June 13, 2024
Market Spotlight: Opportunity Brews in the Craft Beer Niche
Intensifying competition in this $29 billion industry has made brand-building more important than ever. Great merch can help brewers stand out – a keen opportunity for distributors.
The craft beer industry may be at an inflection point, and in that lies potential opportunity for promotional product distributors.
Craft beer brewers have been one of America’s great small-business success stories of recent decades. Thousands of independent breweries have sprouted nationwide, creating jobs under local ownership and suds-style diversity in a marketplace once completely dominated by large corporate brewers that churned out cookie-cutter beers.
Between 2015 and 2023 alone, the number of craft brewers in the U.S. more than doubled, rising to 9,761 as of last year, according to data from the Brewers Association, a nonprofit trade association for the independent beer industry.
Still, there are some mild headwinds.
U.S. craft beer sales volume declined 1% in 2023 – better than the overall decline in beer volume sales (5%), but still down.
The Brewers Association reported that the number of craft brewers increased 0.9% year over year in 2023, but that was thanks to a 3.7% jump in the tally of taprooms; the number of regional craft breweries, microbreweries and brewpubs all declined in the low single-digit percentage range. The overall openings growth rate was also markedly lower than in recent years.
9,761
The number of craft brewers in the United States in 2023(Brewers Association)
Still, for all that, the retail dollar sales of craft beer in the U.S. increased on an annual basis in 2023 by 3.4% to $28.9 billion. Craft now accounts for 24.7% of the $117 billion in U.S. beer retail dollar sales. Despite the sales volume reduction, the dollar sales value rose because of price increases and slightly stronger onsite sales growth versus distribution, according to the Brewers Association.
What does all the statistical soup mean? Perhaps this: There remains a historically high number of craft brewers out there and consumers are willing to pay a premium for the product, but the market may be nearing a saturation point, at least in terms of the number of businesses it can support, making competition stiffer.
To stand out in a crowded niche, brewers need more than just a great product – they need a strong, distinctive brand. Promo distributors can empower brewers to build just that with the help of logoed merchandise. This market spotlight features insights from brewers and distributors that will help both mutually succeed.
$28.9 Billion
Retail dollar sales of craft beer in the U.S. in 2023, a 3.4 % increase(Brewers Association)
Leading With Merch in a ‘Flooded Market’
Before Wild Fern Brewing sold a single beer, the forthcoming crafter of independent ales and other suds styles launched a line of branded merchandise.
“We came out with merch to build excitement around our opening, while also bringing in some revenue for the business,” says Julie Disanti, owner/brewer at Wild Fern, which is set to open in late summer 2024 in Frenchtown, NJ.
The capsule collection of two T-shirts, a dad hat and stickers, with their graphics bearing a distinctively earthy and low-key psychedelic vibe, was having the desired effect. More than $2,000 worth of swag sold within a few weeks of the line’s debut. Passersby in the artsy Delaware River tourist destination of Frenchtown were spotted sporting the items.
“Our merch is helping to create brand awareness and an aesthetic that many can recognize to help our brewery stand out in such a flooded market,” says Disanti.
Like many small-scale brewers, Disanti felt it was important to work with other local small businesses that create quality art/merch – a reality mom-and-pop promo distributors can potentially capitalize on with brewers in their areas. Artist Emily Kelley designed Wild Fern’s merch graphics and screen printers Eric & Christopher produced the decorated apparel.
“We hope that people will want to buy our merchandise to support the local artist who makes the designs and the screen printer who prints them,” Disanti shares. “Also, when people wear our merch around town and beyond, we hope that it’ll spark conversation and serve as advertising for our small business.”
3 Tips for Success With Craft Brewers
Provide warehousing and inventory management. “Generally one of the biggest issues craft brewers encounter with merch is they lack the warehouse space to store it and inventory properly,” says John Resnick, a partner at Massachusetts-based Proforma Printing & Promotion (asi/490705), an affiliate of Top 40 distributor Proforma (asi/300094). Resnick, who has been working with independent breweries for 20 years, adds: “Being able to provide a solution both in warehousing and inventory management can be a big positive to building business with a brewery account.”
Handle e-commerce. An online store/web-based shopping option for a brewery is essential. Resnick suggests distributors take it a step further and run the store – and related fulfillment – on the client’s behalf. “It makes it harder for a competitor to take the business from you,” he advises. Resnick, for instance, operates a quarterly online pop-up store for a brewer, featuring limited-edition merch lines. Each quarterly store typically generates $25,000 in revenue – a win for the brewery and for Resnick.
Offer a spectrum of solutions. It’s important to be more than a “swag guy”; distributors need to be a marketing partner to craft breweries, whose personnel are often pressed for time as they wear multiple hats. In addition to handling e-commerce, warehousing and inventory management, bring creative product and design ideas to the table, and ensure clients know the full range of solutions you can provide, from hard good promos and branded apparel to print and point-of-sale items.
Weaving Stories With the Help of Swag
At heart, Joe David is a storyteller.
He tells those tales – historical, cultural, familial – through the traditionally inspired beers he brews and the events he hosts at his brewpub, Descendants Brewing Company. It’s his hope that over a beer and a meal, patrons are inspired to contemplate and share their own stories. The merch Descendants sells builds on the hearthfire essence of the brand. T-shirts, hoodies, hats, growlers, pint glasses and goblets often feature the brewpub’s tagline, “What’s Your Story?”
