Big Beer: Craft Ally or Enemy?
- International Keg
Improving Your Craft Beer Supply Chain
Prohibition really messed things up, huh? The apparent rift between craft and big beer is the result of a rocky and complex history. We know that a lot of it stems from distribution and the challenges of getting a brewer’s product to the retailer--especially in the U.S. where the legal limitations vary state-by-state and three-tier distribution forces the hand of growth-focused breweries between barrel cap laws and beer franchise laws. Still, savvy craft breweries can actually benefit from the successes of “Big Beer” and unite as an industry to focus on the real enemy. How? By borrowing strategies from the Big Beer playbook to expand craft beer operations, increasing the demand for total beer consumption, and overcoming the beer industry’s declining overall market share caused by a competitor that’s far more threatening than beer brands pitted against each other. If all segments grow, everyone wins. But ultimately the consumer as the end-user makes that call.
It starts by looking at the growth strategies Big Beer uses to sell their beer before determining how the craft beer industry can benefit from them. Then we’ll address the specifics on how craft beer breweries can unite forces with big beer to grow the overall demand for beer as the go-to beverage for more people. And finally, discover how to improve your brewery's supply chain to overcome distribution challenges.
Growth Happens One Sip At A Time
1. Taste is king.
People buy beer for more than image or your story, so maintaining the freshness and the quality of your beer comes first. Go figure. As a brewery, you need to sell more beer to sell more beer. Getting ahead of market competitors has much more to do with driving up the demand for your beer than it does with the delivery of your beer from point A to Point C. Afterall, distributors respond to where the consumer spends. But how do you get ahead of this demand?
2. Invest in growth-minded marketing.
Product placement is just the starting point. Distributors want to see your beer get poured and moved off the shelf. Initial distribution challenges can be overcome with improved marketing, increased brand awareness, and continued market research and product development. All of which will contribute to your added growth in increased market share and truck share. One way to do all these at once is with an improved social media strategy. Maybe you’ve already amassed a huge following of devotees, but it’s always a good time to adapt your strategy so the awareness of any brand (large or small) continues to develop and remain both relevant and meaningful. Beyond beer is your brand, and beyond your brand is the culture. An ear to the ground, feet on the streets approach allows you to build a following from your core community and adapt with new offerings.
3. Flavor consistency without compromise.
Getting your beer to the retailer is the first challenge, but ensuring that the customer is drinking the freshest and highest quality beer possible is the biggest factor for turning curiosity into repeat business. Trial is a required first step, but also the fastest route to extinction if the product is not good. People talk. But doing what’s necessary to maintain flavor consistency doesn’t mean altering your recipe and changing what makes your beer great. We know, not everyone uses rice or pasteurizes their beer. And, you can’t open a new brewery in every market you’re targeting just to guarantee freshness. But you can improve the aspects of your supply chain that get your best product to the retailer more efficiently and securely.
Big Beer Got Big With Big Thinking
International Keg works closely with breweries of all sizes in over 40 countries around the world, and we’ve found that to sell more beer thriving breweries need to know how to think like Big Beer. Thinking like Big Beer doesn’t mean changing how you brew. Instead, try optimizing operational efficiencies while focusing on new opportunities for growth. Re-evaluating how any brewery can gain more of the market share from competitors starts with understanding who your actual competition is.
Despite the growing number of breweries, the beer industry lost 8% of its market share in recent years to wine (7%) and spirits (1%) industries according to the US Distilled Spirits Council. Currently, beer’s share of the alcohol market has dropped to 46%, while wine jumped up to 37%. And in case the shifting interest away from beer wasn’t enough of a red flag, the Beer Institute reports a 22% decrease in beer drinking among 21- to 27-year-olds. The waning appeal of beer among younger adults is partially due to a shifting focus in lifestyle, but to make matters worse the infighting between craft breweries and larger breweries has polarized how beer drinkers identify with one another. As breweries have focused concerns on competing for taps with other breweries, they’ve allowed for wine and spirits to further close the gap on the alcohol market share from the shelves. In order to improve the long-term strength of the beer industry as a whole, breweries should work together to connect with major untapped markets including women, minorities, and Gen Z customers. Making beer relevant and more desirable to a larger audience will boost profits for breweries in the years to come.
The brewing industry’s biggest competition isn’t other breweries. A growing demand for wine, spirits and now the growing number of states legalizing recreational marijuana are the biggest threats to the long-term success of both craft and Big Beer. The fact is, other competing industries are winning more battles for the “share of stomach” at the expense of beer. Improving the demand for great beer requires teamwork between supply and distribution for the beer industry as a whole.
Distribute Like Big Beer With a Kick-Ass Supply Chain
Use Big Beer distribution networks. The most successful craft beer brands were built on the back of Big Beer distribution networks because it allowed them to enter new markets and go beyond local self-delivery. Using this strategy, craft breweries were able to increase demand and scale by benefitting from the distribution systems already in place. Self-distributing can be a good thing, but ultimately has limits like capital and the ability to develop new accounts in crucial retail locations. The 3-tier distribution system provides the advantage of getting beer brands in retail locations with higher demand without the hassle of having to run a trucking company.
Bottom line, Craft Beer is not Big Beer and shouldn’t try to be. Different segments, different consumers. But the end game is to grow total beer consumption by understanding the consumer, creating a preference, and deliver against what they want. So be yourself, brew your best, and borrow Big Beer’s supply chain strategy. Both brewery and distributor benefit when the efficiency of the supply chain is as streamlined as possible. Too often, keg attrition subtracts from the bottom line causing delays and increasing tensions between breweries and distributors. This is why International Keg works with all breweries like regardless of size to ensure that as a brewery you don’t have to worry about keg liability, retrieval, or repairs.
No matter the size of your operation or your location, International Keg provides industry-leading SmartKeg™ rental to breweries who want to focus on making great beer, building their brand, and growing their business. We normalize the complicated relationships between breweries and distributors with our industry-leading SmartKeg™ rental by eliminating all lost keg liability. How? Using our RFID tracking technology allows us to track and trace each of our SmartKeg™ assets filled with your liquid gold to its account, no matter the distance and no matter the amount. With the world’s largest asset pool of technology-enabled kegs with all common types of kegs coupled with our presence in over 500 cities around the world, International Keg can guarantee brewers and distributors that the traditional headaches of kegs can be a thing of the past. We help breweries of every size tap into the smart assets and reverse logistics solutions that Big Beer has, but with 0% of the liability. We make keg loss and retrieval a non-issue with the fastest turnaround times in the industry, anywhere in the world, helping to level the playing field between Craft beer and Big Beer so the focus can be on total beer consumption.
When a brewery taps into smarter supply chain strategies, many distribution challenges can be overcome or at least offset. Our Smart Technology allows you to maximize efficiency and ensures more working capital, time and resources. Now you can focus on growing your brewery and helping build the demand for beer as a whole. Get more of your beer into the hands of happy customers, instead of tracking down kegs and getting boxed out by trucking companies. To learn more about our SmartKeg™ services discover our 3-Steps for easy and efficient Keg Rental.