Light beer remains in an awkward spot.
While still dominating the overall beer industry with a whopping 43.7% of sales, it also remains in perpetual decline. Case sales of light beer were down 3.1% in 2017, following recent years of declines of 2.6%, 3.6% and 3.1%. Market share was also down from 44.5% in 2016, representing a decline of 3.1%.
Obviously Americans still drink a lot of light beer. Moving 1.223 billion 2.25 gallon cases in 2017 is no small feat. But the erosion of the category remains alarming.
What’s behind the losses? Obviously the explosive emergence of craft beer in recent times has played a huge role. Especially among younger LDA drinkers, U.S. consumers now look for more flavor and variety in their brews. While they may enjoy a Miller Lite while mowing the lawn or relaxing by the pool, they’re not brand loyal to light beer, and will reach for craft alternatives when the occasion calls for something more interesting.
Also damaging light beer (and the beer category in general, which was down 1.1% in 2017) is that consumers now drink more across all categories. Rarely will you find someone who is only interested in beer, wine or spirits. Instead, Americans now consume alcohol from all three categories on a regular basis — and sometimes in one single evening.
Looking at the category leaders you see a lot of losses. In the top spot, Bud Light was down 5.4% to 457 million cases, which is in line with declines in recent years. Selling roughly half as many cases, and finishing in second place, Coors Light dropped 3% in case sales to 223 million cases. Both brands still enjoyed astronomical sales, albeit with the single-digit losses that have recently plagued Bud Light and Coors Light.
Same thing with Miller Lite and Natural Lite. Finishing in third and fourth place, respectively, both brands sold a lot of beer with a slight decline: 173 million for -3.1%, and 87.58 million for -2%. Once again, these losses were in line with the results of recent years.
Busch Light in fifth place actually grew 0.1% to 82.23 million cases.
One of the rare success stories in the light beer category is the brand that finished in sixth place. Michelob Ultra grew 15.6% to total 81.83 million cases. As recently as 2012, the brand was only at 46.87 million cases.
Why the rapid growth? It’s all about savvy marketing. Just look at the name. Michelob isn’t a “lite” beer: it’s “ultra.” At the same time, the beer is advertised towards consumers with an active/social lifestyle. Marketing commonly depicts people working out together: running, hiking, bicycling, etc. This particular beer is ideal for such people, the ads argue, because it’s a “premium lager” with “low carbohydrates.” In other words, this is the low-carb beer for anyone who enjoys social-active activities.
Which goes back to how many drinkers today view light beer. As something to drink while being active outside, or at a party or with family. More and more that seems to be the niche for light beer.
Another brand that saw positive numbers in 2017 was Keystone Light. This MillerCoors brew was up 3% last year to reach 45.7 million cases. This is a reversal of recent years of declines, which is likely again due to savvy advertising.
For the rest of the leading brands, it’s a grim picture. Of particular note is Michelob Light, which was down 24.6% to 2.17 million cases. With Ultra getting all the attention for its perceptive marketing, the Light brand of Michelob has suffered.
What does the future hold for light beer? It will likely continue to dominate the category in terms of market share, while slipping in sales each year by single digits. Light beer still pays the bills, but it’s far from trendy. At the same time, however, craft beer has run into its own headwinds as growth has suddenly slowed from explosive to single digits. How much higher than 10-11% market share can craft really reach? Is the craft category already saturated?
And light beer has not totally lost younger consumers. Among drinkers of the category, around 22% are between the ages of 25 and 34 (compared with about 26% of craft drinkers), meaning that lite beer is not a total turnoff for the Millennial generation.
Especially if other light beer brands takes more of a cue from Michelob Ultra and dial into the niche of active/social drinking. Either way, it’ll take a lot more than single-digit losses and the emerging-but-still-small craft industry to wholly overtake this colossus of a category in the beer industry.
Kyle Swartz is managing editor of Beverage Dynamics magazine. Reach him at firstname.lastname@example.org or on Twitter @kswartzz or Instagram @cheers_magazine. Read his recent piece Does Cannabis Help Craft Beer Sales?