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1st World Problems: Carving a Niche in the (Crowded) Craft Beer Market

When “craft beer” first came on the market in the 1980’s, our national brewing map showed a host of Big Beer strongholds:  St Louis (Budweiser), Milwaukee (Miller), Denver (Coors), and PA (Yuengling,) and a few lonely encampment dots (Anchor, Sierra Nevada, Sam Adams,) scattered in between.

Big Beer distribution was speculative and sporadic (Coors was only available in the western US) and new laws were put on the books by brewery lobbyists who helped sweeten the Big Beer pot for various members (case in point, Anheuser Busch effectively kept Miller out of FL for decades with a state law that limited bottle sizes.)  The topic of how Big Beer uses legal means to limit craft breweries is a future blog post.

The craft brewing pioneers started gaining followers through their alternatives to mass-produced 3.2% lagers; and here and there, ideas of microbrewery /brewpubs starting making inroads. Times were unpredictable, Big Beer was fat (and growing fatter) and no one thought the meager craft beer beginning would turn into a liquid gold rush, the likes of what we’ve seen since 2010.

Fast forward to 2019:

  • Sierra Nevada, Stone, Oskar Blues, New Belgium Brewing and others boast brew house locations in multiple states;
  • U.S. craft breweries/ brewpub numbers skyrocketed to over 7500 by the end of 2018, with little sign of abatement;
  • Big Beer conglomerates (Miller/Coors, AB/InBev) are buying up as many craft breweries as will sell; and at the same time pitching new craft cocktails (think Bud Lite Margaritas as an example);
  • In many states, craft beer sales outpace those of Big Beer and continue to grow.

April 2019 Brewers Association stats show:
Brewers Assn Apr 2019 stats

Branding and Brewfests – Standing out in a Crowded Marketplace

In any industry with double-digit growth, competition starts getting tighter and the guaranteed earnings diminish.  To make it through the first year, brewery start-ups need a cadre of solid brewing skills (and proven recipes,) plus business acumen to make the slim margins work.

And, as the market gets more crowded and charities realize they can make money from brewery product donations, brewery owners need to add marketing, outreach and creative problem-solving skills to their list of must haves.

In geographies where the weather is good and the breweries are better, weekends double and triple up with fundraising brew fests and brewery anniversary parties. Tampa Bay is one such locale with an active festival season running from September to May (when the temperatures are palatable.)

In other areas where the outdoor season is shorter, beer fests cluster indoors or wedge into the short June – August time frame.  Competition becomes tight (and often contentious) to capture the spending of the craft beer loving community.

Competition Brings new Tactics

So what happens when the competition (for buyers and shelf space) ramps up quickly with more breweries in the same market space?

I’ve noticed a few behaviors emerge (not unique to the brewing industry) as well as some creative solutions that are changing the landscape of craft breweries:

  • More tactical collaborations. In the past, collaboration brews happened because brewers knew each other and wanted to try something new – together. Today, it seems that collaborations are often done for bragging rights or to create market presence for lesser known breweries.  I’m not judging here, simply observing that collaboration brews are moving away from the friendly experimentation into the realm of competitive advantage;
  • More “experimental” brewing. The US imagination and creativity is alive and well with the expanding list of beer ingredients.  Kudos to the breweries who are capitalizing on the changing American palate for sour and non-traditional beer flavors;
  • More daring /shock marketing that pushes the envelope of “taste” (on moral or palate grounds.) Brews such as the beard yeast beer, and a questionable vagina yeast beer (Europe 2017) stretch the limits of shock marketing. Add this to the litany of questionable/sexist graphics and beer names more typical of a frat house than professional brewers.  The situation has gotten so out of hand that the Brewers Association is getting involved to remove “offensive” labels (for their graphics and/or beer names) from the marketplace;
  • More niche brewing and new styles.  As breweries seek to prove their own brand identity, some have taken to brewing a wide range of styles (with an equally extensive number of draft taps,) or a narrow one (such as all IPAs) to differentiate them from the crowd. In addition, highly limited bottle releases have created a secondary market for resellers and a “mule” industry (buyers paying proxies to bypass bottle limits on release days), with questionable legality;
  • Rise in trademark infringement lawsuits. Protecting brewery branding and beer names has become highly litigious and involves a complex web of patent and trademark laws.  Recently Patagonia Clothing company filed suit against AB/InBev for launching their Patagonia Beer line.  Other cases include infringement on brewery names, graphic art, or beer names (too similar to another or using trademarked product names or celebrity likenesses.) As the competition heats up, the once friendly cooperation and easy-going settlements out of court become more rare.
  • More specialty brew fests/events and charity causes. When Sierra Nevada donated their gift shop clothing to CA firefighters in late 2018, then launched a nation wide call for  brewers to brew a fund-raising Resilience IPA, the brewing community rose to the challenge. The craft industry has always been generous towards charities, but today, more breweries realize that involvement must be planned.  Played right, one can assume the role of an industry leader for little cost.  But, with charities holding their hands out for donations on a daily basis, good strategic planning on leveraging such donations is needed.  Additionally, consumers are becoming more sophisticated with their expectations of novelty at craft beer events.  In response, breweries are inventing new twists on traditional beer festivals to keep attendees coming back: limited release fests, food/beer pairings, museum fundraisers, art-centric festivals, beer mile runs, PGA-related associations, garden club events, etc. Almost any festival today has a craft beer tent or some sort of beer tie-in.

