As the calendar flips to a new year, the best breweries are taking note of where the industry is heading, taking notes of industry trends to map out their plans for success in 2024.
Untappd helps with its Year in Beer, highlighting the vast check-ins in different styles, most checked-in beers, and places worldwide checking in beer the most throughout the calendar year. From this data, we can see which beer styles are on the rise and which are dropping in popularity. We’ve also covered the importance of packaging trends in beer, showing you key focus areas last year.
But overall, how did the industry fare in 2023, and what can we expect in the new year? What channels should you invest in the most to sell your products? And what beer styles should you make to capitalize on consumer preferences?
We chatted with three top experts in craft beer trends, Bump Williams Consulting, Brewers Association Chief Economist Bart Watson, and global beverage alcohol data and analysis firm The International Wines and Spirits Record (IWSR), to find out big-picture trends to watch out for in 2024.
(Above photography courtesy of RationAle)
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What’s the Overall Outlook of Craft Beer in 2024?
Bump Williams Consulting President and Chief Executive Officer Bump Williams says that, while the short answer to whether the craft beer industry is in decline is “yes,” it goes well beyond the big-picture outlook.
“There are several craft brands enjoying phenomenal growth across the country, so it’s dangerous for me to lump all brands into one giant lump and say ‘craft is down,’” Williams says, noting the firm looks from a U.S. perspective, but also from a local, state, regional, and distributor outlook. “We see a lot of growth from craft breweries and brands, and I expect to see a lot of smaller players—ones that have great business plans, high-quality portfolios, solid retail relationships, and that understand the relationship between price and volume—to be very successful in 2024 and beyond.”
Watson says that it’s hard to know what the industry is in for in 2024, but it could be a good year, depending on how you define success.
“I’m projecting the distribution will do better in 2024 than it did this year,” Watson says. “We’ll see if taprooms/brewpubs can still grow if the brewer number doesn’t grow.”
The chief economist adds, “Looking outside of just beer …numbers, things will likely be better. Can distributed draught stabilize? What does the economy look like? Lots of questions without clear answers.”
For IWSR Research Director Adam Rogers, the industry in 2024 and its related success is more tied to the origin of the beer.
“Mexican imports continue to do well while domestic beer continues its slow and steady decline,” Rogers says. “Within the large U.S. light beer segment, there has been a significant re-distribution of volume since Q1, but while some brands gained as a result of this, the segment as a whole is still down.”
He adds, “Similarly, craft beer saw some improvement over the summer but has since gone back into decline, and this is expected to continue into 2024.”
How Close Is the Industry to Pre-Pandemic Levels?
Rogers says that spirits and RTDs have surpassed 2019 levels of volume consumption. The same can not be said for beer.
“Total beer and wine categories continue on their downward volume trajectory,” Rogers says. “Value for total beer, spirits, wine, and RTD categories have all surpassed 2019 levels.”
Williams says that the volume basis is far from being close to pre-pandemic sales.
“On a dollar basis, we are close to where we were in 2020,” Williams says. “On-premise shutdowns, brewery closings, own-premise operations getting back up and running, cocktails to-go, the poor economy—the price of gasoline makes it expensive to go out these days—and the price of draft beer and cocktails make it almost impossible for the ‘working class’ to go out and enjoy a night on the town.”
Williams adds, “So in that light, I’d say we are still in the recovery phase.”
Watson says, “Broadly craft is still slightly below where it was [before the pandemic],” but he also noted that it largely depends on which channel you’re looking at.
Which Beer Styles Will Perform Well in 2024?
In talking with some brewers, Watson has heard that there is some growth in almost every style, adding that averages can hide variation.
“That said, most of the growth we see is either coming from higher-ABV styles, mostly double IPA, or lower-ABV styles, which are a mix of a variety of things such as lagers, lighter ales, low- and no-alcohol,” Watson says.
This tracks with Untappd data. In 2023, Untappd users checked-in IPAs the most—by far—with about thirty-two million unique check-ins across all variations of the IPA style. Stouts were the second most popular at a little over eight million check-ins, followed by light lagers (7.9 million check-ins), sours (6.8 million), and American ales (6.4 million).
