In the hyper competitive landscape that is the craft beer industry brewing great beer will only take you so far. It is critical for the long term viability of the product to develop a strong brand that the consumer can readily relate to. Successful branding can be the difference in a customer selecting one particular brewery’s product over another. Successful branding makes a connection with the consumer, often times through the establishment of positive connotations such  as  reliability, quality, or status. To put it bluntly, branding is big business.

When surveying the hundreds of craft beer brands currently available there appears to be several common approaches to branding and hundreds more truly unique or hybrid approaches. For this article I would like to take a closer look into three particular branding strategies that are common place in the industry, and I believe to be extremely effective.

Theme Based

This strategy involves creating a theme for the brand and integrating it into every aspect of the company. The theme is integrated into the individual beer names and often times special release series product lines. Furthermore, it takes front and center on all logos, packaging, labels, and associated text for each of the companies products. This overarching theme provides the unifying element for the brand and promotes the companies message to consumers in a clear and consistent message across all product lines.

Examples: Flying Dog Canine Theme, Heavy Seas Brewing Co. Pirate Theme

Location Based

This strategy relies on using local information, wether it be geography, lingo, or landmarks to make an emotional connection with the consumer. This approach can be extremely powerful as it capitalizes on the consumers pride of place. Successfully linking a brand to a local identity also provides the opportunity for the brewer to capture additional drinkers who may not be as familiar with craft beer, but are able to associate a positive connotation of location with the product. Brewers employing this branding strategy also have the opportunity to tap into the extremely hot local food/drink renaissance currently underway.

Examples: Flying Fish New Jersey Turnpike Exit Series, Cigar City Brewing Company Local Tampa Culture

Brewing Philosophy Based

This strategy utilizes the brewers brewing philosophy or approach to brand the product. This approach seems to gaining popularity particularly among American brewers specializing in the production of wild or sour beers. Marketing the technique and hand crafted aspect of the product, particularly the quality and mix of ingredients allows the consumer to believe they are getting a truly unique product. Often times this approach is linked to higher premiums on the products as they require more time and ingredients to produce, thus they are brewed in limited quantities.

Examples: Dogfish Head Off Centered Beers for Off Centered People, Ancient Ales Series, Extreme Brewing Jolly Pumpkin Open Fermentation,Barrel Aging, and Bottle Conditioning, Crooked Stave  Brettanomyces Beers

Essential Components

This may or not be considered a branding strategy but I believe it is important none the less. The product model for the majority of the commercial craft breweries goes something like this. The staples, these are the brewers year round offerings, usually sold in six packs, seasonal offerings usually fall into this category. Big beers, usually marketed in some type of series, these high alcohol beers are usually sold in 22 oz bombers and command a hefty premium. Barrel Aged beers, a subset of the big beers series, have become increasingly popular in today’s market place with many brewers offering a bourbon barrel or wine barrel aged product in their product lineup. The newest trend among today’s brewers is the collaboration series, where two or more breweries team up to create a beer, often times with each of the participating brewers incorporating their hallmark brewing styles.

Lionheart Brand

While I am no where close to opening a brewery anytime soon, I have spent some time thinking about how I could potentially brand Lionheart Brewing.  My approach to branding would utilize the theme based strategy, specifically medieval royalty and nobility.  Lionheart is most commonly associated with generosity and courage, two traits of King Richard I of England, also known as Richard the Lionheart.  It was also a nickname given to me in high school by a friend of mine, and a name I thought would make for a good name for my brewery.

My Lionheart brand would consist of medieval based themes for my standard six pack and seasonal offerings.  My big beers would be branded as a “Nobility Series” and would be associated with famous Kings and Queens throughout history that embodied the characteristics of that particular beer.  I think that this approach could also be integrated with a tagline that plays into the courage aspect of Lionheart, almost as a challenge to drinkers to consume the product, similar to the approach Stone Brewing takes with its Arrogant Bastard beers.  Something along the lines of  ”Lionheart. Is it in you?” Obviously these are still half baked ideas, however the take away is that branding is an extremely important part of a brewery and should be thought of early on in the process as it can have long lasting implications on the overall success or failure a brewery.

