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From Brooklyn to Berlin, the craft beer trend has opened up a whole new untapped market for beer connoisseurs in recent times.
And like with any golden goose, it was only a matter of time before the establishment bigwigs caught on to the trend.
Big beer multinationals have been buying craft brewers by the crate-load in order to garner a share of this nascent market, which has proven to be far more than just a fad.
In the US, for example, while craft beer sales abated slightly at a 6% growth in 2016, compared to a 13% rise during the previous year, the niche is still hugely dynamic compared to the overall beer sector, which is stagnant, according to figures by the Brewers Association.
David And Goliath
Almost any product with the word ‘craft’ in front of it seems to sell, especially among younger and more urban demographics. The term has come to stand for authenticity in products that are made with love and care in a market known largely for its mass-produced brands.
With this in mind, it's could be argued that craft brewers face the danger of losing their core identity and authenticity by ‘selling out’ to bigger companies.
However, if they want to upscale in an increasingly crowded market they may not have a choice but to embrace their buyers.
Most recently, North American brewing conglomerate Molson Coors acquired the heritage UK cider and vinegar maker Aspall. The cidermaker will still be run by the descendants of the Chevallier founding family and produce its ciders and vinegars from its operations in Aspall parish in Suffolk.
In addition, Heineken took control of California-based Lagunitas Brewing Co. in May 2017, after acquiring a 50% stake in the company two years ago.
The Dutch brewing giant has since helped Lagunitas spread beyond the sun-soaked west coast to Europe, Latin America and Asia.
Elsewhere, the world’s number one brewer, the mega-conglomerate Anheuser-Busch InBev, similarly hasn’t overlooked craft beers either, and knows it has to move ‘beyond Budweiser’ to retain its dominance.
The company recently pledged it would devote $6 billion in US capital spending through 2020 with $500 million ring-fenced in the first year for building its core brands and its craft beer presence, among other investments.
Authenticity
Businesses such as Lagunitas and Aspall understand the need to keep their origin stories front and centre, despite coming into the fold of the large establishment brands. After all, successful brands have always been about telling appealing stories.
As the lines between what constitutes 'craft' and what doesn't becomes increasingly blurred, it will be crucial for brewers both large and small to both retain and reinforce their identity.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
