Craft Beer Setting Sail for Greener Waters

I wanted to title this article after the great song by the Grateful Dead called "Ship of Fools", but I figured that would not be received well and not the correct title for the opportunity presented to those who are going to set sail in the hemp beverage industry.

"Ship of Fools" by the Grateful Dead explores themes of disillusionment, existential uncertainty, and the search for meaning in a chaotic world. The lyrics depict a metaphorical journey on a "ship," symbolizing life and the struggles that come with it. The song reflects feelings of being adrift, surrounded by confusion and folly, yet it also conveys a sense of hope and resilience. The narrative captures the idea of navigating through life's challenges while acknowledging the absurdities and unpredictability's that come with it. Ultimately, "Ship of Fools" blends introspective lyrics with a reflective musical style, inviting listeners to contemplate their own journeys. Turn it on after or during your reading of this exploration of the shift I am seeing in the craft brewery world.

As a small craft brewery looking to navigate the evolving landscape of the beverage market, particularly with the growth of cannabis beverages you will have to find a captain that will be considering some of these key factors and strategies for success in 2025 and understand that this market is going to be contingent on local and state regulations and the ability to scale.

Factors to Consider

1. Market Trends

Craft breweries and small craft alcohol producers should know that the cannabis-infused beverage industry is leaning heavily into a marketing angle of wellness and health with their products. Hemp products allow for more open and direct B2C channels that open up more revenue streams without the encumbrances that come from the traditional alcohol pathways. Industry leaders in cannabis and beverage creation alike are capitalizing on cultural changes that have many consumers questioning their intake of sugar, alcohol, and other substances. Because their drinks are alcohol-free and often low in calories, marketing teams play up cannabis-infused beverages as a “health option” that can help us sleep better and relax.?They are becoming more main stream and helping people have another choice in beverage for social situations.

Health-conscious consumers are increasingly sober curious or even “Cali sober”, the anachronistically named term for partially or completely replacing alcohol consumption with “less harmful” alternatives like cannabis. Alcohol can have negative health effects and should certainly be consumed in moderation. But marketing cannabis as a health option is disingenuous at best. Marijuana can also cause ill health effects, from memory problems to addiction to psychosis. Regardless of their accuracy, it’s important to familiarize yourself with the marketing angles cannabis beverage companies are using.

• Consumer Preferences: Keep an eye on the shift toward health-conscious and low-alcohol alternatives. Consumers are increasingly interested in functional beverages, which could include cannabis-infused options.
• Legal Landscape: Monitor changes in cannabis legislation and regulations in your region. This can affect market access and competition.

2. Competition

With declining sales of alcohol products in the US and the rise of premium added-value products, from non-alcoholic RTDs and mocktails to functional soda, intoxicating cannabis beverages have an opportunity to carve a very distinctive place in the drinks space and companies recognize that. Social and responsible intoxication is the first step, but there is clearly more consumer appetite for anxiety and stress reduction, focused energy, and even pain/exercise recovery – all need states in which hemp beverages (and all cannabis beverages) will start playing an important role.

• Cannabis Beverages: Understand the competitive landscape between craft beers and cannabis drinks. Cannabis beverages may attract a similar demographic, so consider how your products can differentiate themselves and how they can be sold directly, at retail, and at a wholesale level.
• Collaborations: Explore partnerships with cannabis producers or brands for limited-edition releases, blending craft beer with cannabis elements.

3. Product Innovation

Product innovation in cannabis beverages can significantly boost sales by catering to evolving consumer preferences. By offering diverse flavors, functional health benefits, and non-alcoholic alternatives, brands can attract a broader audience, including health-conscious and sober-curious consumers. Additionally, unique packaging, customizable experiences, and collaborations with other brands can enhance visibility and engagement. Continuously gathering consumer feedback allows for iterative improvements, ensuring that products resonate with market demands. Overall, innovation creates unique market opportunities and fosters brand loyalty, driving growth in this rapidly expanding sector.

