DENVER — You don’t bring a knife to a gunfight, and if you’re a beer distributor, you don’t bring a light adjunct lager to a Twisted Tea fight, either. So it was with evident relief, and maybe even some optimism, that a wholesaler from North Carolina told a crowd of a hundred or so colleagues at Encompass Technology’s BevAge conference this week that Bojangles Hard Sweet Tea was beginning to win some of Twea’s share and shelf space in the Tar Heel State. Customers, he said, appreciated the novelty of the product, a collaboration between the eponymous regional fried chicken chain and Boone’s Appalachian Mountain Brewery. But their repeat purchases indicated they liked the flavor, too.
Could it be any other way? Approaching the midpoint of 2023, the American drinking public has made eminently clear its unquenchable thirst for stupid-simple, sapid drinks, and breweries searching for growth have joined early adopters (none earlier to the hard tea space than Boston Beer Company’s teeth-rattling powerhouse) in supplying that latent demand. In doing so, they’re reinforcing long-held stereotypes about our national palate — that it lacks complexity, and skews sweet — and making beaucoup bucks in the process.
And it’s not just hard tea. “The sheer array of flavor-forward brands that are [flavored malt beverages], seltzers, import, craft … you can just tell that the landscape is evolving in terms of what the consumers are looking for,” Dave Williams, vice president of analytics and insights for Bump Williams Consulting (BWC), tells Hop Take in a recent phone interview. Sales data, retailer feedback, and distributor demand all point in roughly the same direction: approachable, fun, fruity fermented dranks. And lo: “That’s what suppliers are thinking about when it comes to innovation,” says Williams.
Many Americans likely clocked this shift at their Memorial Day cookouts, as FMBs and FSBs — “fermented sugar beverages,” denoting cane-based beverages — like Bojangles, Simply Spiked, and Cayman Jack joined Twisted Tea in capturing cooler space from the usual B.O.L.A.s (that’s Boring Old Lagers and Ales, reader.) But today’s beer business is a numbers game, and you don’t bring anecdotes to a data fight. In its most recent monthly memo to industry clients, BWC outlined the top 25 new brands and overall growth brands for both beer and spirits year-to-date according to Nielsen scan data from grocery stores, liquor stores, and convenience stores.
Talk about a flavor bomb. The “innovation” cohort (brands that hit the market for the first time in 2023) may as well be a read-out of a gas station’s coldbox inventory. Of the 25 brands, only four — Heineken Silver, Sierra Nevada’s Hazy Little Thing rotator pack, a Bell’s IPA assortment, and a Founders assortment — would pass muster as actual beer among rank-and-file drinkers. If you count New Belgium Brewing’s (NBB) Voodoo Ranger Fruit Force as just another IPA (I don’t, really, but your mileage may vary), the total would stand at five. The rest of the field is dominated by a grab-bag of FMB/FSB line extensions and wholly new products, plus a bunch of “savory” beer-ish stuff (read: cheladas), and Corona’s non-alcoholic entrant. There it is, your 2023 YTD “Beer” Innovation Class, folks!
We’ve talked before about NBB’s seemingly unstoppable Voodoo Ranger value proposition, and why craft breweries of a certain size must pivot beyond beer, and how the segment writ large is going through a consolidatory period that seems to be cramping its creativity at scale. BWC’s analysis showcases just how powerful those craft brewing trends — flavor-forward “craft” tallboys and variety packs from mid-major players, and a whole lotta nada from everybody else — have been in shifting creative momentum and volume away from the segment at the moment. There’s growth to be had in the beer business, but if this cohort is any indication, most of it barely looks like “beer,” and even less of it looks like “craft.”
(The even-keeled consultant is careful not to let your humble Hop Take columnist proclaim a categorical catastrophe for small, independent breweries just yet, though. “I think c-store is an untapped channel for craft, still to this day,” Williams says. NBB has proven 19.2-ounce, high-ABV fruit-bombs can drive serious single-serve sales, and its peers have and will continue to follow. Silver lining, thy name is stovepipe!)
