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What's coming up in beer in 2019? - Predictions for the Year Ahead - Comment

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Our category commentators are all looking forward this month, sharing their forecasts for the year ahead. Next up, we have Stephen Beaumont with his thoughts on the next 12 months in the global beer category.

How will 2019 treat the worlds brewers?

How will 2019 treat the world's brewers?

It's predictions time again in the beer department at just-drinks and. with all of the political, economic and cultural turmoil we've been experiencing recently - and are likely to continue to experience in the coming months - it's tough to even decide on which subjects to consider, much less settle on actual, likely-to-be-correct prophesies. Still, even with all that is ongoing, some directions do seem to be presenting themselves as more probable than others, the most obvious of which is…

Cannabis Pt. 1

Yes, the biggest story of 2018 is set to remain the biggest story in 2019, with beverage firms in general and brewing companies in particular puzzling over what impact legalised weed is likely to have on sales and how they can best position themselves to be a part of the developing cannabis industry.

This year, we can reasonably expect movement on both fronts. And, while I wouldn't want to predict who might yet buy who in terms of alcohol-cannabis hook-ups, I will suggest that by the end of the year we will have a very good idea about the degree of impact legal cannabis sales will have on beer, that being most likely none or next-to-none.

As I reported earlier in 2018, preliminary indications in the US show that beer sales are down less in states with full legalisation of cannabis than they are in states with either legalisation for medical purposes or no legalisation at all. And now, in early-2019, we have another study, this time prepared by the Distilled Spirits Council, which finds that "despite conflicting reports, beer, wine and liquor sales patterns in (Colorado, Washington and Oregon) simply mirror the national average".

In other words, in those states where legal recreational cannabis use has existed for the longest - four years in Colorado and Washington, three years in Oregon - a thorough, six-year analysis of tax and shipment data showed no significant difference in alcohol trends between legal and non-legal states. Much more data will reveal itself in the coming months and years, of course, as California's and Canada's embrace of legal cannabis sales continues to evolve. Both statistically and anecdotally, however, there seems thus far little reason to expect these trends to change.

Cannabis Pt. 2

Regardless of legal weed's impact - or lack thereof - on beer sales, you can be sure that breweries will be hopping into the cannabis 'beer' market with wild abandon – quotation marks added because combining cannabinoids and alcohol is still widely considered verboten.  While we patiently wait to see what Molson Coors and Constellation Brands will develop through their respective cannabis partnerships, first off the mark in 2018 was the recently-retired creator of Blue Moon, Keith Villa, whose Ceria beer debuted in Colorado dispensaries in November. Villa was followed in January this year by Baltimore's Flying Dog Brewery, which has announced plans for a THC-infused IPA called Hop Chronic. 

There is little doubt that the market will fill quickly with other such beverages through 2019.

Speaking of non-alcoholic

While we're on the subject of 'beer' without alcohol, almost all the major players in the global brewing business seem to be going all-in on their non-alcoholic offerings, most notably Anheuser-Busch InBev, whose CEO has gone on record saying that he expects 20% of the group's sales to come from its non-alcoholic stable by 2025.

It's hard to imagine that coming to pass, however, without a great deal of support and sales coming from the US. For now, with a market share of just 0.3% in the country, that isn't looking all too likely. Even if US non-alcoholic sales double by 2024, as is predicted to occur globally by Global Market Insights, that still leaves the segment lagging at well below 1% of the overall market.

The difficulty in developing sales for non-alcoholic beer in the US is certainly connected to the vast array of competing beverages on the market, but may also be related to the defining character of America's best-selling beer brands, namely their lightness. It has been pontificated many times that the reason American beer grew lighter and lighter in flavour over the course of the last half of the 20th Century is that most US beer consumers don't actually enjoy the taste of beer. That being the case, the more likely reasons for the size of the country's US$111bn beer market are drinking out of habit and drinking for alcohol. Eliminate the latter and you have less cause for beer consumption, hence the difficulty in convincing people to buy 0% beer.

Craft shifts gears

It's been on its way for some time and 2019 may well be the year that the world's established markets for craft breweries –-the US, Canada and the UK foremost among them - shift from unfettered growth to low-single-digit expansion or even stagnation. That doesn't mean that craft will be easing up globally, though.

Instead, it's looking quite likely that emerging markets for craft breweries, including some of the world's largest beer-consuming countries, will begin to hit their stride in much the same way that the veteran craft beer markets did at the end of the 20th and start of the 21st Centuries. At the very least, we should see strong craft growth in Latin America, led by Brazil, Argentina and Mexico, and swathes of Asia, possibly including China. 

If and when this does occur, this will almost certainly mean more headaches for the global brewers.


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