Microbrews Slowing Down While Craft Spirits Grow

Apr 25, 2019
Originally published on April 26, 2019 4:19 pm

This might surprise you, but Americans seem to be losing their taste for beer. Even the dizzy growth we've seen in the microbrew industry is slowing down. Craft beer producers are trying to buck this trend, which involves figuring out how to be competitive with each other as well as the newer kid on the block: craft spirits.

Mike Moser's job is to know what people are drinking, and what they aren't.

"People are generally drinking a lot better now," he said. "They're not drinking cheap for the most part."

Moser is with the Wyoming State Liquor Association.

"Where the real drop is in premium beer categories—Budweiser, Coors, et cetera—they've been down every year for a while," he said.

In fact, according to the National Beer Wholesalers Association, premium beers are down by almost 10 percent in sales since 2010. And Moser said brand loyalty has also changed.

"In my father's era, or my grandfather's era, they started with a Schlitz in their hand and a bottle of Ten High whiskey and they died with it in their hand," he said. "That's all they drank."

Millenials are different, Moser said. Younger generations might have favorite brands, but they also want to try out what's new. And when it comes to craft beer there's a lot to choose from.

"If everybody's got an IPA, why is your IPA going to catch the consumer's eye?" Moser asked.

At WeldWerks brewing in Greeley, Colorado, they're thinking about this all the time. Steve Froom is one of their tap room servers. He poured a glass of a murky looking brew.

"This beer we released on our first anniversary, and since then it has launched us on a trajectory upwards," he said, as I took a sip. "It's almost like adult Kool-Aid."

It's called Juicy Bits and it's a hazy or New England Style IPA, which means its flavor is softer and more citrusy. This style of beer has blown up over the last year or so, and this particular one has a reputation for being really delicious among beer drinkers. And Froom said those beer drinkers are coming from all over to try it.

"Within the first three months of me working here, I probably saw 45 plus of the different state IDs," he said.

But WeldWerks still has their work cut out for them. Like a lot of places, you can't walk a few city blocks in the Rocky Mountains without running into a brewery. So on top of tasting good, catchy names and labels, producers are thinking about how their product is perceived. Eric Krszjzaniek is a professor in the Marketing Department at the University of Wyoming.

"Studies have shown that people are willing to pay more, they are willing to pay a premium, even on everyday products such as beer," he said, "if that product is perceived as being good to its employees as well the environment."

In the beer world, Krszjzaniek said this employee-centered approach was pioneered by the Colorado-based New Belgium Brewery, the maker of beers like Fat Tire and Voodoo Ranger. And it worked for them.

"I think you can't separate a company's culture from how it's perceived in the marketplace. You have incredibly educated consumers," Krszjzaniek said.

Neighboring breweries like WeldWerks paid attention. For instance, all Weldwerks full-time employees get health insurance, paid time off and continued education. It also followed New Belgium's lead in distributing its beer outside of the local market. Still, despite all these efforts, craft brewing seems to be slowing down. Meanwhile, crafted distilled spirits are having a moment.

"Craft spirits right now are pretty much following the same trajectory that craft beer did," said Chad Pollock. He and his family own and operate Backwards Distilling in Casper, Wyoming.

"The craft beer market, I think it took some people by surprise, so I think with craft spirits, people are hoping on a little quicker," he said. Last year the number of active craft distilleries in the U.S. grew by over 15 percent.

"I think the most fun part about craft distilling is coming up in the next five years when people start making interesting products," he said. That means more than just your standard vodka, gin or whiskey.

"And that's probably going to be the future of standing out, is making things that are kind of strange," Pollock said. Some that are already in stores are sour cherry gin, smoky tequilla, or cinnamon moonshine.

For Mike Moser, he said he sees current trends carrying on.

"Well, I'll look in my liquor crystal ball," he said. What he sees are beer sales continuing to dip and spirits continuing to rise. Also, the beverage that comes out on top might not even give you a buzz.

"A huge market that is growing is non-alcoholic," said Moser. "I have a number of friends, I'm sure you have a number of friends that don't drink alcohol, but like to go to bars because bars are fun."

Either way, Moser said it's a good time to be a customer, just maybe one without the beer.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City and KRCC and KUNC in Colorado.

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