Sorry, this is so late this morning. We had the bar Christmas party last night. For me, the blame goes to the Fullsteam Fearrington Coffee Pecan Porter and the Ass Clown Cul du Buffon Saison. I’m a little worse for wear this morning.
Anyway, I got lucky this morning in that I found an article right away that caught my eye. This analysis of Boston Beer is spot on in its diagnosis of the major problem legacy craft brewers like Boston Beer have.
The article is right, changing your marketing, packaging, and logo are not long-term solutions to the problem of slipping sales for the large older craft brewers. Their sales growth is slipping because they have problem hit their ceiling as far as market penetration. Boston Beer, New Belgium, Sierra Nevada, Lagunitas, Stone all have the same problem to a certain degree. Everyone who drinks craft beer knows about you and have already made up their minds about you. New logos and marketing aren’t going to change many minds. What they have to hope for is brand loyalty from first or second generation craft beer drinkers. That is much easier said than done mostly because of the second problem.
Their second problem is a bigger issue: The continued growth in new breweries along with the nimbleness of small/local breweries. New breweries are still opening every week. Laws are starting to change in places large and small around the country from the city level to the state level that makes it easier for brewers to open. So, not only do the large legacy brewers have to fight off AB-Inbev and MillerCoors, they have to fight off all the 5-10 barrel breweries opening down the street from their target consumers.
Not only that but the smaller breweries that are already open are much more nimble and able to provide craft beer drinkers with the new beers and new flavors they crave on a weekly basis. Boston Beer can’t do that. Sierra Nevada can’t do that. When one of the legacy brewers releases a new beer, they are usually killing off an old beer to make room in the production schedule. To get to that point, these larger brewers, as large companies, make decisions like large companies do: months of meetings and testing. That is a no-go in today’s ever changing market.
Take the newest IPA style the New England style IPA. These beers are hoppy and hazy to the point of looking like orange juice. I think some of the legacy brewers are coming out with their versions, but it is going to be months after the style hit. Smaller brewers already have their versions on the shelves and in their customer’s hands.
Here is a suggestion from someone with no business skills: These large brewers must restructure to make themselves more nimble. Most of these breweries use their brewing capacity and let their brewers experiment. However, the problem comes in getting those beers out to the public in a timely manner. These breweries don’t need more craft beer drinkers to know who they are, they need craft beer drinkers to think of them as craft beer.