Craft Beer Study - BRICK+BOND

vs.
C r a f t
C r a f t Y
©2013 A CASE STUDY BY BRICK+BOND brickandbond.com
TAPPING INTO THE THE CRAFT BEER MARKET
No longer niche, the craft beer market is growing at a remarkable rate.
Brands of all sizes can not only coexist, but prosper, by strategically
tapping into an influential audience ready to purchase, drink,
and spread the word.

FOR MORE INFORMATION, CONTACT US @ BRICK+BOND 1(646) 347 4340 OR inquiries@brickandbond.com 2
In a crowded market, brands that are more observant
of consumer needs and desires can build greater
engagement, influence purchasing behavior, and
return a positive ROI.
Almost every other day, there is a new article or study attempting to cover the ins and outs of this
highly lucrative market. Whether this is due to craft beer’s staggering growth rates, its increasing
popularity among consumers, or because it is simply an attention-grabbing buzzword, one thing
remains certain—craft beer is here to stay.
Currently, there is a lot of noise regarding the long-standing dispute between small-scale and
large-scale brewers. Regardless of how it is framed—“craft” vs. “crafty”, “real” vs. “fake”, “authentic”
vs. “inauthentic”—this paper will bypass the hoopla by redefining what it means to be truly “craft”
and explaining how brands of all sizes can harmoniously coexist and successfully reach target
consumers effectively—even with limited resources.
By focusing on what really matters to consumers and filtering through the clutter, brands can
establish a strong foothold in the craft beer market and make their marketing dollars go further,
work harder, and amplify a winning strategy.
GET YOUR CRAFT BEER HERE,
there, and EVERYWHERE!

3FOR MORE INFORMATION, CONTACT US @ BRICK+BOND 1(646) 347 4340 OR inquiries@brickandbond.com
Craft beer as a segment has grown by approximately 110% over the past five years, from
$5.7 billion in 2007 to $12 billion in 2012. In addition, craft beer is forecasted for continued
growth to become an $18 billion market by 2017, representing 20% of the entire beer market.
As with all industries, rapid growth breeds increased market complexity. As such, there is an inherent
need to define what craft beer is (and conversely what it isn’t) and segment the market given its
sheer size and growth in order for brewers to launch, take action and make their marketing dollars
go further.
Craft beer is big
and getting bigger
Craft beer was responsible for
almost all category growth in 2012
and now represents 15% of the
total beer market.
*Source - Mintel, Beer - US - December 2012; Mintel, Craft Beer - US - November 2012
ACTUAL FORECAST
TOTAL US SALES CRAFT BEER US SALES
100%
75%
50%
25%
0%
2007
OVERALLCATEGORYVOLUME
2012 2017
20%
15%

4FOR MORE INFORMATION, CONTACT US @ BRICK+BOND 1(646) 347 4340 OR inquiries@brickandbond.com
According to the Brewers Association, an American “craft brewer” is small, independent and
traditional. More than 2,000 breweries are responsible for the beer brands made within the US,
with an estimated 97% of these breweries fitting the “craft brewer” definition.
These numbers seem impressive on the surface, but they are misleading when you begin to dig
deeper. The problem with this statistic is that the Brewers Association voted to change the meaning of
“small” in its definition of what constitutes a “craft” brewer in December of 2010. Whereas “small” used
to be defined as producing no more than 2 million barrels per year, it is now defined as producing up
to 6 million barrels per year. Pretty crafty of them, eh?
NEW DEFINITION:
An independent brewery that produces up to
6 million barrels of traditional beer.
OLD DEFINITION:
An independent brewery that produces no more than
2 million barrels of traditional beer.
WHAT CONSTITUTES
A CRAFT BREWER?
*Source - Mintel, Beer - US - December 2012; Mintel, Craft Beer - US - November 2012
50%
40%
10%
BREWPUBS
MICROBREWERIES
REGIONAL CRAFT + CONTRACT BREWERS

