Craft beer doesn’t need a complete reset in strategy, but rather a re-focus on what consumers care about to stay relevant, the panelists of Brewbound’s first in-person Brew Talks meet-up of 2021 said earlier this month.
Dogfish Head co-founder Sam Calagione, Bell’s Brewery EVP Carrie Yunker, and New Belgium CEO Steve Fechheimer offered their insights into the state of the beer business heading into 2022 during the event held in Denver during the Craft Brewers Conference.
The emergence of the “fourth category” offerings such as hard seltzers, ready-to-drink canned cocktails, and other offerings have dominated recent industry conversations. However, Yunker reminded the audience that “people have been drinking craft beer for hundreds of years.”
“That is not going away,” she said. “I think that us brewers are positioned to continue to make quality beer and there’s always an occasion to drink beer, frankly.”
“I think we need to be focused as an industry as much as possible on brand building and explaining to people why they should interact with the wonderful beers that we’re all making on a more regular basis, and why they’re relevant to occasions,” Fechheimer added.
Calagione emphasized that explaining to consumers how beer is versatile and relevant is particularly important with younger legal-drinking-age (LDA) consumers, (a topic that was further discussed during Brew Talks’ second panel).
“If you look at the top hundred IRI-defined craft SKUs, most of those beers and those labels on them are literally of legal drinking age themselves, they’re at least 21 years old. Which means that the person that just turned 21, that LDA drinker, grew up with Two Hearted, with Fat Tire, with 60 Minute in their parents’ fridge,” he said. “Part of becoming an adult is rebelling against the generation above you, so I don’t think we should be surprised that they’re finding newer beverages that are appealing to them in their messaging and their taste profile.
“I think craft beer has everything those other beverages have, we just have to reframe how we’re presenting our stuff,” he continued. “They might not want to talk about the founders of the breweries — these crazy pioneers — they don’t give a shit about that. There’s 9,000 founders now, it’s not some magical trick that happened.”
Part of effective marketing is also more stringently defining a brand’s target consumers, according to Fechheimer. As New Belgium became a national brand, he said it initially tried to broaden its marketing for its flagship Fat Tire amber ale to be relevant to a national audience. But it found that the more vague targeting strategy “watered down” the brand.
“If you try to win with everybody, you’re probably gonna win with nobody,” he said.
So the brewery refocused and began marketing Fat Tire as a “outdoor brand,” with an emphasis on its Colorado roots and the cohesion of Fat Tire with outdoor activities. Additionally, New Belgium launched Voodoo Ranger — an IPA-focused series that has overtaken Fat Tire as the brewery flagship brand, becoming the No. 2 overall craft beer in the off-premise and No. 1 selling IPA, according to market research firm IRI. Part of the brand’s success has been in New Belgium’s targeting of art and gaming communities that have adopted the brand.
“I don’t think [the craft industry’s] reached out to communities,” Fechheimer said. “We’ve tried to grow the craft beer community. We’ve taught people what makes craft beer really special, we’ve taught them about hops, we’ve taught them about brewing processes. Now there’s an opportunity for us to go into their communities and participate in what they want to do. And so if we show up at gaming events or we show up at art events, that’s us participating in a different community with our beer, and we think that’s a great way to reach new consumers.”
While the panelists each emphasized the importance of their flagships and providing a consistent brand or brand family for consumers to return to, innovation is still important.
“Consumers and retailers are looking [for] trusted quality brands they can depend on,” Yunker said, emphasizing retailers’ desire for “less risk” when it comes to stocking brands. In response, Bell’s has continued its focus on Two Hearted Ale, its “most relevant growth driver.”
While Dogfish Head tries to offer new releases — such as its Hazy-O IPA made with oat milk — the brewery still provides retailers with consistent brands that it knows will have successful sales, such as its 60, 90, and 120 Minute IPAs, which make up about 52% of Dogfish Head’s sales, according to Calagione.
To keep up with innovation, but still make retailers feel at-ease, Fechheimer suggested breweries focus on creating incremental purchases.
“There’s so much profitability for retailers on- and off-premise in that incremental purchase, so we have to be offering that,” he said. “As we’ve thought above innovation, it’s less about ‘hey, what’s that next logical spot for Voodoo, what part of the IPA category don’t we participate in,’ because, let’s be honest, lots of other breweries participate in what that place is that we don’t, and that may not be incremental. It’s how do we bring something new to the category and new to the brand that’s actually going to drive incremental purchases in the on-premise and in the off-premise.”
Watch the full conversation above.