marketing opinion

QUICK POST: A Craft Eat Craft World

"Are All Beers The Same?"

It seems to us that we might have entered a new phase in which craft breweries (def. 2) are explicitly in competition with each other, rather than at war with Big Beer.

That thought was prompted by the announcement by London brewery Brew By Numbers (AKA BBNo) that they are going to include bottled-on dates on all their hoppy beers from now on.

We think this is a laudable move — the more information the better — even if we’re not wholly convinced by the fetishisation of beers that have to be consumed within eight minutes of leaving the brewery, at great inconvenience to distributors and outlets.

But why are they doing it? We’d guess it’s because, in a market where lots of breweries — lots of London breweries, even — are making beer similar to and (give or take) as good as Brew By Numbers, they need to do something to stand out. This isn’t about looking better or more interesting than, say, John Smith’s, or Carslberg — that battle is won — but about competing with Beavertown or Five Points.

The same perhaps goes for Manchester’s Cloudwater whose wonderfully transparent recipe development process isn’t a challenge to AB-InBev but to the other cool kids, and especially to those who were cool a decade or more ago.

When BrewDog came along raging at both Big Beer and the CAMRA-affiliated bitter-brewing microbrewery fraternity (you can debate the sincerity of that rage amongst yourselves) they could score points easily: it didn’t take much to seem fresh. But nowadays, it requires a big gesture, like publishing all their recipes in a free e-book, to maintain their dominant position.

All this might be good news for consumers — more transparency, fundamentally better beer quality — but we understand why it might leave some mourning the days when everyone was in it together.

The point is, in 2011, being Well Craft was enough; now, you’ve got to be Crafter then Craft to get noticed. Where will it end?

28 replies on “QUICK POST: A Craft Eat Craft World”

And you wind up with ludicrous situations like Brewdog’s Born to Die where they end up giving it away to shareholders or having to throw it out.

Let’s just stick to good old competition by price. Wouldn’t it be nice if you could go into a pub and order a pint of craft keg and not have to take out a mortgage?

I couldn’t give a monkeys if the recipe is available online, what benefit is that to me? I just want a tasty pint for under a fiver, please. There are pubs where this is possible, but they’re too few and far between.

Unfortunately the price in pubs is presumably a function of the number of competing pubs rather than the number of competing breweries. If there’s only a couple of craft beer bars in town – and if the mainstream pubs think that “doing craft” means sticking a few six-month old bottles of Goose Island in the fridge – then a crowded wholesale market might let them put the squeeze on their suppliers, but if they’re not having problems getting bums on seats as it is then there’s not much incentive for them to pass that saving on to the punters.

The price differential of pints of Goose Island from one pub to the next could be put down to price competition between pubs, but the price differential between a pint of Goose Island and pint of High Wire in the same pub is presumably down to (lack of) price competition between breweries.

We have 2 pubs on neighbouring streets in Cambridge that both sell UK craft keg – one has 2 taps, and the beer is generally between £4 and £5 a pint, and the other has 4 taps and roughly the same beers are generally between £6 and £8 a pint. Unsurprisingly, you see far more people drinking the craft keg in pub 1 than you do in pub 2. Its not a matter of bums on seats – both pubs are packed pretty much every night of the week.

If you were a craft brewery you’d be much happier with pub 1, actually moving some stock and expanding your market.

I’m not sure that Brew By Numbers, or even Beavertown, are yet large enough to be competing actively against each other. If you looked at every tap in London and then looked at how many of those taps regularly pour Beavertown and Brew By Numbers the figure would be less than 1%.

But in terms of competition within the Craft Beer sector, yes it does exist. Those lines are being swallowed up by US craft breweries with seemingly reckless abandon. It’s tough to find somewhere that doesn’t sell Brooklyn Lager for example. Lagunitas is everywhere, Firestone Walker is pouring in every Nicholson’s pub. And US craft isn’t just ubiquitous, it’s also really good value. Take for example Oskar Blues Dales Pale Ale being sold for £1.99 a can in Tesco, cheaper than Gamma Ray, which usually retails for about £2.50 in outlets such as Oddbins. And lets not forget ABI’s portfolio of brands here, Goose Island will be as common a sight as Heineken in London by this time next year.

