Category Opinion: Beer
Post-Peak Craft Beer: What design is saying about the beer shelf.
The dynamics of the beer space are changing. What can we learn from the design shifts by the big brewers?
Peak craft beer has been called for several years now. Depending on your metric — number of openings, number of closings, open/close ratios, craft beer consumption, M & A activity— there is no doubt that the space is saturated, growth has slowed down, and craft brewers are looking for ways to manage uncertainty and find growth outside of taprooms.
Having spoken with a couple of local brewers, there is a consistent tone and a change of attitude towards chasing experimental, trend-driven styles. This approach to managing brew cycles had its original benefits of improving recipes and crafting new ones while creating a level of expertise that consumers could get behind. But it also became a sort of unwritten rule as to what was required of a brewery to have street cred. The benefits did match the consumer interest in trying a wealth of new styles and flavors, but there is no other category where the majority of manufacturers feel inclined to produce the breadth of what is possible.
As a beer drinker myself, the novelty of a steady flow of newness is becoming tiring. The new styles are nice, but they go beyond being a staple beer that I would turn to regularly. And with the nature of so much choice, I’ve had enough beers now that I just didn’t like. When it comes to beer, they are like friends. I want a handful of good, reliable, ones. Not a thousand that I’ve met once.
These two factors — a change of approach from breweries and a slowing market — appear to mirror some of the goings-on of the beer shelf.
Big beers are experimenting.
There has been a flow of releases from the big brand that bring levels of experimentation and new flavor experiences in an approachable and drinkable way. Affordable and reliable, with some bigger flavors and cooler packaging designs. Guinness Blonde, Budweiser Freedom Reserve, PBR Easy…there will be others.
Craft and Indie beers are going easy.
Small beer companies are embracing the approachability of easy-drinking beers to bring a new sense of quality to trusted affordable styles. Whether it's more Montucky or PNW’s blurring the lines of small & local as an indie brand or Anheuser pushing 10 Barrel towards the cheap end of the aisle, there is a shift towards taking some of the stuffiness — and price — out of craft beers.
Meeting in the middle.
After years of category fragmentation, we anticipate further consolidation at the shelf driven by two forces: consumers fatigue and brewery focus.
The limits have been pushed when it’s come to beer styles and flavors. We’ve tried them all and we know what we like. Cider and wine are starting to encroach with entirely new flavors and experiences. Low- and non-alc trends are also showing promise in the market. Consumers are responding to years of trial by rewarding the breweries they like with more loyalty while other close categories steal some of the experimental purchases.
For breweries feeling the pinch, they are incentivized to stick with what works at a recipe level. They will now start to fight at their strengths for market share instead of chasing an expanding marketplace. While beer isn’t going to look like it did pre-craft, we can expect the category to settle into space with a few dominant styles and players who have committed to the beer drinkers in those spaces. This is a strength or core opportunity for breweries who have or are ready to start investing in their brands.
What does it mean for craft beers?
Invest in brand equities.
A commitment to, and investment in, brand equities (your distinctive identity elements) will help simplify and solidify the memory structures of your brand in the heads of beer drinkers. That is just a fancy way of saying that your brand will be more easily understood and recognizable; thus easier to remember and recall when someone wants some beer. The days of wild designs are over. The big question that needs to be asked is; “where is the equity in our brand?” Breweries will normally fit between two camps; a strong masterbrand (ie Holy Mountain or Alaskan) or strong product brands (ie Bodhizafa or Irish Death). An example of an inbetweener, 7 Seas, has a balance of masterbrand awareness with some distinguished product brands (Rude Parrot, Ballz Deep) but also needs to support generic beer types like Pilsner (formerly 253 Pilsner).
Have a strong masterbrand? Elevating the role of your masterbrand across your portfolio helps beer drinkers find you and simplifies purchase decisions. Especially in a category where there always seems to be something new, make your favorites stand out as the trusted choice that they are. The work 7 Seas did to simplify their identity and lose the compass was probably a difficult and contentious decision. But they are way better for it. The update allows them to shortcut the meaning they had built into an identity that is modern and more flexible. Simplicity on pack will help to compete at shelf with big beer brands.
Working with more of a product brand? The individual distinction gives a leg up in terms of competing within a style and communicating targeted and refined messaging. Creating patterns and a visual language at shelf will help standout and leverage sub-conscious recognition across multiple product brands (ie Manny’s and Bodhizafa).
Double down on your taproom favorites.
You know who drinks your beer. And you know what they like. Give it to them. The old saying, “what got your to this point isn’t what is going to get you to the next,” is a misdeed in the beer space. Trying to steadily outdo your favorites is killing you on two fronts. The first, wasting capital and resource from making your favorite and award-winning brews famous. And second, you are missing the opportunities to reinforce behaviors and love for the brews your fans already know and choose. Be confident in the beers that got you this far — current and future customers will pick up on it.
There is no doubt lots of change coming to the beer aisle. Breweries that take an active role in managing their brands to anticipate and compete will turn this round of dynamism and change into strengths for the next round of challenges.
