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Tag: beer

Colorado brewers roll out lighter option

Call it the new generation of light beers: Reflecting a national trend centered around healthy living, Colorado breweries including Oskar Blues, Ska, Odell and New Belgium have begun rolling out low-calorie, low-carb brews targeted at consumers with active lifestyles.

“Both in hardcore craft drinkers and craft-curious people, the lighter option is seeing a little bit of a resurgence,” says Aaron Baker, senior marketing manager for Oskar Blues, whose new One-y IPA has 4% alcohol by volume and 100 calories per 12-ounce can, as opposed to the 6.5% ABV and 150 calories in its flagship Dale’s Pale Ale.

“We were definitely seeing calls for that [lighter option], and younger drinkers are very health-conscious,” Baker says. “That was part of the reasoning behind it, but also it was just an exciting thing to try out. We wanted to see if we could nail it.”

In a similar move, Durango’s Ska Brewing in April released Aggrolite, a 4.2% ABV IPA with 99 calories in a 12-ounce can. Ska President and co-founder Dave Thibodeau says the brewery experimented with an enzyme called glucoamylase and various combinations of aromatic hops to create a true IPA experience in a lower-alcohol beer. The brewery has seen sales of Aggrolite increase every month since its release, fueled in part by warm-weather months and the outdoor activities they facilitate.

The low-calorie IPA, in particular, is a trend that’s growing nationally, with everyone from Deschutes Brewery in Oregon to California’s Firestone Walker getting in on the buzz. In Colorado, Odell’s Good Behavior, Avery’s Pacer IPA and WeldWerks’ Fit Bits all weigh in around 4% ABV and 100 calories per can. There’s even a nonalcoholic IPA from Denver-based Grüvi, which offers a large selection of nonalcoholic beer and wine.

“If you watch the beverage alcohol market over time, every generation typically wants to drink, but they want to drink differently,” says Bart Watson, chief economist for the Brewers Association in Boulder. “So we had light beer, then you saw low-carb beers, and now we’re seeing seltzer and low-alcohol IPA and hard kombucha. Every generation’s going to want different attributes, and a low-cal IPA may be one of the things that checks the attributes of the next generation of 21-plus drinkers.”

Brewers say that unlike many other beer trends, the low-alcohol movement seems to have staying power—and it’s expanding their market reach to younger drinkers and those who used to reach for a Bud Light or Michelob Ultra. In some ways it’s the opposite of the early days of the craft-beer movement, when bigger almost always meant better.

“For years, we were being super aggressive with the ABV and making the biggest, most outrageous beer we could,” Oskar Blues’ Baker says. “But it’s a great challenge, too, to create well-crafted lighter beers. I think lower ABV is here to stay, and I think the health-conscious beer drinker is here to stay as well, and we’ll continue to look at those things and experiment with them.”

Beer in 2021 and beyond

Don’t panic–beer and the brewing industry will live on. Beer has survived many incredible challenges and it’ll survive this pandemic, too. That said, breweries that want to not only survive but to thrive on the other side will need to change and adapt.

2021 may or may not mark the end of the pandemic, but it will certainly bring additional twists and turns for breweries as they weather the current crisis and position for growth in the coming years.

As 2020 finally nears its end, here are some items to watch in 2021.

Reconfiguring On-Premise Sales

There is no denying COVID-19’s impact on on-premise sales for the alcohol beverage industry. Suppliers, including breweries, felt the impact even to their on-premise accounts. Before COVID-19 began to spread, the taproom/beer garden concept was invaluable to any new or mature brewery. It was the brewer’s interpretation of the weekend bar. However, when shutdowns began to cascade through urban and rural areas, the ability to congregate was removed.

As a result, many in the industry began to incorporate creative ways to get more product out the door. We saw an increase of larger purchases, but over infrequent time periods. Draft beer converted to bottles and cans. Breweries gained the (temporary) ability to sell its beer in to-go containers straight from the tap. We saw on-premise retailers incorporate some element of food to meet the exceptions of the governor’s executive orders to allow food service with a side of alcoholic beverage. Breweries also followed suit in incorporating a fast-casual concept, one that is likely to remain once the COVID-19 crisis is in the rearview mirror.

The rules and regulations are bound to continue changing throughout 2021 and it is important for breweries to keep close tabs on these changes.

