Beer has seemingly reached an inflection point. Perhaps more so than any other category, it has been changed by Covid-19.
Before the pandemic, craft enjoyed rapid growth, fueled by consumer experimentation and a breakout in the taproom model. Then Covid closed on-premise.
Panicking, consumers stocked up on familiar brands. No longer browsing retail aisles or hanging out at bars and taprooms, people experimented significantly less. Craft got crushed, while macro brands benefited. At-home mixology also picked up, while hard seltzer and ready-to-drink beverages spiked meteorically. Consumer preferences have changed, and have so far not reverted back to pre-Covid.
Elsewhere, the health crisis coincided with a nutritional lifestyle movement that was already booming. This drove even more consumers towards “healthier” alcoholic beverages — lighter, with lower ABV.
The category is very different now than in 2019. Our 2022 Beer Growth Brands Awards reflect the altered landscape.
RTDs and Seltzers
Among the most dominant trends from the past few years is the rapid growth of RTDs. Hardly a category even five years ago, now these products have captured consumer attention. A large reason why is premiumization. RTDs are no longer the sugary, low-quality stuff of bottom shelves.
For example: Best New Products Growth Brands Award-winner Deep Eddy Vodka & Soda.
“These spirits-based seltzer products are increasing their share of the category, and often act as a trade-up alternative to the plethora of lower-priced and malt-based options,” says Hannah Venhoff, vice president, Deep Eddy Vodka. “From a spirits perspective, vodka has a more natural integration into the canned cocktail space, given how it’s consumed, as a vodka soda or with another mixer. It is light and refreshing, like some of the most popular canned cocktails on the market.” To-date, it’s sold 124,000 cases, “almost doubling our launch year total in two months,” she adds.
First launched in July 2021, Deep Eddy’s RTDs are 4.5% ABV and 120 calories. They combine real vodka with real juice.
It’s this use of real, all-natural products that has helped spur growth for RTDs, rather than the category falling off a cliff like the pre-pandemic flashes of hard sodas and cider.
“For Deep Eddy, we are still learning about our consumers, whether they’re new to the brand or have been brand fans, and are now grabbing a more convenient solution for their drinking occasion,” says Venhoff. “There will be a lot to come in way of RTD research as new entrants and existing brands enter this space.”
Crown Royal also found success, and won a Growth Brand Award, with its new RTD line.
“Our ready-to-drink cocktails are available in four flavors: Washington Apple, Whisky & Cola, Peach Tea and Whisky Lemonade,” says Nicky Heckles, VP of Crown Royal. “Whisky Lemonade was added as a limited time offering in February 2022, delivering a light taste of lemonade with fruity notes and plenty of whisky character. The original flavors became available nationwide in February.”
The hard seltzer category remains strong, driven by High Noon and White Claw, both of which won Top Sales Driver awards. This summer, the White Claw brand has expanded its portfolio with two completely new and different offerings: White Claw Surf and White Claw REFRSHR. A White Claw spokesperson says that both of the new products give consumers a more full-flavored seltzer with exotic flavor combinations.
The consumer demographic for hard seltzer is the same right now as for tequila: everybody is buying it. The demo is everyone.
Macro Beer Mainstays
Consumers focusing more on familiar staples during Covid was naturally beneficial for bigger brands. Accordingly, Bud Light took home a bevy of Growth Brands Awards, winning for Best Activation Programs, Best Advertising & Promotion Campaigns, Top Sales Drivers and Best New Products for Bud Light Next.
Always active in marketing, Bud Light in 2022 “deepened our commitment to the state of Texas with our ‘Brewed in Texas’ campaign featuring Cooper Davis, Professional Bull Rider; Rodolfo Pizzaro, Mexican National Team Midfielder; and Teofimo Lopez, World Lightweight Champion Boxer,” says Alissa Heinerscheid, VP marketing, Bud Light.
“In May, we continued our longstanding support of the LGBTQ+ community with a new partnership with the NGLCC, the exclusive certifying body of LGBT-owned businesses.”
“Finally, Bud Light was also front and center as the presenting sponsor of the 2022 NFL Draft,” she adds. “Looking ahead, we’re excited to continue bringing fun to NFL fans as we gear up for the 22-23 season.”
This includes launching the Bud Light “Kickoff Beers’ Canthem,” a remixed NFL theme song featuring NFL superstars Travis Kelce and George Kittle “to help the brand celebrate the epic feeling of opening your first beer of the season,” Heinerscheid says.
“And what’s a better kickoff beer than our fan-favorite NFL Team Cans? Returning again for the ‘22-23 season and featuring team logos and chants, this year’s cans will be available to fans across the country.”
Adding to Anheuser-Busch’s haul, Bud Light Seltzer received a Top Sales Drivers Growth Brands Award.
“We expanded our seltzer portfolio with the introduction of Bud Light Seltzer Hard Soda,” says Steve Wolf, VP marketing, Bud Light Extensions. “This unique offering features classic soda flavors like cola, cherry cola, orange and citrus, all while having zero sugar. We’re thrilled to have debuted these products in the last year.”
Focusing on Flagship Beer
Even before the pandemic, Founders Brewing Co. had begun cutting down on SKUs to focus more on the company’s leading brand, All Day IPA. The result is a Top Sales Driver Growth Brands Awards for one of the top-selling craft beers nationally.
“The brand has succeeded thanks to a strong combination of product attributes such as being refreshing and easy-to-drink, its eye-catching and engaging packaging design, and offering a variety of pack types such as single serve plus both a small and large pack,” says Amy Miller, associate brand manager, Founders Brewing Co. “Support from our retail and accounts partners has been invaluable as well.”
Like other leading breweries that have doubled down on flagships, Founders has leaned into the popularity of All Day IPA through line extensions.
