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3-Tier's latest webinar, "Flavor First: Decoding the Bec-Alc Drinker," got deep into the weeds on three Q's: What trends are emerging [in flavors]? Do they translate to craft? And is there continued demand or consumer fatigue? Led by 3-Tier's self-described "Beer Consigliere" Tim Oldread and Beer/Malt/Cider analyst Devon Hevener, and featuring a presentation from Rhinegeist's Marc Venegoni, main takeaway was that brewers need to focus on simplicity, occasions and flavors, as today's beer drinkers are displaying far more catholic tastes than their (fore)fathers. Or, as Marc put it, "they're just not as loyal as they used to be." Wine-Based RTDs "Having A Moment" Crunchin' the numbers, Tim said RTD sales had increased from $11.5 bil in 2021 to $13.4 bil over last 52 wks, and "spirits-based is leading the growth" thru brands like Surfside and Sun Cruiser. And while Tim reminded that 70% of RTD sales are still malt-based bevs, wine-based drinks are "having a moment," he said, specifically via BeatBox and BuzzBallz brands, having gained 1.5 share of the mkt. Tim showed how all RTD categories (aside from malt seltzers) peaked in growth rate during Covid, only to tread separate paths in its aftermath. For instance, spirits-based bevs are still growing after a 2020 peak growth rate, even as its "momentum starts to slow," whereas FMBs followed their 2020 peak with Twisted-driven spikes in 2022/2023 from which they are now ebbing. Wine-based RTDs, conversely, followed a 2020 peak growth rate (off a tiny base) with a bottoming-out but quickly recovered, posting strong sales growth over the past few yrs, even if they still make up a small piece of the category.Craft Is Better Off Than You Think First, the bad news: "The top 15 brand families are really lifting the craft family right now," Tim said, as regional craft is suffering with whole category down 4% on the yr, doubling its losses from 2024. He said more research was needed on how cannabevs were eating into craft share but "there's definitely an impact" that "I don't think has been really captured quite yet." On a rolling 52-wk basis, craft is down 4-5%, while prepared cocktails of all kinds are up 5%.Now the good news. Tim found that "almost 1:1 craft is losing dollars on par with their distribution," and "where it has remained in distribution, it has done well." There "might have been an overcorrection with too much distribution of craft," he said, but it's now "performing well where it is." He also noted that while RTDs have "great velocity" right now, the segment peaked in 2023 and "is coming back to Earth a little bit more."Chelada Is the Captain Now Sortin' thru the top-selling flavor profiles for all alc bevs, Tim showed that in 2023 cinnamon held the top spot (courtesy of Fireball), followed by apple, chelada, lime, peach and cherry, all of which were growing. Fast-forward to today and cinnamon has fallen to fourth, with chelada easily taking the top spot, followed by apple, lime and cinnamon, albeit with slower rates of growth. Tim said cheladas were "going crazy" and it was a "holy crap" moment to learn it was "the #1 flavor across all beer and alcohol."Seasonal Flavors Rule; Behold the Bapple Bump In 2023, "Assorted" was the top craft category, followed closely by "Seasonal," both miles ahead of citrus, the #3 player, Tim said. Fast-fwd to today and "dominant" Seasonal has jumped Assorted, with other specific flavor growth "a little all over the place": the most popular styles after Seasonal are citrus wheat (Blue Moon, etc), followed by mango American wheat, fruit punch IPA (Voodoo Ranger, mostly), Belgian strong ales and pumpkin.Of course, no flavor discussion would be complete without Busch Light Apple, which provided "not a small little spike" to May's #s and illustrates flavor's proof of concept, in Tim's eyes. "We're talking $38 million," he said, so "there is absolutely a consumer out there looking for flavor." And once Bapple started cycling out in June, a funny thing happened with apple flavors of true cider, NA beer and FMBs: they all had a brief uptick in sales before heading back down. Tim couldn't quite say correlation equaled causation, tho it sure looks like consumers were chasin' the apple taste once Bapple began disappearing, in his view."Flavor Can't Be Solved With One Thing" Talkin' Rhinegeist, Marc reiterated that "it's hard to ignore the impact of flavor, especially in craft." Co decided it needed to "really go after this younger consumer," he noted, the group of which are "not truly beer enthusiasts" because "they don't understand it." (Gotta say, this strongly echoes BA's Matt Gacioch's findings we reported on yesterday, where he said craft's challenge was "educating without being preachy.") And while Marc played up success of co's Cincy Light Lime, main topic was threading the craft/RTD needle with Rhinegeist Bubbles.Bubbles brand, which is up strong double-digits in scans, wasn't "just" aimed at the craft consumer, Marc said, as co was "bridging the gap" between malt- and wine-based RTDs. He described "exhaustive process" to get flavors right for brand he admitted "doesn't belong everywhere" but makes up 20% of flavor's small portion of craft sales. And co's continuing to innovate with new hops/extracts because "flavor can't be solved with one thing" and the key was creating "something for every occasion." Broader point being that there's no one drink for every event, and you gotta meet customers with the right choice at the right place and time, which Tim hammered home as well.

3-Tier: Craft Stronger Than It Appears, Keep Focus on Simplicity, Occasions and Flavors

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