Brewers refresh for maturing market
The battle for retail shelf space prompts changes to brands and packaging.
Sitting among aisles of beer at Siciliano’s Market, Steve Siciliano said beer retail stores have hit a saturation point.
The owner of the beer and homebrew store specializes in unique beverages from across the globe — and has since the days when Heineken and Corona were still considered classier picks. Chains might still have room to expand their beer selections beyond Budweiser, Miller and Coors as craft beer advances in market share, but smaller stores such as Siciliano’s are busting at the seams.
The number of breweries in the United States grew from 1,653 in 2010 to 4,269 in 2015, with many more on their way in 2016, according to the Brewers Association. Many of those breweries will never be more than a brewpub on the corner offering a pint and bite to eat, but more are venturing into packaged sales in stores.
“We’ve hit the saturation point here, and we have a lot of shelf space for beer,” Siciliano said. “With so many breweries coming on board, something has to give. We don’t have room for everything. We’ve had to cull out some slow movers.”
Siciliano credits the saturation to a maturing of the beer market and pointed to 2006, when consumers were still able to get excited about every new beer that popped up on a shelf. With many more breweries and beers hitting the shelves each month, competition is heating up.
To stay relevant, established breweries across the country have changed their packaging. In recent years, New Belgium Brewing Co., Firestone Walker Brewing Co., Ballast Point Brewing Co. and more have cleaned up their logos and improved their look.
Even “crafty” Blue Moon, owned by MillerCoors, has altered its packaging.
In West Michigan, New Holland Brewing Co. and Bell’s Brewery this year both announced packaging changes. New Holland’s update includes a common color among all brands on six packs, and bottle caps with cleaner graphics. Vice President of Marketing Joel Petersen calls it a brand evolution.
“Brands need a little refresh sometimes,” Petersen said. “It’s a great way to generate wholesaler interest and energy as the retail shelf is more crowded than ever and your packaging needs to stand out to potential customers while feeling recognizable to longtime fans.”
Those same established breweries are adding to the crowded shelves with more beers in their portfolios, and the brand refreshes help consumers draw the connection from beers to breweries they’ve come to know and enjoy, said Chris Furnari, editor of beer trade publication Brewbound.
Furnari agreed the market is maturing quickly, with added pressure on breweries to continue to increase quality and look more polished on the shelves. Retail stores are likely driving the movement, as customers need to pick through shelves and easily understand what they are buying.
“Gone are the days where startups can rely on their brother-in-law to draw their labels — unless of course he’s an amazing artist,” Furnari said. “In most cases, breweries are recognizing a need to outsource the work to experienced design firms who are, quite honestly, more adept at clearly communicating the essentials: brewery name, brand name, beer style, beer specs and the story behind the brew.”
Updating a “stodgy” design might not create a ton of buzz in the marketplace, but seeing it on the shelf might nudge a consumer to try a brewery again. Sometimes, if those consumers pick up a beer for the first time in a few years, they might get a whole new experience, either because their palate has changed or because the brewery has improved in quality or released a new recipe.
Before the brand refresh, New Holland last year released a new recipe for Mad Hatter, its flagship India Pale Ale, to align more with other mainstream IPAs on the market. It was largely driven by the company’s brewers.
“We listen to what they’d like to do and make sure it fits with where we are going as an organization and a brand,” Petersen said. “Our main goal is to bring to life the best beers possible, and we continue to learn and gain access to new/better ingredients and technologies. We’d be doing a disservice to the consumers and ourselves to not share that growth.”
Petersen said the brand and quality growth are a natural part of the industry, as is the shift from a market that pulls in every beer to one that demands a more solidified brand effort to push beer into a market — whether that means a cleaner design, dedicated sales staff or better beer.
For some new breweries, the thought of a polished brand comes as they prepare to launch in the packaged market. Muskegon’s Pigeon Hill Brewing Co., RateBeer.com’s Best New Michigan Brewery winner last year, launched its first canned beer, Oatmeal Cream Pie, into retail outlets earlier this spring, said Michael Brower, co-owner and director of legal and marketing.
Pigeon Hill’s brand was designed to be “traditional but still funky and funny,” so making sure the canned packages expressed that while standing out on store shelves was important.
Brower said he and his partners spent time walking store aisles to see what worked and didn’t work. He said he noticed a lot of bright colors, so Pigeon Hill decided to go with a mostly white package and cartoon-like simplicity.
“Using really bright, bold colors and imagery isn’t a bad approach, but they’re getting lost in the shelf and blending together more easily now,” Brower said. “We wanted to go simple, cleaner, to help us stand out as clean, simple and classic.”
By picking a “classical approach,” Brower said Pigeon Hill hopes it can survive longer without needing a brand refresh as the beer industry continues to mature.
“Styles change over time,” Brower said. “The classical approach doesn’t get old and stale if you do it correctly. If you’re trying to be more cutting edge, that gets stale.”
Siciliano knows the market isn’t fully mature yet, and consumers are still excited about new beer. Even breweries making less-than-stellar beer in West Michigan are full every week. The trend of everyone surviving won’t last forever, though, and breweries that make quality beer, stay with trends and maintain a strong brand identity will remain in good shape, he said.
“Things will start shaking out a bit in the craft beer business,” Siciliano said. “A brewery that keeps its finger on the pulse will be the one that will continue to be successful.”