Thinking Outside the Bottle Beer entrepreneurs quench the thirst of increasingly savvy consumers.

By Sarah Pierce

Opinions expressed by Entrepreneur contributors are their own.

Once upon a time, beer drinkers only had three major choices when looking to pop a cold one: Budweiser, Miller and Coors. Now the market is flooded with imports, seasonal brews and variations of the old classics. Choosing which beer to drink may have been easier back then, but now it's much more fun.

The U.S. beer market is a $94 billion industry, according to the Brewers Association, far eclipsing sales of spirits, wines and other alcoholic beverages. But thanks to years of lowbrow marketing tactics--think bikini-clad girls dancing around beer-filled ice chests--and ads touting it as the everyman's beverage, beer is facing a major image problem. Today's middle-class consumers don't want to be seen as an average "everyman," and are turning to affordable luxuries that will elevate them to a perceived higher class status.

"Beer marketers are fighting back the best they can, but it's tough because a newer, younger generation of drinker has been very much marketed to and enthused with the cocktail culture," says Gregg Glasser, an editor for several industry publications and a beer expert since 1994.

Over the last several years, beer has slowly been losing market share to wine and flavored alcoholic beverages. According to Glasser, beer drinkers feel pressured to order cocktails to impress the opposite sex and avoid appearing "fuddy duddy."

So what is impressing beer drinkers? Certainly not mainstream beers, which--except in the category of light beer--have been fairly stagnant in terms of sales. The major buzz in beer is craft: traditionally brewed beer that's big in flavor and brewed by small, independent and often local brewers.

The Art of Craft
"It's taken a certain amount of time for people to discover better beer and what better beer is all about," says Brock Wagner, founder of Saint Arnold Brewing Company, the oldest craft brewery in Texas.

According to the Brewers Association, there are more than 1,400 craft brewers in the U.S., including microbreweries. Craft beer industry sales have increased nearly 31 percent over the last three years, outpacing beer, wine and spirits in supermarket sales.

"People's perceptions about what beer is has changed," adds Wagner, whose company has grown an average of 20 percent annually. "People no longer think of beer as just a light, yellow, fizzy drink that you choose which brand you drink based on who had the goofier commercial or the girls with the smaller bikinis on."

Younger consumers have embraced craft brew not for its marketing tactics, but for what it represents.

"There's a cultural phenomenon of people wanting better product across the board in food and beverage. They want to know what the ingredients are, the fat content, if it's a regional product, etc.," says Don Sullivan, owner of Southampton Brewery, a microbrewery in Southampton, New York, that's more than doubled its sales of craft beer this year. "I think crafts have done a terrific job of putting forth the message that fresh beer is synonymous with quality beer."

Cool Connoisseurs
Thanks to craft brews and their many diverse, seasonal flavors, beer has been elevated beyond just a bottle of regular or light beer; it's now gaining a sense of sophistication and fostering new communities of connoisseurs. With this growing sophistication comes the latest trend taking the beer industry by storm: beer sommeliers.

"Twenty years ago, people would have laughed at you if you talked about pairing beer with food, but now I think the average consumer has a better understanding of the breadth and variety [of beer] available today," says Ray Daniels, president of the Craft Beer Institute and founder of the Cicerone Certification Program, the first official beer sommelier certification program, launched in October 2007. "Unlike wine sommeliers, beer sommeliers are less about the snooty tableside presentation and more about better quality beer in the consumer's glass."

The sheer variety of beer now available makes it easier than ever to pair food with the perfect brew. Busch Gardens, San Diego, has a tasting room that allows drinkers to pair a selection of beers with fruit, cheese and chocolate. And Karen Page, co-author of What to Drink With What You Eat, suggests going even further by experimenting with different beers for every meal.

"Beverages have huge implications for the flavor of the dish you're eating," says Page, who suggests pairing a hearty, smoky beer with a smoky dish such as German sausage, or a light fruit beer, such as cherry or blackberry, to go with a piece of cheesecake or chocolate cake. "We have a theory that when customers send dishes back to the kitchen and the kitchen can't find anything wrong with it, it's because the customer ordered the wrong beverage and the dish tastes funny in their mouth."

Savvy Shoppers
Younger beer consumers--and savvy older consumers--are jumping on another trend sweeping the nation. Organic foods, across the board, have gained more shelf space at mainstream grocery stores. Even brewers have jumped on the organic bandwagon with beer made from all-natural, pesticide-free products. The result is beer that's gaining popularity with all consumers, not just the eco-friendly kind.

"The organic product consumer is black, white, rich and poor. The only thing that's a constant is education level: They're a smart, educated consumer," says Jon Cadoux, founder of Peak Brewing, a Portland, Maine brewery that's experienced a 300 percent sales increase last year of its 100 percent organic beer.

"The growth of organic is driven by the very aware consumer; they want to know what's going in their food," adds Morgan Wolaver, founder of Wolaver's Organic Beer in Middlebury, Vermont. "Craft-brewed beers, in particular, tie in really good to organic because it's getting down to good, full-flavored beer and truly knowing what's in your beer."

Cadoux and Wolaver aren't the only organic brewers catching the craze. The Brewers Association has been told that more than 100 organic beers are being made in the U.S., and the North American Organic Brewers Fest draws over 3,000 attendees a year.

Russ Klisch has been making organic beer since 1996 at Milwaukee, Wisconsin's Lakefront Brewery, but it was his introduction of gluten-free beer two-and-a-half years ago that made the biggest impact on his customers. Klisch knows several people who suffer from celiac disease, including his head brewer's father. Celiac sufferers are unable to digest wheat products and related grain such as barley--the key ingredients of beer.

"All of a sudden I realized there's a lot of people out there who can't drink a beer, and what a terrible thing not to be able to have a beer," says Klisch, noting that one out of every 500 people suffer from celiac disease.

Response to Klisch's gluten-free beer has been so great that he's received nearly 400 e-mails thanking him. One man told him, "I finally can go to a Packer party and not drink a chardonnay," and one woman even proposed to him over the internet.

Whatever the reasons for drinking craft beer, it's clear the marketplace is responding.

Wavy Line

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