When Miller introduced Lite in the early 1970s, no one in the industry had any idea how big the light segment would end up being. Miller Lite took off, followed by Budweiser Light, Coors Light, and Schlitz Light, followed by the regionals with their own version of light beer.
A few years later, the light segment surpassed domestic premiums, becoming the largest selling segment and remaining so today. Lights have survived a stream of new flavors and segments introduced over the decades, including, but not limited to, Dry beers, Ice beers and even LA beers.
Almost all these new products, including light beer, came from the large breweries who were working to increase their market share from their competition. To some degree, why rock the boat?
The chart above shows the annual brewery count since the late 1800s. From the late 1940s to the late 1980s there was little increase in brewery count; however, the growth rate for new breweries since the 1980s has been incredible, with almost 3,500 breweries and more coming.
In fact, many colleges are offering brewing classes as part of their curriculum. Some schools, including Portland State University, are offering programs that cover not only brewing, but other aspects of the industry, as well. PSU’s class on sales and distribution has more than 33 students registered. Many of these students come from as far away as Germany, Canada and Puerto Rico, and were already in the industry working at breweries, wineries, ciders, and even hop farms. Almost all either owned, or were planning on owning, their own operations.
Today is the beginning of this year’s BA convention in Portland. Attendance will be around 11,000 people and runs until Friday. As in Portland State’s craft beer program, the excitement for the BA convention grows every year as more and more people see crafts as the place to be in beer.
To some degree, the craft industry is not unlike the light beer industry when it began growing by double digits. The craft industry is now around 11% of the total beer industry. The question remains, just how big will crafts get?
There are some who believe that obtaining a 20% share by 2020 is a realistic goal, and based on recent trends, 20% seems to be very achievable. Forecasting success of any brand, much less the size of any one segment is, at best, difficult. But what we do know is this: two companies control over 50% of the beer industry with light beers, a segment that is in a slow decline, and there are over 3,400 breweries that produce a product that represent only 11% of the beer market, and that segment is on fire with thousands more operations scheduled to open.
These small operations do not have to put up with the corporate bureaucracy and other obstacles with which the large mega breweries deal. These upcoming craft brewers know what their consumers want and are giving them those craft beers.
Just how big will crafts be? It is simple. As with these brewers, the empires of the future are the empires of the minds.
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