By Ozzie Godinez / CEO and Co-Founder at PACO Collective
America loves beer and in recent years, craft beer. According to Nielsen, beer drinkers in this country bought $34 billion in beer in fiscal year 2016. However, that total doesn’t tell the whole story — Growth last year was driven primarily through dollar sales and not volume; in fact, beer sales per unit have remained the same for five years.
The craft realm has taken a similar hit; fiscal year 2016 showed dollar sales growth reaching 2.9 percent. Why is this considered meager? Because craft once enjoyed year-to-year sales growth of 15-18 percent between 2013 and 2016.
The slowdown has craft makers looking toward the Millennial Latino market. This would be a cross-cultural opportunity since, up to now, the craft beer phenomenon has largely been targeted toward white drinkers who have tended to afford the premium prices associated with microbreweries and who have adopted to the culture of local brews in general. In fact, the debate has spilled over to Twitter where #craftbeersowhite has surfaced.
However, according to Lopez Negrete in Houston, Latinos account for 14 percent of Millennials who drink craft beer. What’s more: Millennials purchase more than a third of all craft beer sold. Finally, the opportunity looks like a sure thing with this discovery: Just over half of Millennials who are Hispanic (54 percent) say they would try a craft beer if they just knew more about it. This finding follows another by Harris/Nielsen in 2014 that 57 percent of Hispanic drinkers are drinking more craft beer compared to a few years ago.
Want more proof? Another study, this one reported by the Brewers Association, shows that Hispanics represent the second most likely race or ethnic group to enjoy a craft beer every week; In fact, Hispanics craft drinkers (21 percent) double those of blacks (10 percent) and Asians (9 percent).
Craft beer makers have failed to reach Latinos because they have segmented them via Mexican beer brands, or have relied primarily on Spanish-language marketing in Spanish-language media, assuming that they are effectively reaching Latinos through language alone.
But when you look at the situation cross-culturally, there is one obvious opportunity for beer makers: Authenticity.
The core appeal of craft beer is authenticity — It is expressed everywhere, from the art on the label, to the shape of the bottle, to the ingredients, to the style of the tap room itself. Authenticity is also a value that Millennials appreciate more than their older peers. For them, transparency and identity are important, so they will tend towards brands that are big on taste and style.
Latino Millennials are no different. They speak English in large numbers and are engaged in largely the same belief system of Millennials in general. They want to stand out and support brands that are quirkier than the rest. They are pushed toward brands with personality, which is the business model for any local brewery.
However, for them to appeal to Millennial Latinos more, something must change. Craft brewers must redirect their outreach efforts from Millennials to Latinos in a more mindful way. This may include naming a special beer after something that truly taps into Latino culture (i.e. Tocayo Hominy White Ale), hiring a Latino artist to create a mural in their tap room or design labels for special brews, getting their product into sporting or cultural events where Latinos are majority participants, encouraging Latino Millennials to visit their taproom for culturally relevant and sharable experiences.
The more craft brewers make young Latinos feel welcome, not just in their taprooms, but embracing their products, the more they will show loyalty.