Design and American craft beer share more than just my respective love; but that wasn’t always the case. Up until recently the labels and packaging of craft beer were unanimously hideous, but now craft beer has begun taking its own advice in big waves. The pioneers of the beer world have long been speaking out about the advantages of taking your time carefully crafting a well designed, balanced, and interesting beer. Over the past couple years more and more craft breweries are applying the same level of love and attention to their package design and marketing.
Packaging and marketing for the big American beer companies has been a priority for decades. The difference in design becomes more obvious when you realize the huge gap between a micro and regional brewery (both considered “craft”) and a large brewery. The Brewer’s Association defines a craft brewery as “beer made by a brewer that is small, independent, and traditional.” Independent, meaning less than 2% of the brewery is owned/controlled by an alcoholic beverage industry member who is not, themselves, a craft brewer. “Small” means annual production of 6 million barrels a year (until recently this was 2 million barrels, but was increased to 6 to accommodate Sam Adams). To give a little perspective, Sam Adams is expected to crack the 2 million barrel mark in 2012. The second largest craft brewery is Sierra Nevada at roughly 700,000 barrels a year. A small regional brewery, like Avery Brewing, produces around 20,000 barrels a year, and you can imagine how drastically that number drops for the microbreweries brewing a barrel or two a week. Anheuser Busch (before being purchased by InBev) sold about 25 million barrels a year in the US alone. Clearly there is still a big difference between the large breweries and even the big boys in the craft beer scene.
Craft Beer Growth
A common large brewery would spend about 28% of their production costs on packaging. For a craft brewery that isn’t purchasing bottles, labels, and boxes in the same large quantities it can go even higher than that. For a business starting up it may seem like an obvious thing to cut corners on. However, the recent boom in craft beer sales (a growth of 15% by dollars in 2010 and 2011 versus a drop by 1.3% and 1.2% for the rest of the beer industry) has also brought a with it a higher awareness to the importance of branding and marketing, particularly with the regional breweries producing 8,000 + barrels a year.
The Importance of Branding
Creating a brand that stands out on the shelves and in a consumer mindset is one of the biggest challenges for new, as well as established, companies. Craft breweries actually benefited from less-polished design and packaging for many years; it was a way to quickly and easily distinguish themselves from the larger breweries. But with the craft beer market being flooded with more options every year it makes sense that a shift would be necessary for brands to stand out. It’s also finally to the point where, although small, craft beer is gaining on the large breweries and their packaging needs to reflect the quality of their product in order to compete and continue to take market share. Clearly, it’s never been more important for a craft beer to stand out.
Seattle’s Red Hook Beer recently rebranded themselves with a very intentional play at attracting the mass beer-guzzling consumer and beer snobs alike. “This was about creating something upscale but still everyday. No one is telling that story,” said Patrick Rowell, Brand Strategist at Hornall Anderson (a Seattle based branding agency). The hope is that the shift doesn’t alienate the craft consumers that already love Red Hook while expanding to steal market share from the larger breweries. It’s not a bad stance to take.
Over the past few years many established (largely regional) craft breweries have given their brand a facelift. Places like Left Hand and Avery Brewing have seen drastic changes. Great Divide Brewing, in Denver, changed their packaging a couple of years ago to fantastic success. “Our packaging change… has bolstered our sales, made us more appealing to outside markets and helped cultivate a following of Great Divide lovers both near and far. That Yeti icon is one of our strongest branding images,” said Hanna Laney, Word Nerd for Great Divide Brewing. Many breweries, such as 21st Amendment Brewing in San Francisco and Uinta Brewing in Salt Lake City, have even tapped local artists to create packaging and close the gap between design and craft beer even more.
Some of the leading craft breweries have gone beyond packaging and marketing and have begun to embrace interactive and social media. Great Divide, again, recently sat on a beer panel at South by Southwest talking about beer, social media, and how location based services can and should be used. As great as this is, there are still many breweries slow on the uptake. These breweries will have to adjust over the next few years if they want to stay relevant, just like the design/packaging swing we’re currently seeing.
As a beer lover, I believe this shift is great for the longevity of the craft beer industry. As a designer, it’s even better; I’ve long been the type of person to judge a book by its cover. Finally, I can safely judge a beer by its label.