Via Zerohedge

Submitted by Market Crumbs,

The Brewers Association defines a craft brewer as a small independent brewer. Small is defined as annual production of 6 million barrels of beer or less. Independent is defined as less than 25% of the brewery is owned or controlled by an alcohol industry member that isn’t a craft brewer itself. Brewer is defined as an entity that has a TTB Brewer’s Notice and makes beer.

At the end of 2017, there were 6,372 breweries in the United States. 6,266, or more than 98% of them, are craft breweries. These 6,000-plus craft brewers provide more than 135,000 jobs across the U.S. The combined economic impact of all brewers, distributors, retailers and supply-chain partners totaled more than $328 billion last year.

According to research from Social Standards’ Craft Beer Market Insights Brief 2019, interest in beer appears to be waning. After analyzing 75 million posts on social media, Social Standards found conversations about craft beer have fallen 16% since 2017. Conversations about beer in general have fallen 9% over the same period.

Health trends are largely affecting consumers’ drinking behaviors. Social Standards found that over the same period, conversations about health and wellness topics have increased by 63%. The drink category that is benefiting the most from this trend is hard seltzer.

Hard seltzer drinks are on pace for another year of triple-digit gains with sales expected to surpass $1 billion. While still a small segment in the overall alcohol market, the growth has been noticeable. 

Hard seltzer drinks have seen their share of the overall U.S. alcoholic beverage market increase from 0.85% a year ago to 2.6% currently, according to IWSR. IWSR forecasts that hard seltzer consumption will more than triple from current levels by 2023. 

“The rise of hard seltzers shows there was a segment of consumers underserved by the current beverage alcohol market who were looking for alternatives that were refreshing and flavorful, but also low-calorie and low-sugar,” said Brandy Rand, COO of the Americas at IWSR Drinks Market Analysis.

Sales data appears to confirm the decline seen in consumers’ discussions about beer on social media. According to Beverage Information Group’s 2019 Beer Handbook, U.S. total beer consumption declined by 1.3% last year, the sixth-consecutive year of declines. The craft beer segment saw its growth rate fall to 4% from 4.9% in 2017

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Besides hard seltzer, what are the trends in the alcoholic beverage industry heading into 2020? Not surprisingly, IWSR believes the top trend is “better-for-you” beverages such as those that are free from additives, organic, low- and no- sugar, low calorie and gluten-free. They also predict premium spirits such as agave-based spirits, gin and whiskey, as well as cannabis-based beverages will gain popularity. 

While the beer industry is still an economic powerhouse, it is worth keeping an eye on the changing preferences of consumers and how both large brewers and craft brewers adapt. With the industry responsible for so many jobs, it will be imperative these breweries continue to meet the demands of consumers if they wish to remain in business.