Big Beer Brands Are Fooling Us With Their Crafty Looks

Indie brewers want transparency

Photo: Joshua Scott

It’s a lazy Saturday afternoon, and here we sit in a Whole Foods quaffing pints of creamy craft beer—Old No. 38 Stout from North Coast Brewing in Fort Bragg, Calif., to be exact. About two dozen of us beverage aficionados crowd into a room constructed of locally salvaged wood that’s designed to feel like a rustic saloon from the Gold Rush era. The focus is on 16 taps, many for brews most of us have never heard of before. For a few bucks, one can get a taste, and for $5 to $11, a pint. Just outside this makeshift watering hole, shoppers with kids in tow pile their baskets with freshly ground coffee, organic cereal and free-range chickens.

Whole Foods has put about 50 such tap rooms, featuring exclusively craft beers (and sometimes wine), deep inside its stores nationwide. The operative concept is craft—boutique beer, often local, brewed in limited batches and with an emphasis on flavor and distinct recipes.

The in-store pub is yet another sign of how hot craft beer has become, as drinkers (especially younger ones) increasingly seek fresh brands and more complex and varied tastes. Craft has emerged as a bright spot in an otherwise flat beer market. Mintel forecasts that sales in the craft segment will grow from $12 billion in 2012 to $18 billion by 2017.

Much of that growth can be attributed to the marketing talents of the makers of craft brands. Forget the costly Super Bowl ads—they don’t have that kind of budget. Rather, independent microbrewers rely on irreverent brand names, an anti-establishment attitude and word of mouth. As the category got bigger and micro became “craft” (think Sierra Nevada, Samuel Adams), the brands never lost their down-home image and youthful appeal.

Craft brewers are so effective at understanding their audience, in fact, that indie brands have begun having trouble producing enough product to satisfy demand, say industry sources.

It is no surprise that as craft has caught on, large brewers have jumped on the trend—in a shrewd (craft brands would say sneaky) way. Take the indie-sounding brands Shock Top and Goose Island, which are actually owned by Anheuser-Busch InBev. Blue Moon and Third Shift? They’re part of the SABMiller empire.

Despite their phenomenal growth, indie beer brands still account for just 6 percent of total sales, per the Brewers Association. Two players—A-B InBev and SABMiller—together account for nearly three-quarters of the market.

In 2012, shipments of domestic beer (whose sales had dipped the previous year) grew by about 1 percent, fed by the double-digit growth of faux craft brands from the large brewers, per Beer Marketer Insights. For example, A-B last year peddled 600,000 barrels of Shock Top, more than double the previous year’s sales.

Younger consumers are driving the trend. Half of millennials over the age of 25 drink craft beer, per Mintel. Naturally, as more millennials reach legal drinking age each year, the potential for still further growth in the craft market is enormous. Consider that this year the number of Americans in their 20s will hit 77 million, according to the Pew Research Center, about equal to the size of the massive baby boomers generation.

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