Cocoon
Blog
8.12.2020

Text: Jakub Plášek, Strategic Planner in Cocoon Prague 

Brewing industry appears to be in a churn period and a lot of things are happening on the market. Will beer mean the same in the future as it does today? Traditional beer manufacturers are re-shaping businesses and challenging their brands’ architecture which used to be an almost untouchable asset!

Watching what’s going on in the beer world seems to be a must for the agency which has touched more than 50 beer brands and dozens of their extensions within its 25 years of existence. But it’s not just a matter of keeping up with the field of our expertise, we simply love designing and also drinking beers. OK, located in the heart of the Czech Republic the latter one can be taken for granted. The point is, it’s really exciting to see how much the category has changed and how those changes have accelerated in recent years. We are not living in the same world as we used to in 1995 – consumer needs are not the same, and beer isn’t either. 

The wait for disruptive innovation has ended

Innovations are vital to any category of products and services. Both competitive forces and newly emerging consumer needs stimulate brands and companies to bring new ideas into life. This influences all parts of the production-to-consumption chain. What we usually spot on the market is just the top of the iceberg, however. No need to mention progress in materials used, technologies, manufacturing or planting new sorts of hop, which is taken for granted. It is more exciting to look at what is happening on shelves, in bars and even at homes. We see interesting endeavours for sustainable packaging like Carlsberg’s paper bottle and biodegradable or spent grain ring holders.

We see how growing demand for convenient at-home-consumption is pushing breweries to offer new formats and home taps. Last but not least, the desire for the most colourful experiences possible is inspiring brewers to come up with crazier and crazier recipes and combinations of ingredients.

The young blokes of the nineties who were addressed with beer advertising full of manliness and adventure have become history, the new generation cares much more about exciting taste profiles, unique stories and sustainable production – perfectly manifested in the craft beer tsunami hitting the US market in the last decade.

All those novelties represent just a responsive or incremental innovation, something expected, driven by the usual evolution of culture and society (and consumers as well). But what is happening in breweries, especially in the US market, is becoming a worldwide phenomenon very soon, and can be perceived as a truly disruptive innovation. Yes, I mean embracing the hard seltzers category by beer giants such as AB InBev, Constellation Brands, Molson Coors and Carlsberg.

If innovating “product features” doesn’t bring profit, then you should innovate your way of thinking

It’s no secret that beer category is declining and no craft beer can change that. Seeking for a way out of potential disaster, big beer producers have been trying out different strategies from developing non-alcoholic beers (still a rather promising direction), various beer mixes and focusing on adjacent categories such as ciders. The sweet spot has finally been found in hard seltzers (naturally brewed, carbonated, low-alcohol and low-calorie, flavoured beverages). One can ask, why is this a disruptive innovation? Because breweries have admitted that beer might not be everything – they’ve changed their way of thinking, they’ve opened up. However, they were forced to do so, towards completely new perspectives. The rebranding of Molson Coors to Beverage company seems to be symptomatic in this context. If Big Beers are ready to violate the essence of their existence –beer and the related brands–, are they desperate or super-smart? Only the future will give us the answer…

 How far can we go when talking about beer?

From the brand strategy perspective, the current situation is extremely interesting. Traditional beer brands are concurrently launching hard seltzers extensions (Coors Light Seltzer, Bud Light Seltzer, Corona Seltzer, etc.) and a bunch of other seltzer brands (Bodega Bay, Vizzy, etc.). It is a completely new approach to portfolio management. Let’s not even talk about the fact that everything is happening very fast. Breweries are taking a conscious risk knowing they may harm their former beer assets. But there is one question: do consumers still care? The category formerly defined by the fact that production took place in a brewery, and of course made from water, hop and barley, has been challenged and its boundaries are blurred by those who have carved them into stone in the last century.

A fascinating experience

As a brand and innovation consultancy we are really excited. This churn period of the brewing industry opens space for brave, even crazy innovative ideas, challenges brands we know so intimately – what to do with identities, how to create new consumer experience, how to bring a product closer to consumers and offer them the right experience. Simply put, we cannot wish for better times for us Thinkers, Designers and Makers.

 

Sources of images:

https://coolmaterial.com

https://geekhack.org

https://www.budlight.com/

https://bodegabay.co.uk

tagy: brand strategy brand identity
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