Flavored beers are poised to become more than unorthodox alternatives to traditional brews.
The American beer palate has evolved considerably in recent years. Craft and specialty brewing have gained in popularity among consumers, especially Millennials, who crave variety and new, memorable experiences. Nontraditional styles are achieving higher sales — including flavored beers.
Between 2012-13, the market for leading flavored brands grew 39%. This was propelled, in part, by the resounding success of new entries like Bud Light’s Lime-a-Rita (which sold 7,300 cases in 2012, and 9,950 the next year) and Straw-Ber-Rita (10,300 cases in its 2013 launch year).
Other established flavored brands also realized an uptick in sales. Mike’s Hard Lemonade sold 19,570 cases in 2013, a 5.5% gain from the year prior. Boston Beer’s Twisted Tea, and MillerCoors’ Leinenkugel’s Summer Shandy, achieved sales growths of 15.5% and 25.1%, respectively, in 2013.
Millennials Mean Business
Much of this market movement can be tied to the tastes of Millennials, the youngest generation of legal drinking age.
Many Millennials are 20-somethings who are still determining what styles and flavors they most enjoy. Thus, their purchasing patterns reflect experimentation across different brands and beverages. Even Millennials in their early-30s — now settling down in life, and more fixed in their personal preferences — still have a taste for new and diverse products.
“Drinkers have more sophisticated palates than drinkers generally did years ago,” says Boston Beer founder Jim Koch, whose company was among the first to mass produce flavored beers, like their Cherry Wheat. “Craft beer drinkers, who are largely Millennials, are passionate, curious and are always looking to explore different flavor profiles and styles of beer, and pair or cook with beer as part of their everyday life.”
This trend, before recent times, had not yet affected the beer industry so greatly. However, a generation ago, another alcohol category experienced such a shift in consumer preference towards variety.
“Millennials have adopted and are exploring craft beer the way their parents adopted wine 30 years ago,” says Koch. “When this happened, the wine industry experienced great growth, which we’re seeing this now in in the world of craft beer.”
To tap into that growth, perceptive breweries have positioned their brands to mesh well within the Millennial lifestyle. Flavored beers naturally fit into this strategy.
Bud Light will soon release a new extension — Mixx Tail — a cocktail-flavored beer line. These 8% ABV malt beverages come in three flavors: Long Island, Firewalker and Hurricane.
“We talk about Mixx Tail as being for pre-gaming at night, when everyone is gathered at a home before they go out,” says Mallika Monteiro, director of marketing for Bud Light extensions. “It ties in with Bud Light’s goal to be the number one brand for Millennial consumers. We realized that we needed to expand more into flavored brands. We know that there is change in what our drinkers are looking for, and one of those changes is that they want more options in the cocktail space.”
In the same vein, Heineken’s new product, Desperados, is a Latin-inspired European import beer. It blends tequila barrel aged lager and lemon flavor.
“This lager resonates with young adult consumers who want to ‘amplify’ experiences — those who are high energy, spontaneous, and looking for memorable nights out with friends,” says Raul Esquer, Desperados brand manager. “Similar to other flavored beers, Desperado performs best with the 22-29 adult population.”
“Today’s increasingly influential and growing Millennial, multicultural consumers are driving the demand for innovation in the beer category, by actively exploring more offerings with expanded flavor profiles,” Esquer adds. “These consumers equate cost with quality and, with the improving economy, will shop the upscale segment where quality, variety and image play a key role.”
That upscale segment is a natural place to position premium, small-batch flavored beers. Craft enthusiasts (again, usually Millennials) will spend extra for a bomber of higher-quality product.
Moreover, in line with Millennials seeking memorable, “amplified” experiences, buyers of bombers frequently purchase the larger bottles with the intent of enjoying them among friends. Craft enthusiasts gather at these social events to share bombers and sample multiple premium products.
“For some of our limited release brews like Double Bock, Honey Queen Braggot, Fat Jack Imperial Pumpkin Ale and Merry Maker Gingerbread Stout, we use 22 oz. bottles,” says Koch. “Samuel Adams offers a variety of packaging, including 750ml cork-caged bottles for our Barrel Room Collection brews.”
‘Tis the Season
Other than Millennials’ diverse palate, flavored beers also have benefited from an increase in consumer taste — and expectancy — for seasonal products.
Flavors common to a certain time of year — e.g. pumpkin in fall, lemonade in summer, or gingerbread in winter — have become a core part of the craft experience, as well as a reliable method to drive sales.
“Drinkers anticipate and look forward to these brews each year,” says Koch.
Some seasonal beers, like German bocks in winter, represent Old World traditions dating back centuries. However, seasonals in America entered the mainstream within the recent craft boom. Sam Adams was a pioneer in this category, with their well-known Winter Lager and OctoberFest. The company has continued this strategy, releasing standard and new brews each season, like their Summer Ale, which tastes of lemon peel.
Most breweries have since realized the appeal of seasonals, and are now offering timely twists on their own popular products. After the immense success of Lime-a-Rita and Straw-Ber-Rita, Bud Light expanded this line with Cran-ber-rita — a fall-inspired beverage. Even the two original ‘Rita launches contained seasonal components within their marketing strategy.
“We see the ‘Ritas as being for earlier in the day, perhaps at happy hour, or at the beach or pool, when people are relaxing and want refreshment,” says Monteiro. “We’ve been able to bring great tasting liquid that is really fun and perfect for summer. Flavored beer sales peak when the weather warms up, and around the social holidays like July 4.”
Heineken maintains a similar mindset with their flavored lines. “The change of seasons opens the door to a wealth of flavor and/or mix options, including Strongbow Apple and Strongbow Honey and Apple,” says Esquer. “As winter approaches, more substantial beers flavored with hearty flavors and/or mixes stand up to the season.”
