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Redhook was not the first craft brewer in America, but it was certainly among the pioneers when it poured its first brew in Seattle in 1982, a spicy Belgian ale. And in the nearly 30 years since then, it and other craft brewers went on to find great success with fuller-bodied, more complex beers than your average Bud or Miller Lite.
Today Redhook is on the leading edge of what looks to be another trend, adding a pilsner beer to its full-time portfolio — a style more known for its refreshment than its punch. “It’s the kind of beer that you can sit back with and have friends over for a barbecue,” said Brand Manager Robert Rentsch. It also has just 5.3% alcohol by volume compared with the 5.8% of its flagship amber ale. You can “have four or five of these … and get a lot of enjoyment out of the beer and not be overstuffed,” he said.
While so much of the buzz around craft beer these days is about exotic, extreme ales — including some with soaring alcohol content — there is also a growing recognition that these blends must be balanced by easier-drinking brews. In the trade it’s called “sessionability,” which basically means you can drink more than a couple and not be stumbling drunk or so full that you’re looking for the nearest couch. And there’s a business side effect of so-called session beers: More people will drink them.
Red Hook Beer
“A lot of the breweries are coming out with really sessionable beers … because I think they are recognizing that if they want to grow their share, if they do want to double it or triple it, they are going to have to make those ‘bridgeway’ beers to bring more drinkers into the fold,” said Jennifer Litz, editor of Craft Business Daily.
Comprising nearly 2,000 mostly mom-and-pop brewers, the craft industry is a small portion of the $101 billion U.S. beer industry, capturing 7.6% of all dollars, according to the Brewers Association, a craft trade group that defines craft brewers as making 6 million barrels or less a year. (By contrast, Bud Light alone accounts for more than 40 million barrels.) But craft is beer’s fastest-growing segment, with dollar sales up 12% in 2010, compared with an overall industry decline of roughly 1%, according to the Brewers Association.
There is no single style that defines craft. Top sellers have moderate levels of alcohol, including Sierra Nevada Pale Ale (5.6% alcohol by volume), Sam Adams Boston Lager (4.9% ABV), and New Belgium Fat Tire (5.2% ABV), but still more than the dominant U.S. beers, Anheuser-Busch’s Bud Light (4.2% ABV), and Coors Light (4.2%), which is MillerCoors’ top brand. In recent years, crafts have pushed the alcohol envelope with new offerings such as Flying Dog Brewery’s “Raging Bitch,” a Belgian-style IPA at 8.3% ABV, and “Hellhound” a super-hoppy ale by Dogfish Head at 10% ABV.
Some in the industry are saying enough is enough. “There’s a myth that high-quality needs to be wrapped around high alcohol and that’s just not the case,” said Chris Lohring, an 18-year veteran of the craft industry. Mr. Lohring, who sold his brewery in Boston in 2004, recently got back in the game, launching a brewery called Notch that specializes in session beers under 4.5% ABV. The beers are sold in Massachusetts, with plans to expand to New York City.
MillerCoors Chief Marketing Officer Andy England hammered home the point that people will drink more of lower-alcohol beers to distributors at a recent meeting. He plugged Miller Lite in favor of crafts, which he called higher in price, calories and alcohol. Quoting a MillerCoors survey, he said the average mainstream light-beer drinker had 11.8 servings per week, compared with 8.5 for crafts. “The same guy who used to stay at the bar drinking premium lights all evening is kind of done after a couple of craft beers,” he said. By offering crafts, the retailer’s “intent is to make his establishment more interesting and unique. The unintended consequences of his strategy are that the product he’s touting encourages drinkers to have a couple and go home.”
Craft supporters disagree. Although crafts are more expensive, they also tend to produce higher-profit margins. And craft drinkers are typically more affluent and eat more while drinking, analysts said — in other words the type of folks you want walking into your bar. Indeed, the average craft drinker spends $60.16 per bar and restaurant check on food and drinks, compared with $44.18 for the average premium light-beer drinker, according to Nielsen.
Perhaps because of this, chain bars and restaurants are warming to crafts. A total of 1,133 craft brews appeared on the menus of 169 of the top 250 beverage-selling chains in 2010, up from 803 beers and 154 chains in 2008, according to industry consultant Technomic.
Big brewers are well aware of these trends, which is why they are seeking to carve out their own craft space: MillerCoors with its Tenth and Blake division, which markets the fast-growing Blue Moon brand (5.36% ABV) among others, and Anheuser-Bush, with its plans to buy Chicago craft brewery Goose Island for $38.8 million. (A-B already had a 32% stake of the Craft Brewers Alliance, which has a stake in Goose Island and owns Redhook.)
Still, some experts doubt craft beers will ever grow to become a real threat to big brands. “For whatever reason, Americans just aren’t particularly interested in drinking full-bodied, flavorful beers,” said beer historian Maureen Ogle, author of “Ambitious Brew: The Story of American Beer.” “There’s clearly room for craft to move. But until craft figures out how to market itself, it’s not going to move very far. I’m constantly amazed at how many people have never heard of craft beers.”
Indeed, with their small marketing budgets, craft brewers mostly rely on word-of-mouth buzz, rarely advertising to any large degree. (Boston Beer Company, which makes Sam Adams, is an exception.) Of the $1.2 billion in measured media spent on beer in 2010, 86% was by Anheuser-Busch, MillerCoors and Heineken, according to Kantar Media. “I call it the mouse that roared,” said Bruce Forsley, VP-sales and marketing for Shipyard Brewing Co. in Maine. “There’s a lot of publicity being given to brewers who are making groundbreaking styles of beer,” he said. “But ultimately,” he added, “the core market is looking for balanced, flavorful, affordable, moderate-strength, session beers.”
His company’s strategy is to still pump out big beers for hard-core enthusiasts — such as the newly released “Smashed Blueberry” beer, a Porter and Scotch Ale hybrid with 9% ABV — but balance them with lighter brews, like the forthcoming “Sea Dog Blonde Ale,” a 4.2% ABV beer he described as one level above light beer and a level below pale ale. “I think ultimately we all want to be able to sell a beer that a consumer can drink three, four, five of and still be able to get themselves home,” Mr. Forsley said.