Style or substance?

For brewers across the UK, disruption continues with both brands and beer styles evolving at a phenomenal rate.

Building brand equity

For brewers across the UK, disruption continues with both brands and beer styles evolving at a phenomenal rate. Whilst there is a rush to be seen to be at the style-driven, cutting edge of the market, this is in the face of the significant challenges of supply chain and pricing, as well as the rapid growth across the rest of the alcoholic drinks sector. Brand planning is a challenge at the best of times, never mind in this unpredictable environment.

The USA beer market could help provide insights for those who are reviewing their brand strategies. It has been a bellwether for the craft brewing industry for over two decades, with the likes of Sierra Nevada, Brooklyn, Stone, Odell, Samuel Adams and many other famous names helping to pioneer the craft beer revolution that has made the industry what it is today. Recently the Brewers Association (the trade body for US craft brewers) gave an overview of the state of the sector at its annual conference and there are some interesting learnings and parallels for the UK.

Overall annual production for craft beer in the USA in 2021 had bounced back to an all-time high and whilst the volume share for craft of the beer market was over 13%, the value share was double that at a breathtaking almost 27%. This demonstrates a significant and continued growth in the added value category where brand premiumisation is paramount.

There are also predictors for how the sector is expanding – with over 9,000 US breweries in 2021 and still growing – however overall expansion is slowing and there is a trend towards the philosophy of ‘small is beautiful’. Brewery taps and brewpubs dominate the market by volume, and percentage growth in microbreweries is significantly outnumbering the regionals.

For the US there is also the threat that craft beer is in danger of losing its crown, with the rest of the alcoholic beverages sectors (especially RTDs) moving into the premium beer territory, by applying craft learnings of strong branding and innovation.

In my experience, we have largely mirrored the craft beer trends of the US and these statistics provide interesting insights for brewers in the UK who are planning for growth. The key learnings are that premiumisation is still in the ascendancy and whilst there is a growing prevalence of beer styles and innovation, as the Brewers Association report states, ‘brand trumps style’.