It’s hard to imagine today’s U.S. beer market without the craft sub-sector. But that wasn’t always the case. In fact, annual craft sales have grown more than 65% in the past five years, with sales of almost $5.8 billion for the year ended Jan. 28, 2017. But that much growth has sparked just as much—if not more—competition, which has been a boon for consumers. On the flipside, however, the abundance of choice has made it difficult for brands to get noticed—and get picked up—by thirsty consumers.
Crowded shelves at the store don’t offer infinite space, and retailers have to pick and choose their selections carefully. Last year, brewers debuted more than 2,000 new products in the total beer category (including ciders and flavored malt beverages), and more than 1,800 of them were craft beers. While that’s down from more than 2,000 new craft beers in 2015, it’s safe to say that brewers need every edge they can get when their products have so much new competition. That’s where product packaging can help, especially when you consider that 70% are made at the shelf.
According to Nielsen’s Craft Beer Category Design Audit, 66% of American craft beer buyers say that a beer’s package/label is “very” or “extremely” important for getting them to notice it. Additionally, 60% say that the package/label is “very” or “extremely” important in convincing them to give it a try and buy it. Overall, 71% of craft beer buyers say they like to try brands with bold and interesting packaging. While package and label design is relevant for all consumers, women are slightly more swayed by design than men (75% vs 66%) when it comes to the craft beer category.
Despite the influx of options and myriad variety, savvy creatives are finding success in catching consumers’ attention amid a sea of diversity. During our Craft Beer Design Audit study, we tested 17 package designs in the craft beer realm: nine that were big sellers on the East Coast and eight that were big sellers on the West Coast. Among those with sales from the East Coast, only Big Kona Brewing’s Big Wave Golden Ale and Deschutes Brewery’s Black Butte Porter were viewed as distinct in their ability to stand out and establish brand personality. On the West Coast, Kona’s Castaway IPA and Saint Archer’s IPA ranked highest in terms of equity differentiation.
Among the packages for the West Coast beers, the design audit study found that consumers engaged most with illustrations and logos, and less with package copy. It also found that in terms of equity differentiation, the two beers that were found to appear distinct (Castaway IPA and Saint Archer IPA) did not feature hops imagery. Among East Coast beers, consumers tended to notice and engage with unique brand logos and unusual package carrier graphics. Comparatively, heritage and brewing process claims didn’t perform as well.
With the entire beer category growing each year, package design is a key consideration across the board, especially in newer sub-categories that are growing, like cider. Not only were there three times as many new cider entrants in 2016 as there were in 2012, cider competed with an average of 627 beer items on the average liquor store shelf. And as a result, consumers who buy cider say that 72% of the time, they make their purchase decision after they’ve looked at all the options (rather than knowing ahead of time).
With so much variety and competition in the craft beer aisle, particularly as craft sales inched up just under 3% over the past year, marketing and label innovation play a significant role in getting noticed and added to shoppers’ carts. Standing out visually is also important when you consider that beer purchase decisions are more likely to be made at the shelf than overall fast-moving consumer goods purchases (70% vs. 58%).
For additional insights, download The State of the U.S. Beer Market report.