Good Beer Hunting

We’ve Created a Monster — What Does it Mean to Talk Flagship Fatigue?

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Depending on what doom and gloom you’re filling your time with these days, be it politics, money, or religion, at least we can all agree that beer is fun. Well, unless you’d like to drink the same beer twice. Or tell someone you’re looking for something reliable. Things are so bad, in fact, that we’ve got a month-long campaign in February to rage against the dying of the light for heritage and flagship craft beer brands.

Just to be clear: beer is still fun and hyperbole is still troublesome.

Much like the perceived death of American Stout, recent hand wringing over the failure of consumers to properly appreciate reliable core beers suffers from a hint of Old Man Yells at Cloud Syndrome. Beer loyalty isn’t dead, it’s just changing—like so many other aspects of the industry that we, as consumers, have asked for and supported and enjoyed and celebrated. We are our own worst enemies.

Some of the biggest, most important beer brands in the U.S. have seen slow declines in volume sales, essentially starting somewhere in the 2014-2016 timeframe. Sierra Nevada Pale Ale, Samuel Adams Boston Lager, and New Belgium Fat Tire are just three examples from some of the biggest Brewers Association-defined “craft brewers” in the country. And so, a well-meaning movement named #FlagshipFebruary is meant to turn back the clock and get people excited about core beers again. Of course, in reality, nobody has really forgotten about them in the first place. They’re flagships, after all. This is true for everyone from a small brewery in Williamston, Michigan all the way up to a nationwide behemoth.

“A lot of beer drinkers have developed a sort of ADD with respect to the beers they drink, so going for a glass of beer at the bar or pub becomes less a pleasant distraction and more a relentless search for what’s new and exciting,” writer and author Stephen Beaumont told Forbes about his effort to honor past favorites. “In this mad rush towards the unusual and unknown, we tend to forget the great, familiar and still-wonderful beers that guided us all along the path to the craft beer renaissance.”

Sierra's Pale Ale, which sold a high of almost 280,000 barrels in grocery, convenience, and other IRI-tracked stores in 2015, lost about 20% of that volume through 2018. But still, on the back of Pale Ale sales in those stores alone, Sierra Nevada would be a top-20 craft brewer in the country. In fact, if you took only convenience-store sales—which amounted to just over 77,000 barrels’ worth in 2018—Sierra would still be a top-50 brewery.

This also ignores the odd situation that Sierra Nevada has put itself in. In the last few years, with declines in Pale Ale and Torpedo (a 100,000-BBL brand itself in IRI stores), the CA and NC-based brewery turned to brand extensions (Sidecar Orange Pale Ale [which is now an IPA], and Tropical Torpedo IPA) to breathe new life into the decades-old brands. Yes, Pale Ale is selling less, but it's also faced Sierra Nevada's own attempt to cannibalize its sales.

The giant, green elephant in the room is hard to avoid, too. When it comes to craft beer growth, pretty much all of it comes from one, singular style: IPA. To be clear, this isn’t exaggeration. For craft beer, the last few years’ volume growth have come almost exclusively from IPA brands—something highlighted again by Georgetown Brewing Company’s Roger Bialous in a recent GBH podcast. In IRI sales alone, craft beer has seen an increase of about 22% volume in the five-year period of 2014-2018. But if you remove the IPA category, the entire thing goes essentially flat, and drops to 1.3%.

This could potentially create trouble for the idea of flagships in several ways. Firstly, the monoculture of the modern IPA is far removed from what was popular even five years ago, so to put blame on consumers for following their taste buds would overlook the Pied Piper-like encouragement they’ve been getting all along. Today’s drinkers can’t be expected to pine for Deschutes Mirror Pond Pale Ale, undoubtedly one of  the U.S. beer scene’s foundational brands, when competing recipes are being engineered to fit our biological preferences for juicy or fruity. But even still, Lagunitas IPA remains the best-selling brand of the style in the country, followed by Founders All Day IPA, Sierra Nevada Torpedo, Goose Island IPA, and Elysian Space Dust: all foundational, flagship brands for their respective businesses.

For what it’s worth, Lagunitas IPA (-3.3%), Torpedo (-8.3%) and Goose IPA (-1.6%) were down from 2017-2018, while All Day (32%) and Space Dust (64.5%) were way up in IRI volume sales, but still amounted to equivalents of almost 79,000 BBLs (Space Dust) to about 168,000 BBLs (Lagunitas IPA).

