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Craft beer has quietly undergone the repositioning of itself over the past two pandemic-infused years. The transition is taking craft beer from the guise of purposefully exploding smoothie beers and slime beer back to emphasizing the fundamentals of what craft beer was in the 1990s. And thank God — it’s about time beer started tasting like beer again.
I’ve had something of a front-row seat to all this, and my relationship with craft beer has gone through almost as tumultuous an evolution as the craft beer itself. I started as one of the first nanobrewers in the country back in 2007 and evolved through working as an M&A advisor, operating partner and consultant to finally becoming a steward of Anderson Valley Brewing Company. The craft beer industry is experiencing unique changes in 2022, which leaders in the industry should expect to continue.
Recent Craft Beer History Before Covid-19
The market for craft beer was moving from an early-adolescent stage to maturity — a market that was high-growth with fewer breweries moving into a market that was still high-growth but with increasing numbers of breweries. Following the rocket-hot growth trends of the early to mid-2010s, the craft beer market saw the number of craft breweries grow dramatically with more people seeing craft beer as a viable business opportunity. It was during this time, as the beer aisle was getting more crowded, that breweries started to push more and more aggressively for attention and label design, and adjunct and ingredient use and beer styles started evolving. While slow at first, as more breweries adopted these approaches the effect compounded to the point where it became almost logarithmic and the beer aisle started resembling a technicolor billboard of near-indecipherable products.
March 2020
Then came March 2020 with the advent of Covid-19, which matured the market and fast. This trend is natural — and healthy under normal circumstances — and was already happening with steady but slow progress. March 2020 was not “normal” and instead of this trend manifesting gradually, it seemed to happen overnight. Consumer purchasing swung strongly toward trusted brands and beer stylesand started to resemble most of the other mature consumer product markets. The craft beer aisle found itself facing a very different consumer.
A growing consumer base will result in overall consumer preferences “regressing to the mean” or moderating. While the explosion of people buying and enjoying craft beer has the effect of educating consumers about more flavorful beer and stretching their expectations and preferences, it also influences the breweries as the overall craft beer consumer archetype moderates. At the onset of the pandemic, craft beer was dealing with a consumer base that was more risk-averse than they were previously, more informed (i.e., less forgiving of poorly made beer), and in a lot of ways more mainstream in their preferences. Consumers seemingly overnight pivoted to preferring tried-and-true and familiar products over the relentless (and reckless) innovation that some breweries based their entire existence on.
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What to Look for in 2022
Based on my experience in leading a craft brewing company, here are two fundamental trends I expect we’ll likely see develop in 2022 and beyond:
1. Beer Styles — the Return of the West Coast IPA
As breweries digest these dynamics and get busy launching their 2022 programs, the most interesting trend to watch from my perspective (because it is likely to be the most long-lasting) is a renewed focus on breweries producing and promoting their “flagship” beers.
Hip, young breweries that made it a point of pride to never brew the same beer twice saw beers like New Belgium’s Fat Tire and Sam Adams Boston Lager showing sales growth for the first time in what seemed like forever. This change is also being driven by the realization that continuously relying on introducing “shiny new objects” into the market is a failing prospect when competing with companies that release a squadron of new flavors backed by an enormous war chest of marketing resources.
Sensing a return to the classics, craft breweries are getting back to fundamentals, and for a lot of them that means the West Coast IPA. West Coast IPA rose to prominence in the 1990s and captured craft beer’s audacity, courage and fighting spirit in a glass. It was a joyous riot of hoppy counterpoints to industrial light lager. That spirit is the soul of craft — and a lot of brewers out there are reaching for it with new releases. I propose an expert with time on their hands create the “West Coast IPA Release Index” so those of us in the industry can all follow it in real time.
Yes, there will still be slime beers and exploding smoothies, but there will be fewer breweries relying on them as foundational revenue.
2. The Meaning of the ‘Craft’ Label Continues to Erode
A larger concept (and worthy of its own article) is the more existential impact of the fact that the definitions “craft brewery“ and “craft beer” have become entirely confused and the importance of the “craft” label has eroded. “Craft beer” has generally been defined as “beer made by a craft brewer” — and that’s where the problem is. As the industry has evolved, the old definition of a “craft brewery” as a brewery that is small and independent got muddy. Is ownership by a private equity firm with a 3-year investment harvest horizon more independent than being owned by a large brewing corporation?
In more recent years, the optics, behavior and ownership structures of some craft brewers have begun looking an awful lot like the macro-brewery brands that were such a vivid counterpoint to the craftiness of craft. This undermines the impact of calling something “craft” and has been helped along by the macros acquiring some of their own “craft” brands.
Bottom Line
It’s not clear how craft beer is going to define itself in the future, but given the trend of returning to craft beer’s roots, it will be interesting to watch how — or if — the community reclaims and reinforces the spirit and soul of what made craft beer special in the first place. One thing is clear — we will have more West Coast IPA options to sample as we watch it all happen.