Williams feels beer style shifts are more of a consumer preference.
“That’s why a lot of retailers are shifting to a style set,” Williams says, “but I think anything that is flavor-forward will continue to grow; light, easy-drinking lagers and pilsners will continue to grow.”
He adds, “Non-alcoholic craft and import offerings will continue their growth as well alongside the low-carbohydrate, low-calorie options on the shelves. And when it comes to IPAs, they also shall continue growing.”
Williams also highlights that sub-premium beer, due to mismanagement of price points of other beer segments and uber-local cider options, will rise in 2024.
Rogers just says that the industry in the U.S., in general, will see no to low growth in the years ahead.
Which Channels Will See Growth in 2024?
Williams notes that C-stores will see growth in terms of money, especially for beer, but not solely beer.
“Consumers are in a hurry to get in and get out, knowing exactly what it is they want to buy,” Williams says. “They don’t like standing in lines, and C-stores offer them a solution to these shopping needs while providing ice cold beverages, hot coffee, fresh sandwiches, and gasoline all in one stop.”
Williams stresses that C-stores are and will continue to be the backbone of beverage growth. Some other trades will see selective growth in certain neighborhoods, he says.
“It’s a matter of population growth and demographics,” Williams says. “Several grocery chains are enjoying growth today because they cater to shoppers in their trading zones. The same is true for large-format liquor stores, dollar stores, mass merchandisers, super-centers, and perhaps even a few drug stores around the country.”
He says it’s all about “micro-marketing” and providing the right selection of products in the right stores.
Rogers says that the U.S. economy continues to face challenges affecting consumer spending.
“After substantial pandemic growth, online alcohol sales are expected to stabilize as the on-trade recovers and consumers revert to more typical purchasing habits,” Rogers says. “Increased cost of living will prompt some consumers to go out less, however. Negative perceptions of the on-premise have been exacerbated by pandemic behaviors, when consumers became more aware of the increased costs associated with going out for a drink.”
He adds, “E-commerce growth in the U.S. is predicted to slow down in all categories as demand shifts from pandemic necessity to novelty and convenience.”
Rogers notes that Millennials and Gen Z of legal drinking age are most open to using online channels, but consumers across demographic groups are expected to continue making online purchases at the same rate.
“Buying online is mainly driven by personal treats and replenishment, with no significant change in the past year,” he says.
Watson, citing a Goldman Sachs retailer survey, says that craft space will likely get cut in convenience in spring resets.
“That said, craft has new momentum in the channel driven by the overlap of double IPAs and larger-format (mostly 19.2oz) single-serve cans,” Watson says.
Another area Watson is hopeful for some success this year is in bars and restaurants.
“While the draft environment has certainly been challenged in recent years, I’m talking to more craft brewers thinking critically about their on-premise strategy going forward,” Watson says.
Which Packaging Might Be Successful in 2024?
Rogers says that the IWSR has conducted consumer research to show where packaging successes may lie.
“IWSR consumer research shows that cans and glass bottles are the favored packaging materials,” he says. “Multipacks of twelve-plus and six-packs are the most preferred choices of format.”
Williams said single-serve options are set to boom.
“Single serves are on a rocket trajectory path for continued growth because consumers like the portability, assortment, and variety offerings at a great price point,” Williams says. “If twelve-packs exceed the $20 price-to-consumer threshold, we will see some softness in that package type.”
According to a Bump Williams report from the summer of 2023, the 19.2oz can is the top-growth contributor to incremental dollar sales gains for single-serve cans in 2023.
Williams said that 19.2oz and 24oz to-25oz options will continue to grow. He adds that he sees eight-packs as a growth segment to be aware of, albeit small. Also, with twenty-four packs, he forecasts value propositions.
“I see a lot of discounting to try and recapture some of those lost shopping occasions caused by the Bud Light ‘situation,’” Williams notes. “I think we will also see a lot of twofers and threefers with attractive price-to-consumers in order to drive sales in the single-serve arena.”