Change in the designation of
a “small” brewery has allowed
major craft brewers, such as
The Boston Beer Company
and Sierra Nevada Brewing
Company, to maintain their
image and remain categorized
as “craft brewers” even after
they’ve reached critical mass.
If the two largest craft brewers
have the power to change the
definition of “small” once they
reach production limits, is the
witnessed uptake in craft a
result of real growth, or simply
a change in definition?
The reality is that the definition
of craft beer is already unclear.
With rising trends and market
growth, large brewers have
become “crafty” with their
tactics—working their way
into the market with the likes
of Blue Moon (SABMiller) and
Goose Island (Anheuser-Busch
InBev), much to the chagrin of
small-scale brewers.
It is questionable whether the
success and appeal of craft
beer is due to its real attributes
or its “craft” perception. The
truth is that craft beer’s current
growth and success can be
attributed to a host of factors:
location, variety, history,
story value, quality, timing,
taste, preference, perception,
counter-culture, marketing (or
lack thereof), and even novelty.
Despite semantics, one thing
remains certain—there is
something intrinsically unique
about craft beers, and that is
what makes them so enticing
to consumers.
Given the success of the
numerous “craft” and “crafty”
beers currently available,
perhaps “craft” should be
defined to include brewers of
all sizes that are committed
to experiment, innovate and
most of all, differentiate. If the
past five years have provided
any indication of things to
come, innovation for the beer
industry is stemming almost
entirely from craft breweries
and craft brewing techniques.
On the bright side, there is
room for brewers of all sizes to
grow and prosper in the craft
beer market.
IT’s BIGTO BE SEEN AS LITTLE
It is questionable whether
the success and appeal
of craft beer is due to
its real attributes or its
“craft” perception.

FOR MORE INFORMATION, CONTACT US @ BRICK+BOND 1(646) 347 4340 OR inquiries@brickandbond.com
Craft beer has broad appeal, but the main source of growth is seen coming from Millennials,
in both the younger (21-24) and older (25-34) age segments. Half of all craft beer drinkers
expressed interest in locally made beer, while a quarter of them are interested in purchasing
craft beer where it was brewed. Another 39% are influenced to purchase when they can relate
to the personality of a brand.1
Why should craft brewers care? Not only are these drinkers exceedingly preferential and trendy, they
are also highly influential digital natives. Millennials are largely mobile-driven, spending 14% more time
engaged with their mobile devices in an average week than their generational peers.2
As such, the new
mobile era of “pull” marketing allows for meaningful dialogue with these primary consumers.
In addition, Millennials crave brands with heritage and genuine story value. This segment has an affection
for brands and activities that transport them to a time when things were ‘simpler’—regardless of whether
or not they lived during that era.3
THE CRAFT BEER DRINKER
Craft beer variants have managed to capture
public imagination and appeal to young drinkers
who are frequently on the lookout for new trends
and brands that speak to their individual preferences.
6
Source(s): 1
Mintel, Beer - US - December 2012; Mintel, Craft Beer - US - November 2012; 2
Experian Marketing Services - 2013 Digital Marketer Report
- Life is the channel. – 2013; 3
Javelinexperiential.com – Millennials and the Great Nostalgia Trip – March 8, 2012

THE MIGHTY
MILLENNIAL MARKET
This audience values esoteric
knowledge and characteristically
rejects traditionally large brands.
7
Many Millennials have come
of age during the rise of craft
beer and understand the
differentiation in style and
taste compared to domestic
and imported beer. All of these
factors combined, paired with
high growth and low barriers
to entry, make craft beer a
prime market of focus for small
and large-scale brewers alike.
As such, brewers of all sizes
are attempting to tap this
lucrative market and keep up
with growing demand, which
in turn offers Millennials the
choices and variety they want.
This in effect, creates a highly
stable ‘feedback loop’ that
perpetuates the cycle, thereby
stimulating growing demand
for “craft” beer.
EXPANDING
M
A
RKET AND PALATE EXPERTISE IS
BECOMINGMAINSTREAM
DEMAND
FORTHENEWEVOLVINGDEFINI
TION
oFQUALITY
MORE
ACCESS
TO
INFORMATION
Millennials are more aligned with the ‘food movement’ and love organic farms, small batch jams,
artisanal cheeses…and are willing to go to great lengths to find them. Thus, power is shifting from
mass-market brands to “the little guy” online , at the local green market or at the corner store.*

