McGillin’s Olde Ale House has survived through not one, but two pandemics, and continues to thrive. Founded in 1860, McGillin’s is the oldest continuously operating tavern in Philadelphia and one of the oldest in the country.
The Ale House offers 29 craft beers on tap and specializes in regional microbreweries. “Although we have definitely seen a shift to spirits, we continue to sell a good deal of draft beer,” says Christopher Mullins, Jr., who runs McGillin’s with his parents.
Likewise the beer category is a survivor, rising to new challenges and reinventing itself with new avenues of innovation, such as expanding beer styles, malt beverages (aka hard seltzers) and low-/no-alcohol products. This burst of new product proliferation helps keep beer top of mind.
It hasn’t been easy. Over the past few years, sales have been flat to down, as beer gradually ceded market share to spirits and wine. Despite this, interest in beer remains strong, but there is more competition for consumer beverage dollars.
Beer industry mergers and acquisitions were rife, while new breweries opened at a rapid pace, crowding the market. Consumers began purchasing directly from breweries and craft six-packs were showing up on shelves at supermarkets, convenience stores and drugstore chains.
Beverage centers and beer retailers began closing. “The beer market was trying to figure itself out,” says Jason Daniels, chief operating officer of Half Time Beverage, a Mamaroneck, NY-based retailer.
Then came Covid. Under pandemic restrictions, bars and restaurants shuttered. House-bound consumers stocked up on essentials and beer consumption rose.
“During Covid, everyone was trapped inside their dwellings and wanted to drink,” says Daniels. “Sales skyrocketed. Now things are starting to settle out a bit.”
Pandemic restrictions boosted beer sales off-trade at the expense of on-premise; now, that seesaw is shifting back as bars and restaurants reopen and consumers cautiously reemerge. And they are interested in trying new things.
“Beer still occupies about the same percentage of sales as before the pandemic,” says Ian Hanson, beer manager for the Denver-based retailer Applejack Wine & Spirits. “A more noticeable change has come in the categories sold.”
While some operators focus on attracting a cocktail crowd, a great beer selection is still imperative. Not only does it negate the veto-vote of the beer lovers in the crowd, but astute and unusual suds choices rather than the usual suspects are also a definite advantage.
Of course, beer-centric restaurant concepts have an advantage. “Since we’re a brewpub, we sell five times more beer than wine, and liquor sales usually only total half as much as beer sales depending on the week,” says Tauren Johnston, head brewer for the Rock Bottom Restaurant & Brewery in Centennial, CO.
Johnston is busy brewing up small batches of styles ranging from Kolsch and blonde ales, pilsners and porters, sours and seasonals, and of, course, IPAs. “Between everything in bottles, cans and on draft, my location fluctuates between 16 to 20 options,” says the brewer. The brewpub chain currently operates 19 units.
“We are seeing demand for all ranges of beer styles, which is great!” says Aaron Peck, beer manager for The Publican restaurant in Chicago. The Publican’s extensive beer list specializes in Belgian, Trappist and German selections, but ranges to the U.K. and Iceland as well as local brews. 10 beers are available on tap.
“Krombacher Pilsner is our number-one selling beer; we are selling more Krombacher than before Covid — more than ever actually!” says Peck. “What I’ve noticed lately is more calls for imports and some classics. I love seeing a Kolsch, Trappist, or Berliner Weiss go out to a table.”
One of beer’s big advantages over wine and spirits is the ability to create new products and invent new styles quickly. After all, wine waits for the harvest, and spirits often need to mature in barrel or stainless-steel before release. Brewers, however, can roll out a new batch in a matter of days. Often with inventive results.
Take Wynkoop Brewing’s recent IPA release, for example. Named On Belay (a rock climbing term) Hazy IPA, the ale incorporates climbing chalk normally used to improve climbers’ grip on granite, but in this case adds a “fluffy mouthfeel,” according to the Denver-based brewer.
It’s not as strange as it sounds — traditionally, chalk is used to adjust brewing water minerality — but it’s certainly an intriguing marketing tactic. Wynkoop also brews a Rocky Mountain Oyster Stout with a special ingredient: bull testicles.
Perhaps with the aim of creating crossover appeal for wine drinkers, some brewers have experimented with beer-wine hybrids. Brooklyn brewer Wild East, for example, adds pinot grigio juice to its version of Berliner Weisse, Turnstyle Venezia. And Goodlife Brewing has added local Oregon pinot noir juice to its golden ale, refermenting with Brettanomyces yeast, and aging in pinot noir wine barrels.
