Understanding the True Causes of the Shifts in The Beer Industry

I feel it's important to address the endless stream of lazy narratives in the beverage industry over the last year plus. Not every shift in the beer industry has been caused by the “Bud Light Fiasco.” Using this event as the cause for so much of the industry change is not only lazy but also completely misses the real factors driving these shifts. In doing so, it can cause people to miss why there’s currently so much opportunity and where it lies.

I’ve spent a good bit of time analyzing the success of brands like Montucky Cold Snacks and Garage Beer, and for good reason. These brands are capitalizing on shifting consumer preferences and buying habits in the beer industry, very little of which has been caused by anything Bud Light did or did not do. Why is it so important to be aware of the factors that truly are causing this shift in the beer industry? Because this is where so much opportunity is right now!

Did a few Bud Light drinkers switch to brands like Montucky Cold Snacks or Garage Beer? Sure, some did. Many former Bud Light drinkers also switched to Coors Light and Miller Lite. All you have to do is talk to anyone who works at a MillerCoors distributor, and they will tell you how much of a sales boost they’ve seen over the past year or so. So if brands like Montucky Cold Snacks and Garage Beer aren’t profiting solely from former Bud Light drinkers, why are they seeing so much success? Strong brand identity implemented via a powerful brand strategy, aimed at a clearly defined target audience.

Image Credit: Brewers Association

The high-end craft segment of the beer industry is bleeding consumers. A couple of big causes of this bleed are that consumers have become much more price-conscious and that those same consumers have developed a level of fatigue with high-end craft beer. The high-end craft segment was on fire when beer drinkers constantly wanted to try something they’d never had before and were willing to pay top dollar for it. Brand identity didn’t matter, a lack of brand identity was in fact an advantage for a while as consumers in the segment were going out of their way to try products from brands that they and their friends had never heard of before. Brewed with a home brew kit in a back alley behind the dry cleaners on Fifth Avenue? Sold!

This hype period of incredible growth for microbreweries around the country was never sustainable, and the pandemic only brought the day of reckoning upon us more quickly. Craft beer consumers were locked in their homes, full of stress in a now uncertain world. People wanted familiarity, and they had to spend their money more wisely. What do I know that I like? What brands can I really trust? The craft beer market is now developing into a fully matured industry, where consumers look for brands that they can identify with, and brands that make them feel like they are getting bang for their buck. It’s crucial for brand leadership and investors to realize the true causes of the changes in the industry, because these changes are creating business opportunities.

One thing the Bud Light drama has proven is that you need to have a very clear picture of your brand identity and how that brand identity engages with your target audience. When you try to be everything to everyone, you become nothing to no one. At some point, Bud Light lost the clear picture of what it wanted its brand identity to be, and this marketing mistake was just the catalyst for so many of their customers to realize that.

The biggest benefit of the craft beer craze was that it taught the American drinker to be discerning, and to demand quality in what they choose to drink. There is still plenty of room, and a real need for world-class products in the beer industry. However the industry has matured to a point where brand identity, and a strong ability to market that brand identity toward your target audience provide the path to success. See this change for what it truly is: an incredible opportunity to create sustainable, scalable, and successful beer brands that will make the American beer market a much better place.

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