Trekking The World of Craft Beer Reno/Cali Style!

Having Many Beer SKU’s May Not Be the Answer for Growth

SevenFifty Daily
Image courtesy of SevenFifty Daily. New Economics of Craft Beer
4 years ago Craft Beer breweries were growing at double digits. The craft beer community wanted to explore new styles, new flavors, new brewed products like Seltzers, anything HOPS, and the key was to offer variety-whos is the biggest (sort of). Distribution was a concern to get into retail to expose the brand. Then the Pandemic hit. So, fixes to craft beer revenue and production declines are a constant discussion. Even taprooms are part of the equation. But, the latest diatribe is about breweries that have/had expanded for the return of the boom years are distressed. I have written about the importance of Branding, focusing more on Direct business and building community, Now some wise people are saying brewing as many styles, recipes, and beers as possible is not the way to keep going. A taproom with 20 or more taps is not necessarily a profitable thing. Craft beer is a mature market now. Being all beers for all people is a cost that is prohibitive.

Craft Beer as a business category is mature and needs new strategies for distribution, product SKU's, and core product strategies.

In the past, I was impressed with seeing an endless line of tap handles in a taproom. However, the adage that more is better may not be true now. I realize, all those tap handles had no impact on me; what I wanted. I knew a craft beer I enjoyed, and I rarely venture far from my favorite style and taproom. Yes, occasionally I do venture out and try a new style. However, I do not want, need, or expect a new beer from a craft brewer every week; how many new beer offerings a month become overkill? My routine is to stay with what makes me happy.

In a recent article in SevenFifty Daily, a preponderance of craft brewers are now focusing on core offerings. “Prior to the pandemic, craft breweries could package any hazy IPA and expect customers to purchase every four-pack. Novelty drove consumer demand,” Joshua Bernstein wrote in <em>SevenFifty Daily</em> on April 29, 2024. Stephen Braigen of Array Bottle said, “More drinkers seem to be going back to things that they enjoyed and want to have again.”

Bernstein points out, “Cutting down on beer releases seemingly contradicts the creative, anything-goes ethos that fueled craft brewing’s 2000s boom. Dream it, brew it, sell a ton of it. But these days, just because a brewery can brew something does not mean it should.”

“The marketplace has pretty unanimously decided that it doesn’t need more variety,” says Zack Kinney, a founder of Kings County Brewers Collective. “Double-digit growth papered over many business issues,” says Bart Watson, the chief economist for the Brewers Association. From the Great American Beer Festival in October, there is a move to create a core brand that is in line with a brewery’s capabilities relative to financials, facilities, and distribution.

The message for breweries is to create a brand image that is easy to understand and that means consistent messaging. Messaging about quality, well-defined products, and product offerings that address what the marketplace wants is critical. Fiddlehead Brewing in Vermont grew 22% based, in part, on consistent messaging and quality products.

Growth is possible even in a mature market.

Cheers!