Scorching Hot 2019 Predictions
What better way to get back into the beer blogging spirit than with some 2019 predictions to kick off the year! I remain positive on the beer industry and its future, but "the pinch" happening right now as a result of 7,000+ breweries and a seemingly flat consumer base cannot be ignored. So while some of these predictions may have negative undertones, I remain excited about what we're going to see moving forward as the cream rises to the top. I invited some industry friends from around the country to contribute a prediction of their own. So thank you to Chris, Kenny, Kate, and Danny for letting me include yours. And here we go...
1) Brewery openings continue to outpace closings, but barrels produced by 2019 closures will exceed barrels produced by the new openings
Too often, the go-to response when a sizable brewery closes is that "well, openings are still outpacing closures". I don't view that stat as an indicator of health because one 80,000 BBL/year brewery closing could equal the size of 150 new breweries. You can't balance out a regional production brewery closing with a small restaurant/brewpub opening. They're just not the same thing, so I plan to keep an eye on the numbers of barrels that go out of production, compared to the aspirations/capacity of the new breweries going online.
Why is this happening? This is worthy of an entire series of posts, but I point my index finger not at the fact that less people are drinking, though that certainly can't be ignored, but within craft specifically I blame (or praise?) the fact that people are drinking less. The number of new craft beer drinkers in 2012-2014 was explosive, leaving a ton of runway for exploring, ticking, and even collecting in the years that followed. I believe those people are still buying craft beer, just showing more restraint than ever, for various reasons, and less of a need to try everything and drink beer every day.
A potential contributor to more closures is that a major equipment manufacturer, Diversified Metal Engineering (DME) just fell into receivership after defaulting on their loan payments. Breweries of all sizes have been left scrambling to determine what paths exist to recoup their deposits on equipment that is unlikely to ever show up. The effects of this news are still unknown, and reports seem to vary, but this will likely create issues for more than a handful of businesses.
2) Criticisms for "chasing trends" die down as Survival Mode becomes an industry-wide theme
Every brewery regardless of stature in the beer industry is feeling the pinch right now and is responding quicker to consumer demand. As a result, most breweries will be guilty of what used to be mocked as a "cash-grab" or trend-chasing move. The rhetoric however, has begun to shift toward the brewery listening to their customers. Expect to hear phrases like "We're not in the beer making business, we're in the beer selling business" as a brewery's rationale, instead of the old adage of "we brew what we like to drink."
As this mindset becomes the norm, I fear that the vocal minority could become so well-heard that a large portion of brewery portfolios all start feeling more similar than different. The breweries who play chess, not checkers, by staying multiple moves ahead on innovation will create the longest runway for their success. Dogfish Head is a brewery I would tip my cap to for SeaQuench Ale, which has caught fire up and down the Eastern seaboard. The liquid is not only unique, but the marketing toward the calorie-conscious consumer was a genius way to expand their audience.
3) The "craft" lager/pilsner 6-pack will become an endangered species at retail
You have to be careful when you look at IRI scan data, a helpful tool for large and mid-size breweries to see how their beer (and competitors') is performing at major retailers. The IRI style classifications unfortunately don't keep up with how complicated the market has become. The craft lager/pilsner category for example, will appear very healthy until you dig into the detail. In reality, all the growth is coming from new light(er) lagers offered in large pack sizes, primarily Founders' Solid Gold & Sam '76 on the National front. Small local breweries are even dabbling in this lower margin, higher volume sub-category, like Massachusset's Night Shift Brewing with their attractive-looking Nite Lite.
Photo Credit: Night Shift Brewing
At the style level, the growth of these craft light lagers in 12, 15, and 24-packs is masking the fact that it's an absolute blood bath for our O.G. craft lager/pilsner 6-packs. I'm talking about flavorful American & Import lagers/pilsners, typically 4.9% - 5.5% ABV, made with authentic ingredients and requiring a more premium price tag over domestic/light lagers due to their raw material cost, tank time, and often smaller scale. Most of our favorites from the last 3 to 5 years have been taking a beating in sales and there's no recovery in sight. Eventually, the shelf placements for these brands get yanked in favor of something that will pull better, which leads to archive or brewery-only status for what is often the brewer's favorite style.
It's not that there aren't people out there willing to pay $8.99 - $10.99 for their beloved, well-made craft pilsner 4/6-pack, but that population doesn't appear to be growing and in fact, I believe it's shrunk significantly over the past couple years. While lagers are starting to be embraced in the enthusiast world, perhaps to cleanse the palate in between sugary stouts, the masses aren't picking up these higher price-point lagers quite like they used to. Hardcore lager drinkers know the difference, and will pay up for it, but a significant number are moving onto to those more competitively priced volume packs...and IPAs.
