What is craft beer? One might think it is just a colloquial term applied to especially tasty brews. However, the formal definition set by the Brewers Guild gives small, independent and traditional breweries the title “craft”, and their beer as ‘craft beer’.
Growth and expansion
Craft beer is generally made with traditional ingredients, the hallmark of it being innovation. Their brewers interpret historic styles with unique twists and develop new styles that have no precedent. With an annual production of almost 6 million crates of beer (or less), these brewers have distinctive, individualistic approaches of connecting with their customers. The popularity, of course, has been skyrocketing in the United States and production growth for craft beer is far outpacing overall beer production. So much so that in 2013, while overall beer production fell by 1.4%, craft beer production went up 9.6%. Hence it is no revelation that some big beer companies are trying to capitalize on the movement by buying up the smaller breweries.
How is the rest of the world responding to craft beer
As the craft beer movement is exploding globally, let us take a look at China, which recently overtook the USA to become the world’s largest beer market (by value) and where the market share of craft beer has grown by about 23%. The number of independent craft beer brewers in Hong Kong has risen to more than 35 from none in five years, using local tropical fruits lychee and longan, as well as Hong Kong honey as some flavors. Overall, the sales picture of craft beer in recent times has gradually reduced by a 1.7% up during the first half of 2018, while bigger brewing companies are suffering more than the craft sector.
Response of fintechs
Perhaps the biggest challenge for today’s fintech brands is the need to convince consumers to reject the legacy brand and opt for the unknown. That is where the rise of the craft beer industry can serve as a brief lesson. Fintechs would do well to consider how they too can ‘go craft’, perhaps by focusing more on the quality of their offering and utilizing a few simple necessities to create the best. Secondly, keeping it local and looking up to local financial brands might be a boon too because nothing sells like local pride. Craft beer is getting popular thanks to changing consumer sentiment, a rejection of existing trends and because ‘old is gold’. Fintech can and should embrace these same market dynamics to take on the biggest brands in its own industry.