Craft beers move upmarket in 2008

Beer is continuing to move upmarket. With consumers clamoring after craft beers, brewers are shifting more of their offerings to higher-end products, and experts say the market is ripe for an influx of even more pricey craft brews.

“In the late ’90s, new entrants came from a hodgepodge of breweries and the market wasn’t ready for so many new and more expensive introductions,” said Peter Reid, publisher of Modern Brewery Age. “Now, all systems are go. There are a lot of strong players that have good distribution.” Reid said he expects to see the double-digit growth that craft beers have been generating continue in 2008.

Volume sales of craft beers jumped 11 percent in the first half of 2007 compared with the same period one year ago and dollar growth surged 14 percent, according to the Brewers Association. Association figures show that craft beer has surpassed 5 percent of overall beer dollar sales. Industry experts say that number could grow from 15 percent to 29 percent within the next 10 years.

The trend is fueled by consumers’ desire for luxury beers. “Brewers are doing a lot of interesting beers,” Reid said. “Consumers have embraced these higher-end products. They know with seasonal beers, for example, that the beer is fresh and they are willing to pay more for a premium product.” Distributors and retailers also like the bump in sales that quick in-and-out products can lend to the category.

A recent poll of more than 1,000 chefs by the National Restaurant Association found craft beers to be the sixth-hottest culinary trend in the nation. Consumers have shown plenty of support for small breweries. In fact, the fastest-growing craft beer sector in 2006 was microbreweries, which were up 16 percent, according to the Brewers Association.

Big brewers also are embracing the trend. This month, Miller will test market Miller Lite Brewers Collection in three markets. The new line consists of a blond ale, an amber beer and a wheat beer.

“Light beer continues to provide the greatest sheer volume growth as American beer drinkers reaffirm their desire for drinkable, refreshing products,” said Julian Green, a spokesman for Miller. “As demonstrated by the continued growth of craft beer, we’re seeing an increasing interest in variety.”

Green said the new line offers “craft beer flavor with more refreshment and fewer carbs and calories than a typical craft beer” and is targeted to the mainstream light beer drinker who’s interested in trying something different.

“When Heineken came out with a premium light, the introduction went against the grain of the market, but the product has done very well,” Reid said. “It demonstrated that the products would bring new users to the category.”

Reid sees a growing market for seasonal beers, particularly Belgian beers and wheat beers. “Drug retailers, which have been under-developed in the craft beer category, should layer in ales and lagers to offer their consumers a more balanced portfolio of products,” he said.

Anheuser-Busch offered its Brew Masters’ Private Reserve from Budweiser for holiday 2007. The rich, malty Doppelbock brew featured four types of malts and was billed as a good pairing with holiday meals.

During the summer, consumers are likely to look for American wheat beers and German hefe-weizen brews. “These are very refreshing beers which are rich in B-complex vitamins, so they are a good bet for warm weather,” Reid said.

Smaller breweries are introducing a number of innovative entries. Dogfish Head Craft Brewery will bring Theobromo to market in August. The seasonal brew is based on an ancient Honduran beer.

In March, Clipper City will introduce Raspberry Wheat, an organic beer and Old Dominion will release its summer pilsner.

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