The health of the beer category is the top concern across all distributor networks “by a significant margin,” per a biannual survey conducted by the National Beer Wholesalers Association (NBWA), president and CEO Craig Purser shared in his remarks during the opening General Session of the trade group’s 2023 Annual Convention in Las Vegas.

Purser said: “This isn’t a red, blue/silver, gold or green network issue, folks. This is an industry-wide, five-alarm fire. And the only way we’re going to fix it is to run toward that fire with purpose and with a plan.” 

Purser also zeroed in on the industry’s struggle to appeal to younger (21- to 24-year-old) legal-drinking-age (LDA) consumers. He pointed to 2018, when there were 17.5 million 21- to 24-year-old consumers, 46% of whom said they had a beer in the last 30 days. Meaning there were about 8 million occasional beer drinkers in that age range. 

Now, that number is down to 5.9 million occasional beer drinkers as the number of LDA consumers in that age has declined to 15.5 million, with only 38% of them saying they drank a beer in the last 30 days. 

Purser said: “In plain English, the industry has lost about 30%, or 2.2 million, of its youngest LDA consumers in five years. This is a pattern, and the current brand crisis has accelerated this broader category concern.”

Purser ticked off other reasons for concern, including the annual Gallup survey showing “a significant increase in the percentage of adults under 35 that abstain from alcohol altogether.”

Although some distributors “are selling more beer than ever” as consumers shift their brand of choice, “someone sitting in the row behind you is facing dramatic declines that have nothing to do with anything they did or didn’t do,” Purser said.

“Beyond the personal pain that this brand disruption has caused – from employees being harassed to businesses being forced to make difficult decisions – the fact is, the entire beer category is paying a price. This affects us all,” Purser said, referring to the conservative-led boycotts of Bud Light that caused havoc for A-B distributors in some markets

Purser recalled a conversation with an on-premise, draft-centric chain retailer who shared that his restaurants “have seen a dollar [share] decline from 70% beer to 61% beer in just three years,” and has added wine and pre-mixed cocktails on draft. 

“This is a wake-up call, and also an opportunity for you to think about how to meet that changing demand,” he said.

So what’s the fix?

First, it’s recognizing that this “is a category-wide problem” that won’t be “solved by ‘fixing’ brands,” Purser said. Suppliers must lead the effort to make beer more appealing to younger adults and a broader consumer base. 

Second, distributors must diversify their beverage offerings “with an eye on our future.”

Brewbound Insiders can read more comments from Purser’s speech on category health, including how Next Generation, the BREW initiative and the National Black Brewers Association will play a part in reversing trends. 

The National Black Brewers Association (NB2A) is celebrating the inaugural Black Brewers Day today, the 53rd anniversary of Theodore A. Mack Sr.’s acquisition of Oshkosh, Wisconsin-based People’s Brewing Company, making it the first Black-owned brewery and him the first Black brewery president in the country.

The NB2A wrote: “Black Brewers Day is a day dedicated to recognizing and celebrating the rich heritage and contributions of Black brewers throughout American history. Set to be observed annually on October 10th, this significant occasion commemorates a pivotal moment in brewing history, paying homage to the trailblazers who have shaped the industry.”

Six states California, Louisiana, Maryland, Nevada, Ohio, and Oklahoma) and six cities (Sacramento, Los Angeles, New Orleans, Cleveland, Toledo and Las Vegas) have officially recognized Black Brewers Day this year.

The NB2A has created a social media toolkit for breweries to spread the word about the holiday. NB2A founder Kevin Johnson will be speaking at the NBWA Annual Convention today.

After 35 years in business in downtown San Diego, Karl Strauss Brewing finally owns the keys to its original brewpub.

The company closed on its brewery at Columbia and B streets on October 1, it announced yesterday. 

When it opened its doors in 1989, Karl Strauss was the first post-Prohibition brewery to open in San Diego, now a bastion of the craft beer industry. 

Karl Strauss operates six brewpubs in Southern California and distributes beer in California, Arizona and Nevada.

Acting chief experience officer Jennifer Briggs called the acquisition “a major milestone” in the company’s nearly four-decade history – one that might be lost on casual craft beer drinkers. 

She continued: “I'm guessing many consumers don't understand how hard it is for small- and medium-sized businesses to stay independent, keep people employed, and own some or all of the real estate that helps them make, sell, and serve their products.”

Insiders can read more here.

The Coca-Cola Company is “not here to crash [beer distributors’] party,” Dan White, Coca-Cola, North America chief of new revenue streams, said in a fireside chat with NBWA president and CEO Craig Purser Monday during the NBWA’s annual convention. 

White discussed the strategy around Coca-Cola’s “firewalled” alcohol subsidiary Red Tree Beverages, launched this summer. 

