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Does Big Beer have what it takes to get crafty?

Oct 16, Alexander Dale, Intern


Craft Beer hasn’t been seizing Big Beer’s territory over the past decade because of taste; instead, previous research has demonstrated the importance that branding plays in drinkers’ decision-making.

This growing group of small breweries has experienced double-digit growth in the past decade because of the intimate positioning they’ve built with drinkers.

Craft Beer’s simple story and earnest purpose capture the digestible essence of a brewer’s process and passion. And that’s resonating well with consumers – Craft Beer is predicted to be one fifth of US volume in 2020. Big Beer ends up tasting stale, and no one likes stale beer.

Big Beer might play a different business game to small production breweries, but in the past 30 years, they’ve neglected their long-term strategy in developed markets. However, Big Beer brands from Budweiser to Heineken seem to be changing – will this shift embody the long-term strategy they need to climb back into consumers’ hearts?

Big Beer’s taste hasn’t been watered down; their story’s been diluted with confusing endorsements, skin-deep brand exercises and wet positioning.

Big Beer has reverted to nationalist tunes because they’ve lost sight of their intrinsic merit. Remove Big Beer’s marketing and machismo and you have a group of heritage brands that were originally successful because they focused on their consumers and craft – the two attributes that Craft Beer has honed as they claim territory from Big Beer. The opportunity for Big Beer now is to channel the power of their beer-making heritage into stories that resonate with individuals.

Big Beer could learn a lot from Jack Daniel’s Tennessee Whiskey, which never drew a line in the sand between being craft and being big – it has delivered 7% compound annual growth since it was purchased by Brown-Forman in 1956. Jack Daniel’s has always had a personal relationship with its consumers – no triumphant songs or sports fans. Instead, Jack Daniel’s focused on their process, their people and their sense of place. ‘Postcard’ advertising has communicated the innate qualities that define Jack Daniel’s, and that’s sold well. Even as the growth of small batch whiskeys has eroded the market share of other household names like the Famous Grouse in the UK, Jack Daniel’s sales have grown 9% in the UK.

Craft Beer’s market share has doubled in the past four years and shows no signs of slowing. Is Big Beer in danger of collapse? – no. But Big Beer shouldn’t forget that Blackberry’s device shipment market share used to be 20% in 2010 before collapsing last month.

Big Beer knows it’s in trouble: the market share is shrinking in addition to global beer capacity capping-off. Like other Big Beer groups, AB InBev is using its capital to acquire breweries like Camden Brewery and buttress its market share. These acquisitions might suppress pocketbook pain in the short term, but if Big Beer is going to maintain relevance in an increasingly competitive industry, it needs to grow back into the hearts of consumers by connecting them with an authentic story around beer making.

When John Molson founded North America’s oldest brewery, he wanted to create a beer that could meet the discerning pallet of arriving European immigrants. By bringing specially selected grain from Europe, he created artisan malt that’s subsequently become Canada’s flagship lager, Molson.

But Molson, like other Big Beer brands, has made the mistake of thinking that being bigger meant having to say and do more. Although Heineken is leading the turnaround by communicating the expertise that goes into their beer, the brand still focuses on its role as an accessory to James Bond, the sponsor behind the Rugby World Cup and the voice behind drinking responsibly. The challenge for Heineken isn’t being heard, it’s amplifying the story that really matters: water, barley and hops.

Big Beer is struggling with the role its marketing plays.

Brooklyn Brewery, a craft brewery from New York, never invested in traditional marketing. Instead, they’ve taken a good neighbor approach by investing in community outreach like the Brooklyn Museum and the Brooklyn Academy of Music. This curated grass roots strategy, which is more emblematic of Jack Daniel’s than Big Beer, pays dividends because its giving the brand a social platform with which to expand by double-digits in Big Beer territory like Brazil.

Big Beer feels slow, heavy and desperate.

It confuses answering customer needs with evolving how it communicates its beer-making story, and in today’s environment, playing it safe means losing the race before it’s started. Big Beer has never been accused of being timid, but right now it needs to show us what it’s actually made of.