You can't push people to drink fresh and local, offer them the highest number of freshest, localest new beers, and then cry foul when nationally-distributed brands fall by the wayside. That’s true for the most enthusiastic beer lovers, at least. Amber Ales may not be sexy to craft beer geeks, but Fat Tire still sells about as much of what Abita Brewing moves with its entire portfolio. Is it disappointing that such a classic brand lost 20% in IRI sales from 2017-2018? Of course. But New Belgium also created its own direct competitor with Fat Tire Belgian White, and has had to pivot and modernize with its lineup of Voodoo Ranger IPAs. Voodoo Ranger Imperial IPA was one of just four of the top-15 craft brands to show year-to-year IRI growth from 2017-2018.

[Disclosure: New Belgium is a GBH underwriter that supports our Into the Wild series.]

But there’s also the matter of how we look for the products we buy. Shoppers are particularly prone to stay close to home, so as options have grown exponentially—not only the number of breweries, but also the number of brands available—it wouldn't be a stretch to assume some level of correlation between buying habits and what's made and available nearby. Nine out of 10 consumers typically travel 15 minutes or fewer to make everyday purchases, and when excluding proximity, price and quality became the highest motivating factors. All these elements—locality, cost, quality—should sound familiar for beer lovers: they’re constantly being discussed within the craft community as core values of being a loving craft beer consumer.

Even off-premise bars and restaurants are simply playing to the capitalist structure of what the industry provides and what consumers want. More breweries mean more options, which also means that these locations fill their taplines however they wish, often to appeal to people seeking something local or familiar, or who at least show an interest in such products. Not only is this sentiment gaining traction in grocery stores, but consumers have also shown a willingness to pay more for items they care strongly about. You only need to check out the rise in farmers markets to get an idea of how shoppers’ priorities are changing.

If we have what amounts to a politically-inspired effort by the Brewers Association to focus on “small and independent,” which could also easily mean “local,” what we then have is an industry highlighting the importance of variety and supporting neighborly entrepreneurs. When beers that were hits 10 years ago start slowing down, it makes perfect sense.

Advocates spent the last 40 years decrying the problems of mass market Lager and clamoring for more options and experiences via “small and independent” craft brewers. They can hardly complain when those wishes come to fruition, and when 85% of 21-and-over Americans live within 10 miles of a brewery. This is the future liberal, promiscuous drinkers want, old-guard flagships be damned.

“As craft brewers, we have seen some of our regular customers move away [from our beer as they’re] chasing choice, which has become more abundant,” David Walker, co-founder of Firestone Walker, told The Takeout, emphasizing that his peers have told drinkers to try new things and explore flavors for years. This is now a culmination of that effort. “I always tell my fellow brewers: Be careful what you wish for. We got exactly what we set out to achieve.”

Trial and error is at the core of any experiential good, including beer, and for the consumers driving the flagship-or-no-flagship conversation (where demographic bias is likely in play), craft beer is relatively inexpensive compared to other alcohol options, a factor that allows for increased variety.

These trends aren’t just style-dependent. Consider how beer is being made at a time when more than 7,000 breweries exist in the U.S., the majority of which produce under 1,000 barrels of beer a year. Smaller systems in taproom-focused business models would mean a higher turnover of recipes and brands. Breweries of all sizes are using pilot systems to refine recipes and crank out experimental batches. That doesn’t mean more SKUs equates to no flagships or less loyalty, it just means that brewers are practicing a basic tenet of American consumerism by providing options, or even simply by expanding their own skills and abilities.

It’s all some variation of the widely-repeated “I brew what I like to drink,” heard so often from brewers around the country. While uttered independently from one another, this has become a regular maxim shared by the women and men making our beer, influenced by their own alcohol upbringings. Many entered the industry at a time of daily brewery openings and the need to diversify beyond a traditional brewpub model of Pale Ale, Porter, and Amber, and other classic styles that were once the norm. That also doesn’t mean that flagships, as the bread-and-butter brand that steers the ship, have disappeared. Just because a single beer may constitute 30-40% of volume instead of twice that much, it still leads the way.

Even moreso, maybe it’s simply worth considering what a “modern” flagship may be: if a brewery is making dozens of beers a year for taproom and/or packaged sales, the math alone means that the defining nature of a “flagship” might change in raw numbers, but not purpose. It’s almost exactly what happened with Georgia’s New Realm Brewing, which opened a second facility to brew flagships states away from its experimental batches.

“It’s a calculated strategy, but the more flexible you are, the more you’re able to adapt to industry changes,” Ben Savage, chief marketing officer at Flying Dog Brewery, explained to me a couple years ago as his company was going through updates to its portfolio.

