Brewing change: Alaskans are drinking less, and they’re drinking differently

If you want to see the changes, go to Franklin Street.

Start up north, above 2nd street, where Matt Barnaby’s Barnaby Brewing is coming up with new varieties of beer by the week. Walk south, and you’ll see Amalga Distillery, now on its sixth batch of gin and still approaching its first whiskey.

Keep heading south, and you’ll pass the double doors of Devil’s Club Brewery, whose owners plan to open around New Year’s Day. On the other side of the street, you’ll find Rockwell’s rows of beer taps but be hard-pressed to find someone drinking a Budweiser.

Cross Front Street and duck into The Narrows, where Jared Curé started serving craft cocktails earlier this year.

Keep going, and you’ll pass the Alaskan Brewing Depot, whose storefront bears a name so familiar that it’s hard to remember that it’s barely 30 years old.

Alaska has a reputation as a hard-drinking state with simple tastes. That might have been true 40 years ago, but if you take that walk down Franklin Street, it’s not true anymore. Like the rest of the country — and the rest of the world — Alaska’s taste is changing.

Alaska is drinking less beer, more liquor and more wine. It’s drinking less mainstream beer and more craft beer.

Perhaps most surprisingly, it’s drinking less alcohol overall.

By the numbers

Alaska isn’t alone. Between 2015 and 2016, according to the International Wine and Spirits Review, which tracks figures globally and nationally, global beer consumption dropped by nearly 2 percent. Alcohol consumption overall dropped by more than 1 percent.

American figures show a similar, albeit lesser decline.

According to figures provided by the tax division of the Alaska Department of Revenue, Alaska’s change in alcohol consumption has been brewing for much of the 21st century.

In 2000, each drinking-age Alaskan consumed an average of 36.67 gallons of beer, 2.69 gallons of liquor and 3.47 gallons of wine. The combined tally was the highest in the past 25 years.

Last year, the average drinking-age Alaskan consumed 27.18 gallons of beer, 3.28 gallons of liquor and 4.57 gallons of wine. The 35 combined gallons was more than seven gallons less than 2000.

Brandy Rand is the IWSR’s president for American operations. By phone from New York City, she said the key term in the alcohol industry is “premiumization.” It’s the idea that Americans are consuming less alcohol, but when they do, they’re seeking quality.

“Consumers are becoming more health conscious and are drinking less (or not at all) … When consumers do drink, they choose higher-end products,” IWSR’s five-year forecast states.

In Juneau, Keith Crocker has been an alcohol distributor for 15 years. Before joining Specialty Imports, he was a bartender for 20 years.

“The distributors are keenly aware of what’s going on,” Crocker said.

“Spirits are definitely on the up and up; they’re exhibiting the biggest growth,” he said. “When I used to bartend, it was just cheap beer and a shot, and it’s come full circle back around to cocktails.”

There’s something else going on, too. It’s not just a shift in what people are drinking: There’s a shift in where that drink is coming from.

“Wherever you go, it’s always the local breweries, the local distilleries. That’s what’s trending right now,” Crocker said.

Beyond alcohol

On Franklin Street, Amalga Distillery’s tasting room is packed every Friday night. That’s not what Brandon Howard and Maura Selenak thought would happen when they opened their doors earlier this year.

“The response really surprised us,” he said. “It was so much greater than we ever expected. We thought that this summer we would be able to distribute (our gin) at least through Southeast, and we sold out of our first batch in a week and a half. We thought that first batch would last a month. It was exciting, but we also realized that we were in for a wild ride.”

For the time being, Amalga is just a four-person operation, with help from a part-time accountant, but Howard said he knows the distillery will have to hire more people sooner than he was expecting.

“We’re kind of actively looking for someone to manage the tasting room and manage that,” he said. The distillery is also considering whether to add another person on the production side.

That’s where Alaska’s changing drinking habits start to have ripples.

According to the tax division of the Alaska Department of Revenue, just 1 percent of the 15.3 million gallons of beer sold in Alaska was made in Alaska in fiscal year 2003. In the fiscal year that ended on June 30, 6.7 percent of Alaska’s beer was made in the state.

