The most popular drink worldwide – after water and tea, that is – beer’s global market value in 2022 was $793.74bn, according to Insider Monkey. In the 2022 brewing year, global production of beer increased by 1.3% year on year to 1.89 billion hectolitres, with the market set to return to pre-pandemic levels. There was a production peak of 1.91 billion hectolitres in 2019.

This continued demand for beer comes from a push by low-calorie and, most recently, low-alcohol offerings, the popularity of craft beer from smaller, independent breweries, and the expansion of distribution networks. But outside influences are providing some unavoidable casualties.

The craft conundrum

Despite the popularity in the craft beer space, Australia is facing challenges, with many businesses closing up shop. Kylie Lethbridge, head of the country’s Independent Brewers Association (IBA), told The Guardian newspaper there are different factors to these struggles but the “catalyst” for many was external decisions made during the pandemic.

Lethbridge went on to tell The Guardian: “One of the things we were allowed to do, because the federal government provided some support during the pandemic, was delays to payment of excise tax.

“Then, a couple years in, the Australian Taxation Office, in all their wisdom, decided everything was fine and a brewery could start to pay that back, without taking into consideration any of the other external factors of where the industry was at or its input costs.”

A recent survey by the IBA revealed that of 212 IBA-associated brewers who responded, 91% had been “extremely affected by the current economic climate” and 61% said their businesses “may not survive the downturn”.

And these issues are not limited to Australia – other countries too are feeling the weight of a craft beer recession. Brooklyn Brewery brewmaster Garrett Oliver tells Drinks International this is also happening in the States but he believes it is “cyclical, not permanent”.

Oliver continues: “Like the stock market in the US, the general direction is up, but that does not mean that there will not be downturns along the way. We must be creative with our flavours and give the consumer a reason to be excited about beer again.”

European hops

Also facing decreasing optimism is Europe. The continent is typically a choice area for growing aromatic hops to brew beer, but has been facing challenges with the increase in heatwaves due to climate change. A study published in Nature Communications revealed that, with the cultivation of high-quality aroma hops being restricted to relatively small regions with the correct environmental conditions, there is “a serious risk that much of the production will be affected by individual heatwaves or drought extremes that are likely to increase under global climate change”.

The study says that some hop farmers have responded to the changing climate by “relocating hop gardens to higher elevations and valley locations with water tables, building irrigation systems, changing the orientation and spacing of crop rows, and even breeding more resistant varieties”. The study adds, however, that “a systematic and European-wide investigation of the impact of ongoing and predicted climate change on the quality and quantity of aroma hops is still missing”.

Answers in Africa

With some of the issues beer is facing at the moment, Brooklyn Brewery has sought out solutions in a climate-resistant West African grain, fonio, launching its Fonio Rising expression in collaboration with food business Yolélé.

The brewery explains that fonio, part of the millet family, has long been a source of income for rural African communities and is known as the “seed of the universe”. The grain has thrived in West Africa for over 5,000 years and gained significant attention recently for its nutritional profile and culinary versatility, recognised as part of the UN’s declaration that 2023 is “the year of the millet”. Brooklyn Brewery has been working with this grain since 2019, and Oliver has emerged as an authority on using fonio in the brewing process.

The brewery further points out that fonio is able to thrive in areas where other crops may typically struggle. In arid regions near the Sahel Desert, the grain is able to flourish in nutrient-poor soil, without the need for fertilisers or pesticides, as it is highly nutritious, while also being gluten-free. Furthermore, fonio is drought-resistant and helps regenerate the soil within a two-month growing period, resulting in harvests and providing a vital source of income for rural communities in fonio-farming countries. The launch of Fonio Rising, a double pilsner (6.4% abv) golden lager “pays homage to the efforts of predominantly female-led smallholder farms in West Africa, who persevere in cultivating fonio to safeguard its legacy for future generations”, the brand said in a statement.

Oliver adds that the most critical thing when using fonio is that “not only does it have no chemical inputs, but it also tastes wonderful when fermented into beer". He adds: “Given that it has these properties, can grow in near-desert conditions, and supports thousands of small-hold farmers, fonio does almost everything that younger consumers want to see from craft brewing. It’s a grain with a 5,000-year history but also the grain of the future. Fonio is actually so good that you could not invent something better.”

Moving forward

One increasingly popular part of the beer market which can’t be forgotten is low and no. A pioneer in the category in general, low and no-alcohol beer has seen a recent boost in sales. In October, research company Kantar found that low-alcohol beer sales in the UK increased by 16% compared to the same period last year.

The sector is gaining further traction with international educational trade association the Institute of Brewing & Distilling (IBD) launching a course which teaches participants how to produce “excellent” low and no-alcohol beers.

And there is momentum in different beer styles beyond low and no, with Oliver noting: “There is a new – and welcome – focus on styles other than hazy IPA, which was threatening to become a new (and boring) monoculture. It's a great style, but there are many others. Czech lagers are having a big moment right now, and malty styles are making a comeback.”

Oliver also feels we will see both innovation within the category, and a return to natural ingredients, adding: “We can see that pilsner is having a trendy moment right now, which I think is great. But new ingredients and flavours bring excitement to the category, and in the case of fonio, new values as well.

“Every several years, journalists keep declaring that ‘craft beer is dead’, but it never turns out to be true. What is true, though, is that we are all engaged in fashion. Everything from breeds of dogs to high-end restaurants, to clothes, to craft beer, they all have a great history, but they are also subject to fashion. When things go out of fashion, the brewer can push back by continuing to brew what they wish, but in the end the consumer will decide. Our job is to create variety and make it delicious,” Oliver concludes.