The craft beer industry has been booming for the past several years, but is there a ceiling to this growth?
In 2014, the Brewers Association laid out an ambitious goal for craft breweries to capture 20 percent of the entire U.S. beer market. The organization has since stepped back from those lofty aspirations, and as of March 2017, called those original prognostications a “long shot.”
Is it still possible to increase craft beer’s market share? Absolutely, but brands will need to become much more strategic to facilitate the kind of market growth they’re looking for.
State of the craft beer industry today
Just a few years ago, the outlook for the craft beer industry looked incredibly bright. Although craft’s footprint continues to expand, the industry’s growth rate has slowed down considerably. Craft beer sales increased 10 percent between 2015 and 2016 – which sounds awfully impressive until you compare that figure with the industry’s 20-percent revenue increase between 2012 and 2013.
So, what’s changed? The market has matured, meaning those days of eye-popping year-over-year growth rates are probably long gone. Meanwhile, more competition among smaller, independent breweries has already pushed some players out of the market: There were nearly 100 brewery closings in 2016 alone.
Meanwhile, major beverage alcohol companies like MillerCoors, AB InBev, and Constellation Brands continue to aggressively acquire craft brewery labels. In the past year, popular and well-regarded brands like Anchor Brewing, Funky Buddha, and Wicked Weed have all been bought out by larger corporations.
Maintaining and increasing market growth
The greatest asset craft beer breweries have is their brand image. For many consumers, craft beer is synonymous with high quality, and brands need to protect that reputation at all costs. Retail displays can have a profound – if subtle – effect on brand image depending on the number of facings each SKU receives and how products are organized. A barrel-aged stout shouldn’t be placed right next to a mass-produced “lite” beer, for instance.
Moreover, craft labels get a lot of value out of their image of exclusivity. Limited or seasonal releases certainly help cultivate that appeal, but breweries can also strategically control the release of select products to increase that sense of rarity. In an already crowded marketplace, craft brands can make what would otherwise be normal distribution a major event.
Craft labels should approach their own brands the same way a luxury brand might. Maintaining an image of high quality and relative scarcity requires consistent monitoring of products in the field. Frontline employees should routinely check that retail displays are properly set up, and showcase beer brands in the best light.
Mobile execution management solutions empower field teams to efficiently capture store conditions and generate reports for analysis. That data can provide even more insight into local markets, helping craft beer brands learn more about their target customers and how preferences may shift from region to region. Finding the right software for your business is a tried-and-true way to get enterprise-quality analytics on a craft brewery budget.
