Technology and the The Craft Beer Upheaval
My son in law picked up an interesting trinket recently. As crazy as it might sound, it is a FM frequency transmitter. You use it in your car or maybe even other places to play music from your device through a radio. Maybe this is my age showing but this thing is amazing to me.
Figure at one time it was a huge thing to have a tape player in your car (I won’t even get into 8 tracks). Add to that the wonder of the CD and then how much it might have cost to have a CD player in your car. These changes in technology had a cost, of course. For those who had invested heavily in the older technology it was a pain in the heiny to change your collection over to the new stuff.
Of course, the current technology now is blue-ray for videos, but wait that is changing again. Now it is all on demand. If you don’t have your movie and music collection stored in some cloud you are missing out. Hell it is almost impossible to find a CD player anywhere let alone a tape player. This isn’t even taking into account the battle for our books (I won’t get into that one right now).
Needless to say the first part of this century has seen tremendous growth and change in so many areas it is hard to keep up. And I know right now you are asking what does this have to do with craft beer? Technology and our knowledge base tends to grow hand in hand. Can you imagine 40 years ago if you had said the word craft beer 99% of the world you would have gotten a blank stare. Just like if you had mentioned a sony walkman.
You see, many of these changes came about around the same time. The seeds of change were sown and we haven’t really looked back. Sometimes it can be a bit scary when we realize where we came from.
Ok, ok, I’ll get to the point.
The world of craft beer is changing and growing, just like all these other segments of our lives. Hell, as it is right now if you don’t have a smart phone you are one of the odd ones out (nope still don’t have one probably never will). These changes are happening whether we are ready for them or not.
We hear all the time about a craft beer bubble, or maybe the ebook bubble, or how about the death of TV. Here is the thing, the changes will happen and there is little we can do about it.
But even through all that there is another side to all of this, the controllers of the old technologies. The old guard is still sure of their dominance and their position in the world. But history has taught us much if we take the time to study it.
The turn of the last century was a time of great upheaval as well. Technologies grew and changed in all areas of life. But there was a big one that I am always reminded of when I look at the similarities to our time now, the locomotive. A number of people amassed a fortune from their investment in the locomotive. What happened when Henry Ford utilized the technology of the assembly line? Did you guess that the world of transportation changed irrevocably? Those who refused to change and adapt to the times lost everything.
I bring up this particular story right now just because it is fresh in my mind. I read an article earlier today detailing a new marketing strategy by the Constellation Group (Corona and Modelo). I’ll save you some time. Essentially a new marketing ploy of theirs is going to be releasing more of their Corona Light on draft. This means they will be eating up the limited draft lines that are held by craft breweries. Typical business practice right?
I can see several issues with this move. The first is their plan is only a short term gain. The trends for a good number of years have shown us that the craft movement is growing and the big breweries are losing ground every year. The number of tap handles available will cut the growth in the short term. And if all we were talking about is beer that could be something to think about.
But there is a bigger picture that this type of thinking is missing. Craft beer is more than just the beer. Look at all the other changes happening at the same time, aside from the technology our view on food and dining is changing as well. The restaurants that rely on bland foods and bland beverages are falling away. Not quickly, but it is still happening. Pockets of new food and beer culture are popping up all over the country, not to mention the world.
So in effect what we see is a producer of the old way strongly clinging to what kept them profitable. Much like the investors in the locomotive, they thought they were in the train business, when in fact they should have realized they were in the transportation business. Old school beer companies like Constellation Group or InBev Budweiser think they are simply in the beer business. The companies who survive the changes happening now and still to come will be the ones who figure out that their product is more than just the beer they make or the technology they use.