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Friday, March 25, 2011

Deep Thought Friday: On Choices

It's a slow Friday morning, perhaps because almost everyone in the good beer world is in San Francisco for the Craft Brewers Conference. Looking for a little content fodder, I found an interesting couplet from Jeff Linkous and Lew Bryson. The topic is choice, and whether the staggering selection of beer is detrimental to the market. The thrust of the inquiry goes like this:
  1. Choice is great unless there's so much that it leaves consumers with a nagging feeling that they're choosing an inferior beer when something truly tasty is available.
  2. As a consequence, they go back to the well for the beers they know are winners.
  3. Moral: too much choice can be a dangerous thing.
Let's unpack this a bit. How much choice is there really? It is true that there are upwards of 15,000 different beers brewed in the US right now (1700 brewers ~ nine beers per)--but most of these are made by brewpubs. Go to your local grocery store, and if you're lucky you'll find 20 craft products. (Recognize that not all grocery stores have the selection of your local Portland New Seasons.) The biggies will all be there: Sierra Nevada Pale, Samuel Adams Boston Lager, New Belgium Fat Tire, Widmer Hefeweizen. These, not by unrelated chance, are also the best-selling craft brands in the US--along with Blue Moon and Shiner Bock. Regions matter, so depending on where you're standing while looking at these beers, you might see Bell's or Brooklyn or Lauganitas, too.

We could run the same thought experiment for the average bar, again acknowledging that places like Bailey's represent a vanishingly small portion of the draft market. Ultimately, not a huge amount of choices.

The craft market is small, but the number of people who drink craft beer is actually massive: 59% of beer drinkers, according to results in recent study. Most of these people drink a few of the major national brands and not a whole lot else--they are probably relatively untroubled by the tyranny of choice. A small number of these--ten percent, twenty?--are avid beer fans. they drink the 14,900 niche beers that aren't regularly sold in supermarkets. They are fanatics for choice and will choose a new beer, no matter how low the likelihood that it is tasty, just because it's new. They are also untroubled by the tyranny of choice.

The craft beer market has grown by 40% over the past five years--amid the worst recession since the time when you legally buy no beer. I would say that the abundance of choice is not particularly dangerous.

10 comments:

kevin said...

I don't know; I think I spend more time drinking with people who like beer, but are not beer geeks, than the average beer geek. At a bar, 20 taps definitely exceeds most people's threshold for too much choice (and places like the Green Dragon or Apex or Henry's even overwhelm me sometimes). Most of the time, the decision-making I see boils down to "I like IPAs, give me one of those" or "I like Ninkasi".

I suspect you're seriously off in estimating that 10-20% of beer drinkers "will choose a new beer, no matter how low the likelihood that it is tasty, just because it's new". Even in Portland, I'd guess that group at not more than a couple percent.

Jeff Alworth said...

Kevin, your point is well taken. It could be that I'm over-estimating, but we're talking about sub-samples of sub-samples. The stat I quoted was of beer drinkers (something like 55% of the population). Of those, 59% at least occasionally drink craft beer. Of those, I'd say ten percent are fanatics. Maybe still high, but that's my math.

kevin said...

Ahh, I did mis-read your numbers. 10% of "craft beer drinkers" (however that's defined) seems at least plausible to me for the number of beer geeks.

That said, I'm still not sure I understand why you say that the tyranny of choice doesn't apply to the other 90%. Perhaps not in the sense that they walk away and buy nothing at all, but in the sense that they have their favorite and mostly stick to it.

Kaplan said...

Jeff, I'm sure you aware of this but the way it's mentioned in the article is a bit misleading; Blue Moon is brewed by Molson Coors, despite the fact that they want people to believe otherwise. As such it doesn't really qualify as a craft beer and probably shouldn't be listed among them. Sorry to nitpick but it's a huge beef of mine when a giant conglomerate tries to make you think their product is artisanal to make money off a new trend.

Shawn said...

It still bothers me that the companies like Sierra Nevada and Sam Adams are considered 'craft brewers'. Just because they put out the occasional one-off or annual beer doesn't make them craft brewers. They are very large, corporate beer companies that make beer in large factories. They are not craft brewers at all.

Kaplan said...

Shawn, I think the problem is that there really isn't a good name for them. The certainly aren't macro brewers, for instance Boston Beer Co., the largest craft brewer brews just 1.3M barrels a year (and I think it's the only craft brewer over 1M, Sierra brews on 780,000), while Anheuser-Busch brewed 161M barrels in 2006 (the most recent stat I could find), and even smaller macros like MillerCoors brew in the 50M barrel range. The "craft" breweries, even including Sierra and Boston Beer Co are still orders of magnitude smaller than the big guys.

Jeff Alworth said...

Kaplan and Shawn, this is something I've written about periodically, but to briefly recap: I judge what's in the glass. You both seem to be operating with the definition that craft=little. That's fine, but it's idiosyncratic.

Let's look at Sierra Nevada. They use only the finest ingredients, including some of their own estate hops. They only brew with whole cones--no pellets or oils. (And lest anyone think I'm implying something here, I'm not; I'm using the most restrictive definition of "craft" there is.) The only thing that distinguishes them from, say, Upright is the size of their equipment. That's literally it. Molecularly, the beer is as crafty as you can find.

Blue Moon is not an industrial lager. It's not particularly interesting, but I've had worst beers passed off as "wits" by craft breweries. Don't like it that Coors owns them, fine, but I'd ask why, when we're discussing the objective qualities of a product, ownership or size matters.

a non-mouse said...

Hear, Hear! I don't think that anyone would argue that Sierra Nevada started off as a craft brewery, a pioneering one at that, and though they have grown tremendously, I've never noticed that the quality of their product has suffered for it. Shame on anyone for suggesting that having *succeeded* as a craft brewery means that they are one no longer. Craft brewing is about quality of product, not size of production.

Shawn said...

I actually had my very first Sierra Nevada the other week. I was unable to finish it.

a non-mouse said...

A Sierra Nevada what? They do make more than one beer, you know. :-)

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