Craft is Always in Season
Of course, seasonal flavors remain a cherished tradition within the American microbrewery/craft beer industry. And as this tradition continues forward, and expands in offerings and innovations, certain flavors have become seasonal staples for beer aficionados. Pumpkin, for instance, is now a must-have flavor for craft enthusiasts come fall.
“The pumpkin-beer market is insane,” says Matt Thompson, vice president of sales for Elysian Brewing Company, a Washington-based business. “The market is growing every year. It’s the biggest flavored beer we well, by far.”
The popularity of pumpkin in fall is far from secret. Breweries large and small, and from coast to coast, produce their own variations of pumpkin brews.
“Within the last couple of years, the larger breweries began working with pumpkin beers,” says Thompson. “Historically, it’s been a popular flavor in the Mid-Atlantic and New England areas. We actually made the first pumpkin beer in the northwest. We’ve been doing it now for 12 years.”
Nowadays, as summer cools to autumn, bar taps and beverage stores become flooded with assorted pumpkin styles. It can be a welcome sight for craft drinkers. It can also be a bit overwhelming in sheer magnitude of choice of product. The craft market can sometimes resemble an arms race. Brewers compete annually to produce bolder flavors, bigger events, or to push seasonals into the market earlier than competitors.
These advancements are also the result of the industry being comprised of brewers and other employees whose creative, productive efforts match their great passion for beer. Elysian, for example, elevates craft-drinkers’ love of pumpkin to a celebratory extreme. They host an annual Pumpkin Beer Festival.
“We feature 15-20 of our own pumpkin brews, together with another 60 we buy from other brewers and then offer,” says Thompson. “It’s the biggest pumpkin beer festival in the world. We had more than 5,000 attendees this year. People fly in from all over the world for it. There are pumpkin porters, pumpkin sours, everything.”
Elysian goes to similar lengths when creating their own pumpkin brews. “We actually use real pumpkin,” says Thompson. “Believe it or not, a lot of breweries will actually use pumpkin spices to achieve that flavor. We don’t. We go as far as to use raw, roasted pumpkin seeds by milling them in with the barley and then brew with it.”
Flavors for Everybody
These artisanal styles may not be for everyone. Some drinkers don’t like the offbeat, sometimes-challenging flavors of craft products. They’d rather a simpler, more-accessible beverage. Flavored beer, therefore, may seem like a category that risks limiting its number of potential customers.
But the opposite is true.
Although brand managers and company representatives interviewed for this story stressed that their products were intended for all demographics, there was one customer group undeniably targeted by flavored beverages — women.
If beer is seen culturally as a beverage more tailored toward men, then how does a brewery increase its sales among the other gender? One method seems to be flavoring. Heineken’s Mixx Tail leverages the love of cocktail flavors among female drinkers.
“Our flavored beers have successfully broadened out footprint with female consumers,” says Esquer. “The flavored beer segment is growing quickly and attracting consumers from outside the beer category, especially those who are open to experimentation and new experiences beyond regular beer.”
“Desperados is targeted towards the on-premise, nightlife, party experience, with the drinkability of beer and the image of spirits,” Esquer adds. This suggests a heavy focus on Millennial women.
Bud Light has seen a similar reaction to their flavored beers. “They attract more female drinkers into the brand,” Monteiro says of the ‘Rita line. “Of course, the point is to attract as many people into the franchise as possible.”
Brewers Choosing Flavors
The process of a brewery selecting new flavors can be a matter of inspiration — and thorough marketing research. At Bud Light, much thought goes into consumers’ evolving tastes.
“We have a great R&D department that spends a lot of time talking to drinkers and keeping an eye on the marketplace, keeping an eye on what’s coming up next,” says Monteiro. “And the drinkers are great about suggesting flavors. We spend a lot of time talking with people.”
Thanks to the internet, consumers will bring flavor ideas and preferences directly to Bud Light.
“It’s a little bit of both research and social media,” says Monteiro. “It takes a lot to bring a product to the marketplace, especially with liquids. We do a lot of research, but on social media, every time we launch a new product, there are consumers who are clamoring for more flavors.”
And as this market continues to grow in popularity and sales, certain flavors may logically present themselves as worth pursuing next.
“The ‘Ritas have been really successful for three years, so Mixx Tail seemed like a natural extension to that line, Monteiro says. “And these three Mixx Tail flavors are the perfect place to start. They are so popular already as drinks.”
At craft breweries, selecting new flavors can come from curiosity and passion.
“The inspiration for choosing the styles we brew and the ingredients we choose comes directly from our brewers,” says Koch. “Our brewers brew what they want to drink, and because of the ingredients available and the variety of brewing techniques, the possibilities for experimenting with different recipes are endless.”
Elysian also supports experimentation and creativity.
“The brewers get together and float ideas back and forth. They’ll think, ‘What flavors would work with yeast or malt’,” says Thompson. “We like to be inventive and try new things. There’s only so much you can do with water, yeast, malt, and hops.”
“With a beer like our Superfuzz, we really appreciated the flavor of citrus-driven IPAs and pale ales,” adds Thompson. “We thought, ‘What would go well with citrus?’ And we thought it would be interesting to blend the earthy hoppiness of blood orange with citra hops.”
So what’s next in the realm of flavored beers? Considering the extensive craftsmanship and skill level already in the market, it seems like anything is possible. At the very least, the popularity of flavored beer doesn’t seem likely to wane anytime soon — quite the contrary.
“I think we’ll see more of it,” says Thompson. “We’ll see more flavored IPAs. It’s a great way to extend styles, like grapefruit IPAs, pumpkin porters, or apricot ales.”