Colorado craft beer 2019: new boundaries, new challenges
As beer becomes available in grocery stores, how are local craft breweries affected?
For those of you that haven’t spent a lot of time in a grocery or convenience stores in 2019, you might be in for a surprise. Replacing cooler space once reserved for soda or water is full-strength Colorado craft beer. Gone are the days of “weak beer,” or 3.2 beer –technically known as fermented malt beverages. Today, over 1,000 grocery and convenience stores have the privilege to sell beer above 4.0 percent ABV – including many of your favorite Colorado craft beers – in addition to the 1,500 retail liquor stores currently in operation.
Much has already been said about the impact of this transition on independent liquor stores and whether this change will divert the convenience shopper from supporting local mom-and-pop stores. However, relatively little has been said about how this change impacts Colorado craft breweries. They too are primarily “mom-and-pop shops,” occupying industrial space or a warehouse in your local community. While the number of breweries and brewpubs has ballooned to over 400 in recent years – up from about 120 at the beginning of the decade – only a fraction of these breweries actually package beer that can be sold at a store.
What has this transition been like for the roughly 90 breweries that are most directly impacted? Like most questions, it depends on who you ask. It’s no surprise that mega breweries, like Anheuser-Busch InBev or MillerCoors, made it on to the shelves at all the stores now stocking full-strength beer. Surprisingly, though, there has also been a commitment by many retailers to sell local Colorado beer, sometimes focusing on the hyper-local breweries that exist in a region. Few craft breweries have been asked to overextend themselves and produce more beer than they physically can, though it’s unsure what staffing requests and growth they may have in the future.
Our analysis indicates that, in one grocery store chain, true Colorado craft beer (defined by the Colorado Brewers Guild as an independent craft brewery that produces less than two million barrels of beer a year or is not affiliated with a conglomerate producing more than two million barrels of beer a year) occupies over 20 percent of dedicated shelf space. In addition, purchase data at some stores indicates that Colorado craft beer sales approaches almost 50 percent of revenue from beer sales.
We have also received anecdotes of some liquor stores, especially those near a grocery or convenience store, receiving less traffic as a result of this change. Some of these stores, however, have taken the opportunity to capitalize on this transition by highlighting craft beers that simply cannot be purchased at a grocery or convenience store, like a seasonal beer or a beer too rare to be included in a grocery or convenience store set.
The bottom line is that it is simply too early to tell what the true impact of this transition is on Colorado’s craft breweries. However, with novel interest from potentially new buyers at grocery and convenience stores and with liquor stores specializing in brands that may have been overlooked previously, we are hopeful that our craft brewers will continue to reach their current customers and gain a few new ones along the way.
About Andres Gil Zaldana: Andres Gil Zaldana is the executive director of the Colorado Brewer's Guild (CBG). The CBG's goal is protecting and promoting a diverse Colorado craft beer industry. Zaldana works with local brewers to address their business, commercial, regulatory and community needs. For more information about the Colorado Brewer's Guild, visit www.coloradobeer.org.