“We’re excited to continue growing the All Day Series brand family,” Miller says. “Our All Day Series line extensions have helped build brand awareness for All Day IPA. The two brands that have gained the most retail excitement are All Day Haze, a session hazy IPA, and All Day Chill Day, a session cold IPA.”
By expanding a flagship line, rather than introducing new branding, breweries cultivate loyalty among today’s consumers, who seek out familiar products.
“The packaging design for All Day IPA resonates strongly with consumers, encouraging them to write themselves into the All Day story,” Miller explains. “With each line extension release, the journey continues as our brand icon, the Woody Wagon, takes consumers to different locales.”
“The All Day Series is going to expand again in 2023 with a new summer seasonal,” she adds. “Additionally, we’ll be offering two configurations of an All Day Variety Pack, which will include beloved All Day brands alongside new offerings.”
This reflects a big shift in craft consumer behavior from even just three years ago. Back then, people wanted to drink a new beer every occasion, never repeating. Now, people adhere to familiar staples, or favorite local breweries. Brand loyalty has replaced experimentation as the dominate craft trend.
Imports Remain Strong
The pandemic has greatly hampered imports. Glass and aluminum shortages, shipping problems and factory shutdowns all played a role in limiting inventory. Despite these setbacks, however, imported beer is still extremely popular.
These brands continue to benefit from strong cross-demo appeal.
“Modelo only began running English-language ad campaigns six years ago, with these efforts driving a near 20% rise in household penetration among non-Hispanic drinkers,” says Greg Gallagher, VP, brand marketing, Modelo. “The sales data speaks for itself, but Modelo has been connecting with consumers via the Fighting Spirit campaign.”
“Of course, we also haven’t lost sight of the core Mexican and Hispanic consumer base, so we’re really just firing on all cylinders,” he adds. “Modelo Especial has a strong foundation as the leading brand in penetration rate with Hispanic consumers as well as continuing to expand in the non-Hispanic consumer base by nearly 20% in the past few years, which is more than any other beer brand in the category. Modelo had the number one share of voice in both English- and Spanish-language TV, with a large focus on live sports. Additionally, we expanded investment into digital and social media to reach an even broader audience.”
Corona Extra, which won a Growth Brand for Best Advertising & Promotion Campaigns, also tapped into a multicultural demographic.
“Consumers are connecting with Corona’s ‘La Vida Mas Fina’ or ‘The Fine Life’ mindset, which has led to the brand succeeding so well in the past year,” says Alex Schultz, VP, brand marketing, Corona. “Our ads featuring Snoop Dogg have really resonated with the Corona drinker as well as invited new fans onto our beach.”
“The brand is also focused on ensuring we’re at the center of culture and continuing to be part of the cultural conversations we see happening every day,” Schultz adds. “Last summer, we saw consumers creating the ‘Corona sunrise’ cocktail, so we joined in on the fun by creating on-premise tools to help share the drink in bars and restaurants and worked with influencers to showcase the trend even more.”
Corona also found success at live sporting events, partnering with teams like the Los Angeles Rams, Miami Heat and San Francisco Giants.
Top Sales Driver Dos Equis has taken advantage of category growth by innovating.
“In the last two years alone, Dos Equis has doubled the size of its portfolio with six new products, each of which represents the brand’s unique take on classic beverages,” says Ligia Patrocinio, senior brand director, Dos Equis. “Dos Equis Lime & Salt and Dos Equis Ranch Water brought younger, Hispanics and female consumers to the franchise, and also helped our core Lager business grow. A halo effect with no cannibalization elevated the entire brand.”
This July, the company launched Dos Equis Margarita Classic Lime. The new RTD rolled out in select markets including New Mexico, New Jersey, Colorado, Massachusetts, Louisiana, Illinois, Las Vegas and Georgia. It expands nationwide in the coming months.
Leading with Light
With the “healthier” drinking trend now in full force, low- and no-ABV beers have found a foothold.
Yuengling won a Best New Products award for their Yuengling Light Lager.
“With Flight and Light Lager, for instance, we saw a growing desire amongst health-conscious consumers for more upscale light brands, as well as an increase in focus on beer with lower carbs and calories,” says Jennifer Yuengling, VP of operations, and sixth-generation Yuengling sister.
“We saw a chance to deliver our own interpretations of an upscale light beer, with great taste and stats that are a step up from our competition
“We are constantly looking for ways to innovate and craft new products that cater to different lifestyles and consumers,” she adds. “Throughout 2021 and 2022, we have seen strong growth from brands like Flight by Yuengling, and our limited release, Yuengling Hershey’s Chocolate Porter.”
Launched at the beginning of 2022, Bud Light Next became Anheuser-Busch’s first-ever zero carb beer. It contains 80 calories and 4% ABV.
The company hopes this successful new product will follow in the footsteps of their very popular seltzer extension.
“Portfolio extensions like Bud Light Next and Bud Light Seltzer have continued adding incrementality to the entire Bud Light family,” says Wolf. “We’ve seen continued success in providing our 21+ fans with unique offerings that meet their evolving tastes and preferences, which has helped the entire Bud Light portfolio succeed over the last year.”
Line extensions for popular beer brands has been the common strategy. Consumers still reeling from Covid-19 continue sticking with familiar products instead of experimenting broadly.
How this shift back to loyalty plays out longer term will determine the next year ahead for beer.
Feature photo by Frank Luca on Unsplash.
Kyle Swartz is editor of Beverage Dynamics magazine. Reach him at firstname.lastname@example.org. Read his recent piece When Will the Modern Whiskey Boom End?The post The 2022 Beer Growth Brands: Trends and Growth Drivers first appeared on Beverage Dynamics.
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Author: Kyle Swartz