As appeared on Forbes.com on April 7, 2017.
I cover the business of beer and alcohol, mixed with a little politics
Houston, 2012 — Saint Arnold brewery shows off one of its cars in the Houston Art Car Parade.
If you casually follow beer news, you know craft has finally burst through into the mainstream, completely disrupting the suds industry with double-digit growth in sales every year from 2006 to 2015. But if you pay closer attention, you may have read about Nielsen’s just-released report that finds U.S. off-premises dollar sales growth of craft slowed to just 2.9% last year from 14% just one year prior, and you’ve probably also heard that people who make their living selling craft beer are heading toward full panic mode.
Craft beer personnel view 2017 and 2018 as make-or-break years for many breweries, with the best hope for the industry emerging from new markets, AKA non-craft drinkers. While they agonize over where to most quickly pluck new customers, their current buyers are showing up at beer fests and conferences asking why the community still lacks diversity.
Perhaps considering these queries a little tone deaf given the timing, respondents often reply that though almost everyone in the craft community would love to see more black and brown faces (not to mention women), pressing economic issues take priority over identity advertising. But by viewing these as two separate matters, they’re overlooking a massive opportunity: the Millennial Latino market.
“There’s no reason why craft shouldn’t do extraordinarily well with this consumer,” says Gerry Loredo, director of business analytics for Lopez Negrete Communications, a Houston-based Hispanic marketing firm that has compiled stats on this segment of the market. “If craft beer could give them a nod their numbers could blow up.”
According to Lopez Negrete, Latinos account for 14% of Millennials who drink craft beer, and Millennials in general buy more than a third of craft beer sold. But here’s the number that really matters: 54%. Just over half of Millennials of Hispanic origin say they’d try craft if they knew more about it.
“Craft has a real opportunity,” says agency owner Alex Lopez Negrete.
April 6, 2017 — The Lopez Negrete agency graphically compiled statistics about Hispanic craft beer drinkers.
Half of Hispanics in the U.S. call themselves beer drinkers, which places them slightly above non-Hispanics, and their preference for premium and super premium domestics and imports (from Europe along with Mexico) indicate they favor the types of strong, bold flavors prized in craft brewing. If you need proof, Nielsen reported Wednesday that while U.S. beer sales remained relatively flat last year, the premium/import category continued to boom, which observers attribute in large part to Hispanic drinkers in the U.S. Constellation Brands, which owns Corona, Modelo, and Pacifico, among others, reported in its earnings filing Wednesday that its net beer sales increased 13% last fiscal year, with Corona as its leading brand and Modelo Especial the country’s fastest growing beer.
Additionally, while studies show that Hispanic Millennials embrace their native cultures as points of pride and differentiation within America’s ethnic stew, they also identify with the same anti-corporate, pro-local ethos embodied by their Yankee-born peers and characteristic of the craft industry. But they don’t always make their proclivities public.
“In a Hispanic household you have your front-of-the-fridge beer. That’s your safe beer, like Miller Lite, Coors Light or the Tecate. In the back of the fridge, that’s what the family drinks. Dos Equis, Stella (Artois). That’s where craft can fit in,” says Lopez Negrete.
This reticence to stand out too much socially could explain a little bit about why American craft brewers have so completely overlooked the Latino-American Millennial market and why so few breweries count Hispanics as owners or even brewers. In private conversations about diversity, talk usually centers around women and African-Americans, though Julia Herz at the Brewers Association should be commended for highlighting Hispanics in this web post from August.
In it, she shows that of people who drink craft beer weekly, one-fifth are Hispanic, versus just 10% who are black. Of people who drink any beer at least once a week, one-fifth are Hispanic and 11% are black. So why spend a disproportionate amount of time talking about tapping into the African-American market when it would appear the Hispanic Millennial population actually presents great potential to be the most efficient? We can probably blame geography, culture, national background, and lack of understanding.
- Geography: A brewer in Houston or Los Angeles might see Latinos in her tasting room every day but her counterpart in Northern Michigan may never see any at all. Out of sight out of mind.
- Culture: White industry employees may not know how to work themselves into unfamiliar Latino culture but they hear and see symbols of “urban” culture all the time. In general, African-Americans have inhabited the United States for hundreds of years but Hispanics arrived only a generation or two ago.
- National background: Hispanics come from dozens of different countries so efforts to appeal to one group may not work as well on another. For instance, Lopez Negrete points to Mexicans, Costa Ricans and Columbians as coming from beer cultures while others tend more toward wine or spirits.
- Lack of understanding: Most beer marketers may think they have to bridge a language gap to communicate with Hispanic Millennials (they don’t) or they don’t realize they espouse the same locavore beliefs as other Millennial customers.
Houston — Label for Saint Arnold Santo black kolsch.
The good news is overcoming those challenges can happen pretty easily and cheaply. Big brands spend millions of dollars to sponsor sports tournaments and cast Latino actors in commercials but Lopez Negrete says Millennial Latinos favor authenticity and true community engagement. And if craft brewers can brag about anything, it’s exactly that.
“With craft you have a built-out acceptance to lean in in a genuine way,” he says. “It doesn’t sniff of (ethnic) profiling. Craft beers are quirkier and a lot more creative (than big brands), so se puede dar permiso to give that nod and a wink.”
What he’s saying is that if craft breweries apply their true personalities to their outreach efforts, they’ll receive permission from the community to take some liberties. Saint Arnold in Houston (whom Lopez Negrete represents) named a beer “Santo” (“Saint”) and hired a Mexican artist from Houston to design its Day of the Dead-inspired label. Lopez Negrete says the black Kolsch sells miraculously. Saint Arnold also enters ten cars into Houston’s annual Art Car parade, attended by many different segments, most notably Mexican Millennials who’re into car culture.
Lopez Negrete also cites the craft beer concession stand at Houston’s Major League Soccer stadium, where he says 90% of the players come from Latin America. A Columbian coach trains them and a majority Latino crowd cheers them on.
Both venues offer local craft breweries incredible opportunities to use social media to engage with this audience, which consumes social media voraciously. Brewery employees can post pictures of the colorful cars, videos of the action and interviews with futbol fans drinking their beer.
They can also harness the culinary aspect of Latino culture and intertwine it with Millennial’s seeming obsession with photographing food. Examples would be running live Facebook feeds from Mexican beer dinners and Tweeting out guides for pairing their beers with molé.
“Getting into that community makes it personal,” Lopez Negrete says. “And craft has it in their DNA to dig into the community.”
Ad Age reports that last year companies spent $7.83 billion to advertise on Hispanic major-media TV, cable, newspaper, magazines and radio in the U.S. Obviously, craft beer doesn’t have that kind of money. But it should be brainstorming granular ways to reach Latinos, who hold more than 10% of the nation’s purchasing power.
With Latinos comprising almost a quarter of Millennials and Millennials drinking more craft beer than any other segment, breweries might consider it a no-brainer to try to speak their language.
“Millennials are the sweet spot for craft drinkers,” says Lopez Negrete. “Latinos are a huge component of that.”
Original article: http://bit.ly/2ozhjfq
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