The “What’s Your Story?” Descendants’ tagline often appears on the brewpub’s apparel.
“We love including that line because it’s a question that means so much to so many people, and we’re all about starting that conversation – that’s who we are,” says David. “Merch gives our guests a chance to take a piece of that feeling and what we do home with them. We hope our guests wear our apparel or take a sip of beer from one of our glasses and it reminds them of the special experience they had here and gives them the urge to visit again.”
Indeed, merch is another vehicle for telling the Descendants story – and a strong example of how the right messaging on products can augment a brewery’s brand, something distributors should keep in mind when consulting clients.
A branded goblet from Descendants.
David shares what he – and many brewers – are looking for in a merch partner: “The biggest things are consistency, quality and good communication. When you’re working on a project, you want someone you can trust and who cares about your business – what you’re trying to say and do.”
Beyond Descendants’ mainstay merch collection, the brewpub also recently started doing swag for specific events, such as the Viking Fest it hosted this spring. “Merch for a specific event is great,” says David. “It allows our guests and us to celebrate and enjoy the memory long after the event is over.” Clearly, distributors should be presenting event-specific merch ideas to brewery clients.
Event-particular merch, like this T-shirt and pint glass Descendants created for its recent Viking Fest, “allows our guests and us to celebrate and enjoy the memory long after the event is over,” says owner/brewer Joe David.
David admits he gets a thrill when people don Descendants swag.
“A friend of mine was at Epcot Center in Florida and shot me a photo of someone he randomly saw at a restaurant wearing one of our T-shirts,” says David. “The joy you experience seeing something like that is really special. To make an impact on people and for them to love what we do and the story we tell enough to share us with others in the clothes they wear is just really humbling and an honor.”
3 More Tips for Success With Craft Brewers
Look for what’s missing. Established breweries probably already offer some merch. But what are they not providing? Check out their collections either online or onsite to see what they’re offering – and, more importantly, where there are gaps in the collection. How can you, as a distributor, enhance what they’re already doing? What new swag solutions can you provide? Answer those questions and then approach the brewery’s decision-makers with your ideas.
Provide free spec samples. Many buyers want to test out the physical product before retailing it to customers. Getting items into hands – especially when the products are superior quality – can help advance a sale and get clients to invest in higher-margin items.
Offer creative consultation and graphic design. Some breweries have especially small staffs, lacking a traditional marketing team. Fill that gap when it comes to merch designs and campaigns. “Being a graphic database for them will be a huge value add,” says Resnick, the Proforma pro. Also, consider pitching custom products, other distributors say. This may not be a fit for all breweries, but certain ones with a bit more spending power (see example below) may be keen for custom.
Staying True While Evolving a Brand
Neshaminy Creek Brewing isn’t just selling beer; the Croydon, PA-based brewery says it’s selling an entire brand. And that, shares Logistics Manager Kevin Day, is why merch plays an integral role in the brewer's success.
“When you get your merch right, people want to walk around advertising your brand, which is obviously great,” says Day. “You have to give people quality and a look that really communicates what you’re about. If you do, there are margins to be made on merch, and it helps build the core beer business.”
View this post on Instagram
Neshaminy Creek’s independent roots have a lot of crossover with the Philadelphia-area music/punk rock scene. That somewhat edgy, DIY aesthetic has been reflected in everything from beer-label art to the designs on T-shirts and hoodies the brewer has offered over the years, with skulls, guitar players, low-budget band touring vans, and a kind of dark comic book style among the graphical themes.
“They’re identity pieces for people – a way of showing you’re part of the creative community that we’re part of,” says Day, noting that T-shirts spotlighting particular beers the company brews have proven popular, as has “anything with skulls.”
The brand vibe has also been conveyed in custom products Neshaminy Creek has created, which include guitar pedals and skateboard decks (counterculture punk rock tie-in). “We’ve found there’s an audience for those products,” says Day, noting that making such items as low-quantity limited editions has helped enhance appeal.
Still, Neshaminy Creek’s grown over the years, drawing in a wider audience. Day says one of the interesting challenges that has come with that is being true to the brand in the merch it creates, but “not being too niche” in all graphic designs.
While still offering its punk-inspired skull-style merch, Neshaminy Creek has also introduced items like windbreakers and soft, slouchy dad hats that have more subtle branding, such as a simple left chest logo on the jacket that says “NCBC – Neshaminy Creek Brewing Company.”
View this post on Instagram
“Not everyone’s going to want a giant skull on their windbreaker,” says Day with a laugh. “Being able to meet in the middle, with a simple sleek logo that’s still very much on-brand for us, is great and gives us the chance to bring more people into the fold. The response has been great. I’ve had people stop me on the street to ask about the windbreaker. You want to catch people’s eye, and we are.”
For sure, distributors can help shepherd brewers through the complexities of evolving their brand in merch designs and broader marketing efforts – another value add that can keep clients loyal. At day’s end, one thing’s for sure: Craft brewing and promo are still very much grassroots businesses, and they can help brew each other’s success.
Product Hub
Find the latest in quality products, must-know trends and fresh ideas for upcoming end-buyer campaigns.