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"Micro" Marketing
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Craft brewers used to be called "microbrewers" back in the day, a suggestion that they are smaller than the macro brewers and thus a significant point of brand positioning for many small marketers. Lots of people like "small". The word "craft" has become somewhat confusing with the acquisition of most of the major players, but the category should include only brewers that make less than 6 million barrels of beer annually and excludes the big brands like Budweiser and Coors. But the playing field over the past 10 years has become very crowded and as craft beer sales have flattened (it peaked in 2013 at 20% growth), the competition has become fierce.

 Image result for craft beer competitors

Shelf-space in liquor stores as well as tap handles in bars and restaurants are very difficult to claim these days. And so, as consumer tastes continue their shift towards wine and spirits, more brewers are looking to bypass the middlemen (distributors and retailers) and instead concentrate on selling beer direct-to-consumer, through their taprooms. I identified this trend as it was emerging several years ago in this column and called this phenomenon "micromarketing". It didn't catch on.

Image result for craft beer competitors 

Direct sales grew by 24% last year alone and now account for one out of every twelve beers sold in the U.S., and about 10% of bar traffic comes via taprooms these days. Direct sales surely mean less volume, but they also mean that there are much higher profit margins on individual units sold. And as more states allow breweries to sell grab-and-go beer (many do not), these numbers will begin to rise rapidly. By selling "direct", marketers are also able to offer limited edition specialty products and develop one-to-one relationships with potentially brand loyal drinkers, which is increasingly becoming a necessity for marketers in this digital age. Local breweries are getting more "local" as a result of all of this, and marketers need only look around the neighborhood to get most of the customers that they need to thrive. This is a major shift indeed for the industry.

 

Discussion: Do you think that investors who want lots of return on investment will develop brewery "chains" in the future? Why are "local" and "craft" good points of differentiation for product marketers?

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