Reinvent and diversify says US Brewers Association Chair
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Taprooms need to continually reinvent themselves and brewers need to consider diversifying their portfolios, according to US Brewers Association board chair Garrett Marrero.
Delivering the opening keynote at the recent Brew Asia conference in Saigon, Marrero – who is also CEO and co-founder of Craft ‘Ohana, comprising Maui Brewing and Modern Times breweries – discussed some of the challenges that US brewers were facing and how they may be relevant to the region.
He presented figures, similar to those presented by the association’s chief economist Bart Watson at CBC in May, showing the overall US beer market was down by 3 percent, and craft beer is effectively at zero growth, while imports are up by 2.8 percent.
He noted that after years of unprecedented openings, the graph lines tracing brewery openings and closings were coming together, saying that this was a sign of a maturing market.
“Now, some people look at this [the rise in closures] and point to what is effectively zero market growth and say, ‘the world is over, craft is dead’,” he said.
“That’s really not the true story. What’s really true is that the craft beer market is maturing.
“In most industries when you see a relative equilibrium, openings and closings, after some of the historical double and triple-digit growth rates breweries have had, it’s just slowing down, that’s all it is, slowing down and maturing of the beer market.
“This is nothing to be afraid of, and it’s probably something you’ll see as your markets continue to mature.”
He noted that the one ray of light at the moment was that tap rooms do appear to be growing, seeing 7 percent overall, especially new tap rooms that showed the strongest growth and that “the vast majority of openings were tap rooms”.
“The new breweries, brew pubs and tap rooms, are doing things differently than we did when we first opened, they’re reaching different markets,” he said.
“They’re serving alternative beverages because they realize that their consumers, the guests coming in, not everyone at the table wants to drink the beers.
He said that the success of more recently opened tap rooms showed the need to examine and potentially reinvent regardless of business model.
“This is a continual, this is not something that you’re going to do one time and then say every 10 years ‘I’ve got to look at my model’.
“It is really listening to the customers. Go into your tap rooms and talk to the people that are ordering any beverage and ask them, ‘why why did you order that?’”
Marrero, whose brewery started making seltzer in 2019, said regardless of what was offered, it has to be quality “but having that diversity of beverage also helps”.
“I would really caution don’t just make a seltzer make a really good seltzer or whatever beverage you might make.
“Just make sure it’s a quality beverage your fans, they know the difference.”
He also spoke of the need for brewers to diversity.
“When we first started, it was beer only, and we really quickly realized that it has to be more than beer,” he explained.
He referred to the brewers at the conference and the choices they make.
“Even last night, many of the brewers here said, ‘Hey, as soon as we’re done, you’re gonna get some cocktails’.
“How can we expect our consumers to only drink beer if we’re not doing that?”
He said his company, which acquired fellow brewer Modern Times last year and now produces craft beer, seltzer and coffee, has evolved.
“And our job is shifted from simply producing great craft beer in a local market, to really being that super-premium lifestyle brand.”
He said while seltzer was strong, there was some luck involved in launching immediately prior to COVID.
“Our hard seltzer came online in November 2019, with all flavours launched in January 2020. The pandemic hit two months later,” he said.
“And the vast majority of Hawaiians stopped drinking beer because after a month of just sitting at home drinking beer, you tend to put on a little bit of weight, and so we saw our seltzer just skyrocket.
“Our seltzer is 5 percent alcohol, 100 calories, no sugar.”
Marrero’s comments come as the US Brewers Association changed its policies to allow exhibitors to pour one non-beer product including hard tea and seltzer at this year’s Great American Beer Festival in Denver.
Marrero also revealed plans to grow into the Asia Pacific market, including contract brewing in Australia.
“We have just started brewing in Australia, to support the market down there,” he said.
“I have not been but am very much looking forward to go. The Bikini Blonde and Big Swell IPA will be coming out very quickly. So it’s exciting.”
Both beers have been launched this week, brewed-under-licence by Nomad Brewing.