THE IMPACT OF COVID-19 ON CRAFT BEER
Anyone who remembers the years of the Great Recession - also known as the financial crisis of 2008 -, knows that avoiding the impact that the economic businesses worldwide are going to suffer (and that we are already suffering) as a consequence of the frantic expansion of the coronavirus would be distasteful.
We are facing an unprecedented global emergency situation, which will probably lead to major changes in our society, at all levels. Here at C R A F T E D, however, despite the numerous uncertainties in which we are immersed, we believe that the time has come to give ourselves a break, to turn off the news and to strive to promote positive thinking.
And of course to trust the strength of a field such as craft beer, which has something embedded in its DNA and compared to other industries it has a strong ability to overcome difficulties, just like it has been demonstrating during many years. In any case, before continuing I would like to clarify that in no way do I intend to have a frivolous attitude to the seriousness and the critical moment that many professionals and friends of the beer industry are going through, but rather the opposite, show my sincere support and fullest respect to them.
The measures and government aid will undoubtedly leave its mark on the industry and the evolution of our beer scene, along with the particular and financial situations of each specific case. But in this article I wanted to share five points and some personal reflections that I hope, in some way, can help us to see some light at the end of the tunnel.
1. WE DON'T GO OUT, BUT WE DRINK (MORE) AT HOME. THE BREWERIES ADAPT TO A NEW SCENARIO.
The proof of this is found in the fact that many beer consumers are ordering online, both for pick up and for home delivery directly from the breweries (which, on the other hand is of great help, since as a general rule it provides higher margins for breweries and better prices for their customers).
In this regard, it is worth mentioning that according to data from the Brewers Association, the week of March 15th the beer sales in the United States reached sales figures similar to a mid-summer week. This circumstance, in addition to serving to alleviate the negative impact of the sudden closure of bars, breweries and tap rooms, allows consumers to cover the fears of running out of beers and have their beer needs taken care of during confinement.
I do not have the figures in Spain or other countries, but after I seeing through social networks, we have to commend the creativeness when it comes to temporary solutions for direct / online sales that have been put into place in recent weeks, and the rapid adaptation of many breweries to the new situation.
2. BEER SALES IN SUPERMARKETS INCREASE BY 78%.
As the media has pointed out in recent days, the Spanish have increased their beer purchases in the supermarket by 78% during the first week of confinement.
It is true that most craft beer brands do not sell their beers in supermarkets, however this should serve as an indicator that we are dealing with a basic product in the citizens' shopping basket, and something that is more in demand in the situation that we are experiencing. Simply put: people want beer at home.
3. LOWER QUANTITY AND BETTER QUALITY. RESPONSIBLE CONSUMPTION.
One might think that the consumer, faced with the serious situation of economic uncertainty or lack of income, prefers not to spend a lot and rather buy cheap (=industrial) beer, right?
We know that craft beer is an example of a niche market, and that despite a growing amount of fans, there is still an overwhelming majority who prefers to fill their fridge with cheap beers. But on the other hand, it is also true that there is a growing trend that indicates that consumers prefer to spend their money on quality products, and not only in terms of beer, but also when it comes to food, personal care, etc. And even more so when we are faced with time in confinement.
Less quantity and better quality (flavor and variety), is the new reality that little by little is prevailing when the responsible consumer continues to gain prominence.
4. BRAND VALUES ARE KEY WHEN PAYING MORE.
The values that a brand represents; sustainability and transparency associated with its origin are also factors that are increasingly more valued by consumers, when dealing with quality or convenience, surpassing other factors such as price, just as we have seen in the previous point.
A recent study carried out by IBM where global consumer behaviors have been analyzed in twenty-eight countries, shows us that consumers of all ages and different income, pay more for products that are aligned with their personal values. Something that in my opinion perfectly identifies the craft beer field and its consumers. This is something to take advantage of.
5. LOCAL CONSUMPTION AND SOCIAL COMMITMENT.
Increasingly more people are becoming aware of the importance of consuming local products, and how this helps to maintain and develop the economy of the area they live in.
The case of craft beer is a good example, and more so in these moments in which the collaborative effort of everyone is enhanced not only by trends that the market indicates, but also by the tangible demonstration that the evolution towards an increasingly local, committed and supportive economy is essential for our system not to collapse. In a time of crisis like the current one, many consumers are already showing it, and in my opinion, everything that is happening will very likely serve as a lesson (I hope) to encourage this process of transition towards new, more sustainable models.
Summarizing it all: an agile adaptation by the breweries to a new scenario, a notable demand for beer by the consumers, a raised interest in quality products, and a consumer who is increasingly committed to the values that brands represent, and consuming local products. And of course, the human component and the passion behind our favorite drink. That’s why I am convinced that we will get through this.