March 16, 2022
The Future of Craft Beer
Insights from Head of Brewing Operations, Chris Anderson
Chris Anderson, Head of Brewing Operations at BevZero, has been working in the beer space for the past 25 years, and he has the awards to prove it. He has been a brewery owner and brewer in multiple U.S. markets, and Chris has also consulted for both start-up and existing breweries to help them become or stay successful.
At BevZero, Chris has been utilizing his specialized knowledge to assist clients in making quality products in the non-alcoholic (NA) space—a move that he believes will help sustain craft breweries long-term. We asked Chris about his thoughts on the future of craft beer and the NA segment.
What has changed in beer trends from pre-pandemic to now two years later?
A lot…and whatever it is—it’s here today, gone tomorrow. Like what happened with [hard] seltzers and how quickly that [came and] went out with a bang, [shows how] it’s normal to see a trend rise and then fail just as fast.
There are now 8,000 [brewers in the United States]. [Around 20 years ago], there were less than 2,000, having that many people in the landscape will make the market more competitive. However the folks leading and creating trends are very rare. The majority seem to be just keeping up the Joneses; it’s ‘hey, I’m gonna do this because he’s doing it,’ or vice-versa. That seems to be the norm now. There’s a ton of what I consider IP theft in the beer industry today, but you’re starting to see people come down on it. Also, I expect there will be serious attrition this next year; once all of the PPP loans have worked their way out, there won’t be 8,000 brewers and the landscape will come down.
Looking back at the pandemic, if a brewer didn’t have off-premise presence [before], they were done because immediately all your pints to people in seats became cans over-the-counter or in the parking lot for that matter. So it’s been a huge reckoning, but I’m happy to say that so far, it hasn’t been nearly as bad as we thought.
Which is becoming a smarter business model: producing multiple small batches or meeting a more extensive supply for one SKU?
Larger SKUs are dead in the water. Brewers wish they could have seven core beers brewed consistently with a solid presence. Unfortunately, it’s a shiny penny industry right now. Every brewery has to be coming out with a new concept or a new beer weekly, and that’s not great for the quality of craft beer. Ultimately, when we were at 2,500 breweries, the quality was far exceeding where it’s at today. I’d say there’s a lot of really bad beers out there, mainly because people are testing the waters and trying to figure out what’s the next thing, and to go from one brand to the other; [this results in] label costs, IT development costs for promotions, and more.
Even before Covid, you saw this kind of model of ultra-small breweries, whereas prior to that, seven to ten barrels or 15 barrels for a production brewery would be the norm. Then anything you do beyond that or less than that will not make you enough money to keep the doors open. Since then, all these smaller breweries that are serving the equivalent to what they were serving prior to Covid are now straight across the counter. Some people can make it work, but they’re not making a ton of money. Breweries are getting smaller, leaner, and counting every penny now, where before there used to be a lot more R&D and innovation.
Do you think making an NA option is worth it financially and philosophically based on these and future market trends?
Yes, however there are several ways to make an NA product. One way is arrested fermentation, which, in my opinion, produces a product that doesn’t taste anything like beer. They taste like wort; they taste cloyingly sweet and don’t represent a fully fermented character or even emulate what can be done in the NA space. Filtration is another approach that people are taking. This produces two streams, a dealcoholized product and a concentrated form of an alcoholic product on the back end, the problem with this is there is no essence recovery and therefore produces an inferior tasting product.
I strongly believe that dealcoholization is the best approach and yields the best quality product having started from a fully fermented beer. There are differences though in the technologies, even for dealcoholized products. Very few companies produce NA beer from equipment that is able to capture the essence as part of the finished product – the flavonoids and aroma compounds. We believe that you need these compounds. We capture the essence as a separate stream from the alcoholic and the non-alcoholic fractions and add it back to the non-alcoholic fraction at the very end. We can build back the integrity of the beer using the essence because in our process we’re taking the non alcoholic fraction down to a zero-zero state. In other technologies these compounds end up in the alcoholic distillate and therefore unused.
Do you think the NA space is beneficial and sustainable for breweries in this new climate?
During the pandemic, what we’ve seen certainly supported the fact that the non-alcoholic market is here to stay and will continue to grow. One brand essentially owns 40 percent of the market, and it tells a huge tale for what’s capable of the category. Folks wanting to enter into this have been exponential, and that’s because they’re saying, ‘If one company can do that, I can too.’ Consumers are changing, and they’re looking for a more sober lifestyle. There’s a younger generation that is about wellness and doing things in the best interest of self. So yes, I believe it is very beneficial.
As consumers continue to demand more from the brands they consume, breweries need to stay on top of the latest trends or risk becoming obsolete. BevZero can provide the guidance, services and technology needed for brands to stay relevant and enter this space. Contact BevZero for more information.