During the prohibition era in America, people resorted to “bathtub gin” for their supply of spirits and moonshiners did a thriving business. But more often than not, Americans thirsty for an alcoholic beverage brewed their own beer at home. It wasn't difficult, the ingredients were readily available and weren't very expensive.
You might say those home brews of the 1920s gave birth to today's craft beer industry, which is rapidly gaining marketshare from the mass market giants.
What exactly constitutes a craft beer is hard to pin down. The term typically applies to the size of the brewery making it, as much as to the artistry that goes into the product.
Craft brewers are generally small, independently owned breweries in which the end product is a work of art, not to be influenced by cost. Many of these breweries started in someone's basement, with a compelling back story adding to the market appeal.
Because the beers are brewed in small batches and don't scrimp on production costs, craft beers are not cheap, selling for the same price or more as a premium German import.
But despite the cost and despite a lackluster economy going on 5 years, sales of craft beer are booming. A new report by consumer research firm Mintel finds that 23% of beer drinkers choose a craft beer.
The survey found that consumers who never drink craft beer – who only buy Budweiser or Coors, for example – make up only 30% of the beer-drinking population. Clearly, brand loyalties are shifting.
Most craft beer drinkers cite taste as the main reason for selecting a particular brand, but their affinity shares characteristics with consumers who value certain types of food, because of the way it is produced or the fact that it is local.
Small is beautiful
There may be certain political/cultural/lifestyle significance at work as well. Whether they know it or not, many craft beer aficionados are embracing the philosophy of British economist E.F. Schumacher, who developed the theory that “small is beautiful,” because it is more empowering to people.
The Mintel survey found that among beer-drinking Millennials, the segment's heaviest users, 70% say that the brand of beer says a lot about who they are. In other words, you are what you drink.
"There is a strong sense of community in the craft beer world," said Mintel food and drink analyst Beth Bloom. "Consumers like to share knowledge with one another and are highly invested in the products that they choose.”
So drinking a craft beer is a lot like savoring a fine wine. There is information to be absorbed and the uniqueness of the product lends itself to social activities.
“Craft brands share exposure through collaboration, a practice almost wholly unique to the craft beer market,” Bloom said. “As such, tap rooms, bottle shops, and beer-garden-style breweries, where craft beer can be discovered, discussed, consumed on-site, and even purchased for at-home enjoyment, make for a complete, customizable experience. Craft beer is not only a beverage choice; it appears to be a lifestyle choice."
Research gathered by Technomic shows craft beer is especially favored by consumers in bars and restaurants. According to the research firm, 55% of all craft beer purchased in the U.S. is consumed in a commercial establishment.
Testament to its strong appeal, craft beer's popularity has boomed during the worst economic times since the Great Depression. Mintel projects craft beer sales in the U.S. will reach $20 billion this year. That's more than double the sales from 2009.