"Flagship Beers Are Failing Because Consumers Get Bored Quickly"

Discussion in 'Beer Talk' started by NeroFiddled, Jan 7, 2019.

  1. NeroFiddled

    NeroFiddled Poo-Bah (10,443) Jul 8, 2002 Pennsylvania
    Premium Trader

    Flagship beers are failing. Can they be saved? Is there any need?
    https://vinepair.com/articles/hop-take-flagship-beers-failing/
     
  2. billandsuz

    billandsuz Disciple (372) Sep 1, 2004 New York

    The largest craft brewers are certainly feeling the pinch from the hyper local brands. Distro friends of mine are always bitching about it. Small producers in NY can self distribute, and it is really chipping away at the largest craft brands. It is no easy task for SNPA or Fat Tire to maintain thousands of handles and acres of shelf space when there are 5 or 10 small producers coming after their real estate in every single market across the country. This has been the story for a while now. Reference Victory/Southern Tier alliance.

    Is boredom playing a part? Probably. But let's not kid ourselves. The bulk of these buyers have been buying and drinking the flagship beers for years and it's not like they just woke up to something new. Tickers and BA's are still just a small group in a small slice of the worldwide beer market. Flagships need much more than our minority to survive.

    For me, most flagship brands could go. Except SNPA. I never get tired of that old favorite. Always reliable.

    Cheers.
     
  3. AlcahueteJ

    AlcahueteJ Champion (873) Dec 4, 2004 Massachusetts

    While true, were these previous "buyers of flagship brands" truly loyal to the brands? As loyal as say, a Bud Light drinker?

    Or, were they purchasing the beer because they just wanted something a bit better than a macro lager? And now when they go to the store, there's hundreds of options, so are they swayed by other products?

    Moreover, the fact there's so many brands, means many of these flagships have been pushed off the draft lines. You see ALOT less Boston Lager and Sierra Nevada Pale Ale on draft, at least in my area.
     
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  4. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

    There is no doubt in my mind that these are challenging times for larger, distributing breweries.

    Within the article there is comparison of the decline of beers like Sam Adams Boston Lager, New Belgium Fat Tire, SNPA vs. ‘new’ beers like Jai Alai IPA, Space Dust IPA, etc. I used quotes with the word ‘new’ since these brands have been around for some time but under their new ownership these beers are now being made available to new markets. I personally have just seen Space Dust a couple of years ago into my area. It would be useful to see more data here but I would suggest that beers like Space Dust are growing because their distribution region is expanding. In contrast beers like Sam Adams Boston Lager and SNPA have been available nationwide for a long period of time. Whenever Space Dust reaches nationwide distribution I believe that beer will no longer be in a growth mode and will over time decline just like SNPA, Boston Lager,…

    In my opinion larger, distributing breweries have two (and likely more) major challenges:

    · There is presently more brewing capacity in the US than beer consumer demand

    · The number of small, local breweries is over 7,000 and more are opening at a rate of 2-3 new breweries per day

    Why drink that same old ‘tired’ beer when you go down the street and drink fresh beer from your hometown brewery? How do beer brands like SNPA, Boston Lager, Space Dust,… compete with this market dynamic?

    Cheers!
     
  5. bbtkd

    bbtkd Poo-Bah (2,179) Sep 20, 2015 South Dakota
    Premium Trader

    I know my interests change. Beers that I would buy all I could get my hands on two or three years ago, I no longer buy. Examples are FBS and KBS. Boredom is a big part of it. Two years ago, FBS and KBS were high on my list, but now there are other beers I prefer at the same or lower price point. Availability/rarity do enter into it, because if I know it's easy to get I can put off buying it knowing I can get it later and don't need to stock up. On the other hand, favorites such as BCBS/variants, Avery BA beers, and Prairie BA beers I do stock up on since they only come around once a year at best.
     
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  6. Harrison8

    Harrison8 Poo-Bah (2,974) Dec 6, 2015 Missouri
    Premium Trader

    Just went on a date with someone who likes saisons. I previewed the menu and cooler space to see if there was anything worthy of sharing and named a few options, but she stuck to her familiar Fat Tire due to the social setting. I don't blame her. I wouldn't say flagships are done, but they may not be as prominent as years past.

    I still reach for a Boulevard Wheat or Pale Ale when in a local social setting, as those are two commonly available, solid offerings. Now do I keep my fridge stocked full of that? No.
     
