In the beer market, demand changes play a crucial role in future industry dynamics. We have learned from our conversations with past partners that there is growing investor interest in studying consumer behavior from a marketing perspective, especially in craft and premium beer. Craft brewery’s regional end-consumption research is reflected in the age, gender, and lifestyle of consumers. Among other personal factors, beer engagement, brand familiarity, and frequency of consumption play a role. Furthermore, spending power and occasion are relevant segmentation variables. Research on consumer behavior is a critical factor in the competitive differentiation of beer companies. We will focus on consumer psychology to help investors and partners better manage breweries.
This article analyzes and discusses consumer behavior and business strategies based on the current beer market situation.
Market Overview
Leominster’s Swan Brewery in the UK said in January it was closing due to the economic impact of Covid. The company is a husband and wife team run by Jimmy Swan and Gill Bullock, who have been brewing beer for local pubs, clubs, festivals and retailers for six years. Asked by the BBC what had brought this on, Ms Bullock said it was “that combination of Covid, costs and consumer confidence”.
Our research found that, also to force majeure factors causing pressure on the industry, the global beer market has continued to grow in recent years. There are differences in consumption perceptions depending on the age group, for example, many young people prefer to consume at home to a large extent. Consumers are demanding more variety and novelty, which has spurred the growth of regional and craft brewers.
In the medium term, changing lifestyles, increasing consumption of alcoholic beverages, rapid urbanization, high disposable income, and the popularity of beer among young people are several factors driving the global beer market.
The introduction of new ingredients and innovative flavors into craft beer, combined with a business model that influences the minds of consumers, will increase its appeal among the global millennial demographic. Due to the growing popularity of craft beer, millennials in particular will have a growing preference for “variety” beers.
Market Overview
Consumer psychology and brand influence
The cognition of consumers’ psychological accounts makes brands unique. Consumers are more judgmental about the value of beer than about the price of beer. According to research by Walker Information Inc. ( Walker: Customers 2020: A Progress Report ), in 2020 consumer experience has moved beyond price and product to become a core element of brand differentiation. Shaping the experience brings five advantages to breweries: product differentiation, new competitiveness, customer loyalty, word of mouth, and customer satisfaction.
Discover the life you want to live. When visiting IKEA, we will see model rooms of various design styles, and the experience of each room brings people the joy of discovery and inspiration, and happiness for the future.
The IKEA experience doesn’t stop there. For example, for the elderly in the surrounding communities, IKEA has delicious and cheap breakfast, and can take children to spend a while of parent-child time. For lovers, IKEA brings them infinite yearning to build a nest of future love. For children, IKEA has its own dream “bunk” children’s bed, as well as delicious Swedish meatballs. Beer and household items are both intuitive experiences. End consumers can hold a beer in a bar to chat with friends, or lie on the sofa at home to enjoy the World Cup game.
We consulted past partners and their feedback that most breweries will build a brand image in the regional competition [is there more passion?], which will make the brewery less focused on strengthening the ability of supply, and is to increase demand.
Brand Equity
Brand equity includes four dimensions. , brand awareness was an important aspect as people tended to base their decisions on what they were familiar with and were influenced by well-known brands in the evaluation of their decisions. Research shows that only mentioning a specific brand among people increases the likelihood of a buy.
perceived quality provides reasons for buy, distinguishes brands, attracts customers’ interest, is the basis for raising prices, and improves customer satisfaction in the actual use process. Perceived quality appears to be important for both generations. Gen Xers are known to stay loyal until brands let them down, and millennials are also very sensitive to brand failures, which can lead to loss of trust and patronage.
In the third case, a brand association (image) is anything about the brand in the mind of the customer and is related to brand management, identifying and developing specific associations. All characteristics of brand equity have a positive impact on beer consumer behavior. The higher the beer brand equity, the higher the willingness to buy and the higher the willingness to pay a premium for a particular brand.
The final asset of brand equity is brand loyalty, and Table 2 shows the key role of brand in beer choice across two generations. 81.5% of Gen Xers and 72% of Millennials consider brand more important than price when choosing a beer.
All four dimensions contribute to brand loyalty because they increase customer satisfaction and provide a reason to buy a product.
Characteristics of the beer market
The beer market can often be described as an oligopolistic market, as a few dominant companies hold large market shares and create huge barriers to entry. So, one may doubt the nature of the beer market competitiveness. Production is concentrated in the hands of a few large breweries, and horizontal mergers result in a concentrated market. Also, when companies get suppliers and retailers, a high level of vertical integration occurs, resulting in very similar product mixes. The competition isn’t about price, it’s about advertising, promotions, style, and more. Barriers to entry are high because large breweries have built and experienced customer loyalty. Finally, beer companies tend to diversify into other industries such as dining or leisure to expand their strategic options.
