As part of the sales and marketing team, I spend a considerable amount of time researching and trying to predict the next big “thang”. With over 4,500 craft breweries, it’s an absolute dumpster fire of category noise. IPA continues to be roughly 36% of the Craft Beer category, with fruit and vegetable based hops driving that growth…Do you hedge your strategy on IPA continuing that growth trend and get your share of the pie or is it already too saturated? Hell, for eight months last year, a crazy fad called “Hard Soda” gobbled up around 110MM dollars worth of retail sales and then fell out of the market (note: Hard Soda isn’t a part of the Craft category but we’re all fighting for consumer share of voice). Hard Soda is now seeing a 75% decline in the market…well that’s fine because now it’s all about “Hard Seltzer,” low calorie/carb, gluten free and all natural flavors (hmm…ok, wasn’t that called Zima or Taos?).
Speaking of declines and saturation, Nielsen data shows pumpkin-spiced beer sales fell nearly 10% in 2015, and in terms of volume, the decline was more than 13%…2016 is rumored to be twice as bad as last year. Hmm…well ok, so if it’s not predicting a flavor profile it must be easy finding the right package mix? Does the consumer want 22oz bottles, 6pk cans or bottles, 16oz can single serve versus 4pk or 24pk loose or in a suitcase, or maybe just a growler…glass or titanium, etc…? What in the hell happened to getting three choices, 6pk, 12pk and 24pk suitcase? The funny part is that the industry is it’s own worst enemy. Breweries have lost touch with the conventional way of doing business and have catered to the demands of the retailer and consumer. Because everyone knows, if you don’t do what the retailer or customer wants…another brewery will and you will eventually have to close the doors. That’s what makes our industry so fun yet frustrating at the same time.
According to just-drinks’ Emerging Drinks Industry Trends report, written by industry commentator Richard Siddle, provenance, tradition and a story they can relate to will be the key factors influencing consumer purchasing decisions. For instance, the craft trend will remain a driving influence in beer and spirits with consumers keen “to buy in to both the products and the people who make them.”
At the same time, the report also suggests that drinks categories will see a growing polarization between consumers who are unwilling – and unable – to go beyond entry level price points and those looking for premium, exclusive and specialist products.
In addition, the report claims political pressure on drinks producers will mean brand owners will have to take “even more dramatic steps to manage the industry in step with Government goals and targets on health, sugar, alcohol levels and promotions.”
By the same token, wider public awareness of health issues will increase the potential for products which offer health and functional benefits, with moderation “a growing trend,” particularly among younger drinkers.
So I ask you this simple question…in a world that rewards proactive behavior versus reactive. What’s the next big “thang”? Will it a be a package innovation, new and unique style or flavor of brew or a combination of the two? Wouldn’t it be fun if it were a dark smooth ale…