Craft beer: Is this market “saturated”?

It’s Fall, so naturally, I think about football…and beer.

beer-tailgating-recipes-featured-558x800

I load myself up in my Uggs and flannel shirt and head on down to my local grocery store to stock up before the big tailgate party. But wait! Where did all of these beers come from? Not long ago it seemed one had only about a dozen choices in the beer aisle; Budweiser, Coors, Corona. Not anymore.  Enter the Craft Beer movement.

So many choices! Is this market "saturated"?

As USA Today News reports in the article Craft beer movement comes to a head

There are more breweries in the United States than at any point in country’s history. Is the market becoming, shall I say, saturated? 

In the spirit of my educational pursuits, I decided to investigate this beer issue myself.  In the Product Life Cycle theory, a market cannot continue to grow forever. I mean, how much beer can a nation drink? The craft beer market began in the early stage of life as development and introduction into the mainstream beer consumer market gradually.  With the hipster anti-large corporation movement of local, homegrown brand choice, the craft beer movement became acceptable and preferable ( thus entering the growth stage).  Alas, all good things must come to an end as they say in Product Life Cycle Theory.

Product Life Cycle Theory

So many choices! Is this market “saturated”?

 

As such, sales stabilize and mature with small increases.  Lastly, the product enters the decline phase, where demand is low and the once thirsty craft beer drinking masses no longer see value in their cute, unique different craft beer product.

One thing is for sure, doing market research has never tasted so good!

Is this tasty trend on the way out?

Is this tasty trend on the way out?

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6 Responses to Craft beer: Is this market “saturated”?

  1. Kathleen says:

    Smith-

    Interesting post. While I’m not a huge beer drinker, I do love pumpkin ale, and this craft beer movement has provided a fantastic selection over the past few years. I liked the quote from the USA Today article in which the brewer stated that they’re turning consumers from bad beer to good beer, indicating that while the craft beer movement is peaking, perhaps people are buying less of the “bad beer,” which evens the market out.

    Your blog reminded me a bit of the article we read earlier in the semester regarding coconut water, and I can’t help but think that the big beer companies will buy some of the craft beer brands and mass produce them. That move would, of course, mean that they are no longer craft brews by definition, but this type of creep could occur over time without the majority of consumers even noticing. I also wonder how much local brand loyalty plays into the equation. For example, if my town has a great craft brew, I’m more likely to support it over others. Figuring out how to expand into other areas will also help save the breweries a bit, by opening local beer pubs or partnering with wineries and area festivals.

    Kathy

  2. James Min says:

    Marla,

    Thanks for this interesting post about craft beer’s product lifecycle. Reading about what phase the craft beer industry is in makes me think about what “new uses” that this industry and come up with to create and sustain revenue. I have more than a few friends that brew beer as a hobby and one who started up a craft brewery operation as a business. As the USA Today article summarized, the market is very saturated, and as decline ensues, some of these craft beer companies have been absorbed by bigger mainstream companies, while some have disappeared. Perhaps the equipment or specialized knowledge used in brewing can be leveraged for another revenue stream. Reading about nylon, Scotch tape, and Jell-O was a fascinating in that it revealed examples of how to navigate through the various stages of the product life cycle.

    Fight on!
    –James

  3. Manfred says:

    Hey Marla,

    This blog post reminds me an article that I recently read about why the craft beer/microbrew industry has flourished over the last few decades. Turns out Jimmy Carter (yes, the president) signed HR1337 which legalized home brewing for personal for family use.

    In the cacophony of this political season… FINALLY, there is some legislation that we can all get behind.

  4. Shane says:

    Hello Marla,

    This was an enjoyable post to read. Thanks for sharing this information on the state of the craft beer market.

    I live in the Dallas area and there has been an explosion of craft breweries here, which delights me. Deep Ellum and Community are among my local favorites, and I have been to some of them to see their facilities and drink their beer. It’s always a great experience because you feel like your helping to support a local small business. Personally, my hope is that the craft beer market in the United States will grow at the expense of the mega breweries because most of their beer is just tasteless and soulless. The small guys are making the good stuff.

    And I agree that this is some market research that I am happy to dive into!

    Cheers, Shane

  5. Elysha says:

    Hi Marla,

    Beer is certainly not my thing, but like Kathy some of the new craft beers are pretty tasty and with such a vast selection, there’s no shortage of choices; and look at the market niche and how it has expanded so that there is now something for everyone. People love the handcrafted, brewed with love and a story feel to these beers.

    Elysha