Craft vs Premium

I think it was Boak and Bailey who pointed out this article entitled Is Craft Killing Big Beer – Not Through Sales, But Brand Status Erosion? It’s about the US beer market, and what is very interesting is how different it is from the situation in this country. For a start, if you try to extrapolate the US definition of “craft beer” to the UK it would undoubtedly include all cask beer and all premium bottled ales, which is certainly not how it is perceived here.

We have also never seen any consistent efforts by brewers to develop “premium” beer brands. As I argued here, premium prices tend to apply to one beer category over another, and between upmarket and downmarket pubs, but not to any great extent within individual categories. In recent years, of course, one of the greatest successes of premium beer branding was “reassuringly expensive” Stella Artois, but the brand owners destroyed that image by being too keen to pursue the mass market (not to mention cheapening the recipe) and it has now just become another commodity product. Nowadays, the beer that seems to have acquired that cachet is Peroni, which significantly is not available in cans and never seen on discount at ASDA. Over the years, Guinness has also successfully maintained a premium position, to some extent because it defines its own category and has no effective challengers.

In the past, the national brewers managed to secure something of a price premium in the market because their beers were widely known and advertised, and therefore perceived as superior to the artisanal products of the local independent brewers. I have an early edition of CAMRA’s guide to Derbyshire Ale which displays an obvious preference for Burton beers – Bass, Ind Coope and Marston’s – over the more plebeian output of the Nottingham brewers. That’s largely gone now, as are many of the beers, but it’s still noticeable that pub company pubs, which in many cases have been inherited from the Big Six, tend to charge more than the remaining family brewers.

At least in UK terms, craft beer is perceived as one or more of unusual, extreme, challenging, an acquired taste, something that appeals to geeks, enthusiasts and aficidionados. This isn’t the case in the US, where much of the volume classed under craft is beers like Samuel Adams and Brooklyn Lager which, although coming across as better and more characterful than Budweiser or Miller Lite, are not so much so as to challenge the consumer. Therefore, a drinker who sees himself as discerning, and wants to be seen as such, could happily order one in a bar in a way that his British counterpart would never dream of ordering something described as a “craft beer”.

The key to the marketing concept of “premium” is that it is something that is a clear step up from the mainstream, in the quality and authenticity of ingredients and also, crucially, in how others perceive it. By choosing a premium product, you may well feel more satisfied with your purchase, but you will also make a point to other people that you are a person of discernment, and that you can afford it. But it still retains a link to the mainstream; it is not something that is different to the point of being offputting. It is Tesco Finest over Tesco standard, Audi over Volkswagen.

If you are a business person, staying in a hotel overnight with colleagues and charging your bill to expenses, and you go into the bar, what beer do you order to suggest you are someone of taste and discernment, but not some obscurantist geek? That is the question that “premium” has to answer. The true connoisseur, of course, would say with some justification, that it is largely a marketing construct anyway.

The wine and spirit markets operate rather differently, as in general as you progress up the price scale you will encounter products that are “more so” rather than dramatically different from the mainstream ones. But beer, at least in the UK, doesn’t really work like that.