Craft brewers march into the mainstream

For the past year or so, a growing number of craft brewers moved into larger pack sizes with more-sessionable beers, dropping prices along the way. Now here come the lower-priced craft lagers.

Two Michigan breweries are releasing 15-packs of light lagers, each priced below $16 suggested retail, according to Beer Marketers Insights (subscription required.)

Founders Brewing, which found a nationwide hit with its All Day IPA, plans to release a 4.4 percent alcohol-by-volume Solid Gold Lager in February in six-packs of cans at a suggested retail of $7.99 and 15-packs of cans for $14.99.

That price point pushes it into above-premium territory alongside the likes of Michelob Ultra. The 15-pack is priced $3 below flagship All Day, by far the top-selling craft 15-pack in the country with a 1.5 percent share of the craft segment in the latest Nielsen all-outlet figures, which track data through Nov. 11.

Fellow Michigander Perrin Brewing Company, which is owned by Colorado's Oskar Blues Brewing, just released 15-packs of its 3.8 percent ABV Perrin Light Lager in its home state with plans to expand distribution of the beer across its footprint in 2018. At a suggested retail price of $15.99, the new light lager is line-priced with its No Problems Session IPA, which remains a relatively small brand.

“This is undoubtedly a new era in ‘craft’ beer, and perhaps marks the next wave of attack on ailing domestic lagers,” Beer Marketers Insights wrote Friday in its craft-centric newsletter. The publication also quoted Founders co-founder Mike Stevens, who said craft must look at price in order to “bust through the ceiling” and reach the 85 percent of drinkers who typically don’t choose craft.

Michael Kiser, creative director of the consulting firm and creative agency Good Beer Hunting, says it serves as further evidence craft brewers are starting to realize "they're only going to be able to win over so many people by bringing them to their side of the fence."

With craft growth decelerating, Kiser says, the peak craft can reach as a percentage of total beer is beginning to come into sharper focus. To achieve anything higher than a 15 percent market share by volume, craft brewers will "need to meet American drinkers where they're at. And that means they'll have to look at (lighter) types of beers."

Even so, he questions how widespread the larger pack size trend will get because of pushback in the value chain. Kiser says distributors are wary of allowing productive craft brands to migrate out of the super premium space and begin eating share from imports and above premium brands, two categories that have grown healthily this year.

"Wholesalers need to protect that volume, and I think they're going to have a lot of trouble balancing things" if more craft brands jump into the mainstream, Kiser says.

They're already starting to get a flavor. Twenty-nine craft 15-packs could be found nationally over the past 13 weeks, according to Nielsen. That’s up from just nine through mid-April. The 15-pack has grown at a 117 percent clip over the past 13 weeks and now holds a 3 percent share of craft.

That pack size also has been a boon for larger brewers, including MillerCoors brands Keystone Light and Keystone Ice.

Behind craft leader All Day are Anheuser-Busch InBev’s Shocktop and New Belgium’s Dayblazer, each of which has a roughly 0.3 percent share of craft. Rounding out the top 5 are two other Founders brands: Its PC Pils and its Centennial IPA, each of which are just shy of a 0.2 percent share. All of those beers had an average retail case price at or below $27.10, nearly $10 below the national craft retail average, per Nielsen.

Others are moving into 18-packs, such as Chicago's Revolution Brewing, which earlier this year released its 4.8 percent ABV Cross of Gold golden ale for less than $20 per pack at retail.

Craft partners of MillerCoors and ABI are each moving more beers into larger packs. ABI’s Golden Road this year has had success with Wolf Pup Session IPA in 15-packs, while Terrapin, part of Tenth and Blake, has had a hot start with its 15-packs of its session IPA, RecreationAle.

The pack size is expected to grow even more next year, when Blue Moon Belgian White hits 15-packs. It appears as if it’s a trend that’s not going away.