Craft Beers: a compelling sub-segment brand story
The last decade has been host to a quick rise of craft breweries in the U.S. According to the Brewers Association, there are now 4269 breweries (2015) in the country, 99% of which are classified a small and independent breweries. In 2015 alone, there were 625 new breweries that opened their doors, while only 68 closed. The craft segment now represents 21% of the category in terms of retail dollar value. And during the last ten years, the category has been growing double digits for eight years out of those ten. Considering an overall declining beer category, this is pretty impressive.
Behind these impressive numbers are even bigger social and cultural changes. In fact, craft breweries have helped change consumers’ expectation of what a beer is or should be, just like Starbucks changed consumers expectations of what coffee could be. This has put a tremendous amount of pressure on the large national brands as well as the broader liquor category.
The business reality is that eventually the whole segment will stabilize. Many breweries will be content with a local or regional market position. Some will disappear. Others again will be acquired by the large breweries and be turned into national brands. The last group of craft beers will try to expand their businesses with an eye toward national growth.
The unavoidable need to evolve the craft beer brand stories
Compelling stories sell brands, period, and this holds true in the beer category.
And while the craft beer stories (place of origin, their obsessive founders, the styles/flavors they brew or their creative packaging) have captured the imagination of a whole generation of beer drinkers better than the national mainstream brands have, their story is generic for the craft beer sub-segment as a whole. The inherent associations with craft breweries will become generic over time and slowly lose their motivational appeal. If fifty different craft brands brew an IPA with the same hops inspired by their respective founders’ shared belief that beer should have big flavor, and the vast majority of that fifty package the end result in an aluminum can that makes heavy use of oranges, reds, and yellows, at some point it’s hard not to become background noise.
Strategically, this means that these craft beer brands will have to evolve their positioning platform beyond the craft beer territory and explore new brand stories that would appeal to a broader consumer segment while helping the brand differentiate itself from the hundreds of other brands fighting for national attention and market share.
A natural starting point: the brand and the right consumer segment
On the international level, this is what Fosters did with its “Australian for Beer” campaign a few years back. In fact, it shaped and reinforced peoples’ perceptions of what Australia was (through the defining attributes of its people) and turned it into something people all over the world could aspire to.
Another decision these brands aspiring to a national presence will have to make is what consumer segments to focus on. PBR became the brand of choice of hipsters, Modelo, one of the fastest growing brands in the US, first grew its presence within the Hispanic community before trying to broaden its appeal to all beer drinkers in 2015. And so forth.
Exploring alternative brand narratives
If the current brand story provides a compelling platform for national growth, great. If not, the brand will have to explore new positioning territories. The good news is that for an informed and experienced strategist, the options and choices are plentiful. Below, we’ll list a few positioning thought-starters and brand narratives that have all proven successful and that all could become the seed of a compelling national positioning platform and brand story:
- Identify a compelling role for the brand to play in peoples’ lives: this could include claiming and occupying the ideal/typical emotional territory for consumers (think Corona), owning a typical consumption occasion, validating consumers self-image, acting as a cultural or social symbol for its consumers (think Molson Canadian) or re-defining the category standard in terms of perceived quality (think Stella Artois for example).
- Create a more compelling and differentiated product story, this can include the brand’s defining attributes, its ingredients, its brewing process (think Bud Ice), the sensory attributes of the brand and the meaning associated with those attributes (taste, color, smell, etc.).
- Reflect the aspirations and reality of their core audiences and thus create identification and bonding. This can be done by reflecting consumers’ values, relevant needs and lifestyle or by addressing specific concerns the target audience might have.
- Re-position competition (both within the beer category and beyond). This could be done by exploiting a competitive weakness, by occupying underserved but relevant category needs and emotions, by resolving a category paradox, by further educating the consumers and by helping them evaluate the qualities of a brand (beyond name and taste) and by introducing new types of benefits.
For a strategically educated eye, there are a lot of potential options to tell a compelling brand story that would have national appeal and that would enable a regional craft beer to expand nationally.
The narrative examples mentioned above aren’t random. Instead, they have been generated using First The Trousers’ proprietary positioning development tool (Positioning Roulette) which identifies the 26 universal approaches to brand positioning and brand story telling (you won’t find a 27ths) based on the analysis of over 1200 case studies of effective brand building.
Using Positioning Roulette for a systematic and informed exploration of those 26 universal brand positioning approaches will enable the right brand team (in the context of a workshop, for example) to identify all positioning options available to tell a compelling story for a specific brand. Further, it allows you to quickly validate the most promising one, something no other positioning methodology provides with this level or rigor and speed. This methodology also provides a strong framework to help differentiate various brands within the same brand portfolio. Positioning Roulette works for both new and established brands and can even help identify new product and positioning territories for further exploration.
It will be interesting to see how the craft beer sub-segment and the larger beer brands in general will evolve their brand story over the next few years. It will also be interesting to see what brands achieve national stardom and what brands will disappear.
One thing is for sure though: only those brands who proactively think about the future and how to evolve their brand positioning and brand stories in order to adapt and help shape the market will survive.
Competition and pressure is getting tougher in the beer industry. Compelling and differentiated brand stories and smart and efficient communication strategies will increasingly determine who wins and who loses. First The Trousers is a small brand strategy and innovation firm specialized in providing fresh perspectives into brands, categories and consumers to help unleash business growth. Please feel free to contact us to explore and find out how First The Trousers can help your brand and company thrive and grow.