The Battle of the Beverages isn't about small-batch, craft breweries versus "Big Beer" anymore. Unfortunately for brewers, consumer tastes are rapidly shifting in favor of spirits and wine, and as beer sales continue on a declining trajectory, breweries of all shapes and sizes are struggling to devise marketing strategies that will help them grow. "Big Beer" growth has been negative for years. And, it has been a good 30-year run for craft breweries indeed, but even the growth in this category has halted abruptly (from 20% growth in 2013 to about zero today). It has become clear there are far too many breweries serving what is becoming a shrinking market, and so many of these will have to close their doors over the next decade as the industry re-sizes to fit the realities of changing consumer attitudes and behaviors.
But "Big Beer", having gobbled up most of the larger craft breweries, is exploring greener pastures. With the pending legalization of cannabis in Canada this year and the continued push to do so in more states across the U.S., major brewer Molson Coors is in the process of developing drinks made with cannabis. The first such product will be non-alcoholic and, for now, will only be sold in the Canadian market. The U.S. can't be far behind as attitudes in favor of cannabis legalization become stronger. But Molson isn't the only major brewer to make a strategic move with cannabis.
Corona, owned by the massive Constellation Brands, invested in a Canadian cannabis company last year with plans to develop beverage products to target cannabis users, and Heineken's "Lagunitas" marketers just launched a cannabis-infused water in California. These deals all involve either direct investments or joint ventures with cannabis companies, since brewers know nothing about cannabis and prefer to work with experts. Overall, revenues from the herb, still officially illegal in the U.S., are expected to hit over $10 billion in the U.S. and $7.5 billion in Canada for 2018. Prospects for growth are very optimistic, to say the least. And it looks like states in the U.S. will be free to decide whether or not to legalize the stuff once the federal government finally takes the drug off if its "naughty" list. Other countries will surely follow suit.
From a marketing standpoint, it's nice to see such large, established companies making such bold strategic decisions in such a challenging marketing environment. Indeed, beer marketers know that the writing is on the wall with regard to both beer and "buds", and they are planning accordingly.
Discussion: Why do you think that beer is in decline? Would you buy a cannabis-infused beverage? Do you think that these beer marketers are making the right moves? Why or why not?
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