Innovation Driving Growth in Flavored Beer Sector

The proportion of new flavored beer product launches has skyrocketed from 15 percent of total U.S. beer launches in 2010 to 27 percent of total U.S. beer launches in 2015, an 80 percent increase over the 5-year period, according to new data from Mintel.

According to Mintel’s Global New Products Database (GNPD), leading flavors among product launches include pumpkin, spicy, coffee and chocolate, while newer products, including hard or alcoholic sodas, have become more widely available. What’s more, even grapefruit and habanero flavors are showing up in beers.

Interestingly, while flavor innovation is booming, the proportion of unflavored beer launches has declined from 85 percent of the total beer market in 2010 to less than 73 percent in 2015.

The importance of flavored beer is confirmed by the fact that 57 percent of beer drinkers who increased their beer consumption in 2015 credit this increase to a wider availability of flavors. Fifty-eight percent of U.S. alcohol drinkers say they are interested in fruit-flavored beer, with other flavors such as spicy (45 percent) tart/sour (45 percent) and beer blended with juice, tea and soft drinks (49 percent) also showing strong potential.

Highlighting further interest in fruit-based alcohol, the U.S. cider sector has experienced impressive growth, with volume sales growing fivefold between 2010 and 2015. Millennials are a major factor with 23 percent choosing cider over beer.

“The fact that well over half of all U.S. alcohol drinkers say they are interested in flavored beer highlights a significant opportunity to boost participation in the beer category," said Beth Bloom, food and drink analyst, Mintel. “The trend differs from the boom seen in flavored vodka a few years back in that flavored beer launches are exploring more adult formulations and steering clear of gimmicks such as whipped cream, coconut cream pie, and Dreamsicle varieties."

Today, beer is the nation’s most popular alcoholic drink with 24 percent of U.S. adults saying it is the alcoholic beverage they drink most often, followed by wine at 16 percent. In excess of two in five (44 percent) US consumers are beer drinkers, with men (59 percent) twice as likely as women (29 percent) to be drinkers. Beer drinking among Millennials (48 percent) and Hispanics (48 percent) is also well above average. (Beer also has been shown to benefit heart health and boost runners’ endurance.)

Valued at an estimated $102.1 billion in 2015, dollar sales of beer are estimated to have grown a moderate 4 percent in 2015, amounting to overall gains of 21 percent since 2010. Meanwhile, volume sales continue to decline, slipping 2 percent in the same 5-year period.

Rising value sales coupled with declining volume point at a shift toward premiumization and the continued popularity of craft beer. The premium, imported and craft segments are all experiencing growth, with higher price points contributing to dollar sales increases. Innovation and a wider variety of beer options, including styles, flavors and packaging formats, may help stave off stagnation and retain the patronage of beer drinkers.