Is marihuana the next craft?
Will brewers soon have to defend their share of throat against wine, spirits and pot? It seems likely. Already there is talk in the industry that legalized pot could become the new craft beer. Legalized marijuana is expected to be a USD 50 billion business by 2026, up from USD six billion in 2016.
Big Beer has been investing in up-and-coming craft breweries as their own iconic brands are struggling against a downward trend. Some hopeful analysts believe that weed could be the Big Brewers’ next big investment to keep up with trends.
Beer penetration fell one percent in the US market from 2016 to 2017, while both wine and spirits were unmoved, according to research firm Nielsen. Worse still, beer has already lost ten percent of market share to wine and spirits from 2006 to 2016.
Meanwhile, as legalized marijuana spreads across the US, a new industry is booming.
That could be bad news for the beer industry. Brewers could lose more than USD two billion in retail sales to legal marijuana, Forbes magazine reported, citing a study by Cannabiz Consumer Group.
Therefore many pundits believe the Big Brewers will need to deal with the pot threat as they did with craft brewers: “if you cannot beat them, buy them.”
Between 2011 and 2016 craft brewers more than doubled their market share to 12.3 percent and sold over 29 million hl beer. At the same time, sales of many of the biggest beer brands, including Budweiser and Bud Light, continued their decline.
Recognising a growing taste for craft beer, AB-InBev, MillerCoors, Heineken and Constellation Brands began buying up independent breweries with cult followings.
For many brewers, craft beer is just the tip of the iceberg when it comes to competition. Wine, spirits, now weed – all of them can take market share away from beer.
Legalized weed sales are expected to grow 25 percent through 2020 – a striking growth rate similar to the explosive popularity that craft beer has enjoyed in the recent past. Just as Big Beer began investing in craft beer in the face of growing competition, marijuana investments and acquisitions could follow.
