Brand Identity and the Craft Beer Business
A valid question in today's overly hyped world...What does a brewery do in order to "market" their product successfully? A traditional approach to the industry dictates a necessity for high-quality beer, physical feet on the street (usually in the form of an efficient sales team), and a good distributor who can represent your brand successfully.
Has anything changed? Will this model still cut the mustard in the modern craft economy, or has the marketing paradigm changed?
We see study after study outlining consumer perception around businesses and their brand. The consumer wants to be closer to their brands than ever before (generally). They want transparency. They want communication. They want a dialogue. They want an emotional connection. They literally expect these things. Large consumer brands, on the other hand, continue to struggle with the tactics needed to execute successfully on the results of these studies. Certainly this isn't the case with all brands, as some have fared very well in the recent years. But the entrenched businesses have an uphill battle to retain mindshare and engagement with their customers, both in the traditional marketing channels, and the new domination of online brand identity.
We've said it before, but craft breweries don't have a lot of liquidity to play with, which directly affects their disproportionately small marketing budgets. AB/Inbev, Miller/Coors, and other such businesses have gained such ginormous economies of scale, and minimized their cost of goods sold around production of their beer, that they've turned their highly profitable breweries into marketing machines. Domestic producers AB/InBev and Miller/Coors spends more on marketing than every other brewery in this country combined. Woof.
I hope we've framed up this "marketing" issue successfully. Consumers are more demanding than ever of their brands. Large, domestic producers are spending incredibly large sums of money to gain back the market share they're losing to craft brewing. This looks like a pretty tough situation for a craft brewery trying to make it out there.
But this hasn't stopped the growth. Not even a little. I just spent a weekend at a craft brewing festival, and it was jam packed with fiercely loyal, highly knowledgable craft consumers looking to support their local craft breweries. The craft consumer knows what they want. It's a fact. And they're willing to go the extra mile to support the industry. How did the craft breweries manage to target such an amazingly loyal, valuable, customer?
Bart Watson, Chief economist for the Brewers Association, sums it up really nicely. Craft breweries are aware of their measly marketing budgets, and instead choose to focus all their efforts on just being themselves. Authenticity is key. Authenticity breeds trust, and a distinctly humanized brand in a loud world. Almost every independently owned craft brewery does this. They just...do their thing, for lack of a more eloquent way of describing it, and they communicate openly with their customers about this "thing". Maybe they pride themselves on sustainability, or really hoppy beer, or crazy cool graphics. They are not "all things to all people", and they know the danger of spreading their resources to thinly across the proverbial pie.
I don't foresee the marketing paradigm to change in the craft brewing industry any time soon. While a notable number of large, entrenched businesses struggling to make it, they could take a leaf out of the craft brewing industry's strategy. Craft a great product and you'll create a good experience for your customers. Show them you're listening (via social media, carrier pigeon, or wherever your customers are making noise) and they'll respond in kind. Tell them a good story and they'll feel invested. Put the people first, invest in your brand ambassadors, and you will ride the sustainable, measured curve to success.