It takes ingenuity and flair to create a solid brand presence and carve out a sustainable niche in the craft beer industry today.

What was once a battle of recipes, today is one of marketing prowess and discovering what consumers crave.  With the rising domination of  the millennial drinker (the millennial generation is as big as the boomer generation), competitiveness will focus more on innovative brand/product offerings aligned with charitable/ethical/environmental causes, and of course, good beer.

Don’t count Big Beer out yet, I believe that things will continue to get more interesting as craft continues to dominate.  Craft beer is growing up and if the Tuckman model of business (Forming, Storming, Norming and Performing) is any indication, it’s going to be an industry to watch for many years to come.

What do you think?

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#BBC13 (Beer Bloggers Conference 2013) – Boston, MA – Recap

Boston

The very mention of the city conjures up thoughts of the Boston Bruins (sorry guys, you were sooo close to win the Stanley Cup in 2013!), Red Sox (actually I have to cheer for Tampa Bay Rays!), lobsters, seafood, long summer nights, accents (“I’ll go paak the caa”), festivals, food, and… a burgeoning Craft Beer industry!

Having said this, it is no big surprise that the 4th annual Beer Bloggers Conference (twitter hashtag #BBC13) found its way to Boston this past weekend (July 26-28, 2013) beating out cities such as Asheville, NC (up and coming in the NE!) and other contenders.

And what a weekend it was!

Here’s a slideshow to give you a visual idea…

This slideshow requires JavaScript.

Third time’s a Charm!

This was my 3rd (of 4) BBC’s hosted by Zephyr Adventures previous conferences were held in Boulder CO (2010), Portland, OR (2011), Indianapolis (2012) – and it was clear that the growing pains of previous years are gone.  This year’s event was seemingly flawless with great weather in Boston (high 70s) topping it off and over 150 attendees representing bloggers (hobbyists to professionals), brewers (from around the US and including Florida Beer Company,) brewing associations (Cicerone certification, National Brewers Association and others), distributors and retailers.

One of the most glorious things about the Beer Bloggers Conference (there are many!) is that the 150+ attendees check their egos (and their full time professions) at the door as we all come together to collectively share a common passion – CRAFT BEER!

The proof was in the pudding, so to speak, as such industry luminaries as  Jim Koch, founder of Samuel Adams brewerycurrently the largest US-owned, nationally distributed brewery in the US, and Julia Herz of the Brewers Association and CraftBeer.com – co-mingled and talked “shop” with all of us.  The event started Friday afternoon at the Boston Park Plaza Hotel (some attended the “pre” conference excursion in Maine on Thursday night) – with a trade show, followed by a trip to Sam Adams R&D brewery/center in Boston and a night out hosted by Heavy Seas brewing at Stoddard’s bar.  Throughout the weekend, various breweries and distributors hosted / entertained / spoke / poured for us until we had to say our fond goodbyes just after noon on Sunday.

Takeaways / highlights from BBC 13:

In no particular order:

  • Being able to talk “craft beer” with people who are not intimidated to drink non-mass produced malt beverages. We talked flavors, styles, brewing techniques, food pairings, favorites, best local bars, geography, trends, social media – and nothing to do with the stresses of everyday life (minimal talk about problems with kids, jobs, finances…) —  just pure passionate discussions about craft beer!
  • Positive talk all day, all night – about a hobby I love!
  • Upbeat people who came to Boston to share experiences and offer best practices about blogging, writing, monetizing, short cuts, in other words – helping each other to become successful in beer blogging and in life;
  • Sampling new brews, meeting new people, exchanging experiences, discovering new ways to share our passion about craft beer;
  • Learning what works and doesn’t work about blogging technologies, tools, widgets, platforms, all the IT stuff that goes along with writing and publishing;
  • Visiting the breweries, Boston pubs, distributors, and seeing a bit of Boston by bus;
  • Lots of fun photo opportunities (see slideshow above);
  • Meeting other Florida people who are also passionate about the industry;
  • Finding out that my personality + what I already know about craft beer + a personal way of writing = priceless results;
  • Getting inspired to write more, blog more, get out more!

Thank you to all of our sponsors and our great organizers at Zephyr Adventures for their generous support of the conference.  You rock!

– See more at: http://beerbloggersconference.org/#sthash.kF0079O4.dpuf

I can’t wait for BBC14 (site and dates being finalized) – it’s going to be another awesome time with great people!

Happy imbibing!

Carol

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