So I don’t think UK craft is at the aggressive point of competition yet, although the need to stand out like Brew By Numbers have done is a sign that these smaller breweries are business minded, and are taking their business seriously. Craft doesn’t need to compete with the macro brands any longer, the point of difference is wide enough for most consumers to know the difference. The real competition will be from these US breweries. Big Craft vs. Small Craft, if you will.

(I’ll wait for Alan to comment saying he’s being saying this for years now)

I think this is a good point – craft keg taps and craft beer bottles in fridges are becoming more and more ubiquitous around the country, and this represents a huge opportunity for UK craft brands to become household names and make huge gains in market share and profits, but at the moment, the majority of UK craft breweries are too busy trying to screw customers out of every penny by presenting themselves as some kind of super-premium product that justifies an eye-watering markup (they’re not), and being hugely outcompeted in terms of market share by US imports.

Most punters can tell the difference between keg Jaipur and keg Carlsberg, and if they prefer it, they might pay the additional £1 or whatever per pint. But if you’re trying to compete with Goose Island and you’re a quid more expensive… you’ve got a big problem, because your beer really doesn’t taste that different.

[Being caught up with migrating 3,400 blog posts from a dying custom app to WordPress leaves me with the distinct impression that I have said everything for years now, arguing every possible side.]

At the moment, I think Big Craft is dying. Success and succession sees many players rightly cashing out, big beer has figured out the trick and 400,000 tiny brewers are replicating neghbourhood bakeries. Price point is a natural consequence. I remember in the 1980s how upset florist shops like my mother’s were when supermarkets began to undersell them on pre made quality bouquets flown in from Holland. These shifts happen and, as with good beer today, are usually based on a new way to please the marketplace. A popular reformation. The priestly class always loses out in a populist reformation.

Presumably this is a situation where talking up freshness and an accountable distribution chain is a pretty sound move, then? Both directly, in that geeks like me would rather have fresh Gamma Ray than Lagunitas that’s taken its chances in whatever series of trucks, warehouses and container ships Heineken use to get their products halfway around the world as cheaply as possible, and indirectly, in that even the less nerdy punter gets the idea that this product is fresh, premium, local, artisan, hand-crafted etc etc etc.

People who think they can tell the difference between fresh Gamma Ray and Lagunitas is a pretty bloody small niche market, no?

Presented with a fresh and “non-fresh” Gamma Ray (difference more stark with Neck Oil and other “session IPAs” mind) most folk will think they’re two different beers. (Key variables are both age and storage conditions.) And anyone who thinks a fresh Gamma Ray tastes-alike to a non-fresh Lagunitas probably has some sort of disability in the taste receptor department. They could be said to be of a class… but no more “taste-alike” as Landlord does to London Pride. (I won’t comment on _fresh_ Lagunitas having no had the luck to have tried it, albeit I’ve had UK stock at various stages of freshness and it’s pretty good when fresh off the boat, as such. But still different to Gamma Ray.)

Whilst I don’t have a peer reviewed study on this I must admit, I’ve done enough testing and “field work” (with other folk drinking, not just me) to be pretty damn confident. It is something I’d like to put a bit more time towards… if only time/etc permitted. Hm, speaking of niche… I should open a shop in Cambridge and call it “Beer College”… lulz.

From the perspective of the brewer they’ll get a better hold on the market, and better consumer acceptance & uptake of their product, if it is fresher (obvious qualifier: for the most part, for most popular beer styles). So it is in their best interests to do what work they can to ensure customers are getting fresher stock. (Whether packaged-on dates will significantly improve customer awareness/etc remains to be seen.)

Case in point: have a customer who was formerly getting keg Neck Oil from a dubious source… who switched between one of those kegs and a fresh one from me and said they tasted like “different beers”. I do not know the age of the other keg mind, but know this one was kept at best at ambient during summer. (Our Neck Oil stock is rarely more than about a month old and is kept at 4C.)

If you drank them side by side, most people could probably pass the 2 and 1 test between different IPAs or between a fresh and not-so-fresh version of the same IPA. But if you drank a pint of one tonight and a pint of the other one next week when you’re next in the pub – which is a more realistic representation of how normal punters would try different drinks – how many people could honestly say they could remember what the first beer tasted like so vividly they could be completely sure they were drinking something different? Not many, if we’re honest.