But all will not be not lost for the Pilsner is Life movement. While I predict that less volume of non-light craft lager/pilsner will produced in 2019 than 2018, that's due to their price/performance in chain stores. I am simultaneously predicting that more new lagers than ever will be dreamt up and brewed in 2019. As the regional and national producers have no choice but to steer away due to shrinking shelf opportunities and slow velocity, a nice opening is presented for smaller, local breweries. Don't expect them to draw a line around the office park, regardless of how much cryo you use in the dry-hop, but they're the perfect tool to balance out a draft list and even begin to infiltrate the 16oz-4-pack sticker-can-phenomenon. Get ready for a lot of bad puns around lager/pilsner terminology! The opportunity will have its limitations, as the style will still face challenges with price and keeping the consumer engaged, but with tempered expectations at the smaller producers, there's some running room if executed well.
4) Reports of a quick death for the Brut IPA prove premature
A number of the larger, top 50 breweries were either late to the Hazy IPA trend, or skipped it entirely. Some may have underestimated the level of interest in the style, it's consumer, or the positive impact it could have on their business. Difference in brewing philosophy likely slowed down many larger craft breweries, while some may have flat out been asleep at the wheel. As beer sales slow and the demand for new continues to rise, everyone appears to have been ready for the Brut IPA to come along, and were quick to react. Their growth likely depends on it.
The easy, more cynical prediction would be to say that Brut IPAs are just a fad and will "fizz" out early in 2019. Some may say that they are already fading, but I think that's only really in the line culture community. Here's why I think Brut IPAs are still on the uptick.
Distribution (Availability) is about to explode. The learning curve with Brut IPA has barely begun with the casual craft beer drinker. Think of your friend who loves having a nice 6-pack in their fridge, but spends zero time on the internet reading or keeping up with beer. He or she typically buys their beer at the grocery store. Grocery is where Brut IPAs are about to explode once the Spring store sets come around. Contributors will include the national, regional, and a handful of local breweries each creating a rotating slot to ride the wave as far as it will take them. When presented with the opportunity of new, or trusted, consumers will reach for new allowing Bruts to remain in the discussion for all of 2019.
I've had quite a few Brut IPAs now and I'd give a strong advantage to the cleanness of examples produced by the larger breweries. Unlike a 6-pack of a salty Gose, Triple IPA, or Imperial Porter, the last few of these well-made Brut IPAs don't linger in the back of your refrigerator for months. Examples that were done right go down easy, aren't filling, and make it difficult to have just one. This will help significantly with re-buys, versus consumers buying just to try it, then moving on.
With the larger breweries jumping all over this trend, the smaller breweries are forced to take the style further in order to move enough 16oz cans at the margins they're accustomed to. You'll see them creating more Imperial and fruited versions as a point of differentiation. The few in this realm that I've had were not as desirable, or at least didn't leave me wanting a second pint. So while I agree that Brut IPAs will not be a beer geek or Instagram phenomenon in 2019, I do believe that they're about to penetrate the mainstream customer.
5) More variety packs, from the places you least expect...
Small breweries! A few have begun dabbling, but look for 2019 to be the year that small breweries dip more than just their toe into variety/experience-focused water. These won't be your father's variety pack containing 3 past code Hefeweizens, Porters, Pilsners, and Amber ales, though we'll still see plenty of those with 2 different IPAs in place of the Amber and Hef. Instead, they'll be more in the vein of what Spiteful Brewing launched last month, where the same base brew is transferred into ~4 different tanks, each treated differently from that point on for a unique, but comparable array of beers.
These are a very customer-friendly concepts and I'm a big fan. If I were a brewery, I would be careful to not let their early success take over too much of my future plans, for fear of setting a precedent that will hurt business and cause headaches in the long run. It can be dangerous with the Untappd/Instagram community to set the expectation of getting to try four new beers with every 4-pack you buy.
6) Hazy penetrates further into mainstream, starts Seeing Some Push-Back from enthusiasts, balance of power begins tipping back to retailers
Landing a 4-pack of a coveted New-England Style IPA used to require some hunting or waiting in line, and for many, that rareness is what fueled their interest. Now Sierra Nevada, the 3rd largest craft brewery, has 6-packs of Hazy Little Thing well positioned across the country. The smaller breweries have pushed the undefined style to the extremes with milkshakes, quadruple dry-hops, etc. in order to offer something that you can't achieve with just fruit pectin and certainly not for $9.99 all day.
In 2019, look for larger producers to release products that will compete directly with Hazy Little Thing, and by now, all the small producers are regularly releasing their own takes on the thicker, hoppier, more "New England style" realm. Hazy will go from the most talked-about term among industry members and enthusiasts, to being a household name. Hazy will become over-saturated and less cool among the hardcore enthusiasts. The lines for IPAs will begin to taper off and the insta-sellout will be tougher to come by for breweries. Small breweries will begin to lean heavier on the same retailers who they've been neglecting, for opportunities to move their product that used to move on its own. The ubiquity of hazy will shift the balance of power back to the retailer by the end of 2019.
