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    Brewbound Podcast

    A State of Craft Update with Bart Watson and Katie Marisic of the Brewers Association

    Wed May 08 2024
    Craft BeerMarket TrendsBreweriesIndustry DataMarketing StrategiesGovernment AffairsLegislative UpdatesTax Provisions

    Description

    The episode covers an overview of the craft beer industry, market trends and challenges, positive stories and growth opportunities, the evolution of breweries and community engagement, analyzing industry data and addressing challenges, marketing strategies and future events, government affairs and legislative updates, and tax provisions and future events.

    Insights

    Craft beer sales experienced a challenging period in April

    Craft beer sales faced declines in volume and convenience store sales.

    Athletic Brewing reduced prices and saw growth

    Athletic Brewing lowered prices and experienced high double-digit sales growth.

    Increased competition may impact pricing strategies

    Competition from non-alcoholic versions by major brands could be affecting craft beer pricing strategies.

    Positive vibes at the Craft Brewers Conference

    Bart Watson highlights the positive atmosphere at the Craft Brewers Conference and discusses his new role as VP of Strategy for the Brewers Association.

    Breweries are evolving into community centers

    Breweries are hosting events and creating comfortable environments to engage with their communities.

    Coalition forming to address decline in draft beer sales

    A coalition is working to find solutions for the decline in draft beer sales at different levels of the industry.

    Craft beer brands focus on marketing and branding

    Craft beer brands are emphasizing marketing and branding strategies to connect with consumers.

    Discussion on government affairs work in the brewing industry

    The importance of government affairs work in the brewing industry is discussed.

    Legislative updates impacting brewers

    Advocacy for legislative acts like the USPS Shipping Equity Act and the Cheers Act is highlighted.

    Tax provisions and future events

    Bipartisan legislation, tax provisions, and upcoming events related to the brewing industry are discussed.

    Chapters

    1. Craft Beer Industry Overview
    2. Market Trends and Challenges
    3. Positive Stories and Growth Opportunities
    4. Evolution of Breweries and Community Engagement
    5. Analyzing Industry Data and Addressing Challenges
    6. Marketing Strategies and Future Events
    7. Government Affairs and Legislative Updates
    8. Tax Provisions and Future Events
    Summary
    Transcript

    Craft Beer Industry Overview

    00:00 - 07:56

    • Craft beer sales experienced a challenging period in April, with declines in volume and convenience store sales.
    • Some craft beer brands implemented significant price increases, while others like Athletic Brewing lowered prices and saw growth.
    • Despite recent declines, there is optimism for an upswing in sales during the summer selling season.

    Market Trends and Challenges

    07:33 - 15:41

    • Athletic Brewing has reduced its average case price and is experiencing high double-digit sales growth.
    • Increased competition, especially from non-alcoholic versions by major brands, may be impacting pricing strategies.
    • Stone Delicious saw a significant price increase after previously tweaking prices down for gains.
    • Voodoo Ranger's Imperial IPA and Juice Force are performing well, but Fruit Force is facing challenges possibly due to cannibalization by Tropic Force.
    • The Beer Institute reported a significant decline in domestic tax-paid shipments for March, which could impact the overall beer industry.
    • Import numbers, including Mexican imports, were also down year over year, indicating broader challenges in the beer market.

    Positive Stories and Growth Opportunities

    15:11 - 22:00

    • Despite overall craft volume being down, there are growth stories and optimism within individual craft breweries.
    • Bart Watson highlights the positive vibes at the Craft Brewers Conference and discusses his new role as VP of Strategy for the Brewers Association.
    • Breweries are expanding into distilled spirits, with suppliers evolving to meet members' needs for total beverage companies.

    Evolution of Breweries and Community Engagement

    21:44 - 27:35

    • Breweries are shifting focus towards business aspects and exploring diverse models and experiences to differentiate themselves.
    • Breweries are evolving into community centers by hosting events and creating comfortable environments for patrons.
    • Large regional breweries are reevaluating their footprint and considering partnerships to optimize production and profitability.

    Analyzing Industry Data and Addressing Challenges

    27:13 - 33:05

    • Brewers are considering whether they are better off alone or in a group, and how their brand resonates regionally.
    • Analyzing industry data involves looking at various factors such as median growth and removing outliers to understand real change.
    • The NA beer category is growing but dominated by a few firms due to high costs and challenges in production.
    • There is a coalition forming to address the decline of draft beer sales, with a focus on finding solutions at different levels of the industry.
    • Contract brewers becoming voting members prompts discussions on how to cater to their needs and provide resources for success within the association.
    • Innovation in the beer industry doesn't always mean new products but can involve marketing and branding strategies that resonate with consumers.

    Marketing Strategies and Future Events

    32:39 - 38:18

    • Craft beer brands are focusing on marketing and branding to connect with consumers, even if the products are not significantly different.
    • Brewers are encouraged to spend more time on marketing strategies to reach a broader audience and make craft beer more mainstream.
    • Selecting host cities for beer events involves considerations like logistics, hotel availability, safety, and potential impact on the local beer scene.
    • Future host cities for beer events include Indianapolis and Philadelphia.

    Government Affairs and Legislative Updates

    37:57 - 44:18

    • Discussion about potential after-party plans and introductions at the Craft Brewers Conference
    • Imposter syndrome discussion and the importance of government affairs work in the brewing industry
    • Advocacy for the USPS Shipping Equity Act to allow postal service to ship alcohol where legal
    • Explanation of the Cheers Act to incentivize new draft lines in restaurants and bars
    • Collaboration with industry coalitions for legislative support and attention to tax bills impacting brewers

    Tax Provisions and Future Events

    43:54 - 50:22

    • Bipartisan legislation in the Senate addresses the Child Tax Credit and tax provisions impacting brewers.
    • There is a push to reinstate the research and development credit for brewers, allowing depreciation of R&D investments.
    • 2025 is expected to be significant tax-wise, with attention on fiscal appropriations and dietary guidelines.
    • The 2025 dietary guidelines review includes assessing alcohol's impact on health, potentially changing recommended drink limits.
    • The shift of alcohol portion oversight from USDA to Health and Human Services affects the upcoming dietary guidelines.
    • The upcoming hill climb event in June will bring various stakeholders to Washington DC for discussions and presentations.
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