Beer is going through an evolution. The field is more varied than ever before, and consumers more restless and less loyal. It’s not clear who is leading whom: the consumers who demand ever more variety, or the brewers who present ever more options.

For certain, the beer industry is nowhere near the monolith it once was. Its various segments—differentiated by price, style, scale, image or place of origin—have fared differently. The three major categories (light beer, super premium and premium, and popular) have all lost market share, according to data from the Beverage Information Group, the research unit of Cheers’ parent company. Light beer lost 4.1% of its volume in 2013, and the other categories slipped by 2.2% and 2.7%, respectively. The much smaller malt liquor category fell by 3.2%

Imports as a category were nearly unchanged in 2013 from the year before. Repeating the trends of recent years, the flavored malt beverage category grew this year by 2.7%. But the standout once again was the craft beer segment, which grew by 14% (or by as much as 18% according to the Brewers Association, the trade group for craft beer).

Mainstream Domestics Stall

The traditional pale lager and light lager styles, in both their domestic and imported versions, make up close to 85% of all beers sold in the U.S. The 10 top-selling brands, all examples of these two styles, comprise 60% of all beer sold here. And yet the domestic brands in particular, as huge as they are, seem to be powered by inertia, not enthusiasm. With few exceptions, the volume trend is down for most brands.

Volume declines in beer overall are due almost entirely to losses to these two dominating styles. According to David Almeida, vice president, sales at Anheuser-Busch In-Bev, “the industry has been hit by a number of factors in recent years, including weather, the economy and unemployment.”

At MillerCoors, media relations manager Cat Corrigan takes a different view, noting that “volume declines are a result of increased competition from wine and spirits.”

But Dan Wandel, principal in the client insights group with market research firm IRI, thinks that “it’s not any one cause here—there are multiple things at play. Number one, since the recession, I don’t know that the domestic premium and sub-premium drinkers are buying as much as they used to. There’s a lot of economic and unemployment factors at play there.”

But, he adds, there are “inroads that the spirits category continues to make at the expense of beer, and wine to an extent as well. Those two categories continue to do quite well, and outpace the beer category sales trends.”

What to make of light beer? Light brands still make up roughly half of the beer purchased in the U.S., as they have for several years, dwarfing the premium category by three and a half times. Of the six light beers among the top-10 sellers, five lost ground, and only Busch Light grew in volume during 2013.

Despite slipping numbers, Bud Light still owns the light-beer category. Losses of 4.1% in 2013 can’t be encouraging, but it will take a long time to erode the brand’s lead. Coors Light, which enjoyed growth in 2012, fell by 2%, but still retained its position as the number-two seller. And Miller Lite slipped by 7.6%, despite a return to its original can design that underscores its legacy.

Not all light beer brands did badly: outside the top 10, Michelob Ultra jumped an enviable 7.1% and Corona Light by 3%. It’s tempting to speculate that consumers regard these as a super-premium beer and an import, respectively, rather than strictly as low-calorie options.

Budweiser and Miller High Life, the only full-calorie premium domestics in the top-10 brands, fared worse than their low-cal siblings, dropping by 5.2% and a discouraging 11%.

Chasing Variety

As the traditional beer drinker has had to scale back, the industry has sought to understand its potential new consumers. The Millennials—legal drinkers aged 21-33—are variety-seekers, IRI’s Wandel says. “The loyalty of those consumers is not what it would have been years ago—that’s certainly a factor. With the abundance of choice that exists in these categories, there’s definitely a lot of interaction between beer, wine and spirits.”

Companies chase these new consumers with craft beer aesthetics, cocktail-like concoctions and orchards of changing flavors. “There is some blurring of the categories going on, with the flavors and styles that have emerged helping to promote a kind of product promiscuity, if you will,” Wandel says.

Since the launch of Bud Light Lime-a-Rita, AB In-Bev has introduced new fruit additions annually—raspberry, mango, strawberry—to these higher-alcohol, higher-priced, flavored malt beverages. “A strong, sophisticated innovations pipeline is key to growing our share and resonating with today’s Millennial consumer,” Almeida explains. “The Ritas have served as an unprecedented catalyst for category expansion. We’re capturing significant volume from outside the beer category, which is a new direction with ample room for growth and additional innovation.”

MillerCoors courts the same Millennial audience with its Redd’s franchise, introduced in 2013. Based on the continued success of Redd’s Apple and Redd’s Strawberry Ales, Redd’s debuted a new, higher-ABV apple ale, Redd’s Wicked Apple, this past August.

Importers got the memo, too. Heineken USA introduced the Latin-themed, Dutch-owned, French-brewed Desperados, “inspired by the growth of imports, craft beer and spirits.” The beverage covers all bases, incorporating lemon flavor—a nod to the popularity of fruit flavoring—and tequila barrel-aged lager—a nod to both cocktails and the craft beer rage for barrel aging. Heineken also offers “Dos-a-Rita, which combines Dos Equis Lager and Margarita flavors, and Amstel Radler, a take on a traditional German low-alcohol beverage blending lager with lemonade.

Import Status

“Imported beer” may be a useful category when it comes to licensing and legal status, and logistical concerns such as transportation and customs procedures. But the word sheds little light on the consumer’s beer-drinking experience, any more than the word “domestic” does, nor does it offer much insight for retailers.

Throwing all beer brands of foreign origin into one analytical basket only makes sense because the import category is too small to break into more reasonable sub-categories. The imported beers Pacifico and Westvleteren have as much in common with one another as Busch has with a challenging American craft like Pliny the Elder. Still, just as most domestically produced beers are of only two styles, full-calorie lager and light lager also dominate the import category.

