2021 Trends in Craft

The year 2020 was a bummer. So, let’s move on. But first, there’s the business of craft beer to consider and how it has weathered a pandemic year.

Just looking at the beer headlines and what’s trending about beer on Twitter as the year came to a close could be a perilous pursuit, because the headlines and stories emphasize problems such as a shortage of cans just when they’re needed the most—by everybody from Coca-Cola to craft brewers. There’s more fallout than usual when it comes to closings and bankruptcies. And then there’s the eternal 2020 weirdness such as sales of beer for off-premises consumption, although it increased year-over-year, beginning to lag behind wine and spirits.

When money and jobs are tight and people are drinking far more often at home instead of restaurants, bars or taverns due to a pandemic, one would expect relatively affordable beer sales to be strong. People may be drinking more alcohol in some quarters to cope, but some are drinking less due to job losses, which may be higher among those who often buy beer.

However, as Brewers Association founder Charlie Papazian often stated in his best-selling homebrewing book The Complete Joy of Homebrewing: “Don’t worry, have another (my substitution here) extraordinary craft beer innovation like a juicy or hazy IPA.” The sales of this style, as time and the pandemic march on, are among the leaders in retail sales.

It is worth asking just how it’s going with innovation in craft brewing. Apparently, there’s more emphasis than ever on existing flagships when it comes to drink-at-home packaged beer. Two of craft’s best-known beers, New Belgium Brewing’s Fat Tire and The Boston Beer’s Samuel Adams Boston Lager,” have reversed losses of market share and red ink suffered in 2019.

Draft beer, the crucible of innovation in taprooms and brewpubs, remains a quandary in terms of sales. An unverified anecdotal viewpoint by this writer – due to a lack of travel but no lack of visiting local taproom emporiums with carryout or outdoor seating – indicates that innovation continues. If the market is sick, what better medication than producing new, exciting beers?

Some segments that are measured in off-premises buying trends continue going forward from 2019. Hard seltzer sales continue to increase by astounding amounts, which only serves to put more pressure on can manufacturers and smaller brewers when it comes to accessing the retail market. White Claw’s variety pack, for example, ranked eighth in the Top 100 brand sales of IRI Worldwide tracking of retail sales, just behind Budweiser.

White Claw Hard Seltzer’s retail sales were up by 129% in 2020.

Overall, the White Claw brand’s retail sales are up 129% and the sales of the Truly brand owned by Boston Beer increased 121% per the IRI’s tracking of retail sales. Non-alcoholic beer continues to do well, a trend that became noticeable in 2019, which confirms not everybody is drinking alcohol products to ward off the travails of the pandemic. Led by macro brewer Heineken, which is spending considerable sums on safe driving advertising as a partner in Formula One racing via track signage that is telecast worldwide, leads the way in the non-alcoholic segment with its 0.0 label. A few craft NA-only brewers such as Athletic Brewing, Surreal Brewing, Bauhaus Brew Labs and Hairless Dog are having success in this relatively small American market segment. They have the advantage of being able to ship anywhere since their beers, many in familiar craft styles, carry non-alcoholic status. Overall, the sales trend is down for on-premises consumption in the form of draft beer as one would expect. How far down is a matter of expert assessment best left to economists such as the Brewers Association’s Bart Watson or Lester Jones of the National Beer Wholesalers Association.

Watson calls the question of how much has been lost in draft sales of craft beer the “one-million-barrel” question. It’s tougher for the Brewers Association to assess the loss in draft sales, because so many members serve from taps in either tasting rooms or brewpubs and because craft brewers work in different climates and in different states, which suffer disparate effects from the pandemic. Watson can survey members, but it becomes difficult to pursue the triangulation of data he normally performs to double-check the accuracy of his sampling—because of the location questions and so much upheaval in general. According to NBWA data, in weeks 1 through 11 of 2020, draft beer distribution in kegs was 8%of total draft beer product, which includes cans and bottles. In weeks 12 through 21 (the core of the pandemic lockdown period), the distribution of draft in kegs plummeted to zero. In the subsequent weeks of 22 through 45, the draft distributed in kegs went up slightly to 3.3% of the total.

All observers agree that the sale of packaged beer will not make up for the deficit from draft sales, especially given the winter wave of the pandemic. Watson estimated in his annual mid-year report that the decline in sales in 2020 compared to 2019 was 10% through June. On a more upbeat note, the number of craft beer closings in the first half of the year was 112, a modest 4% increase compared to the same period in 2019. (New brewery openings, meanwhile, have declined, but still far outpace closings.)

But what about innovation? The core of craft lives on despite the challenging times. Tasting rooms may not be drawing as many beer drinkers, but lower volumes required by brewers allowed them more time to consider what to do with spare capacity after the downturn in draft sales. The BA estimates as many as 80% of their more than 8,000 member brewers are confident of continuing in business in 2021, which means continuing to innovate.

The innovation trend was evident in the summer months when craft lagers began appearing more often due to the time and space in fermentation tanks usually dedicated to other styles. Among drinkers who favor craft as well as big-name lagers, it’s a welcome change that the style closely associated with macro brewers’ light pilsners is no longer considered a sacrilege to brew without designating it as a German or Mexican lager or a Czech pilsner.

