Maybe We Don’t Need to Shout at Jim Koch’s Latest Cloud
Boston Beer, the maker of Truly Seltzer, Twisted Tea, and Angry Orchard, announced this week they’d be partnering with PepsiCo to make boozy Mountain Dew. Which seemed—to me—perfectly consonant with the company’s direction over the past decade. I filed it under “insignificant” stories in my mind. I mean, the market for alcoholic drinks has been fragmenting for years, and sugary drinks spiked with booze are an ever-expanding category, especially as the collapse of domestic mass market lagers quickens.
I guess because of the “Beer” in Boston Beer’s name, and the company’s heritage, and possibly because they recently purchased Dogfish Head, the news caused a lot of agita. Yet Boston Beer long ago ceased to be a brewery (just 8% of its volume is beer*), and the trends are all moving toward this large middle category of acronyms (RTDs, FMBs, IRCs). Why wouldn’t Jim Koch steer the company toward a well-positioned brand of soda?
(It does put a lot more pressure on the wheezing infrastructure of laws and regulations governing manufacture, distribution, and taxation of things called “beer.” Kate Bernot delves into these issues, and the implications for wholesalers are fascinating. It seems inevitable that as the market for alcohol goes through this churn, laws and regulations are going to have to follow. The wholesale tier in particular has gotten further and further out of step with market realities, and this should put even more pressure on the need for reform. That can’t happen too fast, and if alcoholic Mountain Dew is what forces change, color me delighted.)
As the great seltzer wave washed over the country the past few years, I pondered what it implied about good beer. In the end, I don’t think it means anything. There’s a hard cap on the amount any high-end, sophisticated product can capture in its industry. People are always going to buy a lot more Camrys than Telsas. The arrival of locally-made blue cheeses didn’t end Kraft’s run, nor have Folger’s or McDonald’s or Doritos vanished because we now have corner espresso shops and farmers markets.
The Industrial Age brought convenience and inexpensive goods, and they’re really popular! Even in countries with ancient brewing traditions that survived industrialization, the percentage of what we’d call “good” beer is limited. Jupiler far outsells Dupont in Belgium. Cask ale is a tiny fraction of the market in Britain. Even in countries like Germany where the mass market is superior to equivalents in other countries, big breweries dominate.
We are in the midst of a realignment in the way Americans drink. Forty years ago, alcohol choice was limited by category to beer, wine, and spirits, and within those categories were far fewer options than today. If you wanted a lightly-alcoholic drink, your choices were a glass of wine, a cocktail, or a domestic lager. It’s absolutely no wonder Americans are giddy about all the new choices now. There’s a lot of churn in the market as people sample broadly and try new things. Some will land, others won’t. History suggests that many will do well for a time and then fall off as other products trend to more contemporary flavors.
I’m not sure this means good beer is dying. Quite the opposite. Despite some very strong headwinds, more people are drinking good beer (however you want to define it) than ever before. People are still excited to open new breweries. The overall barrelage for good beer may have a hard cap, but it’s a fairly high one. And unlike the acronym segment, good beer is a sophisticated, sticky product that keeps its fans. Cultures arise around it. Indeed, I’m so excited by the various reckonings happening with race, sexuality, and gender in beer because they mark the moment these underrepresented groups are demanding to define the culture for themselves. There’s a lot of growth potential because new populations have an interest in participating in good beer culture.
The mass market has always been there and it’s not going away. The products that comprise it are changing a lot, but it’s a changing of the guard rather than an existential threat to good beer. For people like me devoted to the culture, craft, and history of good beer, mass market products are like clouds passing through a blue sky. Once the new products were dry beer and wine coolers and now they’re alcoholic sodas and seltzers. They will be passing overhead forever because people like them. (On the right occasion, I like them, too.) No reason to shake our fists in outrage when we sight a new one approaching on the horizon. We will see a lot more of them in the coming months and years, and they’ll signal very little about the health of good beer.
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*And don’t even get me started on its status as a proudly “independent brewery” according to the tortured definition of the Brewers Association. A company that (1) barely makes beer, (2) is a publicly-traded behemoth, and (3) owns other breweries sounds a lot like the industrial giants the BA ostensibly organized to oppose. Boston “Beer” of 2021 is a lot less a brewery than Anheuser-Busch of 2007, and yet the latter has long been the BA’s bête noire.