Seasonal Beer Offerings Falling Flat

[bjl584]

http://www.barrons.com/articles/boston-beer-suffers-as-seasonal-beers-go-flat-1481926085

Boston Beer Suffers as Seasonal Beers Go Flat

Consumers seem to have lost their taste for cinnamon and pumpkin ale, which is bad news for craft brewers.

By Avi Salzman Dec. 16, 2016 5:08 p.m. ET

Boston Beer has relied on seasonal brews to spike sales, but the novelty seems to have worn off.

Somehow beer companies tricked us all into thinking that summer tastes like lemon, fall like pumpkin, and winter like cinnamon. And for years, the strategy of updating beers to match the season has worked, helping spur sales when “normal” beer might seem unexciting.

That’s over now.

In the last couple of years, seasonals have lost their momentum, and sales are now falling. In 2014, sales of seasonal beers made by craft brewers including Boston Beer grew 13.1%, but growth fell to 0.2% in 2015 and went negative this year, trending at -5.4% year to date, according to data from market research firm IRI Group. Even pumpkin-flavored ales are hurting, according to reports.

Boston Beer has had a rough year, for reasons beyond just the downturn in seasonal brews. But they are a part of the problem – analyst firm Cowen & Co. says Boston Beer’s seasonal sales have been on the downswing since June 2015.

The overall slip in sales for seasonals points to a larger problem in the craft brewing world. It’s hard to get consumers excited about a new beer just by slapping a seasonal brand name on it, according to Bart Watson, chief economist of the Brewers Association.

Watson detailed the problem in an e-mail to Barron’s Next: “My basic take on this is the following: seasonals (along with variety packs) used to be the ‘what’s new’ category within craft. Given that craft consumers tend to be particularly variety seeking, this helped propel their growth. Today, however, there are TONS of ‘what’s new’ options, not only in terms of the number of brands, but also in the form of one-offs, variants (dry-hopped versions for example), collaborations, and more.”

For Boston Beer, whose shares are down 16% this year, the downfall of seasonal beers takes away another option for spurring sales.

Big Picture: A sales slump for seasonal beers is hurting Boston Beer, whose shares were already suffering.

[disneysteve]

I'm not a beer drinker but my sense is not that seasonals have necessarily lost their appeal but rather that there are just so many more choices today. Pumpkin ale used to be a rarity. Now, if you walk into a liquor store in October, there are dozens to choose from. That's got to make it harder for any one company to sell a significant volume of their product with so much competition on the shelves.

Many of the stores around here sell the craft beers in "make your own mix" packs. The shelves are stocked with single bottles and you can grab a 6-pack holder and select any 6 bottles you want. So I could walk in and sample 6 different pumpkin ales rather than being forced to buy a 6-pack of one brand.

I think the explosion of flavored liquors is also an issue that dilutes the market for any one product. Take a look at flavored vodkas, for example. There used to be just a few. Now each company (Smirnoff, Absolut, Pinnacle, etc.) each sell 10-20 varieties. It's insane.

[james.hendrickson]

I do wonder if the human proclivity for finding new ways to get drunk really serves us as nation. For example, wouldn't it be better for the nations economy if Americans put their excess funds into savings accounts or investment strategies, rather than into an ever expanding variety of brews and wines?

[StormRichards]

I do wonder if the human proclivity for finding new ways to get drunk really serves us as nation. For example, wouldn't it be better for the nations economy if Americans put their excess funds into savings accounts or investment strategies, rather than into an ever expanding variety of brews and wines?

Well said.

[disneysteve]

I do wonder if the human proclivity for finding new ways to get drunk really serves us as nation.

I don't think enjoying a variety of drinks constitutes "finding new ways to get drunk." The problem in liquor stores, just like in supermarkets, is the explosion of new products, blends, flavors, craft producers, etc. The selection has gotten overwhelming.

[msomnipotent]

I do wonder if the human proclivity for finding new ways to get drunk really serves us as nation. For example, wouldn't it be better for the nations economy if Americans put their excess funds into savings accounts or investment strategies, rather than into an ever expanding variety of brews and wines?

Boring!!

I stopped drinking beer because I'm so sick of everything being some sort of pale ale.

[LivingAlmostLarge]

Maybe people are getting into wine.

[Outdoorsygal]

I do wonder if the human proclivity for finding new ways to get drunk really serves us as nation. For example, wouldn't it be better for the nations economy if Americans put their excess funds into savings accounts or investment strategies, rather than into an ever expanding variety of brews and wines?

Absolutely. Beer is a bit useless health wise and otherwise. At least wine has some nutritional content and can be medicinal

[disneysteve]

Maybe people are getting into wine.

I wonder if demographics play a part too. Beer is a more common choice among younger folks and less financially well-off folks. As the population ages and the economy continues to improve, there would be a shift toward wine and liquor which are more favored by an older and more financially well-situated population.