by Mark Lasbury
by Mark E. Lasbury for Indiana On Tap
Having more information is better than having less in most cases, and craft beer is often no exception. Small businesses thrive on getting feedback from customers and knowing trends in the industry. The craft brewery, or any small enterprise for that matter, is short for this world if tit doesn’t pay attention to what people inside and outside the industry are telling it.
Brewers talk to brewers as often as they can, but everyone is so busy making beer that this happens less frequently than they would like. In many cases, large festivals are the only times they see one another, and then they are too busy to sit down and talk about what they are seeing in their breweries, taprooms, and from distributors. Breweries and brewing professionals might have a bit more time to talk to the people they see in their taprooms, but this can be a mixed bag of information.
Reviews of beers by patrons are generally a bust; personal tastes and preferences usually overwhelm constructive criticism – but overall sales statistics can give some good insights. If you blow all your kegs of a certain beer in a weekend – you did something right either in making or marketing that beer. Learn what it was and do it again. But as far as food choices, taproom amenities, events, etc. talking to patrons is a great way to go – probably the best. On the other end of the scale, there are large questionnaires run by national industry groups that have either very broad or very narrow information.
It seems that lately I have been seeing numerous results of national surveys and datasets. This highlights the desire that breweries and other industry professionals have for this deep diving information, but we still need to consider who it is helping in the long run. The Brewers Association just released (June 12) some insights on the consumers of craft beer, like how many people consider themselves craft beer drinkers, and how the gender and race/ethnicity gaps are being addressed. Overall, craft beer is gaining drinkers at a quickening rate. As of 2018, about 40% of 21+ individuals drink craft beer, nudging up a couple of points each year. But since this demographic is growing in size quickly, a similar percentage growth each year actually translates into greater and greater growth in terms of real numbers each year.
The recent BA data also shows that craft beer is doing increasingly better with women. In 2018, the split is roughly 68/32 male/female, where as in 2015 it was about 71/29. The change is OK, but by looking at the absolute numbers, it can be seen that new drinkers are much closer to a 55/45 split male/female. This is promising. On the race ethnicity front, the numbers for recent years haven’t been as promising. The change from 2015 to 2018 has been a paltry 86/14 (white/non-white) to 85.5/14.5. For more regular drinkers, the percentage is about 80/20, but the reasons behind this, and the general lack of growth in this area, are a black box.
National brands, and perhaps even regional brewers, need these kinds of numbers. These breweries draw on large swathes of the drinking public, so beer styles, names, marketing campaigns and artwork matter in drawing in more customers. And for these larger breweries, growing their brand on a large is necessary for survival. Small increases aren’t going to move their bottom line, so they need to find ways to unlock customer groups they previously haven’t tapped.
On the other hand, Jeff Burnworth at Teays River Brewing & Public House in Lafayette told me that this national data isn’t really of the kind that is going to help them grow. They are a local brewpub and their core philosophy is to bring great craft beer and food to everyone. So, how do they utilize national data in an ultra-local establishment? It’s difficult, if not impossible. Jeff says that the data that matters to Teays River is gathered right on site. They try to talk to as many as patrons and townspeople as possible, learning what they are doing right and what they could be doing better. This is still survey data, just not the kind that BA or Nielsen could, or would, do.
Yet the big numbers keep coming. The Beer Institute also came out with some numbers about the health of craft beer on June 12, via Brewbound. Conducted by Morning Consult, a D.C.-based market research firm, a survey of 2000 adults that are 21+ showed that 65% support having a brewery in their neighborhood. This is the type of number that makes people who are considering opening a neighborhood brewpub drool. That number could easily be increased to 70 or 80% based on education of locals as to the increases in traffic for other local businesses and the connection of the brewery to the neighborhood.
While this is a boon for the idea of neighborhood breweries (currently the fastest growing model), it says little to the nationally distributing brewery or regional brand looking to push into neighborhood bars and restaurant lists. Does a high percentage of people in favor of neighborhood breweries indicate an increase in over all consumption, including distributed, or does it reflect a rejection of national distributing brands over local support?
And yet the big numbers keep coming…..the Beer Institute told attendees at their national meeting that the 2018 tax breaks for craft brewers via the Craft Beer Modernization and Tax Relief Act were popular, but I found the numbers to be low (47% in favor). The surveyed population must not have contained a large percentage of craft beer fans. Similarly, only 46% said they supported extending the tax breaks beyond the 2019 sunset. Asking brewing professionals, only 38% of respondents indicated that aluminum tariffs will have a negative impact on craft beer, while 13% thought that the tariffs on Chinese and Canadian aluminum might actually benefit the industry.
This particular survey was all over the place, touching on many topics that brewers might or might not find useful. For instance, 74% of national respondents and 79% of women were in favor of the recent requirement (went into effect in May) for chain restaurants with more than 20 locations to post caloric and nutritional information for beers (and all other menu items).
This will most often affect big breweries that have distro contracts with chain restaurants, and the cost for them would be a small percentage of their overall costs, but for a local brewery wanting to get on that same tap list, it will require a larger relative investment to come up with the nutritional information. Also, will this continue to stoke the drive toward more session beers? Beer makers are going to want to get in front of any new or continuing trends.
The data is often hard to interpret, and can sometimes be confusing. For instance, the data from Beer Institute above suggests that session beers might continue their climb (desire for lower alcohol and lower calorie beers), while a bit of data from BA suggests that other beer styles could be on the rise. The Nielsen survey with BA – available mostly to industry professionals – asked 1000 representative craft consumers what styles they were most gaining interest in for the second half of 2018. Forty-seven percent of respondents selected crisp beers, ie. clean and balanced between hop and malt. This doesn’t mean that sessions aren’t still popular, just that kolschs and lagers might be the big winners for the next year or so. So what is a a small brewer to get from this?
And yet the bigger picture might show a more important trend, one that affects big and small brewers alike. The Beer Institute survey of people 21-24 years old indicates that the trend away from beer is continuing. They drink beer more than wine wine (by a small percentage), but there is a general apathy toward beer that is concerning. Only 25% of respondents stated that, “beer is for people like me.”
It may be that they see beer as a workingman’s drink, and of course they’re going to own the world (beer polled poorly as a sophisticated drink). Or it could be a general trend away from alcohol and higher calories in general. The take home message is that breweries need to bring this demographic into the fold or in ten years their audience is going to be sorely lacking.
My personal opinion is that the old adage about they’re being “lies, dam lies, and statistics” should be expanded to include surveys. Brewery owners and their co-workers might be able to make more sense out of these numbers than can I, but I see them saying different things to different people, based on who is reading them and what is important to them. And then there’s the whole issue of the populations surveyed and whether they are truly representative.
The headaches for small, neighborhood brewpubs are many, but in this respect I think I sympathize with large breweries more. Smaller brewers can walk out into the taproom and find much of the data they need, regional and national breweries have to parse these big survey numbers and see if they can find the nuggets that will help them grow their businesses. I hope everyone out there gets what they need, because we care about them all, the big and the small. Give them a hand when you can – tell them what you like and don’t like. If it’s honest and well reasoned feedback, they want to, and need to, hear it.
