What we have seen in the beer industry in recent decades is a revolution by way of innovation. American craft brewers have disrupted a monolithic beer industry that was once indifferent to flavor and obsessed with branding, price, and market share.
Craft brewers like to say that we changed the world of beer, and we did. We recognize that, worldwide, beer is still mostly light lager, but in America, the landscape has been forever changed.
Craft brewers achieved this through real innovation, not by trying to mimic the incumbent players. Innovations included leaning into hop-forward beers; ignoring traditional levels of flavor and aroma; and fermenting and conditioning beers in oak barrels as Old World brewers did. Some innovated their route to market by creating their own distribution systems, bypassing the legacy wholesale channels weighed down with big-brewer priorities. Still others innovated with a dynamic brand, sharing an authentic personality that was legitimate and current, driving a real emotional connection with the consumer.
The Example of IPA
Style was ultimately the greatest platform for disruption, with IPA being the easiest category to showcase.
IPAs let brewers use an almost infinite world of old and new hop cultivars to drive flavor and aroma. It was, in some ways, like moving from a monochromatic world into a technicolor one. Brewers pushed ABVs past traditional levels, as each beer became an occasion to be savored. Fruit additions piled on top of new hops, magnifying and matching the tropical flavors, injecting even more complexity into the category.
Eventually, yeast strains took their turn in transforming IPA, allowing haze to be in suspension while adding insane body to the experience. The canvas for IPA innovation is infinite, and the small brewers popping up all over the United States went to work on it. They’ve created a model that satisfies rapaciously curious consumers who chase more and more innovation—and are willing to pay handsomely for it.
Satisfying the Savvy Drinker
When we started our brewery, we wrung our hands at the indifference of the typical American beer drinker. Within two decades, those drinkers were transformed and engaged. Be careful what you wish for!
We soon discovered that unbridled innovation feeds on itself, creating a wake that can be uncomfortable to navigate. Great beers often don’t last long or aren’t given time to take root, as they are rolled out and miss key focus windows with the wholesale and retail channels. Trends cycle up and down in less than a year, and even enduring trends that would normally cycle after five years are now forecasted to be dead in three.
That said, the vast majority of the roughly 8,900 American craft brewers are well built to take advantage of this dynamic, as they sell most of their beer directly to consumers across the counters of their own bars. It makes for the freshest, most satisfying beer experience, even before mentioning the profitable business model for the brewer. And, most importantly, the largest brewers are powerless to compete.
Staying Relevant
Regional breweries such as ours have to thread the needle. We need to create enduring brands with market and distribution plans that will be relevant for at least three years and engage a meaningful narrative with our fans. All the while, we must create scores of new beers for our taprooms, to help winnow down the winners that will make it into the next market plan—an academy of sorts.
In the final analysis, it makes for a rich beer experience for the consumers, an engaging artisanal journey for the brewers, and a logistical riddle for the wholesale and retail partners who deliver these beers to consumers.
We live in fast-moving times that are forcing wholesalers and retailers to automate while adjusting their expectations from brewers: “new is good,” “anything that slows down is dying,” and “choice drives traffic.” Analytics and data rule the discussion, and “market muscle,” while still relevant, is becoming less dominant.
All in all, our playing field is leveling, and innovation continues to play its part. This is what revolutions are made of.
David Walker is cofounder and CEO of Firestone Walker Brewing Company in Paso Robles, California. Firestone Walker is a media partner of Craft Beer & Brewing Magazine®.