We calculated our annual Beer Growth Brands Awards a bit differently in 2019. We polled our pool of beverage alcohol retailers, bar and restaurant operators and other industry professionals about the beer brands and companies that sold the best for them in 2018.
The responses we received helped paint a picture of the brews that many consumers most prefer now. They also aid us in defining the current beer category as a whole.
Macro Still Means Dollars
When we asked about the top-selling beers, not surprisingly the vast majority of answers were macro brews. Although many of these brands continue to shrink annually, these SKUs by far still dominate the overall beer category.
Light beers comprised 42.6% of the overall U.S. beer market in 2018, according to the Beverage Information Group, Cheers’ research arm. At the same time, they decreased in sales by 3.6%, to 1.18 billion 2.25-gallon cases. Premium and superpremium macro brands currently own 12.8% of the beer market (compared with craft beer’s 11.6% market share), but they fell 3.6% to 354 million cases in 2018.
Despite the steady decline, these old reliables are far from the danger zone. Ceding one point of market share annually (last year, light beers, most of which are lagers, represented 43.6% of overall beer) is hardly a free fall. And these brands do have quite a bit of history on their side.
“Pabst Blue Ribbon has been part of the fabric of America for almost two centuries,” says Justin Medcraft, marketing director for Pabst Blue Ribbon. “The product has always been high quality and affordable, and consumers from all walks of life recognize this.”
“We’re really proud of our past, but as a brand we can’t get lost in it; we have to keep moving forward and innovating, while never losing sight of producing a quality product,” Medcraft adds.
In terms of innovation, many of these global companies have recently invested in craft offerings or breweries, while also launching brands in the burgeoning category below.
FMBs Break Out
The beer category that’s currently growing the most is flavored malt beverages. Led by Growth Brand winners White Claw, Bon & Viv Spiked Seltzer, Truly and Smirnoff Spiked, these hard seltzers helped fuel FMB sales to a 5.1% increase in 2018, reaching 118 million cases.
These easy-drinking products have a wide demographic net, capturing men and women of all ages and backgrounds. What’s their secret?
They tap into a number of current consumer trends. “The hard seltzer category is definitely ‘in’ right now, as we see the ‘better for me’ and convenience trends continue to rise, especially with millennial consumers,” explains Krista Kiisk, brand director, flavored malt beverages at Diageo. “Smirnoff Seltzer taps into both of those trends with low-calorie, low-carb options that are ready-to-drink.”
Smirnoff earned another Growth Brand with a successful new product: Smirnoff Ice Margarita. The fast-growing FMB reflects the popular, ready-to-drink-cocktail aspect of this booming category.
“Smirnoff Ice created a delicious, ready-to-drink version of this fan favorite so that people could enjoy the Margarita that they love away from the bar, without the fuss of having to create it from scratch,” Kiisk says. “The convenience paired with the delicious taste of the liquid made it appealing to consumers and has helped drive its success.”
Imports giant Corona got in on the FMB trend in 2019 with the New Product Growth Brand-winning Corona Refresca.
“This was the first non-beer FMB in the brand’s history, and it enables flavor-seeking consumers the relaxation and reward they are used to with Corona, but through non-beer occasions,” says Maggie Bowman, senior director of communications for the beer division at Constellation Brands. “It also attracts new consumers to the franchise, generating incremental sales opportunities at retail.”
Imported Beers Boom
Despite the threat of U.S. tariffs against foreign countries, imported beers had another strong performance in America last year. The category was up 3.6% for 487 million cases.
At the front of this charge is Constellation Brands. The company’s portfolio boasts multiple Growth Brands Winners, including from top-performing brands Corona and Modelo.
“A number of big cultural shifts have had a positive impact on Constellation’s core portfolio,” says Bowman. “Consumer preference continues to shift to the high-end, with consumers valuing quality over quantity. They may drink fewer drinks, but they are drinking ‘better’ drinks. Millennials are at the forefront of this premiumization trend, as they pursue Insta-worthy, quality experiences.”
What’s more, Bowman says, “the changing Hispanic demographics in the U.S.—including growth of the Hispanic population and accompanying purchasing power—has benefitted Mexican imports and has had an effect on broader culture overall.”
Chuck Boddy, associate brand manager for Heineken, agrees. “Import beer occasions are shifting to align with mainstream domestic beer drinking occasions, as consumers are looking to trade up to more premium options,” he says. “Heineken over-indexes within African Americans, Asians and Hispanic ethnicities, as well as within the Millennial age segment” age 21 to 35.
Elsewhere in the Heineken USA portfolio, Dos Equis also looks to lure drinkers away from American macro brands. “Imported beers maintain the refreshment element of domestic beers, but with higher quality,” says Hannah Dray, Dos Equis brand director.
But there’s no denying the primary market. “While Dos Equis enjoys a wide consumer fan base, our core consumption comes from a mix of general market and Latinos [age] 25 to 34, both male and female,” Dray adds. “We continue to grow our female and Latino base as we put more focus on these audiences and produce more relevant messaging and targeted promotions.”
