Considering the widespread decline in beer consumption, it might be surprising to learn that breweries are trying to help make Dry January a thing.
The fad reportedly began in the U.K. in 2013, when people vowed not to drink any alcohol for the first month of the new year. Dry January has now leaped across the pond, with as many as one in five U.S. consumers participating in 2019, according to a CNBC report citing Nielsen data. Now American brewers are hopping aboard the temperance train, even though beer sales are in a tailspin.
But it's not so much to advocate in favor of sobriety as it is a chance to push more sales of near beer, the low- and no-alcohol beverages that are enjoying a resurgence in popularity.
Putting non-alcoholic beer on tap
Of course, it's still small potatoes. Non-alcoholic beer barely registers on the scale with a 0.37% share of the market as measured by industry analysts at IRI. And though Anheuser-Busch InBev's (NYSE:BUD) O'Doul's is arguably the best-known brand of near beer, much like the rest of the beer giant's portfolio, U.S. sales are declining.
IRI found O'Doul's was down 7.5% in 2019, with Molson Coors (NYSE:TAP) Coors Non-Alcoholic falling 5.9% and Pabst Brewing's Old Milwaukee NA down 9%. Only Heineken's (OTC:HEINY) 0.0 was showing any growth among the biggest brewers, and as part of its tie-in with Dry January, the brewer is actually giving away the beer this month.
Instead, the real growth is occurring among upstart brands like Athletic Brewing, which only produces non-alcoholic beer, and where industry site Good Beer Hunting says it is hoping to see capacity expand to 100,000 barrels this year -- a massive ten-fold increase.
But most near-beer brewers are tiny. WellBeing Brewery, for example, saw its sales of non-alcoholic beer double last year...to 600 barrels, though even at that amount it puts WellBeing around the size of the average craft beer brewery (the Brewers Association says the 50 fastest-growing craft brewers produce just 1,350 barrels a year on average, combining for about 10% of the industry's total production).
Beer sales drying up
Participating in Dry January also represents an attempt by brewers to come to grips with changing consumer preferences as they abandon beer in favor of other alcoholic beverages.
Last summer was called the "summer of seltzer" because of the extraordinary rise of hard seltzers, especially Mark Anthony Group's White Claw and Truly by Boston Beer (NYSE:SAM), the two leading brands that own about 85% of the market. Indeed, Boston Beer now makes more seltzer than it does beer.
Molson Coors has also recognized the change and is distancing itself from the industry by changing its name from Molson Coors Brewing to Molson Coors Beverage and highlighting the non-beer portions of its beverage portfolio.
It's part of a growing wellness trend among millennials and others who view the taste-heavy flavor profiles of craft beer as too rich, making so-called "wellness beers" another growing favorite. Incongruously marketed as beer for athletes, they feature lower alcohol by volume and fewer calories. Molson is tying its Miller64 beer (it has just 64 calories) into the trend by calling on consumers to take part in "Dry-ish January."
No longer wetting their whistle
Whether it's to perk up sales of non-alcoholic beer, promote alternative beverages, or get people to try near beer, brewers see where drinkers are going -- and it's not to their nearest bar.
Still, it seems encouraging consumers to give up alcohol, even for a month, isn't in a brewer's long-term self-interest. They just may be left crying in their beer if Dry January ends up extending into the other months of the year, too.