Is the IPA Still King?
Hop-forward India Pale Ales are ubiquitous, crowding beer lists and accounting for many retail skus. One reason for the style’s continued popularity is that brewers are ringing ever-new variations on the IPA: British, West Coast, Hazy NEIPA, Double, Triple, Imperial, DDH, Milkshake, Black, Brut, Rye, Session, Fruit, Sour — and whatever they dream up tomorrow.
Indeed, the Brewers Association recently revamped its beer style guide to include New Zealand-style IPA. But are consumers getting tired of huge hop intakes and looking for something easy to drink? Yes, say many in the industry.
“The IPA has an ever-expanding repertoire of different styles. And as a group, IPA is still king,” concedes Johnston at Rock Bottom Restaurant & Brewery. But, she adds, “Lighter ales, lagers and sours always trend up during the warmer months of the year, because they’re so satisfying on hot days, and the lower ABV extends day-parties into the night.”
“IPAs are still the hottest-selling craft beers, but pilsner is a heavy hitter as well,” says John Stanton, assistant general manager of Henley, a modern American brasserie in Nashville. Six, mostly local, brews are on tap, supplemented by 10 bottled selections. “Nothing Fancy, a pilsner from [Nashville-based] New Heights Brewing, is especially popular,” says Stanton.
“We sell more IPAs than any other craft — whether it’s a Hazy, Imperial, Session — they all do well and are hard to keep up with,” says Mullins at McGillin’s.
“IPA is still king of the hill,” says Daniels. “But there are so many styles now. Then there’s the crowd that’s burnt-out, drinking rainbow cookie yadda yadda and other wild stuff that now just wants a really good, well-made pilsner or lager.”
At Applejack, Hanson notes the boom in Hazy/New England IPAs. In summer, lighter and fruitier styles are popular, such as shandies, fruit beers, fruited sours and so on. “As the weather cools, pastry stouts and other darker and barrel-aged styles will definitely maintain their popularity,” he adds.
In 2021 to date, the combined IPA subcategories on Drizly account for 17% of beer share, according to Ana Tantum, B2B brand marketing manager for the ecommerce company. IPA is the third-largest beer subcategory, after hard seltzer (23% share) and light lager (19% share). Tantum notes that IPA share is down slightly from 18% during the same time period in 2020.
Contenders Waiting in the Wings
Is there any beer style that can supplant IPAs’ popularity? Many people would vote lagers, and put their money where their mouth is. After all, the three top-selling beer brands globally are all lagers.
“My crystal ball is not always right but if I were to predict, I think people are becoming more interested in cleaner, approachable styles, like pilsners and lagers,” says Daniels.
“McGillin’s House Lager outsells our House Ale 3 to 1!” says Mullins. (The tavern’s house lager, real ale and 1850 IPA are exclusive to McGillin’s in partnership with Troegs Brewery.) Mullins also sees potential in sour beers, now offering two or three on tap at any given time. “I think pilsners have a shot at being the next big thing Ñ quaffable, easy to drink and you can enjoy many at one sitting!”
Belgian Abbey style beers trend in warmer summer months, suggests Stanton at Henley. “Those beers can be light and refreshing, but with interesting complexity and subtle fruit notes owing to the different strains of yeast. He notes positive guest feedback about Wildwood Flower, a Belgian-style honey blonde, from Tennessee Brew Works.
“There have been a few ‘new’ styles (Brut IPAs come to mind) in the past couple of years that breweries tried to get behind, but weren’t able to gain or maintain the fervor of hazy IPAs,” says Hanson, noting that beer trends seem to pendulum. “Several years ago, bitter dank IPAs and seriously funky sours were king. Tastes then shifted to hazy, juicy IPAs, pastry stouts and tart and fruity-yet-approachable sours. The pendulum may swing back as drinkers recall old familiar styles.”
Low/No-ABV is a Go
Low- and no-alcohol beers have been around for ages, getting little trial from consumers, and often derided as watery or not tasting like “real” beer. But that is changing, thanks to a confluence of factors, including increasing interest in health consciousness and a craft approach to no- and low-ABV products.
