Craft beer presents a huge dilemma for Anheuser-Busch InBev and MillerCoors, says Brooklyn Brewery founder Steve Hindy.
AB InBev and MillerCoors have lost volume of more than 20 million barrels a year since their respective mergers were completed in 2008, Hindy told the Australian Craft Brewers Conference in Melbourne this morning.
“That’s a great lake of beer,” he said.
Meanwhile, the craft segment has done the unthinkable and surpassed annual production of 22 million barrels, an 11 per cent share of the US craft beer market.
“Now we’ve set a goal of getting to 20 per cent by 2020,” Hindy said.
He said these market trends were very perplexing for brewing’s old guard, which are torn between stopping the decline of their flagship brands and investing in growth segments.
“They’ve got to defend their brands like Budweiser, which actually has lost volume every year since 1988, and they have to play in the craft segment,” he said.
“I think the craft segment is a real dilemma for them because the more money they put into the craft segment, the more mainstream beer drinkers they introduce to craft beer.
“Eventually those people are going to drink Brooklyn or one of your beers,” he told brewers at the conference.
“I think it’s such a tricky problem for the big brewers.”
Hindy scotched ongoing talk in the US media about a “craft beer bubble”.
“They are saying it now in America, I think it’s been a constant for my last 30 years in the business,” he said.
Australia can follow suit
Hindy said the numbers demonstrate that Australian craft brewers can achieve the rapid growth seen by their US counterparts, which as recently as 2003 had a similar three to four per cent market share.
“For every brewer in the US there’s 92,000 people. In the UK, for every brewery there are 43,000 people. In Germany it’s 60,000 people for every brewery,” he said.
“I did the number for Australia based on 250 brewers and 23 million population, and that’s 92,000 people per brewery.
“You’ve got what it takes to get up to ten per cent and beyond. But I think you really need a strong association and more events like this to really pull together and make that happen,” he told the brewers.