Social Media and Beer Event Craziness

As alluded to previously in these pages (is that what they are?), I have been perplexed for quite some time about the speed at which the craft beer culture is moving. Last summer, there was some talk here and there about "event fatigue," a reference to the fact that it was difficult to keep up with the blitz of events.

I still think the pace of beer events peaks in the summer. But it's starting to stay crazy all the time. For instance, there were a bunch of events this past weekend: The Winter Nano Festival in Tigard, the Hillsdale Brewfest, Lompoc's Shrimp Boil and Chowder Challenge, Double Mountain Tap Takeover (NW Bottles) and the Beer Mixology Hat Trick at Guild Public House. It's quite possible I've missed an event or 10.

Related to this is the pace of new beer releases. It's quite insane. Virtually every brewery is pushing out new, experimental beers on regular basis. There was a time not so long ago when you walked into a brewpub and knew their standards and typical seasonals. That's less possible today, as the list of standards is often pared down, and the list of seasonal offerings has grown.

Why has this happened? Why do breweries, pubs and promoters feel the need to stuff the calendar with special events and new beer releases? The momentum of this trend has gone completely off the hook over the last couple of years. What's the deal?

The Shift to Digital Marketing
The answer has something to do with a monumental shift in the way marketing and advertising is done today. The trend toward more digital marketing was already underway when the economy crashed in late 2008. When the crash came, expenditures on all kinds of marketing tanked. It's not so surprising. People weren't buying anything. Why advertise?

When advertising/marketing budgets began to recover in 2010, the ground had shifted. The old way of doing things was changing. Look at the above graphic, which I did not create. A couple things to note:

1. TV advertising has been pretty stable and will evidently stay that way.
2. Newspapers and magazines never recovered from the recession and are being displaced by digital.
3. Internet (digital) advertising is growing steadily and will continue to do so.

This chart shows why newspapers are getting smaller, cutting staff and covering less. Some papers have decent websites and do a good job selling display ads on those pages. However, 40 percent of their revenue was coming from classified advertising as recently as 2000. The growing power of Craigslist and eBay means those dollars aren't coming back. Print, as we've known it, is in big trouble. (More on the demise of print here.)

TV has done well because Americans love it. Despite the challenges of time shifted (DVR and online) viewing, television continues to draw advertisers who can afford to pay for it (lots of national brands). Why? Because TV audiences are huge and represent the demographics advertisers want to reach.

It's important to note that some of the lines between television, digital and even print are becoming blurred. If you watch a YouTube video on your TV, how should that be counted? If you go to a newspaper website to read a story or watch a video, what's that? My guess is that newspapers will get better at selling web-based ads, which will help them survive in digital form. But traditional newspapers are going the way of the dinosaurs.

Connecting the Dots
Back to the original question: How does the shift toward digital media marketing relate to the craziness in the craft beer scene? That's where this was leading, right? Yup.

Look, social media marketing is a perfect fit for the craft beer industry. It enables breweries and pubs to establish connections with customers that would be impossible and prohibitively expensive with "blast" mediums like TV or print. Facebook, Twitter are highly effective, targeted marketing mediums.

Here's the catch: In order to stay engaged with fans, you've got to constantly provide fresh content. That objective takes on the form of special events, beer release parties, small festivals, chowder challenges and a whole lot more. Craft brewers use these activities to revitalize their relationship with beer fans.

I still contend the beer community could do a better job coordinating the event calendar. How? I'm not really sure. Maybe it doesn't matter. Maybe having a ready supply of possible destinations at any given time is a good thing. Time reveals all.

Maximizing the Power of Social Media

I'm not sure who reads this blog. Maybe no one outside immediate friends and family. But I suspect a few fellow bloggers, media types and brewery people click in here from time to time. My guess is there aren't a lot of casual beer fans reading this or any other blog.

Most of us who write about beer, paid or unpaid, have Google alerts that provide a constant flow of information related to craft beer...grist for the mill, as it were. It's easy to set one of these alerts up and an efficient way to get regular updates on what's happening in beer land. But I digress.

