11 May
2014

Little Beer in a Big Beer’s World?

There’s no doubt about it, Americans love their beer. So much so that small, local craft breweries are popping up all over the place. San Diego County which is located in southern California has become known as the craft beer capital of America; as of November 2014 there are 97 licensed brewpubs and craft breweries, with an additional 39 more getting ready to open in the next couple of years.

What many Americans may not realize is that 90 percent of the domestic beer market today is dominated by just two organizations; MillerCoors and Anheuser-Busch/InBev. The good news is that they are losing market share every day; Americans are no longer willing to settle for yellow carbonated water with the taste of beer just barely present.

The challenges that these small breweries face is due to the domination of the large corporations; large corporations can afford to push the smaller brew houses out of the market by essentially buying up all of the display case room in a store or supermarket. And in response to the small craft phenomenon these large corporations have begun to create what they term as “crafty” beers, such as Blue Moon, which is actually a MillerCoors creation (which unfortunately you can tell as soon as you taste it).

“Craft is a real threat, but it’s also an opportunity,” [Anheuser-Busch InBev Vice President Dave Almeida said]…Dave showed research that indicated that retailers that have too many SKUs actually end up selling less overall beer. He used the example of the health and beauty aids aisle in a supermarket, where consumers spend an average of 90 seconds and only buy something 25% of the time, whereas people spend 31 seconds in the beer aisle and buy something 75% of the time. “Retailers that are winning are not invested in craft to the detriment to the category,” said Dave. Later Dave and his national accounts team walked me through a deck showing that beer chains that over-SKU with crafts end up selling less beer and making less profit than chains that protect their domestic premium space.”

Even though the craft brewing industry only accounts for 6% of the beer market as a whole, these mega beer companies are desperate to get that shelf space back. And if your unique, small craft beer is not on the shelves it can’t be sold.

So, what do you think?