What’s the Next IPA?

One of the most frequent questions I get, from brewers and media alike, is what’s the next IPA? In case you’ve spent the last decade on an arctic expedition looking for lost beer, IPAs are on a bit of a growth trend. Understandably, lots of people are interested in getting ahead of the curve for the “next big thing.”

So as not to bury the lede, I’ll cut straight to my first point: there isn’t going to be another success story like IPAs in the near future. Part of this is simply the sheer size of IPA’s success. In IRI scan data, IPAs accounted for less than 8% of the craft category in 2008 (note: scan data captures off-premise, and so may under represent smaller brewery trends). Today they are 27.4%. That type of share growth would be incredible in a static category, but craft brewing is on pace to have a total volume this year three times larger than it was in 2008. That means if IPAs can finish the year at 27.5%+ craft share, the category would have grown more than 10X its 2008 size, or more than 6 million barrels in absolute growth.

IPA share2

If anything, these numbers probably underestimate the effect IPAs have had on growth, since in addition to IPAs, we’ve seen a trend toward the IPA-ification of everything: hoppy wheats, hoppy browns, SMASH (single malt and single hop) beers, and more. American brewers seem determined to continually put hops where no hops have gone before. That also includes the fast growing extension to the IPA category, session IPAs. Because of all these new hoppy dimensions, I often respond to “what is the next IPA”, with “IPAs.”

However, once we accept that it’s going to be tough for any style category to add the kind of volume growth we’ve seen from IPAs, I do think there are a number of styles that have the potential to get much larger. While these styles/style categories may not be a “next IPA”, they certainly have the potential to drive volume growth in the coming years.

Blonde/Kölsch/Golden Ales

First up are blonde/kölsch/and other golden ales. In IRI data, this segment (which is an agglomeration of several styles), is up nearly 60% YTD and now sells a larger volume than stouts, porters, or Belgian ales. A huge chunk of this can be accounted for by Firestone Walker’s 805, which is more than 40% of the segment. Although I don’t want to overly focus on 805, I think it shows one of the new paths for growth in craft: lighter, sessionable offerings that still offer fuller-flavored alternatives to American lagers and light lagers. These beers are perfect for existing craft lovers looking to integrate beer from small and independent brewers into more occasions (I like IPAs, but not necessarily after mowing the lawn), as well as attracting light lager drinkers into the category. I’ve already written about pilsners due to similar characteristics (and so far I’ve been right; they are up 123% by volume YTD in scans).

Sours/Gose

One category that would be the next IPA if speculative internet articles translated into sales is sours. Searching “are sours the next IPA?” turns up numerous hits and the sour beer market is clearly growing as craft grows and American beer lovers become more adventurous. I personally love sours and their wide range of similar but different flavors is evocative of one of IPA’s strengths, but I’m not convinced about the growth potential of the category as a whole. They can be difficult to make in large quantities, the startup costs are high for many breweries, their flavors are unfamiliar to many American beer drinkers, and they tend to have higher price points. Certain brewers have clearly found success in wild/sour portfolios and I think will continue to do so, but in terms of the larger industry, the combination of challenges makes it unlikely we’re going to see sours go mainstream in the near future.

Within sours, however, I do want to highlight a potential breakout star: Gose. Here’s a chart showing Google searches for “Gose” vs “sour beer” since the beginning of 2011.

Gose

Now, this is admittedly a bit of a skewed view, since Gose searches peaked right around this time last year and so will likely tail off through the colder months, but that’s a pretty incredible jump. More interestingly, Google data reveals that “Gose” searches are quite high in one of the fastest growing regions for craft, the Southeast. Over the past two years, North Carolina had the highest regional interest, with Georgia third, and Florida and Virginia also registering high interest. It remains to be seen if Gose can ever break out of its summer seasonal niche, but even if it can’t, it looks like a growing player in a large niche.

Summary

All of the styles referenced share a number of characteristics, primarily the ability to still pack flavor into lighter, more sessionable styles. These styles are gaining in popularity amongst both brewers and beer lovers, and it is no coincidence that session IPA and Gose were two styles added to the 2015 Brewers Association Style Guidelines. Finding a balance between flavor and sessionability remains key, as 99% of craft beer drinkers identify  “flavor” as an important characteristic in selecting a craft beer to purchase (source: Nielsen data for the Brewers Association). That’s one reason “light” craft beers have never really taken off (they are ~0.5 share of the category and down 10% YTD). Craft lovers first and foremost want flavor and appear to view “light” craft styles as losing some flavor. However, this new set of lighter (not light), more sessionable offerings appears to be finding that balance and should provide growth opportunities in the future.

Bart Watson, Chief Economist for the Brewers Association, is a stats geek, beer lover, and Certified Cicerone®. He holds a PhD from the University of California, Berkeley, where in addition to his dissertation, he completed a comprehensive survey of Bay Area brewpubs one pint at a time. You can follow him on Twitter @BrewersStats.

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