The thing about predictions is that many of them are so damned predictable, extensions of already existing trends that finally reach critical mass. Others are completely random (did anyone see the Brut IPA coming?) but one thing’s for sure…2019 is going to be a rocky year for the beer biz.
Craft Beer Growth Will Continue To Slow
Like it or not, the decade of craft beer showing double digit growth is OVER. The industry may even be entering an era where even 3 to 5 percent growth will be looked at as a positive.
Bart Watson the Chief Economist for the Boulder-based trade organization, the Brewers Association now refers to craft beer as having entered a “more mature phase” (a polite phrase analysts sometimes use to describe an aging industry).
And while craft beer is by no means going away, it’s undeniably not the pop-cultural touchstone that it was just five years ago. Big beer festivals don’t seem as vital as they once did and craft beer in general has become more mainstream. That’s just life and the passage of time. That’s not anyone’s fault.
Consumers Will Continue To Migrate From Beer to Other Options
2019 will continue to see beer (mass-market and craft) lose ground to other alternatives such as wine spirits, recreational pot, plain old sobriety and increasing heath consciousne. And while some are blaming this migration on millennials and Gen Z, it’s a much wider concern than that.
This ongoing ‘beer exi’t will lead more breweries to diversify what they do.
There’s a reason that Dogfish Head has expanded into spirits and that Oskar Blues has introduced a new line of hard seltzers. It’s also the reason that the Brewers Association proactively updated its craft beer definition. And why the success of Boston Beer’s alternative drinks division (which soon might beer larger than its beer arm) is starting to look like genius on their part.
More Cannabis Drinks Will Enter the Market
Forget about Brut and Hazy IPAs, cannabis drinks will dominate brewing in 2019…
And with 2018’s legalization of recreational pot in Canada and more states in the US looking to make recreational marijuana legal, brewing with cannabis (both THC-infused and the non-psychoactive hemp based brews) will be one of this year’s biggest trends…
Just before Christmas Keith Villa, who developed the Blue Moon brand for MillerCoors and is now helming Ceria Brewing a company committed to developing beers that substitutes a THC high for the more traditional alcohol buzz, launched his first beer in Colorado. And Ceria has two more THC-infused beers planned to debut in 2019.
Larger craft breweries like New Belgium and SweetWater are already riding the hemp train with widely promoted new products like The Hemperor and SweetWater’s 420 Strain G13 IPA. And with the recent passage of the Farm Bill having loosened certain hemp provisions, we expect these kind of hemp beers to flourish in 2019.
More Brewery Closings and Layoffs as Craft Beer’s Growth Slows
Hardly the boldest prediction, but one that, unfortunately, is all but certain…
With more 7000 breweries currently operating in the US and hundreds more projected to join their ranks in 2019, we expect the number of brewery closings to greatly accelerate in 2019.
Draft Magazine once surveyed five owners of breweries on what lead to them to close down their operations and it was insightful. Issues like stagnant growth, the age of the brewery and distribution problems all got mentioned…
And we’ll mention another that is brutal in its simplicity…supply and demand.
Things could get particularly dicey for the nation’s larger craft breweries who, with a couple of notable exceptions, saw their fortunes continue to slow in 2018. And we expect to see further retrenchment such as the recent layoffs at Deschutes in 2019.