Top Craft Breweries
Growth has slowed for craft beer, from the double-digit gains during the craze some years ago to single-digit increases. Craft beer was up 4% in 2018 to reach 322 million cases and 11.6% market share.
These numbers represent a category that has reached the mature phase of its growth, says Mike Stevens, cofounder of Founders Brewing Co. As craft beer turns a new page in its story, which larger/regional breweries are the best in the U.S.?
Initially known for its unconventional beers, Dogfish Head has grown in recent years by shrewdly capturing or setting broader consumer trends.
For instance, the company launched Sea Quench, a sour beer brewed with black limes and sea salt, in 2016. Sea Quench is now “the best-selling sour beer in America, and sour beers are now the fastest-growing beer style in America, on a percentage basis,” says Dogfish Head founder/president Sam Calagione.
Tapping into the “better for you” trend that’s sweeping through all food and drink, Dogfish Head’s low-cal IPA Slightly Mighty (95 calories per 12-oz.—the same as Michelob Ultra) “is growing like gangbusters for us,” Calagione adds. The Milton, DE-based Dogfish Head merged with Boston Beer Co. earlier this year.
Grand Rapids, MI-based Founders is another old-school craft brewery that continues to excel. (It was announced in August that Spanish brewer Mahou San Miguel agreed to acquire a controlling stake in Founders.) Stevens believes that Founders’ success in the present and future relies on branding.
“Craft breweries have always been good at creating beers, but I’d argue they’ve never been good at branding,” he says. “It’s time now for the craft industry to move into that phase of maturity. We need to reach out and emotionally connect with consumers. We need to represent something more than the next IPA with a crazy name.”
Mayflower Brewing Co. in Plymouth, MA, uses only traditional brewing methods and ingredients but also has a keen eye for modern consumer preferences. “We have evolved our portfolio to include more modern versions of pale ales and IPAs, as well as a few sought-after styles, like sours and higher-ABV beers,” says Drew Brosseau, founder/president.
While Mayflower’s original English-style IPA remains its biggest seller, the company has expanded through several new year-round SKUs: New World IPA, an American IPA brewed with Citra, Mosaic and El Dorado hops; and Love & Wrestling, a hazy New England Double IPA.
“As much as the beers, however, the switch in our entire lineup to 16-oz. cans—the preferred format in the New England area—has boosted sales across the board,” Brosseau adds.
Karbach Brewing Co. in Houston, TX, is another big craft brewery with a handle on what consumers want. “We were the first Texas brewery to package bourbon beer and after that, the trend took off,” says brand manager David Graham. “Another topic we’ve been paying attention to is the health movement. This resulted in the creation of Game Changer, which is our new low-ABV brew.”
While broad consumer trends are critical, so too is reflecting what’s regional. “Our biggest beer this year is Crawford Bock,” says Graham. The name references the famous Crawford Boxes seating section in Minute Maid Park, home field for the Houston Astros.
Kalamazoo, MI-based Bell’s Brewery first opened in 1985. Thirty-five years later, one of the keys remains quality.
“Our continued success I think is a reflection on our quality focus in making beer,” says Matt Moberly, vice president of sales and marketing. “That continues to drive us as a brewery, with the manifestation results being the beer that goes into the bottle.”
This includes an unusually precise and streamlined distribution model that results in some of the freshest beer on retail shelves—even when those retailers are several states and many miles away.
“In many ways, your relevancy in the marketplace is your freshness,” Moberly adds, “especially the farther you get away from your own local marketplace.” He’s seen Bell’s cans on the same shelf as self-distributed local brands, with Bell’s being fresher, because the self-distributors focus more on selling through batches as efficiently—rather than freshness.
Hall of Fame
Four brands earned entry into our Beer Growth Brands Hall of Fame this year. To realize that achievement, products must have previously received at least nine prior Growth Brands Awards, while also winning in 2019. This accomplishment reflects a long track record of successful sales growth for these industry-defining brands.
The Beer Growth Brands Hall of Fame welcomes Coors Light, Bud Light, Heineken and New Belgium Fat Tire Amber Ale. Each has captured and maintained consumer loyalty, even with today’s fickle purchasing patterns and up-and-down beer market.
Heineken, for one, sees itself as a “healthier” alternative as the craft beer craze slows down.
“Consumers are becoming more health-conscious and are looking for ‘sessionable’ alternatives to the high-ABV craft beer options and for premium beer options that are priced reasonably,” explains Boddy. “The Heineken franchise is positioned well to benefit from these emerging preferences with the launch of Heineken 0.0, a non-alcohol, 69-calorie proposition, as well as with Heineken Original, a quality lager that isn’t as heavy as most craft beers.”
Summer programming for Heineken focused on sports partnerships with UEFA Champions League and Major League Soccer. Attention now turns to the Heineken Holiday campaign, and follow the new brand belief, “If you look at life with a fresh perspective, you will enjoy it more,” says Boddy.