It’s no secret that craft beer’s popularity is increasing rapidly, so much so that Aneheiser Bush purchased the most expensive commercial slot at this year’s Super Bowl, to introduce its new “premium beer” Black Crown, to the nation.  They were not alone, as we also heard from Beck’s Beer with their new product offering Beck’s Saphir, another premium beer brewed with saphir hops.  According to the Brewers Association overall U.S. beer sales were down an estimated 1.3% by volume in 2011 while craft beer sales were up 13% by volume and 15% by sales during the same period.  The trends clearly point to a rise in craft beer in terms of both sales and volume, a fact which the big brewers can clearly no longer ignore.

More importantly, much of this growth has been fueled by the rise of the small independent microbreweries, regional craft brewers, and brewpubs.  According to the Brewers Association as of July 1st, 2012 there were 922 microbreweries and 81 regional craft beer breweries operating in the United States.  When the 1,072 brewpubs are considered this brings the total number of craft breweries to 2,075 in operation nationwide. Below is a map of existing breweries per million people according to the most recent data available by the Brewers Association. (Please note the data was rounded to the nearest million and includes all known breweries including non-craft)

Looking at the map, the the first thing that jumps out is the lack of breweries in the deep south.  None of these states have more than 4 breweries per million people, compare that to the brewery rich Pacific Northwest or New England which have no less than 10 breweries for every million.  There are many potential reasons for this, one might be stricter alcohol laws, particularly as they relate to ABV percentages, another might be a preference towards spirits over beer.  It is important to understand the existing brewery landscape to fully grasp the growth that is being planned for the beer industry in this country.

One way to measure the growth of the brewing industry is to take a look at planned breweries by state.  The brewers association defines a brewery in planning as “any party expressing interest in opening a brewery.”  While the definition itself raises potential concerns as to the data’s accuracy for the sake of this post lets assume the large majority of the breweries in planning will follow through with their interest and eventually open.

When examining the available data it appears that brewery growth rates have gone parabolic, as an estimated 1,273 breweries are currently in the planning stage.  Compare that with the 2,126 breweries currently in operation as of July 1st 2012.  Thats a growth rate of an astronomical 60 percent!  Below is a map showing the distribution of the planned breweries across the nation as of 2/12/13. (Please note the Brewers Association’s “Find US Brewery” directory is updated daily)

Notable trends:

The void of breweries per capita in the deep south appears to be on its way out, and fast. With the exception of Arkansas, Mississippi, and Alabama the southern states that previously had 4 or less breweries per million have a significant number of breweries in the planning stage.  Texas, Florida, and Georgia are leading the way with Louisiana and South Carolina also having elevated numbers of breweries in planning.  Is supply catching up with demand?  It certainly appears that it might be.

The rich get richer.  The Pacific Northwest, California, and Colorado are states amongst the top in the number of planned breweries.  It will be interesting to see how this plays out over time, as there is no doubt these areas have robust craft beer cultures.  With so many new breweries in the planning stages in these areas it appears that a bubble of sorts maybe forming and undoubtedly the point of market saturation maybe drawing near.  These offer a catch 22 to prospective breweries as I would assume they have high demand for premium craft beer, yet they also have some of the highest levels of competition for the finite craft beer consumer dollar.

Lack of growth in the Plains region.  I found it interesting more breweries weren’t being planned in this region with all the talk of America’s new found energy reserves in the Great Plains and the subsequent migration to these states.  I have read of cities and towns in the Dakotas being overwhelmed by the influx of people. To me this area would seem to be ripe for future development of multiple breweries to meet the demand that if it isn’t already there soon will be.

Minimal growth in New England and the Mountain West.  Both of these areas ranked towards the high end of existing breweries per capita.  It appears these markets may have reached their saturation point as the growth rates are far less than other areas in the country.  It will be interesting to watch these areas to see if growth will pick up in future years or if it will continue to slow and if these per capita rates will be the same in which growth in other states begins to slow as well.

Planned growth in Kentucky and West Virginia continue to lag the nation.  Both states ranked towards the bottom of existing breweries per million people and both ranked in the lowest rank for planned breweries. It appears that as strong as the craft beer movement is, it may have a harder time gaining traction in Bourbon Country.

Early last month  word broke that the famed trappist brewery Westvleterteren would be releasing a limited quantity of Westvleterteren XII, considered by many to be the best beer in the world, to help offset the cost of recent renovations at their abbey.  Stateside, craft beer lovers mouths salivated at the chance to taste this pinnacle of beer excellence for the first time, without booking a flight to  Belgium. A limited amount of gift boxes, consisting of six 11.2 oz bottles and two glasses, were sold in a handful of states for $85.00.