Yesterday, my Google alert delivered a link to a story confirming what I already knew or suspected about craft breweries and social media: craft breweries lean heavily on social media for promotion and advertising. There's a big reason for this, which I'll get to, but there's a general point I want to make first.

Almost all businesses are trying to figure out how to use social media (Facebook, Twitter, YouTube, Yelp, blogs like this, etc.) to build their brands and increase revenue. This is happening at a time when the power and reach of traditional media (TV, radio and print) appears to be diminishing in relation to its cost.

Of course, some businesses aren't great fits for social media promotion...likely because they have a product that has zero appeal on the open market. A company that makes smart bombs, for instance, may be a poor fit for social media. You get the idea.

Craft beer is on the flip side of the coin. It's a product that is sold to the public and, more importantly, there is a growing segment of the customer base that is quite rabid about the product. This is an ideal setup for social media because rabid customers can be used to draw in additional fans via word-of-mouth advertising. In a nutshell, this is the heart of social media advertising.

Which brings me back to craft breweries. And why they are leaning on social media. They're doing it partly because they see the value; more importantly, they're doing it because they can't afford to promote and advertise in traditional ways. Budweiser and MillerCoors spend close to $1 billion a year to promote beer that is essentially undrinkable. Craft brewers have a quality product, but shallow pockets.

Why am I bringing this up? Because many craft breweries do not do social media well. They aren't alone in doing social media poorly, admittedly. One of the mistaken assumptions with respect to the social media concept is that anyone can do it. Someone who works in a small brewery and knows something about the web and computers is likely involved in running the social media program.

What's wrong with that? The problem, contrary to prevailing opinion, is that running a successful social media program requires communications skills, knowledge of the medium and planning. Back when traditional media was king, advertising messages were filtered. There's no such thing with social media. Everyone is a prospective expert.

Some of the results: disjointed posts, spelling and grammatical errors, lousy (usually dark or blurry) photos, poor quality video, too many frivolous posts or too few posts to be relevant. In short, bad social media presence. I see it every day on Facebook and Twitter, arguably the most powerful sites.

Look, I know social media is evolving and businesses, including breweries and pubs, will adapt. One of the adjustments they need to make to maximize their social media presence is go pro. They need people who can write effectively, take decent photos and think strategically when it comes to creating a coherent, branded, social media presence.

Sure there's going to be a cost. But this work is too important to be farmed out to an employee, whether it's the owner or a dishwasher, just because that person thinks he or she is an expert. It just ain't so.

Beer Wars: Protect the Integrity of Independent Beer

I'm a little late to the game here, I admit. The documentary film, Beer Wars, appeared more than two years ago. I just watched it on Netflix last week. I can't say why it took so long. Sometimes these things happen.

The point of the film is quite clear. Director Anat Baron, a former bigshot with Mike's Hard Lemonade, intends to reveal how the beer industry is structured to maintain the power of the large breweries, represented primarily by Anheuser-Busch and MillerCoors (Miller and Coors in 2009), to the detriment of small breweries.

If you toss out a few ridiculously stupid and campy cartoon graphics, Baron does an admirable job. Some of the more important points:

• Shows how the "three tier" beer laws (which make it illegal to brew and sell beer directly to consumers) make it difficult for craft brewers to enter the marketplace. These laws, established long ago to guard against monopolized beer markets, have been turned upside down by the large companies
• Shows how the large companies use political influence to keep the laws as they are, very much to the benefit of the major brands.
• Shows how the large companies have used advertising dollars (more than $800 million a year) to con consumers into thinking they are getting a well-made, tasty and refreshing product, despite the fact that macro-brews are made using inferior ingredients and automated processes. Image is everything.

Why bring this up now, two years after the fact? I mean, craft beer is continuing to gain a foothold in the marketplace, despite the stacked deck. Why should we be concerned about the message of the film?

Here's why. The continued growth of the craft industry means the big guys are increasingly trying to find ways to either squeeze or co-opt craft brands. Making distribution difficult is their first line of defense. They are also buying up small brands, closing down the breweries, firing employees and producing the beer at gigantic, automated factories. Another strategy is creating shill brands, like Green Valley Brewing of Fairfield, Calif., brewed at a huge Anheuser-Busch facility, but marketed as a small brand.

