Shock Top Flavour

Crafting small market identity with big market marketing

Shock Top captures a little craft beer identity in a bottle

Is Shock Top a craft beer? It certainly does a good job of marketing itself as one. But Ken Beattie cannot help but laugh.

“In my politeness I’ll say imitation is the best form of flattery,” allows the executive director of the B.C. Craft Brewers Guild. After all, Shock Top is really brewed by U.S.-based Anheuser-Busch, a subsidiary of “the world’s largest brewery” Anheuser-Busch InBev.

In 2012, the U.S. industry group The Brewers’ Association, published a blog post decrying “crafty” and “craft-imitating beers” such as Shock Top and SABMiller’s Blue Moon. The post characterized craft breweries as small, independent and producing less than 7 million hectolitres of beer per year (in Canada, there’s no hard and fast rule, though the Brewers Association of Canada defines a microbrewery as producing up to 250,000 hectolitres of beer per year).

“It’s important to remember that if a large brewer has a controlling share of a smaller producing brewery, the brewer is, by definition, not craft,” the post reads.

So, whether Shock Top is craft or not depends on your definition of craft beer. Is it the size of the brewery that matters? The company that owns it? The amount of beer it produces? Shock Top declined to comment, but clearly they’re doing something right with consumers. The Belgian-style wheat ale is considered the fastest growing craft beer in the U.S, according to a report by the credit-rating agency Moody’s published in February, which indicated that production of Shock Top had increased by 64% between 2011 and 2012.

“It really doesn’t have to do with volume,” said Jennifer Davidson, general manager of Six Pints Specialty Beer Co., the craft and speciality beer subsidiary of Molson Coors, which includes Granville Island Brewing and Creemore Springs. “The way we look at it is much more from a consumer definition, and consumers aren’t preoccupied with the size. They typically don’t know if a brand is big or small. And even local, many consumers aren’t caught up in that craft brands have to be local.”

In other words, the popularity of Shock Top (and Granville and Creemore) is a good example of how craft is changing — or, perhaps more accurately, the definition of what makes a beer craft, according to some. Craft carries such cachet amongst consumers now that the big brewers want in and the ongoing challenge for smaller, regional brewers is finding a way to stand out against competing big brewers with bigger marketing budgets.

“It’s very true that the whole idea of craft seems to be blurring with bigger breweries launching their version of the craft beer, even though they can’t say it’s truly craft,” said Michelle Faris, vice-president of marketing at the Ontario-based Muskoka Brewery. “And likewise, smaller breweries are actually growing and attracting consumers from more mainstream beer… The challenge for all craft breweries out there right now is how do you differentiate? Because there’s more and more of us entering the marketplace.”

This time last year, the Ontario Craft Brewers association estimated close to 150 craft brewers were operating in the province. The B.C. Craft Brewers Guild boasts 30 members, but Beattie knows of at least 71 brewers currently operating in the province are open, with another 17 planned – a big jump over the 50 or so brewers in operation last year.

And there’s still lots of room for growth. In B.C., Beattie puts craft beer’s market share at over 22% based on provincial tax revenue. In Ontario, where the Ontario Craft Brewers association measures market share by volume, Ontario craft beers counted for 3% of beer volume sold in the province in 2013.

But according to a 2012 report by BMO Capital Markets economist Alex Koustas, despite their growing success, the average craft brewer still only operates on margins of roughly 10% – compared with 30-50% for the industry’s larger producers. That leaves little room for extensive marketing campaigns.

While some brewers still pursue traditional types of advertising – namely print, radio and television campaigns – more recent efforts are trending towards a potent mix of word-of-mouth, strategic event participation, brewpub type experiences and the production of limited run beers.

“I can’t overstate the impact of a consumer walking up to a table and talking to the person who made the beer,” said Beattie on the benefits of participating in craft beer festivals, as well as so-called “tap takeover” events, where a bar might give a craft brewer free reign over its draught rotation for a short period of time. He likens such scenarios to farmers markets, where consumers can meet the creators of a beer, learn the differences between one style or brand of beer and the next, and taste samples of each.

“It’s not just about pour and serve, pour and serve,” echoed Faris, referring to more traditional festival settings where big brewers are more concerned with moving product than engaging with and educating consumers.

In a similar vein, many smaller, upstart brewers are literally opening their breweries up to the public, too. Some have opened brewpubs, which combine a brewery and restaurant, while others, such as Toronto’s Indie Ale House, bottle up draught beer for retail sale directly from the brewpub. In Vancouver, Beattie pointed to an especially popular trend, where almost every brewery in town will fill  two-litre jugs of beer called growlers on-site.

“And the really cool thing is, chances are you’re talking to the brewer, because he’s pouring the growler, because these are small shops,” he said, likening it to the resurgence in artisanal butcher shops and cheese stores.

And tied up in all of this is the growing market for what is quickly becoming one of the defining aspects of the craft market: unique, limited run beers that big-name breweries could never make on such a small, often experimental scale (at least, not without buying up smaller brewers, as Creemore did with its purchase of Granville Island Brewing Co., which in turn is now owned by Molson, in 2009).

While new brews may have once been limited to a seasonal schedule, craft brewers now experiment with a range of special, unique or downright weird styles year round. Brewers such as the Ottawa-based Beau’s brew standards such as Lugtread year round, but also experiment with more adventurous flavours – a lavender-infused St. Luke’s Verse anyone? – as part of their Wild Oats series, which to date has included over 40 unique beers. A Vancouver brewer by the name of Parallel 49 has, according to Beattie, brewed and sold an astounding 60 different beers in just the last two years.

“You can’t make tons of money on limited runs, but leveraging that and talking to consumers and sharing the fun and the passion – that’s the marketing angle,” said Faris. They’re good at generating buzz. Snowy Howell, one of Muskoka’s most recent limited edition brews – a Belgian White IPA collaboration with Olympic gold-medal winning Canadian freestyle skier Dara Howell –  sold out in 24 hours this past July. That’s something you’d be hard pressed to see Shock Top do. When Muskoka reveals these beers on Facebook and Twitter, Faris said, “engagement numbers go through the roof.”

“It’s finding a way to differentiate,” she added. “It’s got to be beyond just craft beer credentials. It’s got to be great tasting beer, and something that makes you unique – your brand essence that no one else has.”

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