Craft beer is a classic example of history repeating itself; what’s old is new once again.
What started for many people as a hobby enjoyed in individual garages and basements surged into the cultural mainstream as more people learned they loved to raise a glass with something other than the typical six-pack of beer.
Strong growth numbers for craft brewing
The craft brewing business boomed even during tough economic times. Over the last decade, the industry experienced unprecedented growth. In 2015, the craft beer sales market increased 15 percent to a total of $22.3 billion, according to the Brewers Association annual report. Total barrel production rose to 24.5 million in 2015 compared to only 10.1 million barrels back in 2010.
As of 2015, the number of United States’ craft breweries stood at 4,225 — compared to 1,754 locations just five years before.
Brewers tap into local markets through innovation
Craft brewers and industry experts attribute the industry’s nationwide success to an interesting paradox in today’s culture: people’s modern tastes combined with a growing need to connect with our past.
Los Angeles-based marketing research company IBISWorld released a report in August 2015 highlighting craft beer’s diversity as a critical element to its rising popularity.
“The craft beer production industry brews virtually all styles of beer and regularly experiments with different ingredients to create variant styles of beer,” the IBISWorld report states. “As a result, the industry’s range of products is diverse.”
Craft beer brewers work with a variety of flavor profiles, including chocolate, vanilla, citrus (lemon, grapefruit), coffee, chai and much more. Combining these flavors requires a special touch, yet is essential to stay ahead of a growing industry.
“I think it is the same challenges a lot of brewers are facing today with a new brewery opening every 15 hours in America, which is to continue staying relevant with your existing business while also continuing to innovate with new beers,” explained Neil McCormick of Yazoo Brewing Company in Nashville, Tennessee.
Rather than having eyes on the big prize of national distribution, many craft brewers understand the need to tap into their community’s preferences to continue their business’ growth.
According to a 2015 Nielsen Marketing research study, consumers’ desire for locally sourced beer is on the rise.
“Consumers' desire to search for and buy local is growing,” the report found. “Among all alcoholic beverage categories, local has grown in importance the most among beer drinkers. In fact, 22 percent of beer drinkers said they think the importance of being made locally has grown over the last couple of years, compared with 14 percent of wine drinkers and only 5 percent of spirit drinkers.”
McCormick has noticed this market shift and emphasizes its importance to craft brewing.
“Today we are in a position that people have more access to where their food and beverage comes from,” said McCormick. “Craft beer has always prided itself on being very transparent in the way we interact with our customers that I think resonates with people and makes it hard to go back to the way things used to be. This ability to be a part of something in your community or a community that you visit is what attracts people to craft beer.”
Facing future challenges
Craft brewers face multiple challenges in their industry: an ever-growing pool of competitors popping up in local communities, national brands that spend hundreds of millions of dollars in advertising and a public that can sometimes be seen as “fickle” or “trend jumpers”. McCormick believes there is a way to push back against all of those potential obstacles.
“I think we can keep from fading by continuing to appeal to the other 90 percent or so of folks that aren't craft beer drinkers as we have more to gain at this point than to lose,” he concluded. “And craft brewers have done a great job of educating consumers on what we are doing and I think this will continue to set the bar higher for what people expect out of their beer.”
