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Don’t count out hard seltzers, at least according to one industry consulting firm. Although hard seltzers have generally gone through a rather quick boom/bust cycle, the category is forecast to grow globally at a compound annual growth rate of 8.2% up until 2028.
As Anheuser-Busch sheds craft beer brands and Molson Coors exist the cannabis drinks business, Tilray jumps in. A week after Tilray announced that they were buying eight craft brands from Anheuser-Busch, Tilray said they will acquire the remaining 57.5% equity ownership of cannabis-infused drinks maker Truss Beverage from Molson Coors Canada.
Tilray Brands, the pharmaceutical, cannabis and consumer packaged goods company that just purchased eight craft brands from Anheuser-Busch, paid an astonishingly low $85 million for approximately 8 million cases combined. That’s about $150 per barrel, a far, far distance from the height of the craft beer industry when brands sold as high as $1,000 per barrel only 6-8 years ago.
In another sign that large global brewers are continuing to chase after growth beverage segments outside traditional beer, Molson Coors announced that they will purchase Blue Run Spirits, makers of premium Blue Run Kentucky Bourbon. It is another step forward in the evolution of large brewing companies turning more and more into ‘beverage companies.’
Large global brewers have been slowly selling off their acquired craft brands in recent months. That trickle is now a deluge as Anheuser-Busch announced that they will sell eight craft beer, cider, and energy drink brands to Tilray Brands Inc. The sell-off includes 10-barrel Brewing, Widmer Brothers, Redhook, Breckenridge Brewery and Blue Point Brewing along with the AB in-house craft brand Shock Top.
Coca-Cola, the largest beverage company in the world, has established a new division to develop and manage its alcohol beverage business. The move spotlights the diversification and fragmentation of the alcohol industry, as the largest beverage manufacturers look for ways to benefit from the growing demand for non-traditional alcohol products such as FMB’s, RTD’s and other alcohol-infused drinks.
Many questions have been asked since Anchor Brewing announced last week that the iconic brewery was closing. And many reasons have been assigned as to what caused the demise of the beloved San Francisco brewery. But the story, and the outcome is both varied and complex.
David Burkhart was an employee at Anchor Brewing in San Francisco for 31 years; half of his life. Like many in the industry, it seems inconceivable to him that Anchor is gone forever, and he envisions an angel, “hovering over the brewery, who sees the value in a small business that makes unique, local, delicious, beautiful products — San Francisco in a glass.”
In a stunning, but not surprising announcement, Anchor Brewing Company, the iconic first craft brewery in the modern era, will cease all operations and liquidate the business.
Premium alcoholic beverages have been outperforming other price categories for many years, helping to drive the steady growth in craft beer. But the first half of 2023 has begun to show some cracks in premiumization, which may not bode well for craft beer, which is already slowing due to multiple other factors.
In a story that continues to disrupt the beer industry, Bud Light sales have continued to decline for the ninth week in a row and has now fallen an astounding 24.4% over that period. The downfall has led to significant sales declines at AB wholesalers across the country, an uptick in sales for competing brands and has allowed Modelo to replace Bud Light as the number one selling beer.
In the second, and third such event in just a few weeks, the founders of two craft breweries are reacquiring the brewery back from a global brewer. The founders of Funky Buddha Brewery in Oakland Park, FL and Four Corners Brewing Co. in Dallas, TX are buying back the company they founded from Constellation Brands.
There have been many twists and turns in the history of the craft brewing movement. Without a doubt, one of the most pivotal points along the 40-plus year timeline was when the large global breweries began buying up independent craft breweries in earnest in the early 2010’s. Those of us in the industry wondered where it would lead. Today, maybe we have a hint; the original owners of a brewery that was acquired by ABInBev announced that they have bought the brewery back. Beginning of a trend?
In the state of Nevada, where beer wholesalers have deep political connections, self-distribution for small brewers has always been a non-starter. But craft breweries in the state are making a push for a small step forward in a bill that would allow craft breweries to move beer that is brewed at one location to their own off-site taprooms or tasting rooms without having to first sell it to a distributor.
Distilled spirits market share in the U.S. has surpassed beer for the first time, growing supplier sales market share for the 13th straight year up to 42.1%. The growth puts spirits just slightly ahead of beer at the end of 2022, with beer posting a market share of 41.9%.
According to the annual economic briefing by Distilled Spirits Council of the United States (DISCUS), spirits supplier sales in the U.S. grew by 5.1% in 2022, totaling a record sum of $37.6 billion. Volumes also rose 4.8%.
The biggest growth sector was in premium cocktails, including spirits-based RTDs, which grew at by 35.8%.
In a trend that may be picking up momentum across the country, Washington state legislators are considering a bill that would lower the blood alcohol limit from 0.08 to 0.05.
Hard seltzer exploded out the gate. Sales grew triple digits in both 2019 and 2020, driven by evolving consumer trends and tastes. Many in the industry predicted a slower, but still robust growth in 2021 of 50-80%. Instead, hard seltzers grew by only 16% in 2021.
Japan’s Asahi Shuzo announced plans to open a new $53 million sake plant in New York state. The facility, located in Hyde Park, will begin brewing sake in spring of 2023.
The Brewers Association released a brief announcement saying that the organization would no longer be holding the annual food and craft beer tasting event SAVOR.
A long-running study of Americans’ attitudes, values and purchasing behavior has shown that a new consumer trend may be emerging: a newfound desire for simplicity and simplified choices. This may not bode well for the craft beer segment, and some industry analysists are pointing to it as a root cause for the sluggish performance of craft beer coming out of the pandemic.