Why the beer industry is crashing (and who is winning)
Beer sales have been sinking since COVID, but the decline hasn’t hit every brand equally. In this clip from You’re Not the Audience, Parliament Creative Director Calvin Ross Carl explains why brands with vague identities that chased flavor trends are struggling, while occasion beers, brands with razor-sharp identities, regional favorites, and heritage beers keep growing. He also gives credit to the brewers behind America’s big domestic lagers, and looks at how Michelob, Busch Light, and Athletic Brewing have each cornered a specific occasion. It’s from the You’re Not the Audience episode on beer brands, The Death of Boring Beer Brands.
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Outline
Summary
Calvin Ross Carl looks at the state of the beer industry. Sales have dropped a few percent every year since COVID, only about 54% of people in the US report drinking, and craft brewers with slim margins are feeling the pressure most. The brands sinking hardest tend to have vague identities and have chased flavor trends like pastry stouts, hazies, seltzers, and canned cocktails.
The resilient brands share at least one of four traits: they’re occasion beers, they have razor-sharp and consistent identities, they have a strong regional focus, or they lean on heritage in a way that weaponizes nostalgia. Calvin also pushes back on craft-beer snobbery, arguing that the brewers at domestic giants are at the top of their field because their beer has to taste exactly the same year in and year out.
He closes with three occasion beers: Michelob, which has cornered health-conscious social drinkers; Busch Light, which owns rural outdoor recreation; and Athletic Brewing, whose consistency has made it dominant in non-alcoholic beer.
Highlights
Brands with vague identities that chased flavor trends are sinking.
Resilient beers are occasion-based, consistent, regional, or heritage-driven.
Domestic lager brewers are some of the most skilled in the industry.
Michelob gives health-conscious drinkers permission to enjoy a beer.
Busch Light keeps doubling down on hunting and fishing culture.
Key insights
Chasing trends erases distinction
When every brewery makes a seltzer and a canned cocktail, none of them feel like they’re coming from the brand, and customers lose any reason to invest in one over another.
Occasions are a powerful position
Owning a specific moment, like sports, the outdoors, or social drinking, gives a beer a clear reason to be chosen.
Consistency is rare in craft
Speaking from the same perspective on every product is basic good branding, yet it’s unusual in a category built on showing off variety.
Respect the craft behind the mainstream
Making a lager taste identical every year is an incredible accomplishment, and dismissing domestics misreads where the real skill lies.
Detailed analysis
The clip gives a market-level view of a theme Calvin returns to often: novelty damages brands when it replaces identity. Craft brewing’s flavor arms race made individual breweries harder to tell apart, just as the category shrank.
The winners he highlights aren’t the most innovative. They’re the ones with the clearest sense of when and why someone drinks them, and the discipline to show up the same way every time, even with something as absurd as Busch Light’s hunter orange camo cans.
Conclusion
In a shrinking market, the beers that keep growing are the ones that know their occasion, stay consistent, and resist chasing everyone else’s trends.
Transcript
So, okay, let’s talk about the beer industry as a whole. Now, keep in mind, I’m not a hardcore expert in the industry or category as a whole, but I at least have some knowledge about how to approach them brand-wise. So beer in general—drinking in general, but especially beer—is in a pretty bad place from where it’s been. Sales have been going down. A lot of brands are kind of sinking. I mean, if you follow beer, you’ve seen a lot of microbreweries closing. But it’s kind of been interesting, because it hasn’t been bad for everyone.
If you’ve really been paying attention, you’ve been noticing that a lot of the brands that are sinking right now are brands that have those vague identities and have focused really hard on craft quality and been chasing flavor trends. So, we talk about flavor trends. I mean, that was so big in craft brewing, where it was like, you’ve got this IPA, you’ve got… and it ended in that world of pastries and hazies and crazy things like that, where rather than digging into who they were as a brand and amplifying that, they started chasing these trends in search of novelty. So we’ll end up talking a lot about novelty today, and how that can actually be pretty damaging for your brand overall.
Oh, Aaron [unclear]. pFriem is great. I don’t actually have them mentioned in here, but pFriem is awesome. I don’t know, actually—I assume pFriem sales-wise is doing great, because they are just super focused on their brand. They feel almost like a classic. Their identity—they explore, they create things, but everything is so consistent from an aesthetic perspective that it always still feels like you’re getting a pFriem. They don’t do wild, crazy stuff, and their beers taste great. I think they’re getting pretty big these days.
So, okay, some sales trends overall. This is what’s been happening with beer since COVID. Basically, COVID was a big drop-off. Everyone drank too much during COVID and was like, maybe it’s time we sober up a little bit. So year over year, beer sales have been sinking a few percent every year since COVID—3, 4, 5%. And a crazy stat is only a little over 50% of people in the US report that they drink right now, which I think is a record low. Which is also hilarious to me, because I know who my friends are, and I think 100% of my friends drink, so what’s that say about me? But yeah, supposedly—I think it was 54% in the last studies—only 54% of people in the US are drinking.
