Craft beer sales take a hit from marijuana and wine?
Source: FoodDive
Emma Liem
March 7, 2017
Wine and marijuana are taking market share from the craft beer category, according to Brew Bound. Beer’s dollar share declined 0.3% to 49.2% last year, with wine taking 32.9% of beer industry revenue and marijuana 7.1%.
40% of adults would buy marijuana if it was legal in their state, and 82% said they would stop drinking beer altogether if marijuana was legally available. If marijuana is legalized across the U.S., the beer industry could lose upwards of $2 billion, according to an analyst with IRI.
Wine is becoming a growing threat to beer as more states legalize wine sales outside of liquor stores. Wine and spirit sales outpaced beer for the second year in a row in multi-channel outlets excluding c-stores.
Innovations like canned wine have also captured millennial consumers, and companies like Yellowtail have begun launching their own branded beer products.
Dive Insight:
Foreign beer imports and millennial appetites for blended wine products are hurting the craft beer industry, despite the category’s cool factor. The Craft Beverage Modernization and Tax Reform Act was proposed last month as a way to support American brewers by providing tax relief to all brewers and beer importers. Those who proposed the bill said they hope it could give U.S. brewers a leg up over popular Mexican brewers.
Threats from beyond the beer category may be most damaging to the industry, however. Analysts are seeing an uptick in American interest in fine wines and premium wine innovations, such as wine-infused coffee and sweeter wine profiles. This is especially true for the millennial demographic, which is increasingly turning to wine rather than beer as their go-to alcoholic beverage both at home and out with friends.
Marijuana is also seeing growing interest as cannabis is formulated into more mainstream offerings. Some consumers are starting to see marijuana as a better-for-you ingredient. It is being marketed by manufacturers like AXIM Biotechnologies, which produces a cannabis-based chewing gum, as a natural solution to gut health issues.
As the taboo surrounding marijuana continues to dissipate, the food and beverage industry can expect to see disruption across a number of categories. But if beer wants to withstand consumer fascination with marijuana product innovations, it should look for opportunities to roll out premium product innovations of its own, such as more craft hard sodas or gluten-free varieties.
Recommended Reading:
Power Hour: Wine and Marijuana Cause Problems for Beer Industry
https://www.brewbound.com/news/wine-marijuana-cause-problems-beer-industry