There’s also the space where personal and professional interests collide. In a conversation on the Good Beer Hunting podcast, Jude La Rose and Jeremiah Zimmer of Hop Butcher for the World spoke about an investigatory passion when it came to hops. The pair have built a brewery on the wild success of hazy IPA and constantly evolving recipes in order to determine the exact pairings of hop varietals needed to provide unique flavor experiences. It’s not about purposefully never creating a flagship or telling consumers to always look for the next, new thing. It’s a business plan that also hits at the core of who they are as beer drinkers. Their “flagship” can be a style and process, or variations on a particular theme or hop combo.

“We’re always hunting that new flavor,” La Rose told host Michael Kiser. “It’s as much we drink a lot of beer and we love hops, so we know what that feeling is like for ourselves. We’re seeking those beers out. We want to be able to create that as much for others as ourselves and ourselves for others.”

Also on GBH, brewers from across the country and world shared how an increase in what could essentially be considered side projects was made possible by their flagship brands. Dan Carey, co-owner and brewmaster for New Glarus Brewing, proudly proclaims that “this is the brewery that Spotted Cow built,” a reference to the brewery’s most popular beer, whose success has also allowed New Glarus to experiment with wild and sour beers, and build a new distillery. For breweries like New Glarus and Allagash, a rise in quirky one-offs doesn’t mean the death of anything. It just means today’s business plans, cost of equipment, and other factors allow for additional playtime:

“One percent of sales, 100% of soul” is the refrain often heard from Allagash Brewing Co. staff when talking about their barrel-aging and coolship programs. Brand-leading Allagash White, is the tongue-in-cheek hyperbole representing “99%” of sales. (Truthfully, it’s closer to 80%.) It’s a common business model for many a craft brewery: do what you have to in order to do what you love. Make the beer that pays the bills, but don’t forget about the stuff that gets you excited and can endear you to customers.

Perhaps the most important factor in understanding the challenges or successes of Flagship Anything is also found in the spirit of the #FlagshipFebruary effort. It’s not only supposed to be about classics, but a celebration of the brands that allow for all the fun, new stuff that excites brewers and drinkers alike. It’s not out of the ordinary for flagships to be born out of serendipity these days. New York’s Industrial Arts Brewing Company is expanding this year, almost exclusively because of its wildly popular NE IPA, Wrench. That beer amounts to two-thirds of its volume. Founder Jeff O’Neil told Craft Brew News that maxing out his brewery would take seven or eight years of operation, but because of Wrench’s success, he’s “at least 5 years ahead of plan.”

“I think as a brewery starting out small and growing slowly and carefully, your flagship is your reliable source of production and sales volume week in and week out,” Glenn Lewis, vice president of operations at New Jersey’s Kane Brewing, told Forbes. “Strong flagship sales open the door for experimentation—small batch beers that might have less commercial appeal but are important to us, or for barrel aging, where you’re spending a lot of money and time and taking up valuable square footage on beers that might not generate revenue for two years.”

This mindset is particularly valuable. Despite the lagging sales of classic beers, to flatly proclaim that people who don’t drink the same beer twice or who don’t buy core beers are a problem goes too far. These kinds of beers aren’t disappearing and they’re not going away. All Day IPA can’t be made fast enough for Founders. Firestone Walker’s 805 Blonde Ale has influenced an entire business plan. Even for a small brewery in Tennessee, a plain ol’ Pilsner has changed its game.

Just because Bud Light has been in decline for five years doesn't mean it—or American Adjunct Lager—is on the way out. It’s arguably the flagship of American beer, selling the most volume of any beer in the country: more than Coors Light and Miller Lite combined. Pop over to the message boards on RateBeer or BeerAdvocate and it’s not hard to find discussions about the need to move people away from these brands, rather than convictions that they’re about to go up in a puff of smoke. The same can be said for the anchors of the craft beer scene.

“Instead of accepting the fact that their job is a lot harder, it’s easy for brewers to turn and say, ‘The consumer is fickle. He doesn’t know what he wants,’ Lester Jones, chief economist for the National Beer Wholesalers Association, told The Takeout. “No, the consumer knows what he wants and the consumer is tasting to find what he wants, but given so many choices, it just takes longer.”

Even Merriam-Webster doesn't seem so anxious about the state of "flagship," mindfully defined as "the finest, largest, or most important one of a group of things." With that definition in mind, every brewery everywhere has a flagship. It just might be in front of the patron sitting next to you at the bar instead of in your own pint glass.

Words by Bryan Roth