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Oakes Weekly - April 28, 2007

What’s Next for Craft Beer, Part Two
Oakes Weekly April 28, 2007      
Written by Oakes

Vancouver, CANADA -

Over the past decade there has been a noticeable split in craft beer drinkers. In the old days, it was the handful of kooks who’d been homebrewing and the rest were converts. I was never a convert. I never enjoyed, nor consumed, the fizzy yellow stuff. That was never my world. When I turned of age, it was straight to the micros for me. I’d dabbled in them beforehand of course, but sure enough when I turned 19 it was Okanagan Spring’s Olde English Porter. In the years that have followed, a lot of people have taken that path.

So you have a split. Some craft beer drinkers used to drink macros. Some still do. And some never did. The more I think about it, the more I realize that this way of looking at the craft beer consumer is more important than any demographic breakdown. Indeed, demographic breakdowns most likely flow from this split rather than vice versa.

Each brewery out there will have their own stories to tell, and their own ways of seeing this. I actually rather hope that to the majority of brewers everything I say here will be a proclamation from Captain Obvious. But there are brewers out there right now – I know because I’ve talked to enough of them – who still believe all craft beer drinkers are cut from the same cloth, and are all converts.

Quickly, the first level of convert is the casual craft beer drinker. They probably still drink macrobrew, be it imported or domestic. The stereotypical macro drinker has a certain amount of brand loyalty. This is because the big brewers have worked so hard to cultivate it. There are still those with that brand loyalty but quite frankly the world is passing those people by. Just as most of the major brands of the 50s are relics today if they exist at all, so too most of today’s major brands will have faded five decades hence. Market share is measured year over year, but when you’re looking at the business as a whole you have to think in much longer terms. The goal for craft brewers shouldn’t just be today’s new accounts and this year’s market share; the industry as a whole has to think about how they are going to own the market three, four, five decades from now. Because history has shown us that sort of dominance is up for grabs.

There’s a reason why those who still drink macros but mix in better beer do so. It’s called options. You don’t have to go to a specialty beer store to find different choices in beer. Most bars offer different choices, too. It’s not always the stuff that us hardcore beer geeks go nutty over, but we’re a different market altogether. Nobody has any illusions about Ratebeerians keeping sales of Sam Adams Lager or Fat Tire on the upswing. But these beers do help transition a lot of people away from the macrobrewery world of steadfast loyalty and into a world where there are many different beer options.

In each beer market, somebody is making money going after this target audience. I think it’s important for these brewers and the people like us who make a point of talking about them publicly to understand the role they play. We may not drink their beer, but as long as the QC is there, I don’t see any point to slamming these brewers or what they do. I see it happen and it dismays me. That goes for macrobrewers when they put out a transitional product, too. Heck, they’ve got a captive audience of potential craft beer fans that they are reaching right away with their Blue Moons and Leffes. They certainly aren’t taking market share away from craft breweries…I don’t think anybody trades back down to Leffe Blonde once they’ve had a Saison Dupont.

The second group of craft beer drinkers also transitioned from macrobrew but they’ve completed the transition. They’re a good group for the business in that they relate to the guys still working on that transition. They can take their friends and retrace those steps with them, ensuring more craft beer converts.

The third group never knew a world without craft beer. So this is a young demographic. Most of them skipped right into fairly serious beer geekdom very quickly. They aren’t all posting on the Internet, but this is the group that posts the loudest. What I like about this group is that they, along with some of the second group, really want breweries to push the boundaries. This is the group that buys up the imperial stouts, sour brews and other stuff that people who still drink macrobrews would probably find a bit too much. You can see the boundary-pushing influence of this group in the PNW. People like me who never considered fizzy yellow beer an option but rather jumped straight into porters and IPAs still stand by those types of beers for our everyday drinking. The result? Places like Big Time in Seattle that have 2-4 different IPAs on at the same time. Because in that neck of the woods, drinking IPA is as natural as drinking Michelob.

