Beer in transition: beer's slump may be reversed with savvy image marketing and innovative products

Cheers, Nov-Dec, 2005 by Lew Bryson

And if beer's competition is wine, beer can learn from wine. Forty years ago, wine was mired in a swamp of low-margin jug sales. Drunks were called "winos." Now wine cleaned up, with a freshly shaved face and a fashionable suit of casual clothes, and is headed uptown fueled by constant improvement, innovation, better margins, and real variety. Beer is maybe the face-painted guy screaming at the football game. It's time to take a look at where wine went and think about a new image. In twenty years, beer could be looking at a whole new ball game ... while sitting comfortably in a skybox.

Lew Bryson is managing editor of Malt Advocate and author of numerous books on beer and American brewing.

RELATED ARTICLE: Craft Brewers Show Growth

America's craft brewers have succeeded by being pretty damned certain that consumers across the country were indeed waiting for another beer, and they proved it by becoming the hottest segment of the alcohol beverage market in 2004. The category grew at over 7 percent in 2004, and continued the same pace in the first half of 2005, according to figures released by the Brewers Association. "Many craft brewers reported shipments at an all time high this summer in addition to strong first-half results," said Paul Gatza, director of the Brewers Association.

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"Craft brewers have developed consistent quality," Gatza explained, "and craft beers are seen as a local product with lots of flavor at a fair price. People are trading up in price and buying a beer that is special over quantity. One interesting thing about the craft beer consumer is the sense of brand exploration rather than purchasing the same brand over and over again. Craft beer consumers get [it] that different beers fit different occasions."

How big will craft beers have to be to become a significant part of the market? "Craft beers are already significant," says Bump Williams, executive vice president with Information Resources, Inc. (IRI). "Retailers think so, too. We are seeing new craft beers expanding into new markets, trying out TV advertising, expanding distribution, and getting more and more of retailer and distributor share of mind. There is plenty of room to grow and consumers do not mind paying full price."

Is Samuel Adams too big to be craft? Is Yuengling too big to grow? Not likely. Boston Beer continues to innovate with strong-selling high-priced bottles like the Chocolate Bock and Utopias, and their changing seasonal line-up. Yuengling has nothing but opportunity ahead of it as they continue to expand into new territory. They are one of the strongest small brewery success stories in brewing history, and with strong production support finally in place, they are poised for explosive growth with their combination of unbeatable heritage as America's oldest brewery, and darker-fuller-tastier--but not too much--appeal. If they can get sales support for their Light Lager, the sky's the limit.--LB