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  7. eldoctorador

    eldoctorador Zealot (563) Dec 12, 2014 California

    I'm less of a ticker now and also buy more flagship beers than before, but I guess I'm just contrarian :stuck_out_tongue:
     
  8. Crusader

    Crusader Aspirant (247) Feb 4, 2011 Sweden

    Flagships from larger breweries will have to rely on a different form of consumption to maintain the volume they sell now and to increase that volume further, with larger average pack sizes bought by more people. How do companies achieve this? Successful marketing coupled with occasional price promotions. These breweries can't hope to sell the amount of beer they need to sell/wish to sell the same way a smaller brewery does (where a handful of individual consumers picking up a single of one of your company's beers makes a difference on the bottom line), they need to evolve their selling methods, and not everyone will be successful at it since it involves skill, and skill is not evenly distributed. There is also an element of art to it of course, people do not simply respond to rational arguments (no, paying more for Corona will not mean that you will find yourself on a beach), and if skill is not evenly distributed, the art aspect isn't either. So there will be sales declines for some and gains for others year over year, but not necessarily with linear projectories.

    I think genuine competition for volumes and dollars is coming, and alot of breweries might not be prepared for that reality. But as long as the market remains roughly the same volumewise and valuewise there will be opportunity abound for those that succeed.
     
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  9. Beer_Stan

    Beer_Stan Initiate (64) Mar 15, 2014 California

    I think larger producers like New Belgium and Sam Adams could stand to drop the flagships for a bit just to build up the hype and FOMO of "I cant find it anywhere" shoppers only to bring it back and watch their sales soar. Seemed to work for some Canadian breweries in the past.
     
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  10. drtth

    drtth Poo-Bah (3,688) Nov 25, 2007 Pennsylvania

    Analysis in the article way too supefical, almost glib. Focuses on customer boredom when other factors are much more important, e.g., rise of number of competing alternatives and things such as "drinking beer within sight of the brewery" (i.e. freshness)

    If I give up Sierra Nevada Pale ale for either the Victory Headwaters Pale Ale or the Troegs' Solid Sender (or both) it's because I like all three but two of them are near by and so it's easier to find their beers fresh, etc.
     
  11. zid

    zid Savant (933) Feb 15, 2010 New York

    She's a keeper.
     
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  12. rgordon

    rgordon Champion (873) Apr 26, 2012 North Carolina

    I could not agree with you more. I am a 40+ year veteran of the beer and wine industry and have seen trends come and go and come back again. I worked diligently to bring better beer to the citizenry because I knew good beer from the world. Self distribution by a small brewers has been legislatively stifled in North Carolina. It was written into law years ago that any brewer producing over a certain amount HAD to use a wholesaler for distribution. This self-serving statute was penned by a group underwritten and largely beholden to the North Carolina Beer and Wine Wholesalers Association. This is and has been utter corruption for decades.
     
  13. jesskidden

    jesskidden Meyvn (1,364) Aug 10, 2005 New Jersey

    Any size brewery can self-distribute or own wholesale distributors in New York State as I understand it. AB owns Anheuser-Busch Distr. Of New York Inc., in the Bronx and both Rheingold and Schaefer self-distributed in NYC (in fact, Schaefer in the 60s and 70s even had the contract to distribute Anheuser-Busch's beers in the city). P. Ballantine & Sons owned wholesale "branches" in NYC and most every major city (Rochester, Syracuse, Buffalo, Albany) as well as Hudson Valley and on LI in the post-Repeal era

    Not sure about the upstate pre-craft era breweries like Genesee and Matts - but I do know that when I had a off-premise retail license in NYS I had no problem buying cases of Matt Premium in brown refillables (T/A's came in clear glass) at the loading dock in Utica.
     
    #13 jesskidden, Jan 7, 2019
    Last edited: Jan 7, 2019
  14. chipawayboy

    chipawayboy Disciple (398) Oct 26, 2007 Massachusetts

    Capacity increase is outstripping demand increase by a large margin and had been for several years running.....so that means someone has to suffer sales reductions. It’s logical that it’s gonna be the big craft brewers that take the hit. Nano and little craft are eating big craft’s young. I could care less as 98% of my beer $ is going hyper local.
     
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  15. Ranbot

    Ranbot Zealot (547) Nov 27, 2006 Pennsylvania

    Agreed. Founders is certainly proving there is still opportunity to grow, but it's a different landscape now than 10 years ago.

    I think larger/older craft brewers could also take a page from AB-Inbev playbook and target markets like sports/music/convention centers/airport. That gets them out of the game of competing with every local mom and pop brewer for tap handles, and back to a comfort zone of competing with AALs. They also have the ability to make products better suited to those venues, like the 19 oz "stovepipe" can. I can see some craft brewers doing this already (New Belgium, Lagunitas/Heineken, in particular), but it seems like a weak effort so far.
     