Unfortunately the extremely limited quantities, distribution to select states, and price were not the only challenges craft beer lovers faced when attempting to aquire this beer.  They also had to compete with profiteers looking to purchase as many gift boxes as possible, not to enjoy, but to put up on Ebay in search of maximum profit. Shortly after all the Westvleterteren XII disappeared from the retail shelves it began popping up on the internet for such exorbitant  prices as $100 dollars a bottle, $420 dollars for the gift box, or $25 dollars for the cardboard “gift box” itself.  Those prices might be considered cheap to some, as its not unheard of to see beers being listed on online auction sites at prices in the five figures!

Nothing says you’ve arrived like a good old fashion black market.  Such is the case with the relatively new phenomena the craft beer industry is currently experiencing.  The black market for craft beer is not limited to the recent release of the Westvleterteren XII, in fact many other American brewers have found their limited release beers on online auction sites as well.  The brewers at Russian River, Three Floyd’s, and Stone to name a few, have all recently had to deal with the fact that their hand crafted beers are being resold at extremely high prices, in the name of profit, not the enjoyment of the beer itself.

This resale of beer, a perishable commodity, has left these and many other brewers who find their labor of love being resold on the black market deeply concerned and angry.  Price aside, a few days old growler filled from a tap at a limited release party, shipped god knows how many miles and in what condition is not the sensory experience these brewers had in mind for the consumption of their beer.   In response, some brewers have put a limit on the amount of limited release beers a patron can purchase at a time, while others have imposed even stricter rules by limiting consumption to on premise tasting rooms or select bars with no bottles to go.

While I personally don’t agree with the reselling of these beers I’m also not naive enough to think that this problem is going  away anytime soon.  Like most things in life, if there is demand out there for these and other extremely rare beers, you can bet there will be individuals out their looking to fill it for a tidy profit.  This got me to thinking how much I would personally spend for a limited release beer, and after thinking about it for a bit the most I would pay for a beer would be $25 a bottle. While I love beer and respect the incredibly complex flavors that can be achieved with these extremely limited one off batches, anything more than that I simply cannot justify.  When prices begin to exceed that I start to think of a nice bottle of whiskey or bourbon that I can enjoy over a longer period of time rather than a beer I would drink in a matter of minutes.

Thinking about this got me to wondering what other craft beer lovers would be willing to pay for a limited release beer from one of the premiere breweries.  If you feel so inclined to participate in my not so scientific poll below, let me know how much you would be willing to pay .  While I understand the price will fluctuate for some depending on the quantity of beer for sale, for the sake of this poll lets assume a single bottle of beer, whether it be a 11.2 oz  Westvleterteren XII or a 22 oz bomber of Dark Lord Imperial Stout.

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I recently came upon an article by Ken Weaver summarizing a statistical analysis he performed on the Ratebeer database.  While I’m no statistician it appears Mr. Weaver is, as he diligently sifts through the data to reveal the fastest growing beer styles over the past five years. The Ratebeer database consists of 73 unique beer styles and 168,000 commercial beers collected from 2000 to 2012.

Mr. Weaver’s analysis aggregated the roughly 69,586 commercial beers in the database from 2000 to 2007 by style and percentage by style of the overall beer market.  These figures served as the baseline for his analysis of the data from 2008-2012.  While I don’t frequently buy  commercial beers as I have more homebrew than my kidneys can handle, the results did not come as a surprise to me and I’m sure they won’t to you.

What’s Hot

IPA +4.7%
American Pale Ale +2.4%
Sour/Wild Ale +2.1%
Imperianl/Double IPA +1.9%
Black IPA +1.8%
Imperial Stout +1.8%

 What’s Not

Pale Lager -4.9%
Bitter -2.7%
Pilsner -1.9%
German Hefeweizen -1.4%
Premium Bitter/ESB -1.4%

As with most things over time innovation takes hold leading to radical transformations  from the original starting point.  The same thing appears to be occurring with the shift from traditional European style beers towards the more hop centric American styles.  To put it bluntly today’s beer landscape has moved a long, long  way from the Reinheitsgebot of yesteryear.

The innovation and creativity put on display by today’s brewers has been a pleasure to watch and especially taste.  Brewers of today are pushing the boundaries of our palates by masterfully blending unique ingredients and microbes to produce beers that would have been unthinkable just a few years ago.  As a beer lover this makes me excited for what the future holds, but also cautious that we don’t lose sight of the importance of the classic beer styles and the role they have played in getting us to this point.