• Flavor Profiles: Experiment with flavors and formulations that appeal to both beer and cannabis enthusiasts. Incorporating botanical ingredients may bridge the gap between both markets.
• Sustainability & Health: Focus on sustainable practices, as consumers are increasingly supportive of brands that prioritize environmental responsibility.

4. Marketing Strategies

Marketing strategies for cannabis beverages, whether for small or large producers, should emphasize education, community engagement, and branding. Both can leverage social media platforms to showcase product benefits, share recipes, and connect with consumers, while influencer partnerships can amplify reach and credibility. Hosting tasting events or educational workshops fosters community interaction and builds brand loyalty. For small producers, highlighting local sourcing and artisanal craftsmanship can create a unique brand identity, while larger producers may focus on broader distribution and national campaigns. Clear labeling and transparent communication about ingredients and effects are essential for building trust across all consumer segments. Ultimately, a combination of authentic storytelling and education with targeted marketing can effectively engage diverse audiences in the growing cannabis beverage market. The story sets up the sell.

• Education: Educate your consumers about the differences and benefits of your craft beers versus cannabis beverages. This can build loyalty and interest.
• Brand Storytelling: Leverage your brewery’s unique story and community involvement to create a strong brand identity that resonates with consumers.

5. Distribution Channels

Distribution channels for cannabis beverages through wholesale and retail methods include various avenues tailored to comply with regulatory frameworks. Wholesale distribution often involves partnerships with licensed cannabis distributors. In Texas large retailers like Total Wine & More and Spec's Liquor have gone almost all in on the hemp beverage industry seeing the green wave that is going. Companies and those who can facilitate access to dispensaries and retailers in legal markets. This can include bulk sales to specialty stores or wellness shops that focus on health-conscious products. For retail, direct-to-consumer sales via company websites or pop-up shops can create a personal connection with customers, while brick-and-mortar dispensaries provide visibility and accessibility. Additionally, larger retail chains with cannabis sections or those focused on lifestyle products offer significant reach. Leveraging e-commerce platforms, where permitted, allows producers to tap into broader markets and enhance convenience for consumers. Ultimately, a multi-channel approach combining wholesale and retail strategies maximizes market penetration and consumer accessibility.

• Diverse Offerings: Consider expanding distribution to include cannabis beverages, if legally permissible, to attract a broader customer base.
• Online Sales: Explore e-commerce options and direct-to-consumer sales, especially for specialty or limited-run products.

Possible Effects to the Alcoholic Beverage Industry

By staying informed about market dynamics and being willing to innovate, your craft brewery can effectively navigate the challenges posed by the cannabis beverage market while leveraging opportunities for growth.

• With the expanding growth of the wellness market in the United States, alcohol producers are going to have to reckon with the growth of these healthier beverage options.
• As the cannabis-infused beverage market share grows, shelf space for beer and wine in stores may shrink. It happened with hard seltzers and it will happen again.
• The fate of cannabis-infused beverages rests with its legal battle. Concerned alcohol producers should keep an eye on marijuana legalization efforts.
• The main players in this space are currently small boutique brands like CANN. But as they grow in popularity, we’ll likely see some large alcohol producers and distributors get in on the opportunity. We see the beginning of this already with the recent deal between Recess and Breakthru Beverage Group.
• Continued growth of other functional beverages such as kombucha, mineral water, and herbal infusions will further shrink shelf space for craft beer options.

Alcohol producers should take note of this latest beverage-industry trend and keep an eye out for cannabis-infused beverage news in the coming months and years. Whether you see it as an opportunity to diversify your offerings or competition for shelf space, by all accounts we will be seeing more of these beverages in the coming years.

Thanks for taking the time to read. Looking forward to leaning more into this in 2025 and seeing where cannabis beverages are going in the future.

Gratefully yours,

-Sage Howell

Farmer and Servant of Christ