And what we’ve also seen is that craft beer especially, and microbreweries, are really feeling that pressure, because they operate with pretty slim profits in those businesses. They don’t have the scale to stretch, and so a few percent drop for them across the whole industry can be a pretty big killer.
But the thing to kind of come back to is that a lot of the beers that have been sinking are doing good things. They’re making great beers, but like I said, they started chasing all these trends where they were doing these different flavors. Everyone’s doing a seltzer. Everyone’s doing a canned cocktail. But none of them feel like it’s coming from them. It always just feels like they’re chasing a little piece of that market share for where those things are going. And as soon as you start doing that, you just start looking like everyone else, and no one really sees what the distinction of your brand is, and why they should become wholly invested in your brand as opposed to someone else’s.
So we’re seeing some brands that are really bucking those trends, though. And the ones that are really resilient and growing right now have at least one or two of these traits that I’ve noticed. One is big occasion beers. Occasion beers are beers that you drink on specific occasions: when you’re doing sports, when you’re doing outdoor stuff, things like that. Other ones just have razor-sharp identities, where every product is very consistent and it’s always being spoken from the same messaging. Of course, that’s good branding, but that’s actually rare, especially in the craft area, to be showing up and speaking from a very consistent perspective, because craft brewing became, look at all this different stuff we can do. So if you’re focused in and really clear, you’ve got a good chance.
The other ones are beers with really strong regional focuses. That’s beers that focus on their history, their heritage, and specifically their geographic location. That’s why I love Rainier Beer. But we’ll talk about a few of those. And then last, just ones that have really strong heritage. The heritage and regional stuff seems to mix in a lot, where they play into this nostalgic trait. It’s not quite your dad’s or your granddad’s beer, but they’ve found a way to—what did I say last stream? They found a way to weaponize nostalgia by turning it into heritage. So they’ve done a great job of that.
So let’s talk about some of these. And here’s one thing I want to say up front about all of these. I know we have a tendency, especially if you’re a pretentious jerk like me, to be like, “Oh, I’m into craft beers. I don’t drink domestics.” Or like, the real artists and master brewers are doing the craft stuff. And I think that is a thing we have to get over immediately, because when you’re talking about the people who are making the domestics, even the Budweisers, the people working at Coors, all of those brewers are incredible. Absolute top of their field. Their drink has to taste the exact same year in and year out, and that is an incredible accomplishment. By comparison, it’s quite a bit easier to make IPAs, things of that sort, especially when you don’t necessarily have to [unclear] them every single year like they need to with this exact one. A lot of the larger microbreweries are really good at doing that. I think that’s just one thing to be mindful of: the people working at those giant American lager companies are doing incredible work.
So let’s talk occasion beers. Special occasion beers. I mean, the one that is absolutely dominating this right now—which is funny, I just don’t get it, because it’s not a brand for me—is good old Michelob. Michelob, I think, is maybe now the number one beer in the US. It is massive, and they are a special occasion beer in a way where they have completely cornered the market for active social drinkers who are health conscious. And so it really is an aspirational beer. I think their tagline is “It’s only worth it if you enjoy it,” which is just so good, because it is that kind of thing. It’s giving you permission to be like, okay, I’m health conscious, but you know what? I’m going to take time and enjoy this. And they’re crazy huge now. Aesthetically, they show up the same everywhere. I pulled up this one because this is the official World Cup one they released. It still looks like Michelob. They aren’t doing anything super crazy with it. And this is their wheelhouse. If there’s a brand that should show up for World Cup things, it is them. So they’re looking great.
The other one that’s a really good special occasion beer, that’s something to learn from and has been the same forever—and I feel like people joke about it—is Busch Light. Busch Light is just so consistent. If you are into rural outdoor recreation, if you’re hunting, you’re fishing, they have found a way to completely corner that market, and they can do absurd things. I don’t know if anybody has seen when they do the bright hunter orange camo cans and things like that. It’s so good looking. And they do stuff like this image here, where you’re just like, what the hell is going on here? It’s covered in camo. They’ve got this goofy cooler that has a scope and everything on it, like a little spotter. I think they just know their market and they keep doubling down on that, and so kudos to them. I feel like forever it was everyone poking fun at Busch Light, and now they’re kind of bucking this trend. They’re doing great.
The other one that I think is worth mentioning as a good old special occasion beer is our Athletic beer. I think this one is kind of tough, because the whole NA category in itself has become kind of a special occasion beer. So I’m really curious how this market changes over time. We had a really huge boom right after COVID with this. Athletic has dominated because of their consistency, and whatever they’re doing to get into the market everywhere is pretty impressive. You look at everything, and it looks somewhere between a craft and a domestic a lot of the time. And it’s just super consistent logo placement, everything on the can. You always know as soon as somebody’s grabbing an Athletic. They’re really good at—the name is Athletic, so it’s orienting you toward this more health-conscious lifestyle, but it allows you to join in and drink alongside others in social environments. So I think there’s a lot of brands doing exciting work in the NA world, and I’m excited to see where they all go. Okay, that’s special occasion beers.