As business at on-premise establishments continues to near 2019 levels, craft beer may have the most to gain, NextGlass CEO Trace Smith suggested during last week’s Brewers Association (BA) Collab Hour webinar.
Smith analyzed U.S. data from Untappd, an application that tracks various on-premise consumer trends — such as brewery location, beer style, user demographic, day, weather, and much more — through self-reported check-ins by users. NextGlass is the parent company of Untappd, as well as Hop Culture and BeerAdvocate. In 2021, Untappd recorded its 1 billionth check-in.
While the total volume of check-ins on the Untappd app remain below 2019 levels, Smith pointed out several encouraging trends for craft.
In April 2020, check-ins at breweries decreased to less than 8% of total check-ins across all on-premise venues, falling to less than half of brewery check-ins from before pandemic shutdowns in February (16%). However, amidst falls in check-in rates, the average consumer rating for beers at those breweries spiked, increasing from 3.9 points in February to 4.05 points in April. Smith likened the data to the “don’t know what you got ‘til it’s gone” notion, suggesting consumers have a better perception of a product when they have less access to it.
“[The trend] is a really good indication of how craft beer consumers feel about being able to go into a brewery taproom,” he added.
Brewery check-ins on Untappd increased share of total check-ins +2.1% year-over-year, increasing from 25% in mid-2019 to 27.1% in mid-2021, suggesting the venue has taken share from other on-premise locations. Venues in decline were bars, which decreased from 5% in 2019 to 4% in 2021.
“One percent doesn’t seem that significant, but 1% across hundreds of millions of check-ins or hundreds of millions or billions of consumption moments, it’s a real mix shift,” Smith said, adding that the crowded nature of bars versus the more open space of taprooms likely factored into the change.
Several breweries which opened in 2020 were a testament to craft brewery success. The top five “COVID babies” by checks-ins were (in order) Warwick, New York-based The Drowned Lands Brewery; Madison Wisconsin-based Young Blood Beer Co.; Buffalo Grove, Illinois-based Liquid Love Brewing; Cincinnati, Ohio-based Third Eye Brewing Co.; and North Haven, Connecticut-based Marlow Artisanal Ales.
Of the beers that launched in 2020, Lawson’s Finest Liquids Little Sip American IPA topped the list, increasing from 3,454 check-ins in 2020 to 22,550 check-ins so far in 2021 — more than 16,000 check-ins above the second best performing 2020 release, Old Nation Brewing Company’s 70+ American IPA.
While it appears consumers are returning back to breweries and taprooms, the demographic has changed slightly. Younger consumers (aged 21-25) checking in increased from 2.14% in 2019 to 4.58% in 2021, and older consumers (50)+ increased from 19.04% in 2019 to 20.92%. Older Millennials and Gen X however decreased their brewery check-ins, with 31-35 year-old consumers decreasing from 19.8% in 2019 to 19.1% in 2021, and 35-40 year-olds decreasing from 17.41% to 17.03%.
While the decreases are less than 1%, Smith said the 2% change in younger consumers is not something to ignore, as a “2% change across hundreds of millions of check-ins is likely pretty statistically significant.”
Smith suggested one factor contributing to the decline in visits by craft’s typical consumer is that demographic is also the most likely to have children, and that the lack of ability of many children to get vaccinated may play a role.
“It’s families that are reluctant to bring kids into the taproom,” Smith said. “I suspect that this is something that will normalize as children get vaccinated.
”In the meantime, use this to your advantage. Market more to the Gen Z/younger Millennial crowd or to the 50-plus crowd, because they’re likely a larger part of your patronage right now then they were in years past,” he continued.
While some of the characteristics of consumers checking in appears to have slightly changed, the characteristics of the beers they’re drinking has shifted as well. One aspect Smith pointed to as most significant was the lowering of bitterness across beers.
In January 2019, the average IBUs of beers consumed by Untappd users read 20.8. While the average fluctuated throughout 2020, it has leveled off to 14.9 IBUs as of November 2021.
Smith said he has seen similar trends globally, but he does not have an explanation yet for why.
Of the top 10 styles of beer on Untappd, fruited sours gained the most share apart from American IPAs, increasing from 2.4% in October 2019, to 3.6% in October 2021. American pale ales posted the largest decrease, losing 0.9% share from October 2019 (3.8%) to October 2021 (2.9%). Lagers fell off the top 10 list in 2020, but regained nearly all its share in 2021, increasing to 2.3%. Smith theorized the drop was due to the difficulty of creating lagers and thus those beers being deprioritized during the height of the pandemic.
All IPA substyles increased from 32.6% in 2019 to 34.9% in 2020, but returned to 32.7% in 2021. Hard seltzer increased from 0.16% in 2019 to 0.63% in 2021, while non-alcoholic (NA) offerings increased from 0.4% to 0.61%.
Smith noted that he visited several small breweries over the past year, and almost all of them offered a non-alc option. His “bold prediction” for the webinar was that the growth of the NA segment will continue.