Watson says he hasn’t looked into packaging trends recently but will write an annual packaging recap this month. He adds that members can see the BA’s data on the three-tier beverages/NIQ dashboard.
What’s the Outlook for RTDs, Non-Beer, and NA Options?
Rogers says that the segment of NA options, as well as hop water, is a relatively underdeveloped category in the U.S.
“No-alcohol beer is fueling growth; it remains notably larger than other sub-categories in volume terms, thanks to the maturity of the segment and the ongoing introduction of new brands from large and small breweries,” Rogers says.
According to NielsenIQ-tracked scan data, during the 52 weeks ending July 29, 2023, non-alcoholic offerings accounted for $510 million in sales. Additionally, non-alcoholic beverages grew 31% percent year over year, increasing $121.2 million.
Amazingly, but perhaps not surprisingly, non-alcoholic beer drives this growth, amounting to 86.1 percent of the segment, according to NIQ, backed up by non-alcoholic wine (11.2 percent share) and spirits (2.7 percent share).
Although both non-alcoholic wine and non-alcoholic spirits account for a smaller percentage of non-alcoholic beverages sold, both categories grew pretty substantially over 2023, with NA wine gaining 18.5 percent and NA spirits climbing an incredible 94 percent compared to last year.
Regarding RTDs, Rogers says that its market is shifting from volume to value as consumers gravitate to more premium products with fuller flavors and higher ABVs.
“A saturated malt-based hard seltzer segment will retain the largest share of the overall RTD category over the next five years,” Rogers says. “But its recent volume declines are set to continue as consumers increasingly turn their attention to cocktails-long drinks, FABs and hard teas.”
Overall, IWSR expects the global RTD category to grow twelve percent in the next few years, hitting $40 billion by 2027.
Rogers adds that IWSR is also tracking a rise in products such as hop water and THC beverages.
“IWSR is also seeing the boundaries between alcoholic and non-alcoholic categories blurring,” he says. “For example, hard seltzer brands are increasingly offering no-alcohol versions of their full-strength-ABV products.”
Williams says that non-alcoholic options are big for 2024.
“NA beer is not a fad. It’s a real growth sector, and retailers are embracing this growth trend by allocating more shelf space,” Williams says.
He says that hop water has a smaller growth point but is growing nonetheless. He adds, however, that he isn’t sure how big that will get. What he is sure of is that malt-based, flavor-forward innovations are being unveiled for the spring.
“That will get a lot of play, and it’s all a matter of quality, meeting demand, and staying in stock on the shelves,” Williams says, adding that distributor focus and price-to-consumer thresholds will determine the winners from losers.
Williams also points to RTDs as a space to be wary of, with expectations that the market will continue growth, but the growth trends will dip over the next two to three years.
“We all need to be very cautious on what goes on the shelf, what brands need more shelf space, and what brands/packages need to be cut to drive profits from this segment,” Williams says.
Watson says that the non-alcoholic beer options will almost certainly see continued growth with more brewers entering the space.
“But it remains to be seen how big it can get,” Watson says. “Hop water has lower barriers to entry than non-alc, but there probably isn’t going to be a ton of shelf space yet, and retailers are mixed on where to put it.”
He adds, “And it will be interesting to see if brewers can find the right pricing and marketing strategies for drinkers to see value. We’ll also see how many players the market can really take.”
Any Wild Card Trends to Look Out for in 2024?
Williams says to look out for THC or CBD-infused beverages, though it’s tough to predict.
“There are too many variables about legality and availability,” Williams says. “Not to mention taste, strength, and production quality.”
He adds, “I can tell you with one hundred percent certainty though that all health and wellness, all-natural, better-for-you, organic, and gluten-free offerings will be getting bigger and bigger for years to come.”
Watson can’t pinpoint any trends that aren’t getting deserved attention but is hoping for certain things from a personal drinker standpoint.
“I’ll cross my fingers for the overlap of fuller-flavor and lower-ABV options,” Watson says. “West Coast pilsner is something I’ve seen slowly spreading across the country. This isn’t driven by data but by personal preference, but I’d love to see more of those.”