IPAs and All-Lactose Everything: Will the Pandemic Burst the Craft Beer Bubble?

Craft beer experimentation bubble
Animation by Eric DeFreitas

In recent years, much of the craft beer community has been enthralled by what’s new and exciting. From the meteoric rise—and subsequent abrupt disappearance—of Brut IPAs, to all-lactose-everything, you’d be forgiven for thinking that craft beer drinkers are drawn to trend after rapid-fire trend.

But during the world’s various shutdowns and shelter-in-place orders for the novel coronavirus pandemic, a number of consumers have been turning to classic core beers.

“We’ve experienced a really impressive turnaround in some legacy brands of ours,” says Andrew Emerton, Specialty Brand Manager for Colorado’s New Belgium Brewing Company. In early August, sales of the company’s flagship beer, Fat Tire Amber Ale, were up 5.2% over the same time in 2019.

Is this due to a general shift in preference, or simply what’s been available? As restrictions evolve and venues reopen, will these drinking habits remain?

The Most Common Beer Styles, Explained

Emerton thinks an array of factors are behind Fat Tire’s surge, and notes that Voodoo Ranger, an experimental IPA series launched in January 2019, has “been on fire for a while now.” Sales of the latest Voodoo Ranger, a mango IPA called 1985, were up 48% over the 13 weeks ending in mid-August 2020.

“It would be fascinating if we were experiencing a consumer preference shift due to the pandemic but I, personally, just don’t see it,” says Emerton. “I think the beer consumer was definitely starting to feel somewhat exhausted by the ‘shock value’ in crazy experiments but, again, I think that was happening prior to Covid-19.”

It’s a balancing act. Voodoo Ranger 1985 is part of a long tradition of fruited IPAs, Emerton notes, recalling how Ballast Point “shocked the world with Sculpin, a fruited IPA, when it went national in 2013.”

If 1985 had been a bit further afield—a fruited IPA with lactose and vanilla, for example—it might have “overstepped into ‘crazy experiment world and it would’ve been a dud. The craft consumer doesn’t appear to be as enthusiastic about new-to-the-world experiments as they once were,” he says.

Of course, what people buy is determined by where they shop. Suzanne Schalow, CEO of Craft Beer Cellar, a chain of more than 20 stores nationwide, notes that most people purchase beer and wine in their own neighborhoods.

“The pandemic didn’t change this, so it really became about what people had access to,” she says. “Customers were buying alcohol, without question, and our numbers, overall, across our footprint show average sales growth of near 40% in off-premise package, whether delivery, curbside or in-store pick up.”

While some customers reached for old favorites, Craft Beer Cellars’ sales extended beyond legacy craft labels.

“Some stores push through a decent amount of larger brands like Sierra Nevada, Firestone Walker, Abita, Boston Beer Company, Bell’s, Lagunitas, etc.,” says Schalow, “But on the whole, these are not brands that many of our stores survive on. We haven’t seen larger brands outpacing smaller, more expensive brands,” like indie darlings Untold Brewing, Small Change Brewing Company and Barewolf Brewing Company.

Bart Watson, the Brewers Association’s chief economist, says the stability of some of those pricier craft offerings might coincide with its primary demographic. “Craft tends to skew higher with wealthier socioeconomic groups who so far are doing a bit better during this downturn.”

Still, he warns against false confidence. “I certainly believe we could see some consumers trade down in price during the downturn.”

Style notwithstanding, craft brands with widespread availability continue to sell in the U.S.

“I think some of the narrative of the shift to familiar is just that [bigger] brands are sold more off-premise, at least in the U.S.,” he says, “and so their sales have jumped because people are shopping more in supermarkets now that they aren’t visiting bars.”

How Hazy IPAs Came to Dominate Craft Beer

Six months since the pandemic was declared, a number of bars, taprooms, and breweries have yet to re-open to the public. As purchasing models continue to shift and global economies brace for a recession, brand loyalty is paramount.

Experimentation could remain relevant, however.

“I believe there will be strong continued demand for what’s new and different. Brewers right now need more than ever to stand out and attract the limited customers willing to visit breweries, so, in the short-term, some may lean even more into beers that they think will garner attention,” says Watson.

“In the US we had the IBU wars, where everyone tried to out IBU each other. Then it was barrel aging. Now it’s pastry stout and fruits/unique adjuncts. Those styles may go out of favor, but there is constantly a niche for those types of beers.”

Emerton believes palates in the U.S. have a “constant gravitation toward discovery,” so, it’s unlikely beer innovation will cease, pandemic or no.

Change is a certainty in beer’s post-pandemic future. Emerton believes on-premise sales will suffer much longer than previously predicted and sees drinking habits set in during the past six months as potentially difficult to break over the next 12; Schalow foresees the $20 four-pack becoming a thing of the past.

And so, it’s entirely possible beer will only continue to get weirder, with triple-fruited, choco-chunky beers winning out over the simple ales and lagers once again.

Published on October 19, 2020
Topics: Beer