a) Last week, Brews News in Australia highlighted a report that suggested “the positioning of many craft beers to target ‘purists’ and ‘hipsters’ gave the independent brewers less traction with a sizeable part of the Australian market.”
The result is that mainstream breweries have created a class of “contemporary beers” that are priced between budget beers and premium beers. They appeal to “consumers tiring of traditional beer brand offerings but ‘who felt disenfranchised by the craft movement.’”
b) With that in mind, look at what Mike Urich wrote in his Seven Point Analytic blog last month. Really nice visuals illustrate that, “Low income drinkers have exactly one entry point into beer, and it’s pale/light lager. We’re hardly offering new and low income drinkers a lot of options.”
He contrasts that to spirits, where every segment has significant pricing overlap. “The average price of whiskey, gin, and tequila are each above the average price of vodka, but there are still plenty of options in every segment at essentially every price point. This allows drinkers of every income level an entry point into any spirits segment that they want to try. From there, they can go wherever they want—there’s a cheap, widely available spirits brand in every segment for every drinker.”
c) In 1998, The New Brewer included an article about “The Demographics of the Micro Market.” It reported the results of the National Beer Survey, which was sponsored in part by the Institute of Brewing Studies (a forerunner of the Brewers Association).
(One quick aside, the NBS compiled a list of the styles “micro fans” preferred. In order, they were amber, stout, wheat, Christmas ale, IPA, Belgian, dobblebock, barleywine.)
The national survey found that education was a large factor determining if drinkers chose “micro” beers, “varying from only 8 percent usage for those not finishing high school to over 40 percent for college graduates, with middle education categories progressively in the middle.” John Robinson, a professor of sociology at the University of Maryland who wrote the article, added, “As in so many other areas of life, one’s education reflects taste and a concern with taste.” And later, “The important bottom line here is that one should not be confused by the fact that micro drinkers are more affluent. That money difference is just an education difference in disguise. Market to education, not income.”
d) That was 1998, but how much has changed? In the mid-aughts an article in The New Brewer focused on the concept of “trading up” (confession: I wrote it) featured in the book “Trading Up: The New American luxury.” Boston Beer was among the companies featured, and soon after the book got attention many brewers began to describe what they made as a “new luxury.”
That story includes an exchange between two Philadelphia Inquirer writers in 1985. Food editor Gerry Etter wrote, “Today, beer is invited everywhere. It hobnobs with vintage wines and attends formal parties, it slides effervescently into crystal glasses held by long-gowned hostesses.”
The second writer countered, “I’ve never hobnobbed in my life (and if I did, it was only once and with a consenting adult), and I don’t intend to start now. One doesn’t hobnob while drinking beer, one shoots the bull.” Translation: beer should be a blue-collar beverage.
“Trading Up” proposed that these blue collar workers would pay a disproportionate amount of their income for products that are important to them. This was labeled “rocketing.” Very important was the idea of marketing as education.
Marketing to education was not, and is not, the same as marketing as education.
All of the above are about both the business of selling beer and the value of being inclusive. Funny how that works out, and leads directly to words from Dr. J Nikol Jackson-Beckham.
e) “Lest any business owners still have reservations about the urgency of creating a more equitable beer industry, know that working towards inclusivity is not just a moral imperative—it’s a financial one, too. Ignoring this reality isn’t just ethically bankrupt; it may well be bankrupting.”