If you’re inclined to think lagers are not ever connected with craft innovation, consider Brooklyn Brewing’s Winter Lager. It’s made with dark malts, but it’s not a schwarzbier. Rather, it’s a lager that’s refreshing in the fall and winter at a time when a darker beer suits the clime without the relative strength of darker malts in a porter or a stout. In many respects, it’s the perfect beer for the “second summer” being experienced on the East Coast.

There’s more emphasis than ever on existing flagships when it comes to drink-at-home packaged beer, as The Boston Beer Co.’s Samuel Adams Boston Lager reversed loss of market share suffered in 2019.

This brings up a bit of a sticking point. Larger craft brewers may have the time and money to innovate, then bring a beer to the market. Smaller craft brewers – who may be facing a can shortage that looks a little like a firing squad – may not be able to convert tasting room success and innovation into a beer case offering at the local store. At a time when market risk is simply not a welcome prospect, the double-whammy of a can and cash flow shortage from lower-than-usual draft sales are certainly daunting.

The most daunting element in craft innovation continues to be biotransformation and its role in juicy and hazy beers, usually referred to as New England IPAs. The judging guidelines for the Juicy or Hazy style at the Great American Beer Festival, which first appeared in 2018, do not make mention of biotransformation, hewing instead to the characteristics of flavor, appearance and mouthfeel when it comes to judging this approach for pale ales, IPAs and imperial IPAs. On the other hand, this style originated as “Vermont IPA,” starting with The Alchemist’s Heady Topper, which is widely recognized as the first biotransformation success story.

A chemical process that can be broadly applied to brewing techniques is the creation of esters by interaction with yeast during fermentation, and the more complicated version of biotransformation is considered to be the origin of geyser-like aromas of tropical fruits in the New England IPA. The NEIPA flavor profile is accompanied by a soft mouthfeel, an underlaying level of resinous hops (in place of bitterness), a noticeable sweetness and, of course, haze resulting from the grain bill and no filtering.

These processes describe the new “hazies” showing up from larger craft brewers that are faring quite well according to IRI Worldwide statistics on packaged retail sales. Sierra Nevada’s Hazy Little Thing continues to boom in sales and is joined by a new entry from New Belgium from its Voodoo Ranger line called Juicy Haze IPA, though it’s still too early for data on Oskar Blues’ new Can O’Bliss. This trio of hazies includes an IPA, a double IPA and a pale ale that are likely to make their mark in the marketplace as well-executed examples of an IPA style whose popularity does not look like it will stall any time soon.

When it comes to biotransformation, it’s a bit like Eastern philosophy. Those who know how to execute it aren’t saying and those who are not using biotransformation are talking about it—in the sense that they question its role in brewing absent more research. Notable among those who do have some insights—but decline to talk specifically about the process—are Heady Topper creator John Kimmich of The Alchemist, Shaun Hill of Hill Farmstead and Sean Lawson of Lawson’s Finest Liquids. They are the original primogenitors of “Vermont IPA,” which became the New England IPA that took that region and the rest of the U.S. by storm once Heady Topper was released in cans in 2011 and became more easily transportable.

Non-alcoholic beer continued to do well, which confirms not everybody is drinking alcohol products to ward off the travails of the pandemic.

One can’t argue with the IRI’s results showing the sales of Hazy Little Thing being up 82% in 2020 and New Belgium’s Juicy Haze IPA up 41%. Look at those numbers in comparison to traditional American IPAs such as Bell’s Two-Hearted IPA (up 23%) and Lagunitas IPA (up 20%). The IPAs that mimic the New England style to some extent, Elysian Space Dust and Cigar City’s Jai Alai, are each up 23% in package sales. None of this accounts for the prevalence of IPAs that are cited as juicy, hazy, dank or all three on taproom boards.

It’s a phenomenon in the same vein of the American IPA style that has led craft brewing since 2002, when the category first outpaced the American Pale Ale in number of entries at the GABF. If a style can add more hops, it’s good to go.

There’s also an increasing portfolio of confirmed scientific research about the process of biotransformation, which depends on having the right yeast to pitch during the initial dry hopping in fermentation tanks. A lot of brewers big and small are trying to figure out biotransformation with the help of this research information. They are also searching for yeasts known for making the process work with aroma hops such as Cascade, Citra and Simcoe.

During dry hopping, there is a process at work in which additional compounds are generated through hydrolysis of the hops via yeast during fermentation. These added quantities of familiar fruit-flavored compounds, monoterpene alcohols such as geraniol and citronellol, are further leveraged by the release of tropical fruit-flavored compounds from thiols, also found in hops. The sulfur-based thiols produce compounds that have relatively low flavor thresholds, making them highly detectable by the complex system of human smell and taste. These thiol-derived compounds, also released by hydrolysis, produce synergy and boost the citrusy flavors of geraniol and citronellol already present in relatively large quantity due to big doses of dry hopping and then biotransformation. Hence the arrival of huge gushes of tropical hop aroma.

To what extent the style is being mimicked by the use of a ton of dry hopping, which can leave a vegetative taste behind that can be masked by the haze and soft mouthfeel, remains an open question. There are a lot of “hazeboiz” that use lactose or actual juice as a sweetener as well as oats in the grain bill to generate an extremely thick, almost slushy-like, unfiltered haze, bypassing the need for biotransformation to achieve a similar result. This sort of hop stuffing is a reminder of the “bitterness race” that took over American IPA—until the arrival of the far less bitter, but still very hoppy New England IPA.