Craft Beer Is Taking A Bigger Share Of The Market

In 2010 and on into 2011 much speculation was being made about figures showing that overall US beer sales were seeing a decline, while craft beer was experiencing something of a boom. So much so that the Brewers Association had to revise their upper limit of what constitutes a craft brewery from two million barrels a year to six million so that the Boston Beer Company could continue making Sam Adams and calling it a craft beer when their annual production broke the two million barrel threshold a year or two ago.

So, if beer sales were down but craft beer sales were up that could only mean one thing - sales of mass-produced lager from the big brewers were falling off. And now it seems that the popularity of fizzy yellow beer is taking a downward turn in the UK too according to a new market research report.

It's important to understand before we go on that lager has never been as massively dominant in the UK beer market as it has in the US. Ales of one kind or another have always been the tradition, and although bitter is looked upon as the quintessentially British beer it's only since roughly the mid 1950s that bitter began to overtake mild as the predominant beer style sold in pubs. Nor are the lagers in question exactly the same on either side of the pond. In the US we're talking mostly about the American adjunct lager which has been developed from the German or Czech pilsner, while the UK's most popular lagers are what's called a pale Eurolager - more akin to a German helles. Either way, they're both made in huge volume and usually with profitability in mind first and quality second, despite what the advertising might say. And now it seems they're not as popular as they once were. How come?

A little trans-Atlantic history.

After prohibition a small number of big breweries who had managed to make it through that awful time were able to consolidate their hold on the American beer market, and the beer they made was the ubiquitous pale lager. Sure, a few smaller breweries that had been around before prohibition, such as Anchor Brewing in California and the Spoetzl Brewery in Shiner, TX, were still in business, but as we all know by now, it was the output of breweries such as Pabst, Anheuser-Busch, Miller and Coors that became synonymous with American beer in the 20th century. The adjunct lager, so-called because of the added ingredients (adjuncts) such as corn and rice which make it cheaper to brew but which add little to the flavour, leastways, little that's good in a beer, was pretty much the only choice for the overwhelming majority of American beer drinkers.

And then President Carter did a wonderful thing - in 1978 he legalised homebrewing. That moment is generally looked upon as the beginning of American beer's renaissance for it allowed people like Ken Grossman (Sierra Nevada) and so many others to legally turn their hands to a hobby which would otherwise have been against the law, and eventually set up in business and start brewing beers that are, shall we say, everything that bland lager isn't, influenced, no doubt, by Jack McAuliffe's New Albion Brewery which had already been in existence for a couple of years by the time Jimmy Carter signed that piece of paper.

Although nothing as ghastly as prohibition had happened in the UK, there had been a few dubious episodes in the country's beer timeline during the 20th century. Around the time of the first world war, beer strength took something of a nosedive as the government became worried that munitions workers would get drunk and blow themselves (and the factory) to kingdom come. It was for the same reason that strict licensing hours were introduced around the same time. The very same licensing hours that persisted right through until the end of the century, first being relaxed so that pubs could stay open in the afternoon, having previously had to close for two or three hours, and then virtually done away with altogether so that the dreaded "Time, gentlemen please" no longer had to be called by the landlord at 11pm (or 10.30 in some jurisdictions), and pubs could stay open (almost) as late as they like. This doesn't actually happen too much because so many pubs are situated in residential areas and the rowdiness often associated with 'chucking out time' wouldn't be tolerated by the pub's neighbours, so most close their doors at midnight.

And then there's keg beer. To the average American craft beer drinker, the idea of keg beer holds no demons. That's how draft beer is done, right? But in the UK, draft beer was for centuries dispensed from a barrel by turning a tap or pulling on a hand pump. In other words, cask-conditioned beer. The beer in the cask (sometimes wood, sometimes metal) was still fermenting when it got to the pub and it needed plenty of care and attention on the part of the publican to get it to the right condition. Once tapped it was good for about three days before it started to become oxidised and develop unpleasant flavours.

