Brewers Reflect on the "Independence Seal"
Shortly after the Brewers Association announced that it was encouraging its members to use a seal to identify themselves as independent--and distinguish them from a growing number of brands posing as independent--I reached out to breweries to hear their thoughts. A whole lot might be said on the topic, but I was interested in two very basic questions: 1) Did breweries believe it was important for consumers to know about breweries' independence?, and 2) were they planning to use the seal? I canvassed a half dozen breweries of different sizes from different parts of the country and got responses from four--Ninkasi (OR) and Harpoon (MA), large craft breweries, Port City (VA), a medium-sized brewery, and Gigantic (OR), a small brewery.
The Brewers Association is a trade group, and its members have some linked interests. But individually, the motivations of a thousand-barrel brewpub bear almost no resemblance to a 100,000-barrel regional brewery. Further, breweries don't spend much time at all thinking about how to nudge their corner of the industry one way or another--they have nuts-and-bolts concerns that keep them plenty occupied. One of the things you may pick up in the responses is how these differences guide their thinking. You may expect smaller breweries to be the quickest to adopt the independence seal, but in fact the larger guys, whose six-packs are right next to AB InBev's cheaper ones, may have the greatest interest.
We'll see how things go as brewers have a chance to consider this further. Nikos Ridge, one of the founders of Ninkasi, understood why the Brewers Association announced this event a week before July 4th--the symbolism was obvious. But summer is a brewery's busiest time. "It isn't a huge priority for us to have been spending time talking about in the middle of summer." Just a few days after announcing the program, the Brewers Association put up a tracker listing the number of breweries that had signed up, and an impressive 870 had already. That's tapered off; there are now only 1165. A lot of breweries are probably delaying this issue until things settle down.
The following responses are therefore sometimes in-process, but the answers provide a nice range of the ways breweries are thinking about it.
Do You Plan on Using the Seal?
Let's start with the second question first--it elicited straightforward answers. Dan Kenary, founder and CEO of Harpoon, was unequivocal:
"We do. We applaud what the BA is doing to help truly independent craft brewers differentiate themselves from those brewers owned by large industrial companies who face none of the same challenges that we face yet want consumers to think of them as 'craft.' We’ve been at this long enough to remember what the beer scene was like when the big guys ran everything. It was pretty bleak. We’ll fight any way we can to maintain the viability of truly independent and real craft brewers."
Jonathan Reeves, head brewer at Port City Brewing, raised an issue three of the four breweries are considering--what it will do to their labels. "In regard to the seal, I'm not sure if we will use it but I know we are talking about it. We are switching to a new labeler which will take a new type of label, so this would be a good time to add the seal."
Van Havig, founder and master brewer at Gigantic, said they hadn't talked about it yet. However: "I will say this--at some point it just ends up being more visual clutter on your package. And that sucks."
At Ninkasi, they haven't discussed it yet, either, but founder and brewer Jamie Floyd mentioned that they were already considering other logos and insignias for their labels.
"The Central Oregon Brewers Guildand now the Oregon Brewers Guild Board have thought about a seal/s of their own which is linked to locality and has different eligibility then the BA." This is in addition to Oregon flags, which some breweries already put on their labels (including corporate-owned 10 Barrel and Hop Valley). So, putting two or three seals on a label are not going to engage consumers and take away from building personal brewery branding."
Is "Independence" Important?
Things got a bit more interesting when breweries started to reflect on independence. Again, Dan Kenary was very clear about the value to Harpoon:
"Yes. We know it is not front-of-mind for all consumers, but true independence matters to many and we believe in being transparent and showing respect to all of our drinkers. We have the same approach to code dating all of our packaged beer. Put it all out there and let the consumers decide what they view as important. We think craft consumers value authenticity and honesty."
Jonathan Reeves agreed. "I am certain that Port City thinks its important for consumers to know that we are independent and local."
Ninkasi's Nikos Ridge was more circumspect.
