Thursday, June 4, 2015

Macrobrewers & the Craft Beer Market Part 2 - Market Trends & The Future

Macrobrewers & the Craft Beer Market Part 2 -  Market Trends & The Future

In the previous post on this topic, I mentioned at the very end that Anheuser-Busch has started buying up craft breweries to add to its portfolio. I already talked about the purchase of Goose Island, which is/was arguably the most high profile of their purchases. Last year, Anheuser-Busch purchased 10 Barrel Brewing based out of Bend, Oregon & Blue Point Brewing based out Patchogue, New York. However, when it was announced early this year that Anheuser-Busch was going to purchase Elysian Brewing, the craft beer community was in shock since Elysian had been a long cherished member of the craft brewing scene; Though rumors of a buyout had been floating around for a couple of months

Oh and remember that commercial from Budweiser? You know, this one.....

Did you catch the part where it talks about fussing over a pumpkin peach ale? A few months prior to Anheuser-Busch's buyout, Elysian actually released a pumpkin peach ale and many took this as a thumb-and-nose gesture on behalf of Budweiser. Upon hearing this information, many people were, understandably, rather upset.

As I've mentioned before, macrobrew sales have been declining steadily over the past few years while craft beer sales continue to grow with each passing year; Which could explain the buyouts we've seen over the past few years. However another reason why sales have been falling is because there is not only to a wider selection as far as beer in concerned, but also many of us (i.e. Millennials) don't have the brand loyalty that our parents had and what we want in a beer is, for lack of a better term, a higher quality of flavor.

Speaking from a Millennial perspective, it's not that I don't have brand loyalty, though you would never guess from all the reviews I do. It's just that I was introduced to craft beer fairly early on, about a couple years after I started drinking beer in general. At the risk of sounding snobbish, my standards as far as the quality of flavor I expect from a beer are considerably higher than what people my age expected 20 years ago.

Furthermore, there are actually few beers that I have as a go-to option when I'm not feeling like writing or I'm just looking to relax for the evening. They're not necessarily amongst the best beers I've ever had but they're great beers that I know I'm getting my money's worth for when I buy them.

So what happens from here? Will craft beer one day reign supreme while AB-InBev & MillerCoors go extinct? Will Budweiser, Heineken & Miller Coors join forces to form a Voltron-like robot and try to wipe out everything craft beer? Truthfully, I don't see any of those happening but I do have an idea of what we will start to see in the foreseeable future.

  1. BMC (Budweiser MillerCoors) will continue to buy craft breweries.

    I mentioned in my previous post that macro-brewers will want to retain their share of the marketplace and we've already seen the expansion of Goose Island to a national level and it has worked favorably for Anheuser-Busch. Whether you like it or not, this is a trend that will continue. Given the recent purchases made on behalf of AB-InBev, don't be too surprised to see MillerCoors start to buyout various craft breweries around the country.

  2. Craft Beer will continue to grow its market share

    This shouldn't really come as too much of a surprise, but the craft beer industry will continue to grow its marketshare. At the time of writing this, craft beer accounted for approximately 11% of the beer industry in the United States. While I don't expect to see craft beer breaking the 25% marker for at least quite a while, I don't expect to see the growth stopping anytime soon.

  3. Expect to see Macrobrewers release their own interpretations of popular craft beer styles.

    For the past couple of years, we've been seeing AB-InBev & MillerCoors release beers with higher-than-normal ABVs in an attempt to draw in the craft beer drinking crowd. The results have been....not so good with just one that I would consider to be tolerable. The thing is that macro-brewers have the capability and resources to make the same thing as craft breweries but they aren't really making an effort to do so.

    I see that changing in the very near future and I expect to see Budweiser or Miller release their own IPA or Saison. This would no doubt be an effort to draw in the craft beer crowd and the quality of the beers would inevitably come into question upon release. Besides... if Blue Moon can make a White IPA that is actually good, I don't see any reason why Budweiser wouldn't be able to do the same.

  4. Microbreweries buying other microbreweries.

    Here's one that I don't think many people really consider since many craft beer drinkers have adopted an "Us Vs. Them" mentality. We all know that some craft breweries come in all shapes and sizes but they are still businesses nevertheless.

    Given the growth at which craft breweries are undergoing, I believe that it's inevitable that we're bound to see other microbrewers merge with or buy up other microbrewers. One prime example I've seen is with Bent Brewstillery, a local Minnesota brewery, merge with Pour Decisions, another Minnesota-based brewery.
So there you have it, my predictions for the future of the craft brewing industry and the brewing industry as a whole. Regardless of what happens, it's going to get very interesting here in the next few years and we all have a front row seat to all the action.

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