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2018 Consumer Beer Sales Analysis

As we hop forward into 2019, the North American craft market continues to refine in interesting ways. We're seeing more niche, focused consolidations and strategic partnerships, along with the development of new avenues into craft markets, including alcoholic versions of functionally-minded drinks like kombucha, and non-alcoholic beers -- some infused with THC and CBD, some of the main active ingredients in cannabis.

The convergence of these craft products is the result of an increasingly health-minded public, and a sign of things to come. With that in mind, you can expect to see a few changes on the shelves this year.

First up is "hard kombucha," which has caught the interest of major brewers, both craft and macro.

The Boston Beer Co. is working on Tura, a 4 percent ABV kombucha brand to be released later this year, and Full Sail is already on the market with its Kyla Kombucha line of products. The West Coast, which originally introduced kombucha to the mainstream, also boasts regional hard kombucha brands including Flying Embers, a startup from the founder of the successful Kevita line of kombuchas. Sierra Nevada is rumored to be eyeing hard kombucha's potential as well.

On the macro end, ZX Ventures, the self-described "global incubator, operator, and venture capital team backed by Anheuser-Busch InBev" is now funding the recently overhauled Kombrewcha, which will debut is higher-ABV (from 3.2 to 4.4 percent), freshly packaged line in March.

Kombrewcha was co-founded by Honest Tea's wonderfully named co-creator Barry Nalebuff as a non-alcoholic brand in 2013 and has been circulating its alcoholic version for the past couple years. Now with increased funding and distribution and its new design aimed at the 28- to 45-year-old female demographic, expansion is imminent, and other brewers will be sure to follow in this brand's footsteps. Look for it to begin impacting the IRI top brands’ numbers in the coming year.


Canned Cannabis

Speaking of new inroads to the craft market, 2019 looks to be the year where the evolving cannabis and craft brewing industries intersect in earnest.

If you’re not familiar with the company Cannabiniers, you likely soon will be. The makers of Two Roots CBD- and THC-infused non-alcoholic craft beers recently signed multiple letters of intent to acquire breweries distributed across North America, including a “top-20 privately held brewery based in California” and a “top-40 privately held brewery on the East Coast”, according to this report.

This is big time – the company’s stated goal is to reach 500,000 bbls of brewing capacity, which would place it among the ranks of the largest brewers in the United States. Similar to the effect craft beer’s popularity had on loosening the reins of restrictive legislation, this move could be a major jolt to the nation in terms of cannabis sales and regulation. In a world where all 50 states have legalized cannabis sales, we could be looking at the seed of the AB InBev of cannabis.

Consider also that Blue Moon inventor Keith Villa has jumped all-in to the non-alcoholic CBD-infused beer market with his new company Ceria Beverages, and we begin to get an image of where craft beverages are headed.

For the consumer, this means an exciting new mode of experiential drinking, if you're open to it.

Last up is the burgeoning non-alcoholic craft brewing market in America. In 2017, people spent over $100 million on NA beer. Within those sales, almost half of that amount of was comprised of O'Douls and Busch NA sales. Obviously, the same logic applied to the craft movement (emphasis on quality) is now being applied to non-alcoholic offerings. If you're going to forsake the buzz, why not at least enjoy the flavor?

To this end, there are now multiple non-alcoholic craft brewers in the U.S. Connecticut boasts Athletic Brewing Co., California has Surreal Brewing Co., and Missouri has Wellbeing Brewing, offering both year-round selections and seasonal releases.

As consumers, investors or brewers, what we may find absurd today is often the beginning of something big. Keep an eye out for these trending segments this year as well as an open mind. On to the numbers.


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