Small-batch producers are forced to be creative in order to survive

As the Covid-19 pandemic unfolds, changes in consumer behaviour are highlighting implications for the medium- and long- term viability and structure of the craft sector.

Crucially, the closure of the on-trade in many global markets has left craft operators struggling. The craft sector tends to rely heavily on the on-trade as well as on receipts from taprooms and visitor centres in order to drive sales. Craft beer also typically has a relatively short shelf life and weeks of lockdown will leave stock unusable whether in warehouse, in closed on-premise outlets, or, in the case of South Africa (where a total ban on the sale of alcohol is in place), anywhere in the distribution chain. Small-batch spirits have somewhat of an advantage in this respect.

In several markets across the world, consumers are turning to familiar, reassuring brands when making purchasing decisions as well. Craft products may fade from the radar of risk-averse retailers and consumers as a result. Trading down is also commonplace as job insecurity escalates and disposable incomes dwindle.

In markets where the sale of beverage alcohol has not been banned, craft owners are having to quickly and creatively pivot to new sales channels in order to off-set the loss of the on-premise.

Where government regulations allow, many craft operators are turning their efforts to go direct to consumers. As for much of the beverage alcohol sector, ecommerce is proving a saviour here. Even the crudest ecommerce and app platforms are seemingly rewarded by consumers, especially loyal ones who recognise the need to continue spending with their favourite brands in order to help them survive through the pandemic.

Many craft producers have quickly updated their websites with new offers and lower minimum spend requirements in order to drive purchase frequency. “Pubs at home” offerings that replicate the on-premise atmosphere at home, such as Beerwulf’s Subkegs that deliver a tap and chilled cartridges to consumers, are not new but are much more relevant and in demand in today’s climate.

In markets such as the US, where state laws curtail ecommerce opportunities for producers, many craft brewers and distillers are offering drive through, click and collect, or pick up orders on-site even if their venues are closed.

Some craft players have made use of their trading license to temporarily turn their shop/on-premise hybrids into neighbourhood stores. For example, a distributor in the UK has trialled selling larger format options and supplementing his business by selling local vegetables, local breads and local dairy produce to consumers who are tired of queuing to get into supermarkets or who want to support local businesses.

Social media is also proving useful in maintaining relevancy and staying in front of consumers. Virtual tastings on social media platforms are helping to replace visits to taprooms and distilleries as well.

Makeshift market stalls, advertising through social media and reaching consumers via the phone are additional ways in which craft producers are reaching consumers. Some craft distillers are also pivoting to make hand sanitiser – this not only helps their communities by donating to first responders, but they are able to sell it to consumers as well.

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