The Hastening Death of Grampa's Beer

Mintel, a food and drinks market research firm based in London, released a remarkable report this month on consumption patterns of American beer drinkers.  It's the same company that offered this eye-opener in a report from two years ago:

Only a modest percentage of beer drinkers say they prefer domestic craft or microbrew beers, but an impressive 59% say they like to try them, and 51% would try more craft or microbrew beers if they knew more about them.

This factoid exposes the key mental mistake most of us hold: Americans regularly drink both craft beer (using the term advisedly) and regular tin-can lagers.  Think of it this way.  There are actually three groups: those who drink only craft beer, those who drink only tin-can lagers, and those who drink both.  It's not a binary choice.

With that I bring you Mintel's newest findings, again eye-opening:

• Craft beer accounts for $12 billion of a $78 billion dollar beer market (15.4%), and craft's growth should rise 50% in the next five years.
• A quarter of American beer drinkers drank more craft beer in 2012 than the year before.
• Craft has an even larger share of the draft market, at 22%.
• Over a third (36%) of Americans regularly drink craft beer, and over half of millennials (under 35) do.  
• Interestingly, only half of craft beer drinkers are interested in locally-brewed beer, and just a quarter in drinking beer where it was brewed.  (Mintel puts those in positive terms, but they seem far lower than I expected, so I'm flipping the emphasis.) 
• And from my perspective, one of the most important findings is this one: “Despite the variety of beer releases created by craft breweries, craft beers are not yet everyday beer choices for most drinkers due to a lack of understanding about their taste profiles.  An additional barrier is lack of knowledge. Craft brewers need to focus on education through tastings and classes that inform consumers about the differentiation in flavor between craft beer and other alcoholic drinks.”

Imagine reading this if your business model depended on selling tin-can lagers ("legacy beers"?).  The young generation doesn't like your beer, and the older folks are sadly not immortal.  It's a structural trend a funny new Super Bowl ad is not likely to change.  (Though you notice that beer ads all feature young people now, not weird old farts arguing in taverns?  Guess why.)   Finally, one of the main reasons people don't drink your competitor's beer is because they don't understand it--which means things are only likely to get worse faster.  You're stuck with old drinkers who regard your product as the familiar, safe tipple.

For some years, I've been predicting that the seemingly inviolable hegemony of tin-can lagers is not so.  But it feels like predictions about global temperatures from the 1990s.  All the new data suggests that things are happening way faster than anyone realized.  If I were to make a prediction for the next five years, it would be that the landscape of what we consider "mass-market" beer is going to go through the first tectonic shift we've seen since the 19th century.  That may be premature--it could happen after 2020, say--but I would be shocked if it didn't happen by then.