Is the beer business headed for a “Trump moment?”
That’s the question Craft Brew Alliance CEO Andy Thomas posed this week to a room of beer industry professionals attending the annual Beer Business Daily Summit in San Diego.
Drawing comparisons between the current U.S. political climate and a rapidly evolving beer industry, Thomas challenged attendees to consider the state of the alcohol beverage sector and beer’s place amongst an increasingly more promiscuous consumer base.
As part of a wide-ranging talk that looked at the three-tier system, consumer demographics, industry trends and threats to the growth of beer, Thomas deployed several timely political analogies and suggested that, like the election of Donald Trump as the 45th president of the United States, the beer category could be headed for the “same surprise that American society and global society is now processing.”
“We lived in a world where the labels were irrelevant, pollsters that were wrong, a popular vote that was encumbered by the system,” he said. “We had an establishment that wasn’t as powerful as it thought it was, campaigns that were exceedingly myopic and facts that weren’t facts. Are we looking at the facts or are we embracing the alternative facts?”
Thomas’ argument? The definition of beer has become so distorted — “pollsters” such as IRI Worldwide or Nielsen include flavored hard sodas and cider in their definitions, he said — that beer companies have lost sight of the only definition that should ultimately matter: the consumer’s.
“Are our labels as irrelevant and outdated as these,” he said, pointing to images of the Republican and Democratic logos embedded in a slideshow presentation.
Thomas also challenged the relevance of the three-tier system, urging attendees to question whether or not it was “built for today’s marketplace.”
“I am an unapologetic advocate of the three-tier system,” he said. “But are we really working together to facilitate what is happening, or are we using it as a crutch?”
He then took it one step further, questioning whether local craft beer — something his own company is betting on and investing behind — would adequately address shrinking beer volumes (domestic tax paid shipments declined 3.1 million barrels over the last two years, according to the Beer Institute).
“Is local and craft the savior of beer, or is beer just along for the ride,” he asked while showcasing the growth of wineries and craft distilleries alongside the growth of permitted U.S. breweries (all three have similar-looking hockey stick-like growth curves).
Like similar presentations Thomas has delivered over the years, there were more questions raised than answers given.
Nevertheless, Thomas’ ultimate takeaway seemed to be that consumers are being ignored by beer companies who have failed to recognize that drinkers will consume wine, beer and spirits offerings during a typical night out.
“Somebody walks into an on-premise account, and they are out for the night, is beer romantic enough to capture their choice that night,” he asked. “Is beer special enough anymore?”
That lack of recognition, combined with the industry’s continued reliance on distorted definitions of “beer” as well as an outdated route to market could lead to some disruptive force that will shakeup how beer businesses across the three-tier system operate.
“I don’t think people are ever going to lose their desire for socialization,” he said when asked who, or what, might be the beer industry’s Donald Trump. “Is weed Trump? Weed could be Trump.”