But surely different IPAs from different brewers vary considerably in flavour and character. To say they don’t is on a par with saying “all bitters taste much the same”.

@py I don’t refute what you say, and I definitely don’t refute that there are beers on the market that taste alike or very similar – detailed memory comes into it.

And cask is another kettle of fish to some degree. The edge that something like Landlord has, other than being a decent beer, is that it has such brand recognition that it rarely lasts longer than 2 nights in a good pub. So most folk drinking it get it in good condition. (I do hear otherwise a fair bit, that is I guess an unavoidable side-affect of approaching ubiquity.)

For typical good cask beer folk getting in early will be left with a good impression, folk getting in at day 3 (or 4, or 5 😐 ) less so (and there *are* a small number of of folk who prefer it at day 3 mind… but they’re not a big market).

As a brewer you want to leave that good impression… which is frustratingly well out of your hands, doubly so with cask. It’s the good impression that gives people a recognition that the brand is “good” (better-than-merely-OK) and that’ll make them keep an eye-out for it in future. And with cask “not good” is sadly all too common for even what should be great beers. (And thus I’d take the Buxton approach personally and keep cask ultra-local.)

So back to your example – a drinker walking around drinking IPAs all week is drinking beers of a class that have some similar traits and mostly they’re probably “OK”. Some are going to be “WOW” (if the drinker is lucky) and leave an impression (and some will be “yuck!” and leave the opposite impression.) The “wow” and “yuck” beers will stick in the mind, will be what they tell other folk about, and will be what they return to or avoid. The majority of beers will quickly fade from memory. Beavertown is cementing a “wow” sort of following – maybe because they’ve managed to ramp up production just behind the demand curve – thus their beer never lasts long on the market, there’s rarely “old” Beavertown on offer. They’re also the most careful about supply chain management of any brewery I’ve dealt with.

I also don’t think it is the job of the drinker to care about the details -their job is to drink and enjoy their beer. It is the job of the industry as a whole up to the point the beer is in the glass to work to ensure the beer is good. (And I don’t honestly think bottled-on dates are a solution to this, but indirectly they may well improve overall awareness so I approve of them.)

I think you overestimate Yvan, the level of attention your average punter pays to the beer he is drinking in a pub. We’re talking fractional differences here. The average non-beer geek will walk into a new pub, look at the lager taps and think “nah”, look at the cask taps selling a range of uninteresting bitters that no-one else seems to be drinking and think “meh”, and finally spot the Punk IPA/Sierra Nevada/Goose Island tap and think “oh thank god for that, something drinkable”.

The difference between a fresh or tired pint of IPA is miniscule in comparison to the difference between an IPA and a pint of lager or bitter. You’re not going to think too deeply about it, you’re just going to enjoy your beer whilst chatting to your mates and be grateful you’re not having to drink shitty lager.

I think perhaps we all over-estimate the proportion of craft beer that is drunk by craft beer geeks. The vast, vast majority is just drunk by people who don’t really care about things like “authenticity”, they’re just people like me and my mates, who tried a bottle of IPA 5-10 years ago from tesco and found they liked the taste a lot more than lager or (most) bitter.

@py – no I don’t think I over-estimate. Bear in mind I’m talking trends led by subtleties of experience. I do not think even a sizeable minority of drinkers actively *think* any of this to the degree I express it at. (Some tiny number of technical beer nerds can analyse and name the key factors.) I am describing a “why” behind what is mostly a subconscious process. But the impact is very real, and likely measurable – and I believe there are studies along these lines – both in beer and other areas. (Why do we know so much about brewing flaws at all and why do mass-market brands go to such length to avoid them… and at the same time one of the huge issues of the “craft” sector is a lack of QC/quality-in-general that adds friction against growth and uptake.)

And whilst most folk won’t recognise them, and probably won’t have the vocabulary to describe them, the differences are stark. All gets fed into the complex subconscious data-processing engine that is the human brain and leads you to make certain decisions later on. It might merely be “this IPA stuff is alright, I’ll have one of them” and often enough it is “oh that beaver thingy beer! I’ll have one of them.” And another, and another… I have seen this on the “coalface” serving beer to totally non-beer-nerd general public, some beers are a bit of a phenomenon.

