Are Low-Cal Beers the Next Big Thing?
Last week, two news items pushed a slow-burning trend out into the open: low-alcohol beers. It’s a not-yet-perfectly-established category of beers somewhere in the 2% - 3.5% range, but really somewhere on either side of 3%. First up, SevenFifty Daily posted the definitive article on the trend, by Josh Bernstein, who gives full shape to what breweries are thinking. Later, we learned that Sierra Nevada was testing a 2.8% beer called Go-Two IPA, an awkward name that nevertheless also serves as the beer’s mission statement.
Let’s give Josh the floor to define the terms.
“[Founder’s new 3% IPA] Low Profile is among the latest entrants in America’s emergent mid-strength beer category that’s defined by alcohol content—roughly between 2.5% and 3.5% ABV—and not style. They target drinkers looking to cut back but not entirely cut out alcohol. Mid-strength pilsners and IPAs deliver more flavor and less alcohol than light lagers, which are typically around 4% ABV.”
So: weaker than a Michelob Ultra and less than 100 calories, but stronger than NA and fuller-flavored for craft beer drinkers. The notion, as Sierra hints, is that people can drink more of these at a sitting and enjoy themselves without getting drunk or fat. On paper, it sounds great!
It’s been a while since I’ve made a bold prediction, and we’ve all found my prognosticatory forays amusing (they tend to be bad), so this is a fine time to go on the record and say I think this is going to be a dud.
We certainly have abundant evidence that Americans love low(ish)-alcohol beer: most of the beer America drinks is light beer. There’s a fair amount of evidence that calories are a big part of drinkers’ motivation. Getting a beer down below ten calories an ounce really helps move product. Breweries post calories as prominently as they do alcohol content right on the package.
So again, on paper, all of this suggests a potential new market in 3% beers. And yet, it just doesn’t quite make sense to me. I’ve been pondering this for some days now, trying to figure out where the disconnect lies. It has to do with price.
Are Americans really going to pay $12-14 a six-pack to buy a 3% beer so they can drink three or four beers when they could buy a 5% beer at the same price point, drink two or three and save money?
I was surprised to see people pay full freight for non-alcoholic beer, but they do, sorta. (NA boosters must finally admit that the ceiling isn’t that high; after the better part of a decade hyping NA, it’s still just 2% of the market.) NA drinkers want beer without the alcohol. They could save a lot of money by buying Diet Coke, but they want the taste of beer. But here’s the thing: low-alc and non-alc are categorically different. If you’re buying low-alc beers, you’ve signed up for alcohol, and now we’re just debating dosage.
In his piece, Josh notes that some places do have robust low-alc markets, but he also acknowledges this is a function of taxes and pricing. Low-alc beer flourishes where it is cheaper. Will breweries discount low-alc beer? Maybe a bit at the margins, but I think they’ve learned the perils of going down the cheap-beer road. It can goose sales temporarily, but margins are already tight, and breweries need to be very cautious about degrading (watering down?) their brand.
In service of full disclosure, I will add one data point that cuts across my thesis. Oregon’s Fort George Brewery has a 2.8% IPA replete with the tropical goodness their fans demand (hops: Krush, Eclipse, Mosaic, Krush Cryo). And Drew Worden, the brewery’s Sales Director, says it’s selling like hotcakes.
“Our low ABV IPA gets more ‘I’m obsessed with this beer (from trying at the taproom or finding at a bottleshop); where can I find this again’ emails than any other beer we’ve released in the 5+ years I’ve been at Fort George.”
So has the Oracle of Oregon made another horrible prediction? Time will tell. You are invited to discuss this trend and offer your insights and anecdotes in the comments.