Craft Brewers: Reshaping the Beer Lanscape
By L2 | 15 March 2013
Until last year, the beer business was hardly the happy-go-lucky image portrayed in beer brands’ TV and print ads. In fact, beer’s share of the domestic alcohol beverage market had been in decline for over a decade, from its height in 2000 at 56 percent to 49 percent early last year—the result of an economic downturn but also a boom in spirits. Late last year, however, the Beer Institute released some unexpectedly happy news for beer makers: for the first time in three years, YOY beer sales by volume actually went up. The difference? Craft beers. Even as demand for “premium” (Bud, Miller, Michelob, et al.) and “light” brews continued to fall, popular craft beers like Sierra Nevada, Dogfish Head, and hundreds of others, picked up the slack and posted double-digit growth of almost 14 percent annually between 2009 and 2012. Last year, half of the 10 fastest-growing brews were craft beers. And in our new Digital IQ Index: Beer study, two craft brews, Sierra Nevada and New Belgium, cracked the premium and light-dominated Top 10, with “Gifted” titles and 7th and 8th place respective finishes.
Just as in any industry, there is an insurmountable resource disparity between mass and niche brands. In the beer trade, a craft brewer typically bottles fewer than 6M barrels per year. Compare this with an enterprise like Anheuser-Busch InBev, which, in 2011, bottled close to 17 times that—and that was just domestically. And then there’s marketing and advertising capability, where the gulf may be even wider. As previously discussed, the Super Bowl has in some ways, become the Beer Industry Bowl in terms of commercial spend. Despite the majority of media transitioning to digital, brands like Budwesier still allocate in the neighborhood of 85 percent of their annual media spend on TV. And no TV spot is more coveted (or wildly expensive) than those 30-second Super Bowl ads, the cost of which — this year: $3.8 million — far exceeds the vast majority of craft brewers’ entire annual budgets. For these smaller brands digital has been a godsend. Not only are digital platforms like Facebook, Twitter, Instagram, Tumblr and YouTube far less expensive than TV and/or print, they also allow for real-time fan engagement and the kind of creative multi-channel integration that attracts and builds loyalty with the all-important Millennial set. It’s little surprise that innovative and nimble craft brewers scored the highest average Digital IQ of any category and did so by a significant 13-point margin.
An example of a craft brand punching above its weight class is Utica-based Matt Brewing Company’s (est. 1853) Saranac, whose “Best Craft Beer of 2012” campaign encouraged its fans to vote on TheFullPint.com for its new White IPA. In addition to a conventional Facebook push to its 18K fans, the most innovative part of the campaign was integrating mobile via a branded QR code. The scan-able code allowed people to cast their vote in a bar, in a grocery store, or at a party in someone’s basement. Ultimately, Saranac’s White IPA came in second, but the 4,500+ votes the brew received definitely showed that the brand knew how to mobilize a community.