I am most interested in the market & market-growth of “craft” styled beer amongst the more general public. Whilst I appreciate the views and thoughts of beer nerds (such as myself), I don’t see them as guiding lights in how beer can be sold and marketed. (More credence being given to the technical sort of nerd you’ll usually find brewing the beer rather than waxing lyrical about the latest oyster and woodchip gose.) So most analysis and thinking I do has an “average punter” in mind, and I base my own observations average punters & more normal pubs as much as possible.

There is always more to the story of course – selling lots of Lagunitas is more about effectively buying tap space (not so much directly, but through Adnams general tie, pricing, and branding + POS) than it is about wow-factor. Selling lots of Beavertown is more about wow-factor than “buying” tap-space. And these are just 2 data-point beers amongst many beers across many formats. (And I pay as much attention to cask and trad styles as I do crafty stuff.)

I already said above I don’t expect the customer to know or care about any of the details. They just drink the beer – it’s up to the industry to make sure they are presented with beer they’ll come back to. (And different players in the industry have different motivations and buy-in on this, the typical publican doesn’t give a crap about the brand/brewery so long as beer sells – the good publican knows they’ll probably sell more beer if they look after it well but still hasn’t usually any “brand loyalty”. All recognise what sold well in the past and thus what they’ll then buy more of in future. And up the chain folk like me buying pallets of kegs see the trends too, and breweries producing hectolitres of beer and having no trouble selling it – it’s an aggregate thing and I mostly think from that aggregate perspective. [Brewers who don’t sell as much beer have a habit of blaming everything except themselves of course.])

I, as always, recognise that I could be completely wrong on several factors of course. I just do my best to observe and learn. 🙂

I find myself agreeing (mostly) with Matt and amazingly, (almost) entirely with py. The wind of competition is starting to blow on craft and it is starting to feel the cold. You simply can’t go on in a bubble, hoping to continually increase prices and deny quality and consistency while a new “big craft” monster is stalking you..

I note Matt says “every tap in London” and London isn’t everywhere, but where it does give an alarm bell is that even in affluent and undiscerning (pricewise) London, the big American brewers are going to continue to eat away at margins and may well force some to modify their business plans at the very least. If what Matt says is true – and I think he has his finger on this pulse – then alarm bells will start to ring if they aren’t already.

py has the right of tastealike beers. That is an increasing issue in craft as umpteen variations of IPA, imperial stouts and more compete for bar space.

This scenario has yet to play out fully, but the easy times may already be past and the future looks a lot less certain for the railway arch craft brewer of gunk. Even some of the better ones would be wise to buy a coat. Winter may well be coming.

The taste-alike problem is very real.

We’ve been through IPAs, double IPAs, black IPAs, wheat beers, saisons, imperial stouts, etc, and whilst they’re all very nice beers, most brewery’s versions taste pretty much the same. Which is fine from the punters point of view as they can just drink whichever is cheapest in that particular pub, but it leaves the brewers exposed to price competition – differentiate or compete on price is the choice.

and by and large, they choose to try to continue to differentiate – even newer styles, and more elaborate branding and marketing gimmicks, The whole thing with trying to flog sours, berlinerweises, goses, etc and a whole load of beers with silly flavours, is trying to do something different, the problem is, they don’t really taste particularly great, or even particularly like beer. Rather than breaking into newer and newer market territory, they’re retreating into a smaller and smaller niche.

The market is running out of room to continue to differentiate in a way that punters will care about; there are plenty of breweries out there who can make a half decent pint of beer, but how many of them can make a half decent pint of beer in a genuinely cost-effective manner?

That’s the real skill of brewing – any old idiot could make a tasty IPA given an unlimited budget, but how many can make efficiently enough that they can make profit off a retail price point of £4 a pint? In the next few years, we’ll find out.

There’s very real competition for UK “craft” shelf space and draught lines. Not quite sure what formula gives the edge that wins space… it isn’t obviously any of price, dates, or even beer quality. “Hype” and “brand”… but not entirely them either. (To a very small extent some is folk like me listing them of course. And folk like me can only practically fit so many lines in the range. So I’ve got to admit I have an active hand, in a very localised sense.)