Heineken’s 0.0 led the current no-ABV charge, and Suntory now offers All-Free. Dogfish Head recently launched Lemon Quest non-alcoholic brew, and Brooklyn Brewery released Special Effects IPA, also non-alcoholic, to name just a few. Partake Brewing, a craft producer specializing in no-ABV, recently greatly expanded its distribution network.
“There has been a noticeable increase in non-alcoholic sales, though it is tough to say if that is due to a change in preference or just to the more numerous offerings now,” says Hanson. “Non-alcohol products across the board have become quite popular, with numerous ‘artisan’ offerings coming to market. Consumers have responded favorably, and so I anticipate that category will continue to grow.”
The fastest-growing beer subcategories in 2021 to date on Drizly are non-alcoholic beer, hard kombucha and hard iced tea, “Our 2021 Consumer Report, found that health factors are a key decision-maker consumers consider when making alcohol purchases Ñ a trend which can be seen across our fastest-growing beer subcategories, all of which market health benefits like lower-calorie, lower-sugar, lower/ no ABV and more,” says Tantum.
The Publican currently offers a Krombacher Pils NA and Big Drop Pale Ale. “When presented with those options, guests are usually excited and surprised,” says Peck. “Often when they go with the Pale Ale, they end up having several.”
On the Light Side
Producers have been refocusing light beers, aiming at the health-conscious crowd. Yuengling recently reformulated its light entry as Yuengling Light Lager 99, with just 99 calories and 3.2 carbs per serving. Molson Coors recently launched Coors Pure, a USDA-certified organic light beer, ringing in at 92 calories. And parlaying the success of its All Day IPA, Founders released a sessionable (4.6%) wheat version, called All Day Vacay.
“As the low-cal preference continues to grow amongst beer drinkers, I think light lagers will continue to hit big,” says Johnston at Rock Bottom, because they satisfy the desire for a full-flavored beer that is both low-cal and low-ABV.
Hard seltzers also sell briskly at Rock Bottom, he notes, but not as well as when they first debuted. “We definitely sell more seltzer to the younger crowd of drinkers. They’re another great, gluten-free option for cider drinkers or people who don’t drink beer.”
Not everyone is on board the low/no train. “We get occasional requests for low-/no-alcohol, but not to the extent we were seeing pre-pandemic,” says Stanton. “I guess people need a stiff drink now more than ever!”
“From my perspective, low-calorie and low-ABV beers have not had a great year,” says retailer Daniels. “They haven’t seen as much growth as I would have thought. People are so stressed out they want as much alcohol as possible.”
Spreading the Word
During the shutdown, take-away sales of beverage alcohol was a lifeline for bars and restaurants during Covid. Most operators continue to rely on these add-on sales even as customers return to their seats on-premise.
Online offerings like zoom tastings and digital educational programs allow retailers and restaurants to keep engaged with customers. While brewers offer stuck-at-home beer lovers a chance to explore with virtual brewery tours.
Many bars, restaurants and taprooms have substituted QR codes for menus and ordering. Even bottles and cans are strutting their assets via RFID labels.
“Social media platforms have definitely changed the dynamic of promotions, as have safety measures during the pandemic,” says Hanson. “Hand-sells were put on hold last year entirely, though have resumed in a small capacity, and we still have not resumed customer samplings.” But he notes that end-cap displays are still important, especially given the high-volume nature of Applejack’s business as a way to promote deals and feature items.
“In-store merchandising is still important for sure,” agrees Daniels. Half Time is picky about allowing outsiders to put up displays and shelf talkers. “We don’t want the floor to look like a circus, and it’s important that customers have enough room to browse.”
Rock Bottom continues to incentivize with its Rock Rewards program. Members receive points for dollars spent, number of pints ordered, etc. Points and rewards are transferable across all Rock Bottom locations. “Next up are the Craft Brewer’s Conference, football season, the Great American Beer Festival and Rocktoberfest, so we have to get prepared to sell a ton of beer,” notes Johnston.
Although the future remains uncertain and unsettled, most operators are maintaining positive outlooks.
“We are looking forward to hosting more events now that restrictions have been lifted and people are getting back into society,” says Johnston.
“This year no one knew what to expect,” says Daniels. “2021 is throw our hands in the air and pray everything works out. I think holiday numbers will be insane this year as people are finally able to celebrate and send gifts. And 2022 will see a complete reshuffling of the market.”
Thomas Henry Strenk is a Brooklyn-based writer specializing in all things drinkable. Read his recent piece on The Top Sparkling Wine Trends in 2021-22.