The amount of Alaska-made spirits is too small to merit tracking as yet.

Economists talk about a multiplier effect when a manufacturer moves into a town: That manufacturer buys raw materials from local wholesalers, pays salaries to people who buy things from local stores and ships finished products using local transportation.

Brewers and distillers are manufacturers just as much as a factory making boots.

According to state figures, there were 34 taxpaying breweries in Alaska last fiscal year, and none was bigger than Alaskan Brewing Company, which is now the largest manufacturer in Juneau.

“That’s a big part of our impact,” said Alaskan spokesman Andy Kline. “We feel that we’re trying to have a positive impact by showing that manufacturing can happen.”

Alaskan employs about 120 year-round workers, Kline said, plus seasonal staff.

“Like any successful, significant business in a community, we support jobs, we support salaries, we support people’s families in the community,” he said.

In 2015, the Brewers Guild of Alaska found the state’s brewing industry directly employed more than 1,400 people. Heather Shade, president of the Distillers Guild of Alaska, said her organization has not yet conducted an economic impact study, but she estimates (based on an average of four employees per distillery) that the state’s distilleries employ about 40 people.

That’s only one side of the trend, however.

On Franklin Street, Jared Curé spent months and thousands of dollars renovating the Arctic Bar into The Narrows, a new cocktail bar designed to meet demand for something more than the standard shot-and-a-beer menu.

He buys herbs and materials locally where he can.

It, like the distillery, is crowded almost every weekend.

“If you’re not keeping up with the trends, people stop going there, and there’s going to be a change in hands with the license or someone’s going to throw a lot of money into it,” he said.

He did all of the above, transforming the Arctic Bar in the process.

“We saw the Arctic Bar change, we’re going to see the Rendezvous change. We’re going to see that with package stores, too. It’s just going to be natural,” Curé said.

No end in sight

Earlier this year, the IWSR issued a five-year forecast examining what Americans are likely to drink for the next five years.

“Consumers are seeking local and authentic brands,” the report stated. “On-site sales at local breweries are a highlight of the beer industry as consumers enjoy having an experience of seeing how their local beer is made and consuming it right on the premises.”

The report said that while demand local and craft beer and liquor will increase, “the forecasted growth in wine, whisky, Cognac and tequila is not enough to offset declines in beer, cider and mixed drinks.”

As it continues, the trend will draw other factors along: the economy, government, and health care. Last year, Sen. Peter Micciche, R-Soldotna, introduced a comprehensive reform bill for Alaska’s alcohol laws.

That bill has been in the works for almost five years and promises the most significant changes to Alaska’s alcohol laws since the 1980s. Those changes have been driven in part by the changing trend in the alcohol industry.

In Alaska’s alcohol and marijuana control office, there’s a growing dispute over the role of distilleries and breweries and how much they should be able to sell out their front doors.

There are public health concerns, too. Alaskans might be drinking less beer, but they’re not really drinking less alcohol. Because liquor has a higher alcohol content than beer, and because craft beer tends to have more alcohol than mainstream beer, it isn’t clear whether the trend is having any helpful effect, said Dr. Jay Butler, the state’s top medical officer.

The timing of the drinking matters, too. Even if people are drinking less, alcohol can cause problems if it’s being consumed in a binge rather than spread out over a week.

Alaska continues to have some of the highest rates of alcohol abuse in the country, and a 2016 McDowell Group report estimated alcohol abuse costs Alaska’s economy $1.84 billion per year. It also costs lives: 160 people were killed by alcohol in 2015, according to the Alaska Section of Vital Statistics.

Earlier this year, the head of Alaska’s Alcohol and Marijuana Control Office traveled to the National Conference of State Liquor Administrators in Denver.

Erika McConnell attended workshops and heard from regulators around the country who are in the same position she’s in.

She heard about the trend toward craft brewing and distilling around the country, and she heard something else: “It’s not showing signs of dissipating,” she said.

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2017 IWSR US BAR Press Release FINAL (PDF)

2017 IWSR US BAR Press Release FINAL (Text)


• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 523-2258.


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