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Beer Insights Extras

Extra beer business news, thoughts and insights from the publishers of Beer Marketer’s Insights, Insights Express, Craft Brew News, Beverage Business Insights and Alcohol Issues Insights.

Some Segments Grow Both Ways

Part of my job as a business reporter covering the craft beer industry for the last 4 years has been to read almost everything I can get my hands on that has anything, even marginally to do with craft beer, small brewers and larger competitors.  I’ve read more “New Brewery On Tap for Downtown X-ville” articles than I could possibly count.  More “Craft Beer Bubbling Up in Blah-dee-town” and “Locals Hopping for Small Brewery’s Wares” pieces than probably most other folks out there obsessing over this industry.  I’ve often been stunned as seemingly every local paper or state business journal or alt weekly available online has at least dipped their toes in addressing how the growth of small brewers in the US has touched or will touch their readership.

It’s been gratifying to watch since I joined this industry in 2010 on a whim, on a chance.  My father’s worked for Beer Marketer’s Insights since before I was born.  I knew the people at BMI but nothing of what they did or the industry they covered.  Not while stuffing orange newsletters in envelopes as a teenager.  Not while teaching and tutoring standardized tests in NYC after graduating college, trying to make it as a director/choreographer in the big city.  I’ve often heard people refer to having “ah hah” moments upon tasting some beer for the first time, a “beer that changed everything,” and wondered what that’s like.  Revelation didn’t come in the form of flavor for me.  Instead, researching this industry, reading about the companies that built it and writing a “dummy issue” of Craft Brew News (and trust me, it was pretty dummy, save parts of the Facebook article that Benj decided to print in the second official issue) changed the course of my life.

Regular readers of Craft Brew News may recognize a few common themes that have popped up again and again in our text.  One of our favorites has been the “mainstreaming” of craft: TV shows, celebrity endorsements, fast-casual restaurant and convenience store sales, session brands and an endless list of other phenomena wherein “craft beer” has acted a bit more or felt a bit more like just plain “beer.”  Regular readers may have also noticed that simultaneous to this movement towards the center, craft has continued expanding out along the edges, pushing further the boundaries of what “beer” could possibly be understood to be.  Just as craft beer has become more accessible, more affordable, more drinkable, it’s also become harder to find, buy and guzzle with abandon.  

I’ve long posited that this movement in
both directions contributes to craft’s continued health and growth.

Put another way:
without this movement in both directions, craft probably isn’t as healthy, doesn’t grow as quickly.

Right along with those locally-focused overviews of craft -- printed by ever-smaller papers as ever-smaller brewers started affecting ever-smaller communities -- I’ve also had to read the growing number of “think pieces” offered to the universe that dissect “the big picture.”  Doing that without mis-stepping or mis-stating is no easy task.

In a brief email interaction with a rep from a small brewery recently, “grinding” was the response to “how are things?” -- “you too?” I replied.  Par for the course, as far as I can tell: everyone’s running to keep up.  That’s been the basic story from the largest small brewer, that giant among pygmies (scratch that, reverse it), Boston Beer, so far this year on its quarterly earnings calls: “chasing the growth” to the point that it’s affecting efficiency, operations and yes, earnings.  I imagine newsrooms across the country are no different: running to keep up with an ever-faster news cycle, publishing content without deep research, confirmations or counter-arguments ever heard.  Just get it out the door!  So no surprise, really, news story or think piece, we end up with a broad range: total gem to lump of coal.

It doesn’t take a genius to extend the metaphor: we end up with a broad range of beers these days too.  Everyone running to keep up and all, follow their passions, grab a piece of the pie.  I could spin off any number of the thoughts above into separate posts (and in an ideal world, I will, but let’s not make any promises; running to keep up and all).  To try to bring it all together, let’s take a moment to re-imagine the “pieces of the pie” that brewers of all sizes are working to grab.

Market share is most easily represented graphically as a pie chart, right?  And just like those pies you eat, companies or segments or brands or groups of those things are typically represented by differently-sized slices for comparison’s sake.  It works because anyone who’s taken a bit of geometry (and likely many who haven’t) can look at a pair of slices and tell you which one is larger than the other. 

But what if we think about the craft segment not as a slice of the beer-pie, but as the crust, say: a ring around the outside of this circle (which is probably more like a sphere, but let’s not get too complex too quickly). 

If we assume the outer-edges of beer are bordered by non-beer beverages -- wine, spirits, soda -- and probably food too, you can start to imagine how the overlap between beer and wine, for example, is already being explored (not hard to name a few brands that belong in the center piece of that Venn Diagram).  As more and more circles of related products are added into the mix (again, spheres may be more accurate) it’s also pretty clear that craft doesn’t occupy the
entire outer ring of the “beer” circle.  Flavored malt beverages take a chunk there -- not exactly what everyone thinks of when they hear the word “beer,” but part of the segment regardless.  Cider, depending on who you ask, has a small chunk of a couple different circles (spheres?). 

The resulting image is more akin to an amorphous blob with blurring borders than our once easy-reading pie.  But it’s this view that helps me explain what I see happening in craft beer as it relates to the total beer category.  Craft expands in all directions, getting closer and closer to the heart of “beer” in the popular imagination while simultaneously crossing boundaries into other categories and yes, even into the white space where nothing yet exists.  It seems to me that this is part of the reason why craft's been so difficult to define (nail down) and why that may only get harder.  

It also seems to me that the passion ignited in beer drinkers by the boundary-pushing experimental beers (visible in long-lines, ticket-sell-outs, avid trading and more) allows brewers to exert that force against whatever historical standard or circumstance drew the borders.  Said another way: the money beer lovers are willing to pay, the effort they’re willing to take to taste these beers on the bleeding edge allows brewers to invest in the expense of making them in the first place.

I recently confronted a think piece -- one of those "big picture" dissections -- that seemed to suggest that as craft moves closer to the center (as I put it above), asking beer drinkers to pay for more-expensive limited offerings with hard-earned money or time seems somehow like a foolish endeavor, especially now that drinkers have so many high-quality, cheaper, easier to find options.  

I get it, but this doesn't jibe with my view.  Instead, I see room for
both/and.  For beer marketers to put beer in every corner store the world over and to hide it in a haystack that can only be found by buying a treasure map and breaking its code.  To satisfy a drinker’s flavor expectations of “beer” and to explode those expectations.  To make a beer that somehow does both and then hide it behind the milk in every corner store the world over.  To dig deeper to the core and to expand out around the edges.  This is how craft has grown and, I suspect, how it will continue to grow.  Both ways.

There was a time, soon after I first started writing for Craft Brew News, when I pored over those articles about new breweries in local papers and when shorter versions of them or round-ups of multiple stories found their way into CBN.  Put another way: when we believed our readers would find great value in those stories.  I read more of them now on a weekly basis than I have in 4 years.  Paradoxically, I write about them less, perhaps incorrectly assessing the diminished value we now believe our readers would attach to them.  The fairly consistent acceleration of their printing tracks pretty closely to the acceleration of craft’s overall growth, it seems to me.  These local stories help broaden the meaning of “beer” in new pockets and corners of the country, pushing the boundaries of craft’s sphere of influence you could say.  Other publications that initiated craft-coverage years ago simultaneously identify ways that craft moves closer to the center, develops a closer relationship with their readership.  Those that find value in the former story might see less value in the latter and vice versa, but both can serve to change minds and further widen the borders of the segment.  Borders stretch and become more porous.  And craft grows.

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