Beer markets can be specified from product and geographic dimensions. The ease of substitution between products (beer brands) determines the ease of substitution between products (beer brands), products in the same market are close substitutes, while products outside the market are very imperfect substitutes in the internal market, product-market substitution depends on product characteristics, such as alcohol content and Type of beer (lager, premium, stout, etc.). From a beer geographic perspective, the beer market is generally considered to be national. Popular types of beer are large worldwide.
Beer consumption is influenced by a variety of factors; consumer demand for beer is influenced by specific beer prices, alternative and supplement prices, consumer income and product characteristics. The likelihood of becoming addicted to beer also has an impact on demand. Many studies have shown that demand for beer is a good indicator of price changes, and that consumer incomes have little impact on demand. When demographics are considered, men tend to drink beer more than women, and 18-44 year olds are more likely to find beer popular than those 45+. Generally speaking, beer is often drunk among a group of friends or other social groups who like to drink the same style of beer. This is likely to influence individual preferences and cause peer effects. Furthermore, consumption depends not only on the individual himself, but also on the social context in which the product is consumed, especially by whom. As a result, consumers may change preferences due to human contact with friends, peers, family members or others. Omit preferences and their potential changes, beer is an interesting example. Experience and past consumption are very important aspects here, as consumers’ psychological choices determine preferences along with others’ consumption behavior and availability. Interesting research, conducted with international students, showed that the most important reasons for changes in beer consumption habits were taste change (29%), peer influence (24%), availability (31%), price (10%) and others (6 %) .
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China stainless steel fermentation vessels manufacturer The fermentation tank is where the beer carry out the fermentation process, it provides a place suitable for life activities and metabolism for microorganisms. To adapt to the use of different sizes of breweries, Micet Craft produced a variety of sizes and specifications of fermentation tanks. Customers can choose
Professional bright Beer tank manufacturer from China The bright tank is a vessel for storing and carbonated beer, it is also called the brite tank. The bright tank is an important part of the workflow of professional beer brewers. It can be used to store and carbonate beer, thus eliminating the trouble of cleaning beer
China brewing equipment manufacturer and suppliers Micet Craft has cooperated with breweries in many countries around the world to provide them with brewing equipment. We provide customers with turnkey brewery solutions, which include designing, manufacturing and installing customized breweries. The Micet Craft team has decades of experience in the manufacturing of brewing equipment, we not
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Best beer brewing system manufacturer from china Micet Craft is a professional beer brewing system manufacturer in China. We mainly produce high-end customized turnkey brewing systems. Whether you are planning to open a nano-brewery, microbrewery, or commercial brewery, we can provide you with the most complete turnkey solution. Our beer brewing systems are all price-competitive
Beer Brewery Equipment Manufacturer The brewing supplies provided by Micet Craft can support your brewing needs from small batches of micro beer brewing equipment to 100 barrels capacity. Micet Craft has reached cooperation with many breweries around the world, we can design and manufacture professional brewing systems for breweries, including cellar beer brewing equipment and other
China stainless steel fermentation vessels manufacturer The fermentation tank is where the beer carry out the fermentation process, it provides a place suitable for life activities and metabolism for microorganisms. To adapt to the use of different sizes of breweries, Micet Craft produced a variety of sizes and specifications of fermentation tanks. Customers can choose
Professional bright Beer tank manufacturer from China The bright tank is a vessel for storing and carbonated beer, it is also called the brite tank. The bright tank is an important part of the workflow of professional beer brewers. It can be used to store and carbonate beer, thus eliminating the trouble of cleaning beer
China brewing equipment manufacturer and suppliers Micet Craft has cooperated with breweries in many countries around the world to provide them with brewing equipment. We provide customers with turnkey brewery solutions, which include designing, manufacturing and installing customized breweries. The Micet Craft team has decades of experience in the manufacturing of brewing equipment, we not
Best brewhouse equipment manufacturer from china Brewing good beer requires brewhouse equipment. Whether you are brewing beer for home, business or brewery, Micet Craft can provide a turnkey solution according to the daily output you need. We have brewhouse equipment with 2 vessels, 3 vessels and 4 vessels, the unique design allows you to do decoction
Professional beer filling machine manufacturer Beer filling machine is the core equipment of the beer production line. Our beer filling system uses stainless steel as the production material. Stainless steel is not easy to wear, and it is easy to clean. Micet Craft provides you with a cheap and efficient way of filling beer. We
Best beer brewing system manufacturer from china Micet Craft is a professional beer brewing system manufacturer in China. We mainly produce high-end customized turnkey brewing systems. Whether you are planning to open a nano-brewery, microbrewery, or commercial brewery, we can provide you with the most complete turnkey solution. Our beer brewing systems are all price-competitive