  16. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

    Patrik, an example of a ‘craft’ brewery that is doing what you advocate here is Founders. Over the past few years they have adopted a 15-pack packaging (a new format for the US) and simultaneously they priced these beers economically. Examples are the brands of All Day IPA, PC Pils, Solid Gold, Mosaic Promise, Azacca IPA,…

    Below is a link discussing this new 15-pack format:

    http://allaboutbeer.com/article/craft-beer-15-packs/

    Founders is eating Boston Beer Company/New Belgium/Sierra Nevada’s lunch?

    Cheers!

    @SierraTerence

    [​IMG]
     
  17. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

    Randy, you will see this in action at Phillies games at Citizens Bank Park. I personally prefer to drink the draft craft options instead (Victory, Troegs, etc.).

    It would be interesting to see the Phillies craft beer sales vs. BMC (e.g., Miller Lite, Bud Light,...). I see a lot of Miller Lite/Bud Light cans (16 ounce and larger) at the games.

    Cheers!
     
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  18. Crusader

    Crusader Aspirant (247) Feb 4, 2011 Sweden

    Yeah they are a good example of selling in volume at a decent price, but I wonder how solid their marketing is once their competitors copy their model (which I assume some of them will, not all, but some). How do they stand out then. Solely on price? That can get destructive. They want to keep their margins and if anything increase them (like Boston Beer Company with their annual 1-2% beer price creep strategy). If another brewery undercuts them on price, and they eventually get stale in the eyes of the consumer, they're in a bad position.

    I think sometimes of Yuengling, here's this brewery, oldest in the country, with one hell of a story to tell, yet it seems that they are not as talked about these days as before, and instead they seem to have ramped up the speed at which they go into new markets trying to achieve growth through expanding their market rather than growing organically. Meanwhile sales over all seem to be slipping. To me it seems like even a good story risks getting old after a while, once people have heard it too many times. That doesn't necessarily mean that things will only go downhill from here on out, but they might stumble for a bit unless they can find something new and exciting that works in bringing in new consumers.

    I think Founders might very well find themselves in that situation in the next few years as the competition increases, and some other brewery will have found a combination of product and marketing which works better.

    I don't envy these people having to reinvent themselves trying to sell the same beer. Why did you buy my beer last year and not this year? What changed? What should I change, what can I change to make you buy it again (or maybe the question is, who can I get to buy it instead)? Those are million dollar questions. I would think that there must have been literary thousands of breweries in the last century alone, now closed, who failed to come up with answers to those questions.
     
    #18 Crusader, Jan 7, 2019
    Last edited: Jan 7, 2019
  19. rgordon

    rgordon Champion (873) Apr 26, 2012 North Carolina

    There is 25,000 bbl. annual cap on self distribution here. Otherwise one would need to franchise the brand to a wholesaler. It's a well calculated quantity. Even as a wholesaler I despised the law.
     
  20. rgordon

    rgordon Champion (873) Apr 26, 2012 North Carolina

    Excellent post. Brand quality (and story) never equals brand loyalty. Marketing is always changing and can be like stabbing at the wind. What sticks is what works. It's tough to see favorites die and it's fun watching the new be born.........
     
  21. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

    In the linked article there is discussion about 21st Amendment adopting the 15-pack format prior to Founders reaching their market area; they chose to not discount the 15-pack price. I would think that once Founders reaches their market (maybe they already have?) there may be competitive pressures on 21st Amendment to lower their prices?
    Last year they decided to add a new beer as a year-round product: Yuengling Pilsner. I have no idea how well this is selling? Maybe @jesskidden has some data here?
    There is an old saying/joke of: business would be so much simpler if it wasn't for the customers!:wink:

    Every consumer product/business has the same 'challenge' of keeping their customers excited/engaged. For the larger businesses this often manifests itself in a significant advertising budget (e.g., AB selling Bud Light via Dilly Dilly). At the moment Founders has a 'home run' with their 15-packs and economical pricing. Hopefully their Marketing & Sales staff (two guys?) have their pulse on the market and have their 'thinking caps' on to come up with their next 'home run'.

    Cheers!
     
  22. sdhopaddict

    sdhopaddict Initiate (76) Oct 9, 2016 California

    The growth of nationwide IPA brands works only because of certain markets where you have fairly limited access to local packaged beer. Phoenix has a lot of breweries but most of the breweries don't distribute out their beers and so having these bigger brands coming in (Firestone walker, Founders, etc) coming into the market helps those groups who may not want to drive to the brewery directly.

