A recent study published in the Marketing Science journal reveals that local craft beer consumers tend to lose loyalty when their favorite brands are acquired by larger corporations. The research sheds light on the emotional connection between consumers and craft beer brands, and how changes in brand ownership can impact consumer behavior.
The Craft Beer Industry’s Shift in Ownership
The craft beer industry has seen significant growth in recent years, with the number of breweries in the United States reaching over 6,400 as of 2019. However, this rapid expansion has also led to a wave of acquisitions, as larger beer companies seek to capitalize on the popularity of craft brews.
The study, conducted by a team of researchers from Koç University, the University of California, San Diego, and New York University, analyzed data on approximately 40 acquisitions of regional breweries between 2006 and 2016. The findings suggest that these acquisitions have a significant impact on consumer loyalty and behavior.
The Emotional Connection Between Consumers and Craft Beer Brands
The study’s authors found that there is a strong emotional connection between craft beer consumers and the brands they love. According to Ali Umut Guler of Koç University, “The consumer sees the brand as part of their extended self. So, when a local craft beer brand is acquired, the acquisition can impact that sense of ownership on the part of the consumer.”
This emotional attachment is a key factor in the appeal of craft beer brands, as consumers often feel a sense of pride and loyalty towards their local breweries. When these beloved brands are acquired by larger companies, the researchers found a 15% drop in baseline product demand in local craft beer markets, as consumers express their displeasure through their spending habits and product ratings.
The Importance of Maintaining Local Craft Beer Authenticity
The study’s findings suggest that the local nature of craft beer brands is a significant factor in their appeal to consumers. Kanishka Misra of the University of California, San Diego, notes that “the decline in brand loyalty begins immediately following the acquisition and manifests itself in both sales and product ratings.”
Furthermore, the researchers found that the reaction is more pronounced when the acquiring firm is perceived as “big business.” Vishal Singh of New York University explains, “The local nature of craft beer brands is a significant factor in their appeal to consumers. When you take that away, for many consumers, you take away some of the brand attributes that attracted the consumers to the brand in the first place.”
This suggests that maintaining the local, authentic feel of craft beer brands is crucial for retaining consumer loyalty, even in the face of acquisition by larger companies.
