Episode 128: The Craft Beer Contraction: How Great Lakes Brewing Co is Pivoting to Win

For decades, the craft beer industry rode an exponential wave where a rising tide lifted all boats. Today, overall craft volume has stalled, retail shelf space is contracting, and younger consumers are dividing their disposable income across canned cocktails, online gaming, and mindful moderation. On this episode of Marketing Moves, Great Lakes Brewing Co. CEO Christopher Brown sits down with Ashtyn Morris to break down how Ohio's original craft brewery is transforming from a traditional beer maker into a multi-category beverage company, leveraging massive seasonal equity, and winning the high-stakes battle for retail floor space.

For nearly thirty years, craft brewing in America enjoyed unprecedented, uninterrupted expansion. New taprooms opened weekly, retail shelves stretched indefinitely to accommodate obscure styles, and consumer demand felt limitless.

Today, that boom era has officially come to an end.

According to 2026 data from the Brewers Association and NIQ, overall craft beer volume has remained essentially flat. At the same time, the broader alcohol landscape is experiencing its most volatile period of contraction and fragmentation in modern history. Ready-to-drink (RTD) spirits-based canned cocktails, flavored malt beverages, and functional drinks are capturing virtually all retail growth, while younger demographics are drinking less, spending differently, and prioritizing mindful moderation.

For legacy breweries, the choice is stark: cling to the romanticized craft model of the past, or reinvent what it means to be a modern commercial beverage enterprise.

Few leaders understand this operational tension better than Christopher Brown, CEO of Great Lakes Brewing Co. Founded in 1988 by brothers Pat and Dan Conway in Cleveland's historic Ohio City, Great Lakes is Ohio's original craft brewery and a top-20 craft producer nationally. But longevity alone does not guarantee survival.

In this episode of Marketing Moves, host Ashtyn Morris sat down with Brown to unpack the commercial playbook behind steering a 38-year-old heritage institution through market contraction. From cross-category product innovation to the brutal economics of three-tier distribution, Brown shared an unfiltered look at how independent breweries can stay nimble, protect margin, and win in a shrinking market.

The challenges facing the beer industry are not simply a matter of shifting flavor preferences. They reflect a fundamental change in consumer lifestyle and wallet share.

As Brown points out, young adults today possess roughly the same amount of discretionary spending cash as their counterparts did twenty years ago. The critical difference is how they divide it. Where previous generations defaulted to buying a twelve-pack of beer and grabbing fast food, today's consumers allocate that capital across sports betting apps, video games, specialty dining, and diverse beverage categories.

"The biggest thing I have been talking to all of our employees and our board about is that we are no longer just a brewery," Brown explains. "We have to be a beverage company in the current sense of it."

When the overall market pie is shrinking, growth cannot come from defending legacy beer styles alone. Breweries must carve out new slices of that pie by addressing portfolio gaps and entering adjacent categories where consumer momentum actually exists.

Entering new categories does not mean blindly jumping on every commercial bandwagon. The ready-to-drink canned cocktail category has seen explosive growth with brands like High Noon, Surfside, and Cutwater, but the market is already oversaturated with generic vodka-and-fruit-juice combinations.

To differentiate without losing authenticity, Great Lakes looked across state lines and partnered with Watershed Distillery, Ohio's largest craft spirits producer based in Columbus.

Rather than copying mass-market formulas, the two companies developed aSPLASH, a crafted take on the traditional Scandinavian long drink built with Watershed's citrus-forward Four Peel Gin and real grapefruit. It brings together Cleveland's largest craft brewery and Ohio's largest craft distillery to create an elevated product that neither brand could have produced alone.

To make the brand resonate with younger, socially conscious consumers, Great Lakes integrated a purpose-driven mission directly into the product. A portion of every aSPLASH sale is donated to CLEANR, an environmental startup born out of Case Western Reserve University.

After learning that commercial and domestic laundry is the single largest source of microplastics in our waterways, Great Lakes chose to fund the installation of Cleaner filtration units directly inside college campus laundromats across the Great Lakes region.

"We can educate the next generation about microplastics through CLEANR, back it up with a great product, and hit all the points: great packaging, incredible liquid, and an Ohio-centric brand story," Brown says.

While the non-alcoholic (NA) beer category has grown rapidly, led by brands like Athletic Brewing and heavily funded macro-breweries, producing high-quality 0.0% NA beer requires multi-million-dollar de-alcoholization equipment. For a brewery operating out of a historic 19th-century production facility in Ohio City, that infrastructure was neither practical nor strategically viable.

More importantly, Brown recognized that most consumers looking to moderate their drinking do not necessarily want total abstinence. Instead, they want lower-proof, sessionable options that still taste like authentic beer and allow them to participate in social rituals.

