Exclusive US On Premise Craft Beer research demonstrates the category’s long reach. More than two in five (44%) visitors to the US On Premise drink beer, and just over half (51%) of these choose craft.
But while craft remains the second biggest selling beer segment behind domestic premium, it faces significant challenges. Rate of sale is down by 10.3% year-on-year, and it has lost 1.5 percentage points of share to other segments including imports. Challenges are particularly acute among younger drinkers, with the proportion of 21 to 34 year-olds buying craft falling by 7 percentage points since 2019.
This trend is concerning—not just as it compromises today’s sales, but because these are the craft beer consumers of the future. Here are five key insights to help craft brands and suppliers capture interest from the younger generation:
1 Tell craft stories
Gen Z’s perceptions of craft are significantly different to older consumers. They over-index for the importance of flavors, natural ingredients and ABV, which makes these three essential parts of messaging. But with lower awareness of regional breweries and craft’s independent roots, there is also room to educate Gen Z about the movement, and its benefits to diversity and sustainability in particular.
2 Target the right venues
Craft beer brands need to concentrate engagement efforts in the right places. Casual dining restaurants, neighborhood bars and sports bars are the three most popular channels for all craft beer drinkers, but Gen Z significantly over-index for experiential bars and high energy venues, and this is where they might be best disposed to try craft. Gen Z is much less likely than average to visit taprooms and brew pubs, so new strategies are needed to pull them in.
3 Balance draft and packaged
Draft has earned 82.4% of craft beer volumes in the last 12 months. But preferences vary, and packaged serves are more prevalent in many of the faster-paced outlets that Gen Z frequent. Eye-catching aesthetics can boost appeal to them, whether on tap handles, bottles or cans.
4 Vary the range
While IPA, Pale Ale and seasonal are Gen Zers’ three most popular craft segments, preferences are varied and there are opportunities to introduce them to new styles like Hazy, plus no and low alcohol alternatives.
5 Win recommendations
To attract Gen Z, craft beer brands need to earn recommendations. Social media is vital here, and the Global Bartender Report shows the major influence of staff on drink selection too. Menu recommendations are also powerful—especially to the high number of Gen Zers who want to find new flavors.
Ben Tilton, CGA by NIQ’s client manager for On Premise BevAl, said: “Because craft beer sales skew towards older consumers, it’s vital to keep nurturing the next generations of buyers. Gen Zers can be hard to reach and their sentiments are shifting, but responding to their needs can help brewers grow share. Our latest research provides the ideal foundations for earning their loyalty and futureproofing sales.”
CGA by NIQ provides a unique full view of the BevAl market in the US, with outstanding insights into trends across the On and Off Premise. The suite of services delivers deep analysis of beer and all other categories, helping suppliers, distributors and operators understand latest spending behaviors and seize emerging opportunities. Contact the team to find out more.
