Beer marketers have to step up their game, speakers repeated throughout the day at our Beer Insights Seminar on Monday. Somehow the consensus put a finer point to persistent, yet fuzzier concerns about “category health” and the beer industry’s difficulty growing overall volume. Lotsa questions raised during this week’s proceedings, but here’s another: how can, how will craft participate in fixing beer’s marketing problem?
Craft’s biggest player shares same problem with the biggest players in US beer: its flagship beers are losing volume. And comments about improved marketing at the Seminar culminated in those from Boston Beer chairman Jim Koch (see yesterday’s issue). Jim, AB prexy Michel Doukeris and MC’s Pete Marino all shared hope that better mktg would help struggling Sam Adams, Bud and Miller/Coors brand families, respectively. In general, marketers “haven’t made beer as special as it could or should be,” Pete acknowledged. So the beer biz needs to “bring a little bit of magic back to beer.” What magic does craft have left up its sleeves?
Individual companies and brands aren’t alone in these considerations. Meetings continue among trade assn leaders and many industry members, hoping to address overarching category concerns. But don’t hold your breath waiting for a “Got Milk?”-style industry-wide campaign. Folks like NBWA’s Craig Purser, Beer Institute’s Jim McGreevy and Brewers Assn’s Bob Pease didn’t go into these discussions “with any kind of preconceived” notion of a mass-media ad campaign, as Craig said. Those 3 guys mum for now on specific strategies to shift category trends, but results of those meetings may include “best practices,” Craig said, highlighting roles distributors can play. Some craft brewers participate in these discussions. Will others dig in here too?
Craig then echoed sentiment of Macquarie analyst Caroline Levy, who bluntly remarked earlier that “I look around the room, hate to say this guys, but there just aren’t enough women in here. And there’s a 50% population out there that can drink beer, if you get it right.” Beer biz may be “just starting to tackle” that oppy, but in the meantime “they’re going to spirits, we know that. And they’re going to wine.” Getting it right requires having “women on your staff,” who can help cos ID both products and messaging, Caroline suggested. Are craft brewers jumping in with two feet or tip-toeing around the edges?
Other Wall St analysts on Caroline’s panel dug in hard, calling for better beer marketing. There’s “no such thing as lazy markets,” RBC’s Nik Modi said, “just lazy marketers.” And speaking of blunt: “fix the marketing and you will fix the industry.” Evercore ISI’s Robert Ottenstein piled on, citing the “magic that happens” in creating “emotional connection” between brand and consumer. Those connections have certainly been forged in small breweries and taprooms across the US. How can they be extended, expanded and scaled up?
For now, that magic, that emotion ain’t happening with beer. At least not writ large. And not the beverage in the traditional sense. Not the core brands that represent significant volume for brewers both large and small, for many distributors and retailers too. The energy’s behind hard seltzers and low-cal, low-carb more expensive light lagers. Those brands are helping premiumize the beer biz. Many fall into a pricing sweet-spot of around 1.5X the price of premium brands like Bud/Bud Light. It’s where MillerCoors looks to price Saint Archer Gold, about where Founders Solid Gold sits, nearby Corona Premier, Mich Ultra Pure Gold and top 2018 growers. Will other craft brands follow without upsetting the segment’s overall pricing structure?
Volume growth will come eventually, Constellation Brands Beer Division prexy Paul Hetterich argued. He estimates that category volume growth follows 4-5 yrs after 50% of category $$ are in the high end. That happened for beer last yr, pushing off overall beer growth til 2021-22 in this scenario. Some think it’ll be about that long before craft picks up steam again. Will it take that long to recruit more women and other underrepresented populations into industry jobs and as beer drinkers? Will it take that long to fix the marketing? And, once more, how will craft participate?