    It is also inevitable that as more breweries try to go nationwide they are going to find lack of name recognition and end up retracting. Green Flash ended up scaling back after going nationwide with various Alpine beers. I foresee this happening to other brands as well. Unless the beer launching in new markets is drastically better than the mainstays in that market, they might sell some initially as people see new exciting beer but lose those sales over time.
     
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  23. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

  24. nc41

    nc41 Poo-Bah (1,659) Sep 25, 2008 North Carolina
    Trader

    The local options are pushing the bigger breweries out, you can tell by the beer casesand palates on the floor. And lately there’s empty space in the coolers where the used to be slam full. Lots of beers are gone, stuff like Hop Devil is long gone, beers from Alpine gone, for that matter a ton of Cali beers are gone. From a retailers standpoint if they don’t turn I won’t put them on the shelf. On the other hand IMO there’s a ton of mediocre local stuff in all styles that push $13/6er. There’s just so many beers out there from so many breweries, and there’s new stuff popping up all the time. It’s really quite the dilemma, and the problems will eventually push right back into the breweries.
     
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  25. sdhopaddict

    sdhopaddict Initiate (76) Oct 9, 2016 California

    I wish it would stop but I don't see that happening. Regional expansion makes sense because you at least build name recognition before expanding into the market. Green Flash assumed too strongly that they had a national name recognition.

    I wrote about the ridiculousness of the national expansion in September of 2017 on my blog. It makes sense if they have a unique product but adding another IPA doesn't make sense. I'm waiting to see Founders and Bells retract from the Southern California market at least some of their IPAs.
    https://www.sdhopaddict.com/2017/09/13/stop-trying-to-create-national-ipa-brands/
     
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  26. bubseymour

    bubseymour Poo-Bah (2,317) Oct 30, 2010 Maryland
    Trader

    This is my current frustration. Replacing mediocre $10 sixers from national distribution with $15 4packs of mediocre local brewers. Basically I'm just paying more now if I'm ticking from store singles and not getting anything much better.
     
  27. MNAle

    MNAle Meyvn (1,058) Sep 6, 2011 Minnesota

    One of the larger MN breweries has already done this ... not nationwide, but wider multi-state distribution, and was forced to retract to their natural home region. They focus on more traditional styles, and they were likely having a hard time getting attention in the new wave of "innovation".

    Fortunately, here in MN we have a number of brewers who still focus on traditional styles (English and German, especially German), so while many (most?) of the new darlings here are chasing NE IPAs, pastry stouts, etc., there are several to provide respite from this insanity of a new beer every day.
     
  28. SierraTerence

    SierraTerence Initiate (142) Mar 14, 2007 California

    Some call it the continued devaluing of craft beer that was started by the big three.
     
  29. MNAle

    MNAle Meyvn (1,058) Sep 6, 2011 Minnesota

    One thing many seemingly continue to not understand is that the national dominance of light lager was due to consumer demand, not macro brewer dominance. The cause and effect is the other way around.

    The same story (consumer demand for light lagers) has been a driving force reshaping ALL of the traditional beer cultures worldwide.

    Businesses responding to consumer demand and giving consumers what they want are not "evil".... they are successful.

    The same is true of the local craft brewers serving their customer and the large craft brewers going after the larger consumer preference.
     
  30. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

    Terence, which "big three" are you referring to here? Is it the 'old' big three of BMC or the big three of craft beer (e.g., Boston Beer Company, New Belgium and Sierra Nevada)?

    Cheers!
     
  31. JackHorzempa

    JackHorzempa Poo-Bah (3,764) Dec 15, 2005 Pennsylvania
    Premium

    Why specifically do you wish for this expansion of craft brewery distribution to stop? Do you think it is 'bad' for the beer consumer if breweries like Founders or Bells expands distribution? Do you worry for the financial health of breweries like Founders and Bells if they expand distribution?

    Cheers!
     
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  32. Prep8611

    Prep8611 Aspirant (254) Aug 22, 2014 New Jersey

    Imho Founders gets “it” or at least they got “it” with the 15pk. Yup can cheaply fill a fridge for a party with a variety of craft for about 1.10 a beer. Brilliant!
     
