Beer brands: Craft vs Domestic

Domestic vs. Craft Beer

It's no secret that America loves beer; in 2021, beer companies in the U.S. raked in $100.2 billion.1 Though domestic beer brands still hold most of the market share, the consumption of craft beer has been on the rise since the 1990s, with millennials leading the charge.2 Millennials are the only generation that progressed into drinking age with a booming craft beer market, and because they are more likely to shop with companies that have similar values to their own, they're one party responsible for the decline in sales among established non-craft brands.3

Macrobreweries Challenging Craft Brewers

To redirect attention back to its signature brand, Budweiser aired a Super Bowl commercial in 2015 that focused on the beer's history and crisp flavor 4 while blatantly poking fun at craft beer and those who drink it, sending fans of craft beer into a rage. Some, however, saw it as a good sign for craft beer – America's biggest beer company had acknowledged the competition. While Budweiser created a controversy, it also admitted publicly that craft beer was a threat to the domestic beer market.

Budweiser isn't the only big brand that's taken on the threat of craft beer. In 2012, Guinness was sponsoring an awards ceremony for the British Institute of Innkeeping, and the winner of Bar Operator of the Year was initially supposed to go to BrewDog, a craft beer competitor that had clashed with Guinness in the past. When a different bar was given the award, it was eventually discovered that a representative of Guinness's parent company, Diageo, threatened to withdraw support from the organization if BrewDog won.5 Diageo apologized to the organization and BrewDog, giving the smaller company free advertising and smearing their own reputation in the process.

Stone Brewing, a leader in the craft beer industry, recently filed a lawsuit against Molson Coors, the maker of Keystone Light. Molson Coors awarded the craft brewery $56 million in damages for Keystone's infringement on the "stone" trademark.6 Although this infringement was deemed unintentional by the jury that presided over the case, Molson Coors insinuated that Stone Brewing had ulterior motives for this lawsuit. Molson Coors claimed that the craft beer company wasn't concerned about customer confusion, but rather the debt owed to private equity investors.

Craft Beer Sellouts

The Brewer's Association defines a craft brewer as one that produces 6 million barrels of beer or less annually, with less than 25 percent of the company controlled by non-craft alcohol companies.7 With mixed marketing results, some big beer brands have turned to purchasing craft beer companies to try to cash in on the trend, rather than spend time, money and effort fighting against it. Companies such as Anheuser-Busch InBev and Molson Coors are heavily invested or in complete control of craft breweries.8 For now, macrobreweries will continue to buy the competition, though it remains to be seen whether craft beer lovers will remain loyal to their favorites brands if they're sold to beer giants.

References

  1. National Beer Sales & Production Data Brewers Association. Accessed July 2022.
  2. Why Craft Beer's Rise Is a Warning Flag for All Sorts of Big Brands Chicago Booth Review. Accessed July 2022.
  3. Millennials and the Take-Off of Craft Brands: Preference Formation in the U.S. Beer Industry National Bureau of Economic Research. Accessed July 2022.
  4. Why is Budweiser Still Mocking Craft Beer?" Fortune. Accessed July 2022.
  5. The ugliest feud in the beer industry just reached a new boiling point Insider. Accessed July 2022.
  6. Stone Brewing Awarded $56M in Trademark Lawsuit Against Keystone Light's 'Stone' Cans Food & Wine. Accessed July 2022.
  7. Craft Brewer Definition Brewers Association. Accessed July 2022.
  8. This Massive Chart Shows All the Craft Breweries Owned by Big Beer Companies. VinePair. Accessed July 2022.