Defining the Definition of ‘Craft Beer’

craft beer-beer-word cloud

We are living in Pax Beervana – the golden age of beer enlightenment.

You may have noticed that 2013 was another record year for craft beer, a seemingly never-ending display of growth that has seen barrel production nearly double from 8 million barrels in 2009 to 15.6 million in 2013. Craft sales, which make up 7.8 percent of the beer market, is now a $14.3 billion industry. Our pint glasses runneth over.

As us beer enthusiasts tend to do, this news is best consumed as part of a pairing, which is why we shouldn’t ignore the Brewers Association recent decision to alter their definition of “craft beer” to include Big Boy producers like Yuengling and August Schell. But the reason why this matters isn’t because of hypocrisy on part of the Association or the continued debate of “craft vs. crafty.

The reason both these pieces of news are important is because as craft beer continues its momentous climb, more people will officially become craft consumers, even if they don’t realize it. When they do, they’re not going to care about what officially defines “craft” in terms of adjuncts or barrels produced.

The idea of “craft” is ambiguous to Average Joe Drinker, who defines craft in two ways: price and “beer that tastes good.” It’s fitting, really, as all this fumbling with the idea of what defines craft – even if it doesn’t matter to the consumer – is actually convenient for the Brewers Association moving forward.

Consider not just what consumers think, but brewers themselves. Here’s how Boston Beer’s Jim Koch “defined” craft last year:

We craft brewers have created a category that is able to command a price premium based on our points of difference from the mass domestic brewers. And that has created a lot of profitability in the category and a lot of growth.

If we look at what craft means to the average person, they’re not going to care that Yuengling is now officially “craft” to the Brewers Association. They’re going to care that they found something tasty to drink. From a marketing perspective, I see the benefit of including these new breweries in the craft category as good for two reasons (among others):

  1. It grows craft beer’s market share percentage by at least one point. This will certainly make next year’s annual numbers look large, as the expectation is to sit around 10 percent of total market share, a jump of roughly 2.2 percent.
  2. It carries the “craft” theme to a broader number of brands.

That second point is really important, as the growth of craft hinges on finding more drinkers for which price point matters. The ubiquitous feature of craft beer for consumers is that it’s more expensive and even if that’s true for good reasons – ingredient quality, localized production, etc. – dollar values still mean something.

What “crafty” beers like Blue Moon and Shock Top’s brands do is find a great balance between price and flavor. There’s a reason why Consumer Reports chose Shock Top as a “best buy” beer, even if it isn’t actually craft by definition.

So while the Brewers Association brings in more brands into the craft fold that can be deemed more affordable, there’s a secondary boon to the inevitable increased market share:

“When craft brewers go into retailers, having the higher share is a nice selling point to say that craft might warrant more shelf space.”

Which is the key to the Brewers Association “20-by-20” plan to have craft beer make up 20 percent of beer volume sales by 2020. Recent years have proven that craft will continue to grow no matter what, but it could use a little help to reach the ambitious goal.

Right now, the average beer drinker spends almost $1,300 a year on beer. If we think of that as a general cap, it’s easy to see how necessary it is to have a larger selection of beers at a variety of prices for any kind of consumer. Especially if 42 percent of beer drinkers drink/buy new brews one to three times per week. You have to make each purchase count.

That $7 for a six-pack of Yuengling matches up well with the $8 six-pack of Blue Moon and that’s 72 more ounces the Brewers Association can count on.

Related reading for you, from Friend of the Program Doug: Craft Beer: We don’t drink definitions. We drink good beer.

+Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

About these ads

10 thoughts on “Defining the Definition of ‘Craft Beer’

  1. Great stuff man. I have a draft post with a different take on the subject that I’ll have to finish now to compliment yours. Also, VERY glad to hear that the average craft beer drinker spends $1,300 a year. Makes me feel better about my $1,200 last year.

    • Thank you! I’m looking forward to your post. This kind of topic certainly begs for a wide variety of viewpoints, which is why I was glad Doug gave me some things to think about, too.

  2. Great post as always. Although building market share by simply changing the definition seems, I don’t know, underhanded, LOL. But to be honest, next year when the numbers come out, everyone who isn’t in the craft corner will be adjusting Yuengling and August Schell’s numbers out of the total to report “the truth”, And to be honest, I’ll be interested in that number myself.

    • Thanks, Ed. Even without the new Big Boys of Craft, the BA market share would still be impressive in 2014, I’m sure. But we’re talking about going from 1 percent (or a tiny bit more) to solidly 2 percent. I’m sure they’d be happy with the gains, but if you can give yourself a nice boost … why not?

      Ultimately, I’m curious how the ongoing relationship evolves between brewers and the Brewers Association. What was once geared toward the small guys is now very much looking at the big picture. It’s an important change given the rapid changes in the industry – one that I agree with – but a change nonetheless.

  3. Pingback: Craft vs. Crafty: Should We Drop the Craft and Just Call it Beer?

  4. Pingback: Birth of a Brewery? Another Look at Sharp End Brewing | This Is Why I'm Drunk

  5. Pingback: He Said What? Pete Coors and His Magical Mystery Press Tour | This Is Why I'm Drunk

  6. Pingback: There’s Craft in Your Beer: A Giant, An Industry and a Definition | This Is Why I'm Drunk

  7. Pingback: Diversifying Boston Beer: How a Company Mindset Leads Growth, Innovation | This Is Why I'm Drunk

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s