Coming off 10 years as a head brewer and production manager for production breweries, I transitioned into the sales world a mere two months before the pandemic hit. Suddenly, I had to learn the world of technical sales and custom equipment manufacturing in the most challenging of times. What was supposed to be a natural transition into sales became a crash course in navigating a completely upended industry. Over the past five years, I’ve watched the craft beer industry navigate turbulent waters. From the early days of the pandemic to the changing consumer habits in the post-pandemic world, my customers — the breweries I’ve worked with — have fought to stay afloat. It hasn’t been easy, but amid the struggle, there have been rays of hope. The key? Diversification.
The Impact of the Pandemic
When COVID-19 hit, the craft beer industry was obviously hit hard. Taprooms were shut down, festivals were canceled, and on-premise sales dried up almost overnight. Brewers who relied heavily on their local taprooms or brewery events found themselves scrambling. I vividly recall how, in the early months, breweries rushed to pivot to direct-to-consumer sales through curbside pickups and local deliveries. While that helped some, it wasn’t sustainable for all.
The breweries that survived were the ones who diversified. Many of my customers, forced by necessity, explored options they’d never considered before.
Diversification Strategies: What Works?
Craft brewers are positioned to lead the charge into the expanding world of a variety of craft beverages. With a legacy of constant innovation, brewers have honed the art of experimentation, flavor development, and quality control—skills that seamlessly translate to crafting non-alcoholic beverages, and other emerging drink categories. Breweries are equipped with adaptable systems, from fermentation tanks to filtration and packaging lines, which can be retooled to accommodate diverse beverage production. This adaptability, combined with the brewer's expertise in balancing science and creativity, positions us as the vanguard of the broader craft beverage movement. In today’s market, the craft beverage industry is no longer defined solely by beer but by a growing portfolio of drinks that meet evolving consumer demands. Brewers, with their resourcefulness and forward-thinking mindset, are the perfect leaders for this shift.
- Cold Brew Coffee and Coffee-Infused Beverages
Several breweries are venturing into cold brew coffee, capitalizing on both the growing trend in
craft coffee and the demand for non-alcoholic yet premium beverages. Some breweries are
even integrating their brewing infrastructure with cold-press systems, creating new products
like coffee-infused beers, seltzers, RTDs and infused-spirits. - Non-Alcoholic and Low-Alcohol Beverages
The rise of the sober-curious movement was already in motion before 2020, but the pandemic
accelerated it. Breweries like Athletic Brewing Co. led the way, and some of my other clients
followed suit. Non-alcoholic beer sales are surging more than 100% year-over-year. By 2023 the
global non-alcoholic beer market reached $20.08 billion (Global Market Insights Inc.). Younger
generations are drinking less, and breweries are taking note. Breweries are now producing non-
alcoholic beers, as well as hop-infused sparkling waters, kombucha, and other functional
beverages. - Hard Seltzers
Hard seltzers started to explode in popularity right before and during the pandemic, with the
U.S. hard seltzer market hitting $4.9 billion in 2022 (14 billion globally). Many breweries jumped
on this trend, producing low-calorie, flavored seltzers that catered to health-conscious drinkers
looking for an alternative to beer. Although the seltzer boom has plateaued, the category
remains strong for those who successfully diversify. - Ready-to-Drink (RTD) Cocktails
Convenience and premium flavors drive breweries to launch RTD cocktails. With more people
drinking at home, the market for ready-made cocktails has seen growth. Breweries pivoting into
this space find themselves with a steady revenue stream, especially as demand for premium
RTDs continues to rise (Future Insights) (The Business Research Company). - Cannabis-Infused Beverages
As more states legalized cannabis, a few of my more adventurous brewery clients have ventured
into the realm of THC- and CBD-infused drinks. Notably Bale Breaker Brewing launched their
Cannabis Seltzer in Washington State (Sungaze Lime Agave). Lagunitas Brewing Co., as another example, launched their Hi-Fi Hops, a THC-infused sparkling
water. Cannabis beverages are still a niche market, but their growth potential is strong with the
expansion of cannabis legalization (Future Insights).
Navigating Changing Consumer Habits
The craft beer boom of the 2010s led to an oversaturation in the market. There are simply too many small craft breweries competing for a shrinking audience. Sadly, I’ve seen many breweries close their doors, victims of both economic strain and changing tastes. The consolidation we’re seeing is a natural, if painful, correction to the market.
The broad challenge for craft breweries is the challenge to adapt to shifting consumer habits. Millennials and Gen Z drinkers are far more health-conscious than previous generations. They’re opting for non-alcoholic, low-calorie, and functional beverages with ingredients like adaptogens, probiotics, and nootropics. When they choose an alcoholic drink, they are choosing premium exciting drinks.
The Road Ahead: Hope in New Beverage Categories
The future, I believe, is in craft beverage, not just craft beer. I remain hopeful about the future of the craft beverage industry. Brewers who are willing to evolve and diversify their offerings are well- positioned to thrive. The functional beverage market, including products like kombucha, CBD drinks, cold brew coffee, and alcohol-free cocktails, is projected to reach $173 billion by 2025 (Global Market Insights Inc.). Brewers are uniquely equipped to tap into this trend, leveraging their production expertise and innovative spirit.
As someone with over a decade of experience brewing in production facilities and transitioning into the ‘dark side’ world of sales the past 5 years, it’s clear that diversification is no longer just a strategy for growth — it’s a necessity for survival. While some breweries have succumbed to the inevitable market correction, those that are adapting find there are new paths forward. The world of craft beverages is expanding beyond beer, and those who embrace this shift have a bright future ahead.
For my customers, it’s not just about brewing beer anymore; it’s about creating an entire range of beverages that cater to a new generation of consumers. The landscape may have changed, but with it comes new opportunities for those willing to take the leap.
— Steven B., Technical Salesman in the Craft Beverage Industry