Celebrity Guest Contributions
7) Death of the All Sour House
Danny Becker - Founder, The Full Pint (Los Angeles, CA)
"I've noticed a decline in popularity of wood aged, Belgian-inspired sour ales here in Southern California, directly related to the rise in popularity of the canned hazy IPA and the bottled adjunct stout. I would like to imagine it's not just this market. While the style of beer is one of my favorites, I don't believe a small brewery can stay as healthy as they like with only sour ales, mixed fermentation and tart saisons. One of my favorite breweries in the world, Sante Adairius, has been flirting with packaged IPAs, as an example of market pressures. An all-sour house like Jester King and or The Rare Barrel will be pressured into diversifying into IPA and possibly stout production." You can check out the rest of Danny's 2019 predictions here:
8) "More of the same Hazy IPAs will open doors for those bold enough to do something different."
Chris Quinn - Owner, The Beer Temple Chicago, IL
"The story of 2019 is undoubtedly the craft beer "squeeze", as I first heard it called by Green Flash Brewing founder Mike Hinkley. The tightening craft beer market will undoubtedly have a ripple effect from top to bottom, so I've geared my prediction around some of the more subtle consequences I feel will trickle down to the craft beer lover. Fearful of the squeeze, more and more breweries will play if safe, putting a larger portion of their overall output not just towards IPAs, but IPAs with a similar flavor profile. Low bitterness, aggressively dry hopped ales with tropical or juicy flavor profiles will become ubiquitous, so much so that those who prefer other types of pale ales will find it hard to scratch their itch. By the end of 2019, the sameness of so many of these beers will reach a tipping point, and people will again start looking for variety in their pale ales.
Those breweries that were daring enough to not put all their eggs in the juicy basket, and offered a variety of hoppy styles will be well positioned to fill tap handles at bars looking to supplement their existing NEIPAs on draft. I tend to think of a larger regional or nation breweries in this regard, who may reap some (much needed) benefit of a "retro" flavor profile that they will be seen to have been authentically sticking by all along. Breweries such as Odell, or Bell's, would fit this bill nicely. Or it could come from some contrarian newcomers who boldly stick their necks out from the get-go and zag while others zig.
Sadly, I can't immediately think of anyone who fits this bill - although I'm sure they are out there. Finally, if this type of stylistic return to form is to occur, I'm curious how it will be received when breweries known for haze start to dabble in "retro" IPAs. Will they be see purely as opportunistic, as many elder statesmen of craft beer were seen when pivoting to juicy styles? Or will their cache only enhance the growth of a retro resurgence, and perhaps even be credited to them?"
9) Further decline in prominence of the formerly ubiquitous flagship line-up of packaged beers
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10) Bottles - Could they come back?
Kate Brankin - Creative Director, Pipeworks Brewing (Chicago, IL)
"Yes, there's still a place for really good and really reliable, but I bet in 2019 we see a further decline of the 5-6 packaged flagship beer line-up (the IPA, the pale ale, the golden ale, the porter...) offered by small to mid-sized packaging breweries. With the exception of maybe 1-2 core beers, agility and variation may continue to win over tested and true. In 2019, I'm anticipating even more style specialization coming from newer breweries."
"There were many complex sourcing factors that may have led to moments in 2018 when can-focused small to mid-sized breweries experienced bottlenecking when it came to procuring aluminum cans to package their beers in. Some breweries even took to wrapping labels over pre-printed cans. I wouldn't be surprised if this sourcing unreliabillity continues and encourages more breweries to return their focus to bottles for small batches and special releases."
Check out what a great job Kate does keeping it fun and creative on the @PipeworksBrewing Instagram feed.
11) The Death of Lactose
Kenny Gould - Founder, HopCulture.com (New York, NY)
"Tired Hands in Ardmore, Pennsylvania, made the milkshake IPA famous, and Jean Broillet's biggest mistake was revealing his process. In the last few years, every brewer and their mother has been tossing lactose into their mash tuns, which gives the beer a creamy, almost milkshake-like quality. Some breweries, like Hudson Valley and Imprint, have managed to innovate on Broillet's process to great effect; others have produced beer/greek yogurt hybrids that taste like the offspring of Violet Beauregarde and the wrapper of a creamsicle. Personally, I think the consumer is done with the novelty, and (unless you're Hudson Valley) it's time for the cloying overly sweet lactose IPA to go the way of the brown ale."
HopCulture.com are editors of a craft beer magazine & throwers of juicy beer fests across the country. You can check out the rest of Kenny's 2019 predictions here.