The solution came from an internal experiment run by Great Lakes innovation lead Jacob, who tested blending their flagship Dortmunder Gold lager with sparkling water. The result was Dort Lite, a 2.9% ABV "mid-strength" lager that delivers the full malt and hop character of Dortmunder at exactly half the alcohol content (down from 5.8% ABV).

Rather than chasing the extreme ends of Dry January or Sober October, Dort Lite embraces what Brown calls being "lightly damp." Packaged in traditional bottles for the bar and on-premise market, it provides an authentic, full-flavor option for consumers practicing "zebra striping" (alternating between alcoholic and non-alcoholic drinks during an evening out) without feeling like they are drinking unfinished wort.

In an era where year-round flagship beers are struggling, seasonal offerings represent a massive competitive advantage. Great Lakes ranks as the number three seasonal craft brand in the entire United States, despite sitting around number 21 or 22 in overall production volume.

The crown jewel of that seasonal engine is Christmas Ale, a holiday staple that transcends the traditional craft beer audience. In just ten to eleven weeks, Great Lakes sells more Christmas Ale than any other single brand in their portfolio sells across all fifty-two weeks of the year. The brand attracts consumers who rarely drink craft beer, including wine drinkers drawn to its honey and spice flavor profile, and sparks dedicated consumer rituals like the annual "First Pour" celebration.

To extend that seasonal authority across the entire calendar, Great Lakes introduced curated quarterly Party Packs. Each variety twelve-pack is tailored to the exact seasonal mindset of the consumer:

Spring: Conway's Irish Ale paired with an Irish stout and an Irish lager.

Summer: A warm-weather pool pack featuring Mexican lager and flavored wheat beer.

Fall and Winter: Transitioning through Oktoberfest into the legendary Christmas Ale lineup.

These seasonal packs quickly became one of the top five new brand launches in the country because they align with what retail shoppers already expect from the Great Lakes brand: seasonal excellence delivered with predictable reliability.

One of the most misunderstood realities of commercial alcohol marketing is that retail shoppers are not a brewery's direct customer. In the United States three-tier system, distributors are the entities that purchase product and write the checks.

Furthermore, state alcohol laws vary wildly, creating a fragmented regulatory map where every market functions like a separate country. In Michigan, for example, state regulations ban paper point-of-sale materials entirely. In Ohio, strict cost-plus 25% pricing laws eliminate traditional volume discounts or aggressive case markdowns.

In an environment where price slashing is illegal and retail shelf space is shrinking, winning requires focusing on two operational priorities:

1. Incentivizing the Distributor Sales Force: With distributors carrying hundreds of competing beverage SKUs, Great Lakes must over-invest in sales incentives, specialized programming, and educational support so distributor sales reps actively fight for their brands.

2. Securing Floor Displays: In grocery and convenience retail, floor displays increase consumer purchase rates by 30% to 40%. Great Lakes secures floor placement by building high-impact promotional partnerships, such as serving as the official craft beer partner of the Cleveland Cavaliers and offering exclusive ticket packages that retailers can leverage in-store.

"You have to win your own backyard first," Brown emphasizes. "It is like putting a pat of butter on warm bread: the farther you go away from home, the thinner you get. If you cannot dominate your home market, you have no business trying to expand across twenty states."

Digital ad budgets are finite, paid social costs continue to rise, and alcohol advertising faces strict compliance boundaries. Because of those limitations, physical experiences have become Great Lakes' most potent top-of-funnel marketing channel.

The original Ohio City brewpub acts as a living laboratory for consumer trial. Instead of maintaining a generic taproom, the Great Lakes team transformed their historic, multi-level Cellar Pub into a series of themed pop-up destinations.

A Harry Potter-themed pop-up bar in January drove the highest-grossing January revenue in the brewpub's 38-year history, powered largely by creative specialty cocktails rather than traditional beer. Upcoming transformations, including a Nightmare Before Christmas concept linking Halloween to the Christmas Ale launch, continue to pull in non-beer drinkers and younger demographics who prioritize shareable, experiential outings.

When executed properly, physical hospitality creates an emotional bond that cannot be replicated on a digital screen. Consumers walk away with a memorable connection to the brand, translating into immediate brand loyalty when they encounter Great Lakes on retail shelves.

The ongoing contraction of the craft beer market is separating operators who chase fleeting gimmicks from brands built to endure. The breweries that survive will not be the ones that double down on obsolete 1990s tactics, nor will they be the ones that abandon their identity to chase every short-lived viral trend.

Surviving and thriving requires operational balance. It means respecting heritage brands like Edmund Fitzgerald and Christmas Ale while possessing the humility and agility to innovate into ready-to-drink cocktails, mid-strength lagers, and cause-driven partnerships.

For founders, marketers, and growth leaders across every industry, the lesson from Great Lakes Brewing Co. is clear: when your core market matures, do not wait for the tide to turn. Expand your definition of the business, align your incentives with distribution partners, and give modern consumers a compelling reason to buy.