Packaging (But Don’t Lose Track of the Beer Garden Concept–It’ll Return)

COVID-19 exposed the pressure points in the package-to-draft split for breweries. Across the board, the draft model has suffered, with a lopsided emphasis on brewers’ packaging lines. However, not all breweries had an emphasis on packaging and their distribution channels, and that was okay – so long as brewers were intentional about their own models. The industrywide impact refocused brewery owners to the business basics: managing cash flow, analyzing and leveraging profit margins, and focusing on product-to-consumer flow.

Consumers’ home bars have taken up both refrigerator and wall space, in place of bringing a casual four- or six-pack to a friend’s house. As such, it is likely that lower ABV sessionable beers will continue, and the volume each consumer drinks at home is likely less.

Increasing Direct Access to Consumers in Creative Ways

Demand for consumer consumption has increased – not necessarily in volume, but in how the product reaches the consumer. Because brewery taprooms and on-premise retailers were heavily impacted during the COVID-19 pandemic, consumers looked to deliveries and greater access in grocery stores. It is safe to assume that in 2021, the way in which consumers get their beer will continue to evolve.

Prior to 2020, the grocery store footprint wasn’t on the radar of some breweries – they were too small, it didn’t align with their sales strategy or business philosophy, or they didn’t have the appropriate distribution relationship to adequately stock product to the grocery store demand. While many brewers may continue to avoid the grocery or convenience store space, some have considered other ways to provide their product to consumers. A strategy that has gained increased attention is the direct delivery of beer to consumers out of state. For breweries that deliver beer in state, it goes without saying that it is very important to understand and comply with all of the applicable rules and regulations. For breweries that are considering direct-to-consumer delivery out of state, it is even more important to hit the brakes and speak with a professional. The network of laws and regulations related to out-of-state direct delivery of alcoholic beverages is inconsistent and complex and the costs associated with violations can be high.

Continue to Harvest Relationships (Drinks Will Be Necessary on the Other Side)

COVID-19 has exposed the vulnerabilities and the resourcefulness in relationships. This extends to supplier relationships – hop market, malt market, aluminum and bottle manufacturer, and the relationship with your distributor. It also has stress-tested brewers’ relationship with their landlords and banks.

Beginning now and into early 2021, many distributors will meet with their brewers to discuss their annual business/distribution plans and look to historical (i.e., 2020) figures. It would be a shortsighted approach for either the brewer or distributor to rely heavily on 2020’s data figures as an outlier.

For breweries that have not already done so, now is the time to closely evaluate your relationships and shore up weaknesses wherever possible. This process could include entering new relationships, exiting current relationships or a combination of the two.

Effectively Utilizing Tech

Digital commerce will likely continue the trends seen in 2020. From the revival of QR codes to pre-order options to order beer through your platform, customers have become comfortable with purchasing and having product delivered within 24-48 hours. Moreover, COVID-19 has forced those less tech-savvy to quickly adapt to technology, while the generations that automatically gravitate toward tech interfaces and easy U/X comfortably shifted to online buying.

As these trends continue, brewers should evaluate their technology and the means of using it more effectively to drive sales. In doing so, it is equally important to ensure that the use of such technology complies with all applicable regulations – going beyond the obvious, such regulations would include protecting the privacy of customer information and ensuring that your website complies with ADA requirements.

One thing we can absolutely predict is that 2021 will also contain many twists and turns. As everyone knows, vaccines are coming and we appear to be closer to the end of the pandemic than the beginning. On one hand, the rollout of vaccines should be a boost to business and hopefully allow people to socialize more – but still in a safe way.

On the other hand, the distribution of vaccines is bound to be uneven and lead to frustration as we see localized outbreaks, which may prompt governing authorities to periodically tighten restrictions on businesses. Notwithstanding the uncertainty that 2021 is bound to contain, one of the strengths of the brewing industry has always been the ability to adapt and be creative.

As the clouds continue to part in 2021, it will be very important for breweries to lean heavily on these strengths.

Craig Knobbe 01 Craig J. Knobbe, partner, is an attorney in Denver-based law firm Moye White LLP’s Brewing & Distilling team. He can be reached at [email protected].

Jessica Hunter Jessica R. Hunter, associate, is an attorney in Denver-based law firm Moye White LLP’s Brewing & Distilling team. She can be reached at [email protected].