INFLUENCING
THE INFLUENCERS
Mintel research found that 45% of craft beer drinkers would try more craft beers if they knew more
about them. To capture these interested but cautious beer drinkers, craft brewers need to educate
consumers about the qualities of their beers.
Tasting events, beer-food pairing menu listings, and on and off-premise beer samplers can empower
drinkers to experiment with craft beers.1
The key is to target communities that are primed for craft beer
consumption, which directly translates to massive reach and frequency for craft brewers. By pursuing
highly influential markets, craft beer brands can capture a significant portion of the craft beer market on
small budgets.
Brick and Bond has identified nine such targetable areas across the US. These key markets provide an
opportunity to gain significant traction among Millennials, and should be the primary focus of any
strategy to achieve success in the booming craft beer market.
By pursuing highly influential
markets, craft beer brands can
capture a significant portion of the
craft beer market, even with
limited resources.
Source: Forbes, How ‘Millennials’ Are Changing Food as We Know It, September 4, 2012

Unique in many aspects, our chosen influential target markets have
some key important characteristics in common.
LOCATING THE MAJOR MILLENNIAL MARKETS
Source: Mintel, Beer - US - December 2012; Mintel, Craft Beer - US - November 2012
9
WILLIAMSBURG
BROOKLYN, NY
H STREET CORRIDOR
WASHINGTON, DC
SILVER LAKE
LOS ANGELES, CA
MISSION DISTRICT
SAN FRANCISCO, CA
PEARL DISTRICT
PORTLAND, OR
CAPITOL HILL
SEATTLE, WA
WAREHOUSE DISTRICT
NEW ORLEANS, LA
WICKER PARK
CHICAGO, IL
EAST AUSTIN
AUSTIN, TX
• Undergone or are
undergoing gentrification
• Dense populations
of influential Millennial
consumers
• Abundance of variety
and choice
• Value diversity, history
and culture
• Known for trend-setting,
exclusivity and ‘hipness’
• Cultural hubs for food,
art, fashion, shopping,
music, nightlife and
entertainment
• Large concentrations
of trendy, off-the-beat
restaurants and bars
• Provide “rabbit holes”
for storytelling, exploration
and discovery

“For this generation,
the definition of ‘expert
—a person with the
credibility to recommend
brands, products, or services
—has shifted from someone
with professional or academic
credentials to potentially
anyone with firsthand
experience, ideally a peer…”
Concentrations of young,
creative and sophisticated
individuals tend to set cultural
trends and radiate tremendous
amounts of influence. As such,
targeting the nine key areas
identified using authentic,
small-scale, localized,
integrated marketing efforts
will cause a permeating ripple
effect among Millennials.
Carefully invested marketing
will allow brewers to achieve
and enjoy a national presence
with localized budgets.
Source: BCG The Boston Consulting Group “The Millennial Consumer - Debunking Stereotypes’ – April, 2012
ACCORDING TO THE ‘EXPERTS’…
Concentrations of young, creative
and sophisticated individuals
have a tendency to set cultural
trends and radiate tremendous
amounts of influence.

11
Regardless of whether a beer is defined as “craft” or “crafty,” there is no doubt that a growing demand for craft beer
exists and is projected to grow rapidly over the next five years.
No matter how the craft beer market evolves over time, the true winners will be those who not only have ambition, but
those who can integrate that ambition with smart marketing to utilize their resources wisely, achieve scale, and take
advantage of this fantastically fertile market.
SO, GRAB YOUR SEAT AT THE BAR
We exist to provide unparalleled value
to our clients through a rigorous,
client-tailored planning process and
world class creative.
To discuss your challenges and
initiatives, give us a call or email us
BRICK+BOND
200 Varick Street
Suite 802
New York, NY 10014
t +1 646 307 4340
inquiries@brickandbond.com
HOW TO REACH US:

Craft Beer Study - BRICK+BOND

More Related Content

What's hot

Similar to Craft Beer Study - BRICK+BOND

More from Nuri Djavit

Recently uploaded

Craft Beer Study - BRICK+BOND