There was a lot of talk this week about the growth of the craft beer industry during the 18th annual Beer Insights Seminar held on Monday in New York City.
The event, hosted by the Beer Marketers Insights publication, drew some of the biggest names in the beer business. Among them were craft brewers Sam Calagione, Steve Hindy and Kim Jordan to name a few.
Hindy was the only craft brewer to speak and he delivered with a speech that had people talking.
“I believe that full-flavored beer will become 30 percent of the beer business in the next ten years,” he said. “Big brands will get their share of this but I believe that the ‘lions share’ will go to small brewers.”
That statement summarized the overarching theme to emerge from the conference: The beer business has changed.
Hindy described this change as B.C. and A.C. (before craft and after craft).
“I think the A.C. period marks a major shift in the industry,” he said.
But it wasn’t just the recent success of craft beer that industry leaders were discussing. Paul Chibe, the Vice President of Marketing for Anheuser-Busch and Heineken USA President Dolf van den Brink both spoke extensively about big beers need for more marketing.
“The beer industry over the last 20 years simply just has not done a good enough job in marketing,” said Chibe.
Both Chibe and van den Brink pointed to a spirits category that is gaining market share and taking it from the beer industry.
A July Gallop poll shows consumer preference for beer at just 36 percent, down from a high of 47 percent in the early 90’s. Spirits on the other hands is steadily increasing, up two percentage points over the last year.
Van den Brink’s message: Change.
In his presentation, van den Brink called for increased marketing initiatives from the big beer producers. Highlighting examples of how the spirits category is winning the creative marketing battle, van den Brink said he expects the both domestic and import beer brands to increase their marketing presence in 2012.
All of that starkly contrasts a craft beer industry that is notorious for limiting the amount of money budgeted for advertising. And the approach seems to be working. Current craft trends indicate the industry is up 14 percent for the first half of 2011 and retail dollars are up 15 percent — according to a presentation from Brewer Association Director Paul Gatza.
Gatza also noted that the IPA category is up 41 percent YTD with 42 percent of all craft beer being made in California, Pennsylvania and Colorado.
And the feeling that everyone seemed to agree one was that innovation in the craft beer space is driving the overall beer business forward.
When asked if craft beer is good for the beer business, industry expert Carlos Laboy’s response couldn’t be more telling.
“If you are a retailer, yes but not if you are one of the big two,” said Laboy.
The craft beer space is something that everyone in the industry is watching, and for good reason.