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Why Craft Beer Won't Pour Itself a Shandy

Stocks in this article: TAP BUD SAM

PORTLAND, Ore. (TheStreet) -- American beer drinkers are going to hear more about shandy and radler this summer than they ever have on these shores, but craft beer won't be behind the citrus-spiked bar banter.

A shandy or radler -- depending on whether you like the British or Central European term better -- is basically a mix of lager and lemon soda. It's refreshing and usually has a fairly low alcohol content, but that splash of soda has always made U.S. craft beer just a bit uncomfortable about embracing it too willingly.

The folks at Jacob Leinenkugel Brewing in Chippewa Falls, Wis., have no such inhibitions. Since launching their Summer Shandy back in 2007, they've watched it become their best-selling brand. It makes up more than half of all the beer Leinenkugel produces in a year and, when it went nationwide in 2012, it was the third best-selling specialty beer brand by dollar amount behind Blue Moon and Anheuser-Busch InBev's (BUD) Shock Top, according to Symphony IRI. It was the No. 2 seasonal brand in the country behind only Boston Beer Company's (SAM) Samuel Adams seasonals and outsold every craft beer brand except Samuel Adams Boston Lager, Sam Seasonal and Sierra Nevada Pale Ale.

Its sales were roughly equivalent to the entire line produced by Bend, Ore.-based Deschutes Brewery and nearly double those of Petaluma, Calif.-based Lagunitas. As Tom Rotunno of CNBC noted in a great piece on the rise of shandy and radler, off-premise sales of major shandy brands in supermarkets, drugstores, Target (TGT) and Walmart (WMT) reached $67 million in 2013, up 227% vs. 2012. There's still plenty of room to grow, mostly because much of the U.S. still doesn't know what a shandy is.

But craft beer is still wary of embracing it. Jeff Wharton, co-founder of Boston-based online publication Drink Craft Beer, was put off shandies by what he'd tasted from brewers, but he changed his mind when his business partner mixed him a shandy of lemonade and Narragansett Summer Ale. He's now setting up a shandy bar at Drink Craft Beer's Summerfest beer event in Boston.

There are definitely a lot of obstacles to overcome in getting the shandy accepted by craft beer folks, the biggest one being that most people seem to see the shandy as a way to "dumb down" beer for the mass market, which is exactly what people were trying to escape with craft beer, he says. Also, for too long, people have correlated big alcohol content and overwhelming flavors with "quality" in craft beer. A shandy is low in alcohol and has a more laid-back flavor ... which is why you can drink a few of them in a row.

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