The launch caused a stir, particularly with beer distributors, with industry members believing the subsidiary was Coca-Cola’s version of PepsiCo’s Blue Cloud Distribution. However, White “wouldn’t be on stage” at NBWA’s annual conference if that were the case, he said.

Additionally, Coca-Cola sees the best way it can participate in bev-alc is “through relationships” between its non-alc brands and the bev-alc market like the ones the soda giant has made with Molson Coors (Topo Chico Hard Seltzer, Simply Spiked), Constellation Brands (Fresca Mixed) and Brown-Forman (Jack & Coke). 

White said: “We like to think that there’s business, like the distribution business or the selling business, that other companies can probably do a little better than we can.

“We want to bring distinct brands with distinct trademarks to the business; we want to ensure that we keep those very separate, that's through our authorized manufacture process. … And then we want to do it responsibly.”

Insiders can read more, including White’s comments on what is driving Coca-Cola’s involvement in bev-alc.

Chicago-based Metropolitan Brewing (a.k.a. Metro Brewing) has filed for chapter 11 bankruptcy. 

News of the filing was first reported last week on Twitter/X by Porch Drinking editor Mike Zoller. Metro Brewing filed its voluntary petition on October 3 with the U.S. Bankruptcy Court, Illinois Northern District, Zoller reported. 

Metro Brewing confirmed the news two days later in its own Twitter/X thread, writing: “Yeah, it’s true. Earlier this week, we filed for chapter 11 bankruptcy protection. This is the ‘reorganization’ type of bankruptcy, meant to help us right our ship. The details are super boring.”

Metro remains open and has “no current plans to change that status.”

“But we are struggling a little, especially going into the cooler months when people don’t want to hang on the patio,” the company continued. “Bottom line: we still have plenty of fight in us. And we still believe in the beer we brew. We’ll get through this. It will just be easier – and way more fun – if you join us.”

The average price of 12 oz. equivalent (EQ) of beer at U.S. bars and restaurants has increased +10.2% in the last 52 weeks (ending August 12) versus the previous 52-week period, according to CGA, an NIQ-powered on-premise market research firm.

Consumers paid an average of $4.96 for 12 oz. of beer in the 52-week period, versus $4.50 in the same period in 2022 and $4.20 in 2021. 

The double-digit increase is “nearly twice the pace of growth in spirits,” CGA wrote. 

The average price for 1.5 oz. EQ of spirits at bars and restaurants was $7.24 in the 52-week period, a +5.3% increase year-over-year (YoY). Consumers paid an average of $6.87 per 1.5 oz. for the same period in 2022 and $6.60 in 2021. 

The largest price increases were recorded for below premium beers (+12.9% YoY in 2023, and +9.7% in 2022), followed by domestic super premium (+11% in 2023, +7.7% in 2022), domestic premium (+10.3% in 2023, +8.3% in 2022), craft beer (+10.2% in 2023, +5.1% in 2022) and imports (+9.2% in 2023, +5.6% in 2022).

Insiders can read more details from CGA’s report, including state-specific price increases, and price increase numbers for spirits.

California's Beachwood Brewing has opened a new taproom location along the Pacific Coast Highway in Long Beach.

The taproom, referred to as the “2nd & PCH” location, is the Huntington Beach-based craft brewery’s seventh location.

Beachwood co-owner Gabriel Gordon said in a press release: “We’ve been working on this location since 2019, but COVID delayed the project significantly. A tasting room just makes sense – it’s an open, outdoor tasting room, in a busy retail plaza in our own backyard."

Rochester, New York-based Roc Brewing Co. has closed its doors after more than 12 years in business.

The brewery announced the news Wednesday on Facebook, writing: “It is with a heavy heart that we have to announce this. Due to financial hardships culminating this week we are forced to close our doors Saturday, 10/7. We appreciate your support as a valued member of the family we have cultivated."

Greenville, South Carolina-based Birds Fly South Ale Project will have its last day October 10 after seven years in business.

Owners Shawn and Lindsay Johnson announced the news on Facebook, writing: “As we look back on these past 7 years, we have a lot to be proud of and it's only upon reflection that we realize what we've accomplished. 

“We wish that this was a fairy tale ending, but recognize all good things must come to an end,” they continued. “Timing is everything, and we embarked on an expansion to increase our taproom sales that have taken a hit over the last year.  We don't regret that decision, only the way we went about it.”

The “silver lining” of the closure is that the owners will “have more time to focus on our family,” the duo wrote.

The Brewbound Live business conference returns December 6-7 in Marina del Rey.

Registration and the discounted room block is now open. Find out more details, including announced speakers, here.