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High ABV and nonalcoholic beers are dominating the craft beer industry

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Facing the brightly lit beer cooler doors at his local bottle shop or bodega, Danny Tejada mentally performs the same calculation each time: He takes stock of various beers’ prices, packaging sizes, and most importantly, their alcohol content.

“If I’m going to drop down $12 for a six-pack, I want to make sure the alcohol content is 6 percent [alcohol by volume] or higher. That way I can just drink one or two and be satisfied, and still have a couple of beers left for later,” says Tejada, a college counselor who lives in New York’s Brooklyn borough. “My brain says ‘6 percent or up.’ Below that, I’m not interested.”

It’s not just the economic calculation that motivates him, though inflation has put pressure on many Americans’ budgets. Instead, Tejada is part of a growing number of drinkers who are increasingly gravitating toward the extremes of beer’s alcohol spectrum, choosing either very strong beers or beers without any alcohol at all.

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This is particularly true within craft beer, where beers with an ABV percentage higher than 8 — mostly double and even triple India pale ales, but also Belgian-style tripels and imperial stouts — have gained 5 percent market share versus four years ago, according to chain retail sales data from the Beer Institute and NielsenIQ National Beer Wholesalers Association. During that same period, nonalcoholic beers have also gained 1 percent share in those same grocery stores, pharmacies and big box stores.

Growth at the low and high end of beer has come at the expense of beer’s historic sweet spot: The only ABV range in overall beer to lose share in the past four years has been 4 to 6 percent.

“We’re seeing high-intensity beers get more intense, and we’re seeing low-intensity beers get less intense to the point that some of them don’t even have alcohol in them,” says Dave Knospe, senior brand manager for Voodoo Ranger, a line of IPAs brewed by Fort Collins, Colo.-based New Belgium Brewing Company. “That doesn’t leave a lot in the middle.”

Knospe has had a front-row seat for this polarization in consumer taste. For decades, New Belgium’s flagship beer was Fat Tire, an easy-drinking, 5.2 percent amber ale squarely in beer’s “middle.” But in summer 2019, something remarkable happened: A relatively new beer, Voodoo Ranger Imperial IPA, caught fire. New Belgium doubled down, redesigning the beer’s package to more prominently display its 9 percent alcohol content. (That’s more than double the ABV of a standard light lager such as Coors Light or Miller Lite.) By the end of the following year, Voodoo Ranger Imperial IPA was the brewery’s No. 1 beer, raking in $25 million more in chain retail sales than Fat Tire. According to Nielsen data, it’s now America’s best-selling IPA — a title it earned beginning in March 2021 when it surpassed Lagunitas IPA (6.2 percent ABV) and Founders All Day IPA (4.7 percent) — and one of the most successful new craft beer brands of the past decade.

But for all the drinkers choosing high-intensity, high-flavor beers, many are also running to the opposite pole. Nonalcoholic beer makes up less than 1 percent of the overall beer market in the United States, but within craft beer especially, its recent growth has raised eyebrows. Since 2019, nonalcoholic beer has increased its chain retail sales by 27 percent. Athletic Brewing Co. in Stratford, Conn., exclusively makes nonalcoholic beer, and last year, it was the 27th largest craft brewery in the country. This boom is driven by new, better-tasting nonalcoholic beer options from craft brands like Athletic and Brooklyn Brewery, as well as from larger brands such as Heineken and Budweiser.

Danelle Kosmal, vice president of research for the Beer Institute, a DC-based trade group, says that the growth of nonalcoholic craft beer appears to be at the expense of beers in the 1 to 4 percent ABV range.

“This potentially illustrates a shift in consumer trends, with craft beer drinkers gravitating away from low-alcohol craft beers like radlers, craft light lagers and session IPAs and towards no-alcohol craft beers,” Kosmal says.

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Amid recent trends in both high and low ABV, perhaps no style has been left in the dust more than the venerable American pale ale. Pioneered by Chico, Calif.-based Sierra Nevada Brewing Co. in 1980, pale ale was for decades a staple of craft breweries and beer bars. With a balance between malt and hops and an ABV generally around 5.5 percent, pale ale was about as broadly appealing as craft beer could be. Until it wasn’t.

“Pale ales are a dying style,” says Suzanne Schalow, director of operations for the Craft Beer Initiative, which owns Trinktisch beer hall and Craft Beer Cellar bottle shop in Belmont, Mass.

Schalow estimates that at any given time, Craft Beer Cellar carries 250 different versions of IPA, pale ale’s bigger, boozier sibling, including its best-selling beer of 2021: 8 percent Sip of Sunshine IPA from Lawson’s Finest Liquids in Waitsfield, Vt. In contrast, the store carries just a half-dozen pale ales.

“People don’t seem to like the words ‘pale ale.’ To them, that’s inferior to the term IPA,” Schalow says, adding that many of her customers are what she calls “bang for the buck” shoppers who will always choose a 13 percent triple IPA over a 6 percent IPA if they’re equally priced.

“Things are getting lost a little bit in the middle,” Schalow says.

It’s not clear to what degree this is an existential issue for the industry. Trends come and go in all consumer goods, especially an arena as premised on innovation as craft beer. But if craft beer continues to empty out its ABV middle, it stands to lose the beers that the segment was built on: Those with more flavor, but beers you could still take camping or biking or to a barbecue without risk of lethargy or drunkenness.

It sets up two possible futures. In one, drinkers continue to move toward ABV’s poles, hollowing out beer’s traditional strength range. (Newer beverages such as hard seltzer and hard kombucha, meanwhile, have been happy to step in to fill that void.) In another, growth for nonalcoholic beers and imperial IPAs slows, and eventually, beer’s overall ABVs settle back near the middle again. Historical data would support this latter scenario.

“The trends of no alcohol and high-end ABV, there are ebbs and flows to that,” Kosmal says. “If we look over the past two decades across the total beer category, the average ABV doesn’t deviate a lot from 4.5 percent.”

After all, the status quo is quite powerful. The best-selling beer in America has been the same for 21 years: Bud Light, a distinctly middle-of-the-road lager clocking in at 4.2 percent. Voodoo Ranger Imperial IPA may rule craft at the moment, but it’s unlikely to dethrone that king any time soon.

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