Store shelf space isn’t getting any bigger. In fact, as a result of online retailers like Amazon, many brick and mortar retailers are reducing their store size. The good news for craft beer is that due to the regulatory quagmire, online retailers aren’t selling craft beer for the most part. That aside, grocery stores and convenience stores are not likely to devote much more of their precious shelf and cooler space to craft beer when craft beer sales are on the decline.
In the sea of cans and bottles on the store shelves, craft beer producers need to find a way to stand out and capture the attention of the consumer in the few minutes, or seconds, they are looking at the store shelf to select a product to purchase. Craft beer lovers tend to like to try new things on a regular basis so brand affinity plays a smaller role in these purchasing decisions.
Product packaging has become a critical element of brand strategy and marketing. Let’s look at some of the emerging trends for 2018. CODO reviewed some of the stand-out product packaging designs currently on the store shelves. You should check out their blog article on 2018 craft beer branding trends. https://cododesign.com/2018-craft-beer-branding-trends/For a brief summary, keep reading.
Several craft beer companies have started to use differently colored cans and bottle labels to differentiate between SKUs. It’s simple and easily identifiable. For example, IPA has a green label and porter has a blue label.
They also demonstrate the use of photos on labels and packaging. https://cododesign.com/2018-craft-beer-branding-trends/ Some of the examples they provided are visually stunning. This confirms the importance of trade dress, design patents and copyright in the brand protection strategy. Product differentiation depends on more than the beer name. It includes the packaging and even the bottle design itself. As a true IP firm with licensed patent, trademark and copyright attorneys, and a craft beverage legal team, we understand this and are thrilled to see others reporting on how important these elements are in brand strategy!
CODO also notes the use of both “busy” designs that contrast with many of the minimalist brand packaging used by some breweries and the use of minimalist designs on white cans. Interestingly, they comment on how this packaging begs the question of whether it is premium, vintage or store brand. They conclude that it remains to be seen if these white minimalist packaging designs will be successful on the store shelves. https://cododesign.com/2018-craft-beer-branding-trends/
It is a black and white year. In addition to the prevalence of white cans, black has been another trending can color. But it is not limited to the background color on cans. It extends to black-out can lids, caps and carriers. The article comments that this color scheme can be perceived as either be premium or sinister so the creative element is must adequately convey the brand personality and marketing message.
Throwback designs continue to be popular. Instead of the 40’s/50’s era theme, the newest labels design revives a 60’s/70’s theme. A bit more irreverent (aka fun) than the Beaver Cleaver or Happy Days brand personality. https://cododesign.com/2018-craft-beer-branding-trends/
CODO predicts that the introduction of private label brands by Big Box retailers will drive prices down. I agree that this is a real threat and needs to be part of any craft brewery’s SWOT analysis. However, I hope that the lure of quality artisan, locally produced, fresh products is not supplanted by commoditization of craft beer. It goes against the essence of the industry and what it stands for – something I hope Big Box can’t capture and replace.
CODO also warns that “Craft should be weary of competing on price. Against monolithic competition, including other big craft breweries, this is a race to the bottom.” More and more craft beer companies are producing 15 packs or the like, at a bulk type price. This is driving down the rice industry wide. Consumers are impacted by the per unit price. While the breweries may be selling more beer, they are making less money per sale. This is a recipe for disaster in the long run. Once consumers get sed to buying a quality craft beer for $2 or $3 per can, they won’t go back to paying $4 or $6 per can very easily.
CODO also confirms that craft beer drinkers are a fickle bunch, and an experimental bunch. New strategies are emerging with a perpetual limited edition release cycle replacing the role of the flagship beer for some breweries. Declining sales for flagship beers has forced craft breweries to look at different strategies to stay relevant and retain market share. This is interesting and inviting for the brewers who can be creative and innovative. However, from a business perspective, this can be risky. When beer names, recipes and packaging have to be re-invented with every product, costs increase. The brewery isn’t going to have the advantage of long term supply contracts to achieve lower ingredient costs. With lower margins, it remains to be seen if this strategy is a viable long-term business model.
CODO suggests that cannabis will take market share away from alcoholic beverages in next decade because today’s youth use more cannabis than alcohol and will likely continue that trend as cannabis becomes legal throughout the country. There is a ring of truth in this prediction, but I hope it is wrong and that the craft beverage industry finds a way to capture this demographic. The media reported that analog clocks are being eliminated from some schools as irrelevant and old technology. I actually prefer seeing the clock hands on my watch in lieu of just the digital numbers. I am not sure I am ready for the day when alcohol is only for the “old people.”
CODO suggests that the margins of taprooms will result in more craft beer being sold in tap rooms than through off premises retailers, restaurants and bars. It also suggests that there is increasing tension between craft beer bars and breweries. While craft beer bars helped create the market and demand for craft beer, they are now direct competitors in the local market where brewery tap rooms are as prevalent as beer-focused bars who don’t have the same cost advantage.
The Tracy Jong Law Firm team can help your brewery to develop a custom brand strategy that includes protection of all of your brand assets such as can and bottle shapes, labels, artwork, carriers, other product packaging, point of sale materials, product displays, table tents and neck hangers. We have significant experience working with small companies and are licensed patent and trademark professionals. For more information about our services, and how we can assist your company, please contact us at [email protected].