I don’t really feel that US imports are closing lines to UK beers mind, I think they’re taking volume from premium macro beers more so. One could thus assume they’re reducing growth-potential of home-grown keg options… but perhaps they’re actually opening volume for them… most installs I know of that put on a US “craft” offering have, or lead to, an indy/rotating craft line. The big chains putting in big US “craft” probably are not in the market for UK alternatives, and the UK alternatives are probably mostly unable to supply them anyway? (The only “permanent” draught lines I’ve managed to supply so far are Beavertown by the way, we’ve far more permanent listings for cans and bottles mind.)

The “bottled on” thing is, I believe, a step forward (but still requires a best-before of course). In a world where beers sit on dusty shelves *good* US brewers who respect their product are horrified by the lengths of best-before date that UK/European markets demand. (US brewers who don’t really give a crap about their beer export it to the UK.) – “it frustrates me to see craft brewers put 6 month code dates on their beer” – Mitch Steele (ex-Stone, which comes with a level of irony given Stone do export to Europe, albeit with the now-realised plan to help solve the problem by brewing here.)

Most folk are only going to care about BBE… but bottled-on is a service to the “connoisseur” I suppose. I, for one, am not going to pick up a bottle of session from a warm shop shelf that was bottled 5 months ago, nor 4 probably, or even 3… I’m a picky bastard. Mind you I’ll be less worried about buying a 6 month old bottle conditioned porter, or most Belgians for that matter, etc, etc…

So, at present, I think “bottled on” is a fanservice for nerds, that also does a bit to nudge more people into thinking about their beer. (Many don’t want to and won’t care, this isn’t done for them.) However it may sway the purchasing decisions of a certain class of buyers and influencers… it ups a brewery’s “score” in *my* opinion.

In a market where most retailers are demanding 6-months as a minimum it also means brewers can tick their customers’ long-BBE box, but also put on the basic bit of guidance that tells the savvy consumer what they need to know.

Some other notes:

1. Cloudwater started putting on bottled-on a year ago:

2. Beavertown made a “thing” of their Lupuloid being sent out with just 3 months on BBE:

3. Orval has always had bottled-on dates? Which are key to knowing where the beer is as it develops… a bottled-on date isn’t just about “drink fresh” it’s about knowing your product and drinking it when it suits *you*.

Lots of beers have “bottled on” dates marked. It’s fairly normal practice for a contract bottler to include this detail in their “batch” coding. If you’re interested (and now you’ve been told you ought to be be) you can have a look. If the brewer was really bothered, they’d be working on stability or refusing to mark a 6mo+ BBE. That said, I’d be happier buying a beer stored for half a year sensibly than one that’s been abused for a couple of weeks. Except for that Goose Island pasteurised barrel stuff of course. That’s cooked already.

I don’t reckon you can have one of these ultra-dry-hopped beers *and* stability. What you really need is short BBEs… and probably to make less of the stuff so it doesn’t sit around. Some of them age OK, the stronger ones with some body – the session IPAs mostly age quickly into insipid pisswater… oxidation-aside, which is another matter entirely.

In light of the “market” not accepting short-BBEs sticking a clear packaged-on date is a service the brewery can do for a small portion of the population that knows to care. Specially coded dates are a different thing to clearly marked bottled-on dates.

As I always qualify my own views with: does not apply equally to all beers, your barrel aged strong thingies and their ilk are probably at the far end from your session IPAs. Albeit personally I’d still want them at at most a stable cellar temperature. And even then YMMV… so much packaging is just a bit crap.

A bottle/can is not a magic time-capsule.

So the combination of a long BBE and a glaring “bottled on” date is to say “We know this beer will be past its best but only the plebs will be drinking it then. But we’ll ‘ave their money anyway”?

@Jon – Yes, that seems pretty much spot-on. Sadly. Making the best of a bad situation? But the end-goal is to make sure the “plebs” always get the beer as you hope it should be. Meanwhile breweries need to find whatever their viability point is… and for those with big investment that might be a fairly urgent race.

Funilly enough I find the pace of all this stuff in the beer industry to seem pretty slow and leisurely compared to tech.

In my experience, some independent bottle shops leave much to be desired when it comes to stock rotation, and even with long BBE dates you run a serious risk of getting out-of-date stock unless you make sure to check the bottle first. As with pubs, there’s a trade-off between range and turnover.

Comments are closed.