I need to digress for a moment. There's been some argument on various blogs about the meaning of craft. My opinion is the term has little meaning today. To me, craft suggests small and perhaps handmade. But great beers are being produced by breweries that are not small. Deschutes and Widmer come to mind. There are many others. What these large craft brewers share is independence and an attention to quality ingredients and processes.

Which brings me back to the call to action of Beer Wars? To me it's this: If we want to protect the integrity and longevity of true craft brands, we need to buy the products of typically small, always independent brewers whenever and wherever possible. That usually means buying locally-produced beer because most of these brands have regional distribution at best.

Secondly, it means staying away from beer produced by the major brands, even if they are decent (Blue Moon, a Coors brand, comes to mind). Why? Because the big guys use those dollars to undermine the integrity of the true craft industry. End of story.

Here's to the Losers

Reading the weekend Google craft beer alerts is sometimes a treat. You never know when something interesting or surprising is going to pop you straight between the eyes. Such was the case today.

If you spend any amount of time looking at or thinking about beer, you probably know craft beer market share is up and macro-brew market share is in decline. What you may not know is that some of America's most popular traditional beers are in virtual free fall. Of the 30 most popular brands, 8 saw their sales decline 30 percent or more between 2006 and 2010. That is staggering.

Read the list and weep:

#8 Budweiser -30 percent
The self-styled King of Beers...the beer with the red, white and blue labeling. Between 2006 and 2010, Bud sales dropped 30 percent. When you consider that Bud sold 18 million barrels of beer in 2010, the 30 percent represents something like 7 million barrels over five years. That's massive.

#7 Milwaukee's Best Light -34 percent
Never a very big selling beer, Milwaukee's Best Light has been squeezed out by the larger brand light beers like Bud Light and Miller Lite. Sales in 2010: 1.3 million barrels.

#6 Miller Genuine Draft -51 percent
Often referred to as MGD, this is Miller's unpasteurized, cold-filtered beer. It was introduced in 1985 and peaked at 7 million barrels sold in 1992. Sales last year: 1.8 million barrels. Astounding.

#5 Old Milwaukee -52 percent
Once a flagship of Pabst Brewing Company, Old Milwaukee has been squeezed out of the best store shelves by the power of Anheuser-Busch and MillerCoors, and possibly also by growing craft inventories in some areas.

#4 Milwaukee's Best -53 percent

Once sold 7 millions barrels in a year. That was in 1990. Now down to 925,000. Yikes!

#3 Bud Select -60 percent

Anheuser-Busch's big product in the low calorie beer segment with 99 calories/can. Bud Select was introduced in 2005 and has lost sales ever since.

#2 Michelob Light -64 percent

Released in 1978 to compete with the success of Miller Lite, Michelob Light never made the grade. Sales peaked in 1994 at 2 million barrels. Now down to 525,000.

#1 Michelob -72 percent

Launched as a premium alternative to imports, Michelob never did all that well. Today it is being eaten alive by the craft segment and imports. Sales for 2010: 175,000 barrels.

What does it all mean? I'm sure there are many interpretations. I see two main threads here:

For probably a variety of reasons, light beer is taking over the macro segment. You don't see Bud Light, Miller Lite or Coors Light on this list. Those beers may not be in high growth mode, but they aren't big losers like the traditional, mainstream beers. Demographics are undoubtedly driving some of this, with aging baby boomers, as well as young party animals, looking for lighter alternatives. 

The rapidly expanding craft segment (14 percent for the first half of 2011) is hitting macro market share from the high side, essentially wiping out the top and middle. People who want beer that tastes good aren't reaching for a Budweiser, Michelob or Killian's Red these days. They know better. Instead, they increasingly reach for a craft beer produced somewhere nearby. 

Where will this lead? I'd say the big guys will continue to chase the light beer segment. There's a lot of money on the table. At the same time, they will be looking to expand their craft portfolios. Anheuser-Busch has a good thing going via its ownership share in the Craft Brewers Alliance (Widmer, Redhook and Kona) and ownership of Goose Island Brewing. Coors owns the Blue Moon brand. It seems likely this trend will gain momentum as the macro industry sees its market share slide.