CEO Roundtable:  Craft-beverage industry weathers changes

Craft brewing’s once-captive audience is beginning to get a bit more distracted.

Consumers are increasingly moving on to the trends of hard seltzers and non-alcoholic drinks in the marketplace, and now that grocery stores carry wine and beers, they’re competing for traffic and shelf space. But then there’s the challenge of being seen in general.

Heavy is the heart for smaller brewers and distillers, who have ridden Colorado’s wave of craft-brewing supremacy that many in the rest of the nation now follow.

“We’re losing drinkers,” said Mat Dinsmore, owner of Wilbur’s Total Beverage in Fort Collins. “The boomers are aging out and capping on what they can spend. Xers like me, the first generation to make less than our parents. Millennials, half are actively trying not to drink. We have an entire 16-foot gondola of non-alcohol spirits. Half of them are awful. But people are really sober curious.  If you take it a step further, people are living healthier (and losing weight), and they don’t want to drink.

“We have some headwinds in front of us this industry has never had,” Dinsmore said.

Every month, BizWest brings industry leaders to talk shop and challenges they face as an industry. This month, it was the craft-brewing and retail-alcohol industry’s turn.

“People aren’t drinking as much,” said Todd Thibault, culture czar with Breckenridge Brewery, which just recently took over Sweetwater Brewng’s Fort Collins space in July. “I really have always felt that education is a big part of what we really need to do.”

No, he doesn’t mean create a beer curriculum in local schools. It’s as simple as engaging with customers. When they don’t get the beers they want, they tend to rely on old standbys, such as the mass-produced beers they grew up with. That’s the time to educate consumers about the craft brews on tap or in-house that can tempt those tastebuds with brewers’ passion for the right flavor pairings.

“Craft beer used to be a pilgrimage,” said Ben Harmelink, owner of High Brau Taphouse in Greeley, nodding to that previous fervor for those new and unique flavors that brought crowds from miles away try to new flavors.

Nationwide, beer sales has decreased. In Colorado beer sales have dropped only by 3%, but it’s concerning.

“That was a generation that came into craft beer (as it boomed) who are now aging to a point where we can’t have multiple beverages, they might have one instead of two, three or four,” said Shawnee Adelson, executive director of the Colorado Brewers Guild.  “Something else we’re hearing, is that the number of underage drinkers is very low, and that’s a good thing. … But that is having a hangover effect now. The 21- to 24-year-old is the lower drinking group, which is when you traditionally see them start drinking.”

Still, Adelson said, two-thirds of Americans have consistently drank alcohol for years, and that group is steady.

While this is going on, there are new brewers out there trying to get into a crowded field. Daniel Yetter just opened his Yetters Brewing Co., in downtown Greeley. His main concern is opening fully, and then attracting customers.

The same is true for Brian Lackey, who just took over an old bar in Fort Collins with his Konstruct Brewing concept.  Both agreed that social media is key to marketing, but neither feel that they can navigate it themselves, or feel comfortable becoming the stars of their own channels.

Others, such as Joel Gustafson, founder and head distiller of Seed & Spirit Distilling in Fort Collins, and Neil Fisher, owner of WeldWerks Brewing Co., in Greeley, said they use social media to engage with their customers. It’s not just about a photo of a pretty cocktail or beer; it’s about asking customers for feedback or inviting them to tastings or events or telling your story.

“It’s a way to interact with customers and build the community,” Fisher said. “Don’t think you can put it up and check out for the day.”

Added Gustafson: “If you’re trying to use social media as an advertisement on TV, you’re really missing an opportunity to engage with people to show your authenticity. People want to know what they’re supporting and who they’re supporting.”

Being a part of the community is the ideal for many craft beverage companies.
“Our focus is really on using beer and interesting craft beers as a leverage to be involved in our community,” said Tom Cochran, co-owner of Horse & Dragon Brewing Co. in Fort Collins.

The wave hasn’t come crashing down, just ebbing a touch. And it’s one our brewers will use to find new ways to market and bring out the consumers to enjoy their craft – not just drink.

“It’s just a natural progression of an industry, it’s not an infinite source of growth, as you reach a mature market, eventually there’s going to be constriction,” Fisher said. “The difference is how we find our identity. In Colorado, we have to meet challenges. How do we continue to make a strong identity in Colorado for the craft beverage industry, even if interest isn’t that meteoric.”

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