, craft beer has a lot of assets that will help retain their drinkers than fizzy alcohol water.
Yet it also reveals another dimension to the “craft” issue I’ve been pondering lately. For so much of the past forty years, small breweries were trying to lure people to their product, to help them get over that initial hurdle. So much of the industry has been built around education and generating excitement that this new phase presents both strengths but also novel challenges. Craft beer isn’t new and exciting anymore, and almost everyone has heard of it, and the vast majority of potential future customers have experimented with it. What breweries have to do now is sell their product to people who are already familiar with it—but also blasé about it. Craft beer is part of the wallpaper of alcoholic beverages now—present, but in the background, familiar and easy to ignore. Selling a product like that is very different than selling beer in 2000.
I don’t need to belabor this point, but I think an illustration will help contextualize the challenge for a small brewery in 2025.
Don’t focus too much on the dates—one could easily move those around without argument from me (part of the challenge is that different parts of the country went through these phases at different times). The real point is that we’ve entered a new phase. For the first couple decades, small breweries commanded a very committed, niche audience. These were the early-adopters who were excited to discover a new craft they could help birth. Beginning in the late aughts, craft beer started to break through and had enough of a profile to reach a broader audience. It wasn’t completely niche anymore; it was a new arena for the cool kids to enter.
Today, most people have heard of craft beer; IPAs are about as exotic as as lattes. You can get it anywhere, and anywhere you go where beer is served, “craft” will be available, from dive bars to stadiums to the best restaurants. Nothing stays cool long, and so trends in alcohol have moved along. This is the way of things: once a product category reaches a certain threshold, it is too common to be cool. It’s true that the craft segment is only about 15% of the beer market, but it’s also true that most beer drinkers drink craft beer at least sometimes.
When I first traveled to Europe to do research for the Beer Bible, I remember being startled at how unimpressed locals were about their amazing beer in places like England, Belgium, and Germany. They liked their beer and were proud of it, after a fashion, but they weren’t excited about it. And why would they be? Little breweries have been making characterful local styles of beer for centuries in these places. It’s part of the wallpaper there. Fourteen years ago, when I first visited, selling cask bitter in England looked nothing like selling IPAs in America. One was familiar and ho hum and everybody knew about it and one was weird and maybe a little dangerous, and only cool people knew about it.
Selling IPA in America today looks a lot more like selling cask ale in England in 2011 (or 1911). I have no great insight into how a brewery might do that, except that it can no longer revolve around discovery, trendiness, and excitement. That’s not where consumers are. The very positive news is that people are still interested in craft beer, even if the reasons have changed. It’s a great product, with tons of flavor and complexity and a cultural history that stretches back for centuries. Those are huge strengths, and represent a sturdy foundation to build on—a lot sturdier than blue-flavored alcoholic fizzy water.
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* Unnecessary aside: selecting Bart was an unexpected but very smart move by the Brewers Association; as the longtime economist, he built up a reputation for fact-based straight-shooting, and that’s exactly what the organization really needs right now.