Force-carbonated keg beer to the rescue! Keg beer had none of those problems. It was filtered, it was pasteurised, it was sterilised, it was pretty much bulletproof. Brewers didn't even have to keg it at the brewery - they could pump it into tankers and drive it to kegging facilities all over the country, even to other countries before shipping it off to the pub, thus cutting down on transport costs. That's hardly the kind of treatment US craft brewers mete out to their beers. Their keg beer is overall a better brew, is usually unpasteurised, often unfiltered, especially in the case of hefeweizens and witbiers and is generally treated with much more respect both by the brewer and the drinker.

Before we go any further, I have to take issue with Roger Protz and his comment in the BBC story that "In [the 1970s] all bitter was cask-conditioned and had to be consumed within a few days of reaching the pub". At the time I started drinking in pubs (early 70s), cask-conditioned beer was just about non-existent in my part of London and many parts of the country. If you had the notion to travel to west London you'd find yourself in Young's and Fuller's territory, and neither of those two breweries ever stopped making cask-conditioned beer. Likewise many other family brewers around the UK, but when lager started to become popular in the mid 70s, cask beer was already on the wane throughout the land and keg beer was fast becoming the norm. That's why CAMRA - the Campaign for Real Ale - was founded in 1971, to stop cask beer from becoming extinct. Courage Tavern, Whitbread Trophy, Worthington E, Double Diamond and Watney's Red Barrel were all well known nationally distributed keg bitters by the beginning of the 70s, so the idea that "all bitter was cask-conditioned" at the time is simply not true.

Let's get back to the subject matter. A few years after I began my drinking career lager suddenly became fashionable. Oh, it had always been there, but it was largely thought of as a ladies' drink. Lager and lime - a pint of lager with a dash of lime cordial - or lager and black(currant cordial) were popular drinks amongst women, and young drinkers who had not yet worked their way up to bitter or Guinness, and also, it seems, of four musical lads from Liverpool. But the mid 70s it was being drunk by anyone and everyone, particularly by young men who wanted to look hip; young men who had lost the taste for cask-conditioned beer or who had never had it in the first place, having only drunk keg bitter. And they were paying extra for it too - about 15% more than the average pint of bitter. A pint of lager was quite refreshing on a hot summer day, and the record-breakingly hot summer of 1976 no doubt played its part in cementing the popularity of lager, but lager didn't give the same satisfaction and taste as a pint of bitter, even keg bitter, and it certainly wasn't in the same league as Live Oak Pilz, Pilsner Urquell, Spaten Dunkel or Ayinger Celebrator. No, this was the mass produced Eurolager - Heineken, Carling, Kronenbourg, Stella Artois, aka 'the standard lager'.

I'll give them due credit though - although the product wasn't all that great, some of the advertising campaigns were. Both "Heineken refreshes the parts that other beers cannot reach" and "I bet he drinks Carling Black Label" ran for years and are fondly remembered, as are Paul Hogan's 'Amber nectar' ads for Fosters. Mind you, the ale brewers fought back with a few of their own.

It's not hard to decipher the message Courage was sending out in commercials like those: by using period settings and costume together with faux black and white footage they were reinforcing the image of bitter, not lager, as the rightful and traditional choice of beverage for the British working man and woman when visiting the pub.

The American adjunct lager and the British standard lager are unlikely to be going away any time soon, but I think we can say that small chinks are appearing in their armour. For sure the big Euro brewers such as Heineken and Carling are unlikely to lose their grip, and Bud MillerCoors will always have the lion's share of the US market, but like all shrewd businesses they're responding to a trend in the market and getting in on the act. We've already seen Budweiser American Ale and Bud Light Platinum hit the shelves, and Coors are doing very nicely with their pseudo-craft witbier, Blue Moon. It remains to be seen just how big craft beer will become, and how massive a brewer such as Sam Adams can get before it's thought of as just another macro.

I think they'll be able to avoid that as long as they put the beer before the balance sheet.