How this pieces together is straightforward – it works across many different industries. The most hardcore group is now in place and they have a means to put their voice out there. These are the people of influence. They are knowledgeable and passionate.

Begin slightly off-topic rant. (Seriously – I’ve seen brewers who think that these folks aren’t knowledgeable…ardunno maybe they didn’t attend a Siebel course or whatever…but that’s bullshit. Anytime I talk to beer geeks, I learn things. Some have brewed for years. Some have tasted for years. Some are great with techniques, some with ingredients, and some don’t know much about either but they’ve been on top of their local beer scene for years and tell you things like “when that guy first started out at the local Rock Bottom, he made some tweaks to the IPA that really improved it. Now that he’s got his own place, I’m not surprised that his IPA is the best in the state.” It’s not rocket science, it’s insight. And you know what people who are curious about good beer but don’t know much really like? Insight. They actually don’t want boring brewing lectures about ph and diacetyl rests and stuff. Most of what the critical brewers call knowledge is way over the heads of the people who buy their beer…and there’s nothing wrong with that. It means that when some no-knowledge loudmouth on the Internet tells them something, they might actually understand it, thus adding to their appreciation of the beer without knowing anything about this year’s Saaz harvest.) End rant.

People of influence are gooooood. Really good. They are exactly what microbrewers didn’t have much of in the 80s and 90s. Now they are in place. The most marketing-savvy brewers use this resource very well. I really wish more brewers would. Here’s why.

In the wine world, these people are the wine writers and the sommeliers. The writers have books and newspaper columns. The sommeliers have a captive audience at restaurants where sophisticated tastes and flavour combinations are to be discussed. It matters not whether the reader or the diner knows anything…they have someone to help them. Beer barely has this. We have brewspapers and a couple of magazines. For the most part, though, these preach to the converted. Craft beer has unfortunately come to view “lifestyle” as a bad word in terms of marketing. It’s understandable, don’t get me wrong, but lamentable nonetheless. One of the reasons I agreed to become involved with the Beer Advocate Magazine – to the extent they’ll have me – is precisely because their vision sounded like the sort of thing that would transcend the “preaching to the converted” approach that the rest of the publications have. I mean, as much as I like the brewspapers I can’t imagine that any of my non-beer-geek friends would. They only know I write for one because I’ve told them, not because they’ve actually read one. It’s fun for insiders but not really comparable to having a column in a major newspaper.

So this is where the industry and the beer geek community, in a perfect world, would come together a bit more. Identifying writers and publication opportunities and using a push strategy rather than pull to get the word out there. If you look at the shelves, there are very few beer books out there for the mass market. We need more. And more newspaper columns, too. It may take more people on the beer geek side getting together with more people on the industry side to set up contacts and force the issue a bit.

In terms of a corollary with sommeliers, a beer sommelier program is a nice idea, but it will take restaurant buy-in. This is an area where brewers have a huge body of knowledge. They’re the ones who sell to restaurants. They run brewpubs. Right now, bartenders peform the function, but it’s not the same. Remember, there are a lot of people who have great passion and knowledge for beer and wouldn’t mind getting into the business, but don’t see themselves as a brewer. Anyway, I think this is something that is an area of major opportunity but it will definitely require the industry to come together and share its knowledge of the restaurant business with the beer lovers who have the knowledge, passion and in many cases the desire to spread that knowledge and passion.

When you have engaged the hardcore beer geeks, you’re set. Although a few brewers gear their business directly to that market, most will only gear a few products at best. The real money, the real growth, is in getting more people into “group one” and getting more folks from “group one” into “group two”. I think the business has done well with this. Craft beer has grown quite a bit over the past few years. But if you think about that long term I talked about at the beginning of the piece, there’s so much room between a 3% market share and where craft beer could be when our grandchildren come of age.

More next week…



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start quote The more I think about it, the more I realize that this way of looking at the craft beer consumer is more important than any demographic breakdown. end quote