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Monday, January 24, 2011

Could the US Become an IPA Country?

A couple weeks ago, I pondered aloud the question: is craft brewing about to enter a bubble of over-growth? The answer, based on current rates of consumption, appears to be no. Based on current trends and consumption patterns, there are a lot of reasons to think that craft brewing has room to grow. That got me thinking: based on current trends and consumption patterns. Fine, but what if the current snapshot is wildly understating the case for growth?

Brewing history has been marvelously volatile. The century-plus dominance of light lagers belies the churn that marked the rise and fall of brewing styles that came before. I love the story of Berliner Weisse, now a nearly-extinct style; yet in the 19th century, it was so popular Berlin could support 700 weisse breweries. In England, porters once dominated the market. Martyn Cornell reports that until 1863, it accounted for 75% of London's sales. A hundred years later, mild accounted for more than half of all draft sales--but it was on the wane. Bitter was already on the rise.

There's no reason to think that American tastes can't similarly evolve. The US has essentially become a light beer country--Bud Light, Coors Light, and Miller Lite all outsell their "full-bodied" variants. Yet macro sales have been flat or waning for years. For the first time, beer feel below 50% of the alcoholic beverage market as macros' sales tanked. In short, things aren't looking great for the makers of cheap beer. (Though they today celebrate 75 years of canning their product.)

At the moment, craft beer is just a niche market, but it's not hard to run a thought experiment in which good beer began to seize major chunks of the beer market. If the rest of the country catches up to Oregon, craft beer would have 12.4% of the market. Of course, the good beer share would be higher, including faux craft, imports, and good macros (like Budweiser American Ale). Say 20% good beer. At what point does beer culture change so that people start expecting better beer? Subtle clues will tell that things are changing, like seeing IBUs rise among macros. It's not hard to imagine that a major macro would go in whole hog and release a macro IPA, complete with a multi-million-dollar ad campaign. Once something like that happened, we could quickly see a change in the drinking preferences of the average American.

Maybe not--who knows? If the history of beer is any guide, it's certainly not out of the question.


  1. Kind of seems like it may already be an IPA country

  2. Speaking as a proud Brit, the US is currently producing the most exciting, and by that I mean the most excellent, new beer of all nations.

    My stupid little bottled beer project reflects that.

    If all of that endeavour doesn't eventually set fire to the entire American domestic beer market, nothing ever will.

    I predict it will.

    Excellence tends to do that.

  3. Ghost, not mathematically--IPAs have less than 1% of the market right now.

  4. I don't usually comment on the US beer market, because I don't know enough about it. But I've written a post on why I disagree: — well, I half disagree. I think craft beer can achieve a share of the market bigger than anyone expects, but the big sellers won't be IPA. I wouldn't mind being wrong. I'll buy you a pint if I am.

  5. "good macros (like Budweiser American Ale)"
    You have to be kidding me. One of the worst beers ever made. I would rather drink MGD.

  6. Okay, but don't forget that 25% of the American wine market is still E&J Gallo. They make Andre ($4 sparkling white wine), Boone's farm, and Thunderbird fortified wine.

    America has a lot of room to grow re: craft beer, but I highly doubt you'll ever see a point where the mass public is drinking IPA.

  7. I should be more careful in my titling. The IPA was just a suggestion--I mainly meant, could we envision a future where the US consumes more good beer than cheap. And Brad, I think your data suggests it's possible. Those wine figures were probably 80% cheap stuff a couple decades ago.

    The "macros" with 25% of the market. I could live with that.

  8. We will definitely crack the 10% ceiling for market share and who knows where it could go from there.

    As far as IPA country, maybe, as long as it was a light, low alcohol, quaffable IPA with a nice hop profile, sessionability, and, oh wait, that's a pale ale.

    The majority of folks want a beer that they can drink 4-5 of while watching a game or mowing the lawn and not black out. If craft can provide more of that at a reasonable price, and still make a product with integrity, then we're getting somewhere.