A recent article on “big beer” highlighted the very real problems facing the domestic beer category, from shifting preferences in taste, to increasing fragmentation, to problematic creative. Before we mourn its demise, it is worth noting that big beer is not dead -- at least not yet. The core of its high volume occasions (those times that call for long hours of drinking with good friends) remains strong. Also, you don’t see many folks showing up at an NFL tailgate with a 30-pack of craft beer. That’s because from a product standpoint, big beer has two enduring advantages when high consumption is called for: sessionability and affordability.
We can reasonably assume that declines in big beer are not from high volume/high consumption occasions, rather from the much lower in consumption, but higher in frequency, “how-about-we-grab-a-few-with-friends-after-work-at-a-local-bar” occasions, or the “I’m-not-sure-I-can-get-through-this-episode-of-Breaking-Bad-without-one at home” occasions. In these cases, much of the decline in sales can be attributed to loss of relevance among Millennials, where the craft beer category is winning not just the tactic debate but the philosophy debate. In this regard, big beer has significant challenges ahead:
Aligning with millennials’ value system
With their emphasis on community, localization, sustainability, and of course craft, craft breweries are Millennials’ value system personified. For a generation that ranks brand identification as important as religion and ethnicity when it comes to online identifiers, an authentic relationship with a brand reigns supreme. More importantly, craft beer breweries come by these values honestly. Rather than chasing trends, fads and market research, for years they have been quietly focusing on themselves, building cultures that reflect their personal ethics and companies that reflect commitment -- not just to their liquid, but also to their people.
It is not easy to imbue these values into brands that already feel so fundamentally big. Which is why big beer, from Budweiser to MillerCoors, has been investing in what many call “faux craft” brands (the media has yet to cover how much of Budweiser’s and MillerCoors’s sales declines, for example, have been offset by the growth of their sub-brands -- ShockTop and Blue Moon, respectively).
Craft breweries today simply have the upper hand when it comes to storytelling. Much of this is due to big beer’s placement within mass media. Because of its scale, mass media buys require one ad unit to connect with an impossibly large audience size (Super Bowl 2013 audience viewers exceeded 100 million). It is understandable -- big beer is big business, which means their marketers tend to place an emphasis on eyeballs. From a creative standpoint, it’s not that big beer cannot make good advertising -- it's that their creative has to be broadly appealing to reach so many consumers. While it is certainly possible, there is an enormously high degree of difficulty in creating a single ad that speaks to the sensibilities of a Millennial in his or her early 20’s and those of a mid-40’s regular Joe. By virtue of not having big beer’s budgets, craft beer has had to be hypertargeted with their advertising for years, which means they are phenomenally good at tailoring message to mindset to media to target -- and creating something that can actually make a genuine connection with consumers.
Creating communities instead of targeting consumers
This is what craft does best. Millennials require a more intimate relationship with the brands they consume and demand a say in everything from marketing to product development. Authenticity and two-way relationships cannot happen in a :30 ad. But craft has two enduring advantages in this regard. First, breweries are actual physical places that draw consumers in, giving them the chance to see the place and meet the people. It feels real to them -- and because of that realness, like a community they can belong to and that will listen to their input. The second aspect is the heavy reliance that breweries have placed on experiences as well as social media, which lets the spirit of their employees come through the advertising, not just through event or social media agencies. By virtue of the media channels they have come to rely on, breweries have been able to develop relationships with a community of consumers that feel authentic, personal and two-sided.
The obstacles that big beer faces are not exclusive and live across multiple categories. In a time when value systems, authenticity and two-way relationships with consumers reign above all else, it is not just big beer that has its challenges -- it is big brands.