And yet, the import badge in itself retains some of the caché left over from the days when all domestic beer was of one broad style and only imports offered variety for the curious drinker. That some sophistication still clings to the entire import category would seem to be the best explanation for American drinkers favoring imported brands over similarly styled domestics. Of the 10 top-selling imported beers, seven are mainstream lager styles, two are light beers, and only one—Guinness Stout—offers a stylistic alternative.

No brand has capitalized on this aura of sophistication as effectively as Dos Equis, whose Most Interesting Man in the World character manages to embody the essence of cool. Now in its sixth year, the ad campaign is largely credited with the Mexican pale lager’s handsome growth: 18% in 2013. Heineken USA, the brand’s import house, had less luck with its flagship Heineken brand. Despite a loss of 4%, Heineken, once the country’s leading import, holds the second position in sales.

Crown Imports, the leading beer import company and home to number-one import Corona and the other Modelo brands, is now rechristened Constellation Brands Beer Division following consolidations in 2012. Bill Hackett, president of Crown and now of the Constellation division, described the changes following the beer acquisition.

“Throughout the transition, we had to remain focused on maintaining our industry-leading momentum and couldn’t allow the commercial side of the business to become distracted. At the same time we had to quickly build out the operational side of the business.” This included a doubling of the Piedras Negras Brewery in Mexico to supply the U.S. market.

Constellation is entirely focused on Mexican beers, with the exception of Tsingtao from China. The company balances the appeal of its brands to the American Hispanic drinker with the Millennial drinker that is every producer’s holy grail.

“Our insights show that consumers’ tastes are evolving. Today’s beer drinker is more willing to trade up as they are introduced to imports and crafts with more taste,” Hackett explains. “This is important to note, because Corona Light has two times the IBU’s (International Bitterness Units) as the average domestic light, giving the brand a true taste advantage in the category.”

With the consolidation in 2012 of the Modelo imports under Constellation, A-B Inbev was out of the Mexican beer market in the U.S. The company this past summer introduced Montejo, a golden lager that is its first import from Mexico.

Craft and its Imitators

Craft beer protects its exclusivity. As a David among Goliaths, sometimes exclusivity was all that the category had. The steady growth of the craft beer category over the past decade or so has spawned a few problems, but problems that any industry should be happy to have: that of imitation and challenges to authenticity that come with enviable success.

That success means that in a survey like this one, crafty, craft-like, and craft-inspired beers have to be considered alongside the BA-sanctioned genuine article, because many consumers make no distinction.

According to Bart Watson, chief economist with the Brewers Association, craft brew grew by 18% in 2013. What’s more, he says, “not only was it strong, it was coming from an increasing number of players, which in the long run makes it more sustainable.” By the end of last year, 2,822 breweries were operating in the U.S., with 2,768 considered craft by the BA.

Eleven years ago, then-BA president Kim Jordan of New Belgium Brewing Co. threw an audacious challenge to her fellow craft brewers: Build the segment until it comprises 10% of the U.S. market. This year, with craft claiming 7.8% of the volume, the stakes have been raised to “20 by 2020”: that is, 20% by the year 2020. Watson says the goal is possible, if growth continues at the current ten-year average of 10.9%—even more so if mainstream numbers keep declining.

Among American craft breweries, Abita Brewing Co. in Louisiana is ranked number 15 by volume, according to the Brewers Association. But its reach and portfolio range is very different from the seemingly ubiquitous and cutting-edge Boston Beer, the largest craft brewer and producer of the Samuel Adams brands.

This may be changing, with Jaime Jurado recently hired as Abita’s director of brewing operations. With decades of experience, Jurado will oversee the completion of a new brewhouse, the first step in creating the infrastructure for planned growth. Jurado sees craft beer trends heading in two opposite directions: highly drinkable session styles, and the big IPAs and their ilk. Abita excels in the former.

“We’re famous for our Purple Haze and other easy-drinking beers, like our Louisiana Dark Amber and our Turbodog,” Jurado says. New developments will include “more ‘boutique-y’ beers that cater more to the specialty drinker.”

More experimental beers will always be at the fringe of craft brewing, generating excitement, but not the bulk of sales. Brooklyn Brewery is a great example, Jurado says, because 85% of their beer is still contract brewed, mainly their more commercial styles, “but it’s their 15% of unusual beers that helps to propel them.”

But if it’s the “easy-drinking” craft that pays the rent, those are also the styles that are vulnerable to appropriation by companies that are not “sanctioned” craft brewers. Blue Moon, MillerCoors’ 20 year-old wit beer, is referred to by Corrigan as “a pioneer of craft brewing in the U.S.”

A new offering from Guinness, Blonde American Lager—launching its Discovery Series of “fusion brew” beers—makes a point of naming the hop varieties used, details more typical of a craft-beer promotion. And A-B InBev looks to its expanding Shock Top family and the Goose Island and Leinenkugel brands to give cred to its own craft beer claims.

Some craft brewers take an oppositional view of Big Beer, but Jim Koch, founder of Boston Beer, is much more conciliatory. “What I’m hoping is that the mass domestic beers get their mojo back,” he says.

“Because when we all started paying attention to beer 30 or 40 years ago, the big brewers were part of the fabric of American culture, with ‘Whazzup!’ and ‘Yes I am,’ and ‘Tastes great, less filling.’ I certainly hope that they’re able to reclaim that position. It would be good for the entire beer industry.”