A long-running study of Americans’ attitudes, values and purchasing behavior has shown that a new consumer trend may be emerging: a newfound desire for simplicity and simplified choices. This may not bode well for the craft beer segment, and some industry analysists are pointing to it as a root cause for the sluggish performance of craft beer coming out of the pandemic.
First Key, consultants to the brewing industry, took a deep dive into the study to uncover how the “paradox of choice” may have a negative impact on craft beer.
“In recent years, disruptions to the beer market have been plentiful. One that is getting a lot of attention recently is the seeming lack of vitality of the craft beer category,” writes Mike Kallenberger, senior advisor, marketing insights and strategy at First Key. “Craft beer sales took a hit during the pandemic and only partially recovered in 2021; now, further declines may be on the horizon.”
One example arises from the 2004 book The Paradox of Choice in which psychologist Barry Schwartz asserts that “when people are confronted with too many choices, their response is often essentially to shut down and make no choice at all.” Craft beer has seemed to happily defy this behavior, but First Key thinks this immunity may be fading as new generations enter adulthood and social changes become more influential.
“….in 2004 Millennials were in their 20s and Gen Z had yet to emerge from toddlerhood. Today, Millennials are middle-aged, and Gen Z is the newly emerging young adult generation. And both generations have helped pioneer a newfound desire for simplicity in daily life,” says Kallenberger.
But it doesn’t mean craft beer will take a belly flop after 40-plus years of growth. Kallenberger concludes by saying, “’Simplification’ might be better described as taking a more strategic, structured approach to developing a portfolio, where every style has a distinct, relevant, and clearly communicated reason-for-being – making it easier for drinkers to get their heads around their options. Brewers who are successful in that regard will likely benefit from a consumer trend that seems to be gaining momentum every day.
See the detailed analysis here.