There's Big Promotional Products Sales Opportunity in the (Still-Growing) Craft Brewery Boom
Having a craft brewery in your town is no longer a rarity. Craft beer companies and craft breweries are popping up at unprecedented levels as demand for smaller and local breweries skyrockets, especially among millennials. Now, it's more a matter of how many you have. This, for the first time in some places, creates local competition among these businesses.
Because of this, according to Bart Watson, chief economist for the Brewers Association, craft breweries have to work double time to stand out among the competition. In Watson's words, speaking at the Beer Marketing and Tourism Conference, "marketing and branding is more important than ever."
According to Brewbound, Watson said that an average of two breweries open every day in the U.S., and there are currently 11,500 brewery permits filed with the Alcohol and Tobacco Tax and Trade Bureau.
BEER FACTS: According to Bureau of Labor Statistics, the number of breweries in the United States increased more than fivefold from 2010 to 2016. @mcall @BreweriesinPA #CraftBeer #brewing pic.twitter.com/jiqbQgKQbG
— Lehigh Valley Craft Beer (@craftbeerlv) February 2, 2018
"Anyone who thinks this explosion in the number of breweries is going to end sometime soon, I think they're deluding themselves," Watson said. "It's going to end at some point, but most of the data suggests we're not there yet, and that there are a lot of breweries going to open. And some of these are second locations."
It's not just beer, either. There is also a growing number of smaller distilleries and wineries that open up with tasting rooms in cities all across the country, and breweries will have to compete for consumer attention. Watson also dove into the buying habits of older millennials and younger Gen Xers.
"We're at peak 21- to 34-year olds right now," Watson said. "But we're going to get a lot more of 35- to 44-year-olds."
Basically, now that the sudden boom of craft beer has happened, and most people have settled down trying any new beer they get their hands on, they're starting to have favorites and form loyalty toward certain brands, the same way older generations did for big-name beverage companies like Coors or Budweiser. Frankly, millennials are kind of snobs, and they like things made locally in small batches, as opposed to the mass-production of their parents' generation. Craft beer is kind of the ultimate product for them.
With that in mind, the breweries themselves aren't necessarily the top destination for younger drinkers anymore, especially as they get a little older.
“We’re getting more people visiting breweries, but then, on average, they may be visiting breweries slightly less, which makes sense,” Watson said. “Anything that goes more mainstream, you’re going to have a less committed core.”
He cited places where drinking is a part of the activity, but it's not the sole focus, unlike a brewery or a bar. These so-called "third-spaces" include axe-throwing bars, escape rooms or concert venues. These, like craft breweries, are popping up in cities where younger people are revitalizing rundown neighborhoods, using former industrial spaces for new ventures where remodeling an old warehouse or loft doesn't take a lot of work.
The abundance of places to drink alcohol other than the bar itself presents opportunities for promotional products distributors to kill two birds with one stone. They can include beverage-branded merchandise for an axe-throwing facility, such as a brewery-branded axe or target boards. They could include glassware in an escape room or create can coolers with the facility's name on it along with a beer sponsor.
All of this is not to say that breweries are some out-of-fashion destination. They're not.
Brewbound reported that 55 million people visited a brewery that is more than two hours from their home last year. That statistic is up from 37 million in 2015.
ICYMI: Ohio has reclaimed the No. 4 spot nationwide in craft beer production and it's also closing in fast on having 300 craft breweries, according to new state-specific statistics from the Brewers Association. Full story: https://t.co/BGHAZIxhfy @OhioCraftBeer @akronymbrewing pic.twitter.com/6LMWFdTgu9
— Rick Armon (@ArmonRick) April 25, 2019
"We’re seeing a pretty strong growth in the number of brewery tourists,” Watson. “Even if the average visits are going down a little bit, the total number of brewery tourists has steadily increased."
In the increasingly competitive craft beer market, including both distributed and in-brewery sales, these companies need to get their name out there. They are looking for an audience that is looking for its next favorite beer.
When it comes to sculpting an identity, breweries often look for ways to deck out their employees and also provide apparel options for fans. Having apparel for sale is especially important for those "beer tourists," who want a souvenir like any other vacationer.
Also, limited releases are part of the appeal of a lot of craft breweries, so creating promotional campaigns around seasonal or limited releases generates buzz, and fans will want ways to commemorate the occasion long after the fact. This could be things like pint glasses, T-shirts, growlers, coasters and more. For the ones that also serve food, they'll need menus and maybe some wooden boards to create that popular rustic vibe.
In the end, Watson's speech was basically a cry for distributors to come to the rescue. It's an excellent example of the opportunities distributors have with what FLEXcon's Jodi Sawyer called "micro-brands." These are small companies that are growing in popularity but might not identify or understand where they're lacking in a marketing sense. Distributors who reach out and create solutions for problems these businesses didn't even know they had—in this case using promotional products to compete against other breweries—can achieve lasting success and a solid brand partnership.
The bottom line is this: Breweries are looking to stand out and survive a huge boom in the industry and "make it" before the bubble bursts. They'll be looking to you to help them with that.