Craft beer has a branding problem, and it could be rather serious.
In a recent MarketWatch report, columnist Jason Notte reported that the number of stock keeping units (SKUs) in the craft beer industry has more than tripled from 2008 to last year, from 2,274 to 7,400 SKUs.
An SKU is a item’s (in this case, a bottle, can, bomber, six pack, etc.) identification code, usually represented as a barcode somewhere on the label. Bart Watson, the Brewers Association’s chief economist, thinks that number may be an underestimate, as breweries may fit as many as four seasonal or special offerings under one SKU.
What does it mean? Added burden is being placed on beer distributors and stores that sell craft beer to not only catalog each item they sell but also to simply find shelf space for beer. Just two decades ago, stores that sold craft beer were working with on average nine breweries. Compare that to today when stores are carrying on average 35 different breweries, and you can begin to see how space is becoming an issue.
Along with that, stores had on average 272 SKUs in 2007, which jumped to 981 SKUs last year as more breweries began to produce and distribute more beer. As breweries begin to distribute more, a greater emphasis will be need to be placed on market trends to make sure their brand doesn’t get lost in the shuffle (a great example used was the amount of pumpkin beers left on shelves months after their peak).
Add to that the pressure and money from Miller/Bud/Coors for shelf space and it becomes even more of a mess.
James McGreevy, CEO of the Beer Institute, echoed that sentiment.
“The beer industry is focused on providing beers that consumers want, while being mindful of the complexities that wholesalers and retailers face as more beer choices abound. As consumer tastes and preferences in beer evolve, the industry is meeting that demand by presenting more choices in packaging, styles and flavors,” he told MarketWatch.
Indianapolis has roughly 40 craft breweries and tap rooms right now (not counting many in the furthest suburbs), which is great for the craft beer industry both in the state and across the country. The amount of SKUs generated by our breweries however will make it even harder for newer breweries trying to break into the market.