And the report doesn’t spell total doom for beer-flavored beer as a whole, either. While alcopop brands like The Beast Unleashed, Lipton Hard Iced Tea, and Canta Ritos dominate BWC’s innovation chart, overall growth winners in the category through the first five months of the year feature plenty of familiar sub-premium and premium lagers. In fact, there isn’t an FMB/FSB in the top five gainers by dollars or volume, and only three in the top 10 — a fairly shocking feat when you consider the broad bases that legacy lines like Miller Lite, Busch Light, and Michelob Ultra are expanding upon.
And Modelo! Especial leads the entire category in YTD dollar growth, and is fourth overall in dollar growth, all while its parent company, Constellation Brands, has rolled out a red-hot extension under the same banner. If Modelo’s new Chelada Sandia Picante product is cannibalizing Especial sales, it isn’t showing up in sales figures just yet. “The Constellation machine is just a well-oiled machine, because it’s a lean portfolio,” says Williams. (Even leaner after spinning Funky Buddha and Four Corners back to their respective founders last month.) “They built up the trust and credibility [in the Modelo brand], and it’s well deserved.”
Of course, no discussion of the beer category’s innovation these days is complete without a check-in on the category beer is increasingly innovating against: spirits. BWC’s analysis shows High Noon’s new tequila-based product as the clear winner for brand-new brands YTD, but vodka-based variety packs from “legacy” hard seltzer brands White Claw and Truly are hitting hard, too, as is Sunny D vodka seltzer. Williams says he’ll reserve judgment to see how the latter brand cycles year-over-year, pointing out that plenty of brands have been able to capture quick momentum on the strength of novelty only to watch it dissipate by the time annual comps roll around. (Looking at you, Truly hard seltzer margaritas mix-pack.)
As for hard tea: Bojangles is BWC’s No. 18 beer category innovation of 2023 so far, but it’s hardly the only brand angling to take share from Twisted Tea. Lipton is in the mix, and NBB will likely enter the chat soon, too. Fruit-forward flavors are the order of the day, and hard tea is the “platform” of choice for brewers looking to capitalize. Not that it’ll be easy, Williams warns. “Twisted Tea’s not only got the trial [interest] but it’s got the repeat [customers.] And no one’s been able to take a serious shot at their crown.”
Optimistic Bojanglers, take note: If you come at the king, you best not miss.
🤯 Hop-ocalypse Now
We must regrettably now return our attention to Bud Light, which at publication remains the country’s best-selling beer despite macrobrewer Anheuser-Busch InBev’s best worst efforts. The brand’s sales slide slowed up some over Memorial Day Weekend, but its volume is down something like 25 percent. The drinker demographics driving this downturn are, ironically, pretty diverse. Using Numerator Insights data, Royal Bank of Canada analysts last week concluded that Bud Light is losing customers across basically every generational segment and drinker profile. RBC saw the biggest lapses among 55+-year-old White/Caucasian customers who consume a lot of TV and radio and have lower-than-average education rates and household incomes. Making a joke here feels gross, let’s just move on!
Sierra Nevada Brewing Co.’s indefatigable founder Ken Grossman is retaking the helm until the firm finds a permanent replacement for retiring CEO Jeff White… Another bloodless transition of craft brewing power as Uinta’s head honcho Jeremy Ragonese hands the reins to sales VP Noah Brown… Cigar City Brewing Co.’s stalwart Jai Alai was the only beer in Untappd’s draft pricing index to actually go down (1 cent!) since last year…
📉 …and downs
ABI mishandled and/or failed to safeguard the handling of ammonia at multiple breweries, for which it owes the Environmental Protection Agency $537,000… Yes, inflation has hiked beer prices this year, but zoom out and it looks much, much worse… Drinkers are rejecting tradition (4– and 6-packs) and embracing modernity (12-packs and singles)…
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