"I would say on some levels yes, which is partly why there is such an effort by the global brewers to obscure the origins of acquired brands. But in terms of how much people care, it doesn't seem like trends in general reflect a lot of time spent making purchasing choices based on independence (macro trends for Elysian in the NW for instance don't seem to indicate a downside in terms of sales growth to becoming ABI owned)."
If Ridge was unsure, Gigantic's Van Havig was openly skeptical. Here in Oregon, we have the most potent experiment of this hypothesis about the value of independence happening in real time. Two growing, mid-sized breweries were purchased by AB InBev and MillerCoors, and their sales immediately exploded. And this is in what is widely regarded as the most mature and parochial market in the country. Havig picks it up from there.
"I think there's always been a belief in the craft industry that drinkers care about who makes their beer. We've told ourselves for a long time that independence matters to the consumer, and we tend to cite things like the long lost AB Originals series of beers in the 90s. I'm not so sure. Back then, only 'hard core' craft drinkers drank what we made. To them, I think it really did matter who made their beer. Then came Blue Moon, the market grew enormously, and AB and brethren came a callin'."
"Now, when you ask self identified craft drinkers if it matters, they probably say 'yes, independence matters.' But you can't have over 15% of the beer market be craft (or whatever it is these days) if all craft beer is consumed by self identified craft drinkers. I don't think there are enough of us for that. Just look at how much the barrelage of 10 Barrel and Hop Valley has increased in Oregon (!!!!) since the buyouts. Ostensibly, Oregonians know of these highly publicized events. But the data sure doesn't show that they care. Sure, there's an immediate backlash--but that's temporary. Then everyone just sees that they can get that beer for $.50 less per six pack, and they stop caring. What I'm getting at is that the craft market is now so big that we've moved beyond the 'believers' and well into people who just want to have a beer. And I don't think they care at all."
A couple of the brewers went a little further in their analysis. After answering my questions, Ninkasi's Ridge asked, "Should people care?" He continued:
"I think if you care about the whole origin and idea of why the story of craft beer is awesome then yes. If beer is just another CPG [consumer packaged good] to you then probably doesn't matter; that entire world generally follows a trend toward consolidation and that trend generally is certainly more "normal" that what we have seen in the craft beer industry. We definitely care about what craft is and where it came from, which is why we started a brewery, and we enjoy what we do, and plan to keep doing it!"
I have a sense this gets at the heart of the matter for most breweries. They feel on the one hand that being an independent, standing on your own two feet, and trying to make great beer in a crowded marketplace is something to be enormously proud of. (AB InBev's highly defensive response to the Brewers Association seal suggests there's real emotion tied to independence.) My guess is that most of them would have enthusiastically agreed that "independence" is important to the consumer five years ago. What we've seen in recent years is that craft beer doesn't have to be independent to sell. So now, while breweries themselves may value their own independence, they aren't sure it's something worth emphasizing in terms of sales.
As a coda to the moment, Gigantic's Havig takes this further and breaks down why trying to highlight independence may be so difficult now that the edges of the market have blurred.
"Now for the large craft breweries, I think it's a real issue. How do you know that Elysian is owned by AB (or Lagunitas/Heineken, Saint Archer/Miller, etc.), but Good Life isn't? Realistically, breweries like Elysian, Lagunitas, Four Peaks, and Breckenridge, who have been around for a long time before they sold, have decades of their local (and national) public associating them with local and independent. That's hard to shake. The Golden Road, Devil's Backbone, Saint Archer crowd may have a tougher time keeping their indy cred, since most people will be introduced to them as parts of a larger corporate whole. And the flip side of that is that Good Life, Modern Times, Trillium, Rheingeist, etc with their very rapid growth, look too much like those newer, sold-out breweries. By our smallness, we are obviously independent, so I'm not sure the seal has any added value for us."
It's a complex issue, and one that won't be a settled matter for years or decades. It's nice to check in from time to time to see how things are changing, so stay tuned--