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  33. nc41

    nc41 Poo-Bah (1,659) Sep 25, 2008 North Carolina
    Trader

    Perhaps another to look at this is that the buyers are rejecting the big beers. Why? Because they dont know what’s out there. I don’t know this, but I’m supposing guys new to craft beers are offered up lots of local beers, both on tap and in bottle shops. So they buy accordingly. When I go to the local watering hole the taps are full of crap from Raleigh breweries. So a guy straying from aals are running into local breweries, might be good, maybe not, but it’s whats in the bars too. Local bars are going more local as well. I can’t think of one bar here that serves up a simple SNPA, that might cure this crap.
     
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  34. zid

    zid Savant (933) Feb 15, 2010 New York

    As a beer lover, you should care about the health of the bigger "craft" breweries even if you don't buy their product. A healthy market is something that should be desired. Beyond the importance of trailblazers having continued market presence, they have the resources to help smaller breweries directly and indirectly - impacting the beer you do drink.. Look at things like the "Hop Quality Group" for a potential example. You're probably not spending too much of your beer budget on UK cask ale either... but I'm sure you'd care if that went away. :slight_smile:
     
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  35. zid

    zid Savant (933) Feb 15, 2010 New York

    [​IMG]

    I snapped this pic by a supermarket end cap the other day.

    Yep, 21st Amendment is part of the "15-team." What does it take to be a member in the above club? Let's see... from left to right...
    • part of a "craft" amalgamation with ties to Kirin
    • AB InBev brand
    • private equity "craft" amalgamation stacked together
    • AB InBev brands stacked together
    • partial ownership by Mahou-San Miguel Group
    :wink:
     
  36. cavedave

    cavedave Poo-Bah (2,468) Mar 12, 2009 New York
    Trader

    I believe consumers will continue to buy what they like. If that means that they like local, fresher, and in modern styles that change up frequently, this isn't some problem, it is what it is, consumers deciding what to buy and whether your company has it. If one company doesn't provide what consumers demand, another company will. If I managed a large craft brewery in this country I would be looking to get out of some markets that have large, well respected communities of small, excellent locals who know local tastes better, find them out faster, and provide them more quickly, and in greater variety, and (in some cases) not even need to compete with the old guard on store shelves to sell their beers.
     
  37. Brewday

    Brewday Initiate (121) Dec 25, 2015 New York

    Not sure about that.I just came back from eastern NC and couldn't find any SN,NB or stone at walmarts,food lions or piggly wigglys. Except for a few lagunitas cans, everything was Inbev or mc.
     
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  38. rgordon

    rgordon Champion (873) Apr 26, 2012 North Carolina

    Eastern North Carolina could easily fit into the Old South. It was Jesse Helms who said, "You don't have to drink beer and smoke dope to make a fool of yourself, but it helps".
     
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  39. AlcahueteJ

    AlcahueteJ Champion (873) Dec 4, 2004 Massachusetts

    Aren't Founders' best sellers All Day IPA and Solid Gold?

    Those aren't exactly the two styles that I consider hallmarks of craft beer when this whole resurgence began back in the early 2000s.

    And this is why everyone produces New England IPAs...it's what the customer wants right now.

    While being independent and making a "quality craft" product that's not yellow fizzy watered down beer was the initial goal, money is ultimately the driving force, and is a powerful motivator.

    I think by "bigger breweries" he may have meant bigger craft breweries (Sierra Nevada, New Belgium...etc.).

    @nc41
     
  40. LeRose

    LeRose Meyvn (1,348) Nov 24, 2011 Massachusetts
    Premium

    I rely on the larger, distributing breweries a great deal. Where this whole local concept falls apart for me is in areas that are more rural that would have a hard time supporting a bunch of good, local breweries. If I look at my local area, there is a brewey fifteen minutes away. Their beer is average at best and they don't sell on premise yet. If I expand to 30 minutes, then I have a mixture of average to downright awful with one or two consistently good brewers to choose from. Go 60 to 90 minutes, a couple more very good breweries, a couple more with some wored class or exceptional beers.

    I have rarely bought a beer from Founders, SN, or BBC that I would call undrinkable. I'm not going to drive an hour to buy at the brewery on a regular basis, especially for inconsistent or lesser quality products, so I rely on what I can find at the bottle shop. I would buy more local if the beer was more consistent and I didn't have to go so far. I'd rather spend my beer dollars on products I know I can rely on, and for the vast majority of the time they aren't from around here. Honestly, I don't care where my beer comes from as long as I enjoy it. So I will continue to support the regional and larger distributing brewers and dabble in the local as I do now.

    But I do think it might be a sinking ship for reasons already mentioned in the thread. Unfortunately, with our population spread out in rural areas, not everybody is going to have a choice of local brewers and the odds are, based on my experience, that many of the locals just aren't that good. Not good enough to earn my dollars, anyway.