Updated: Mar 14
If you’re heading to friend’s place and want to bring a few beers with you, what do you bring?
Based on recent data we collected on Beer and RTD drinking habits in Ontario, it probably isn’t Ontario Craft Beer you’re bringing to your friend’s place. The numbers are stark, only 1% of Ontario Craft Beer and RTD beverages appear to be consumed at a friend’s place, compared to 14% for non-craft volume. In contrast, Craft brands do exceptionally well at the cottage, relying on these occasions for 7% of volume compared to just 2% for non-craft volume. Craft also does notably better on premise overall.
But, why should craft producers care? Occasion based marketing has been central to the beverage marketing industry for years, with major consulting firms like Boston Consulting Group and Kantar providing “demand space” strategies to major brewers since 2015. For Craft producers, struggling to access those “Beer-at-a-Buddy’s” occasions directly impacts who drinks their products. These occasions tend to skew younger and lower income, with notable strength among 19–29-year-olds. In contrast, the cottage occasion tends to be more developed with consumers in their 30’s who have somewhat higher incomes. No doubt, Ontario Craft tends to be a premium product and so tends to rely on higher income consumers in the present, but accessing younger drinkers will be essential for future growth of the category.
So what does Beer-at-a-Buddy’s look like? What’s Craft beer missing?
Well, digging into it, the results seem intuitive. When young people get together to have drinks at their friend’s place they tend to just hang-out, they watch some sports, they talk, maybe it’s a party. But contrast this to what’s happening at the cottage, where Craft does exceptionally well, and the difference is telling. At the cottage the occasion is all about ‘relaxing’ (i.e. drinking while reading, listening to music, watching the world go by, etc.), having meals, and doing chores. There’s always a job to do at the cottage.
This will impact the type of products people are choosing for different occasions. To examine this we pulled product descriptions for over 200 unique brands reported in our study, and used machine language processing to extract themes, flavours, and product attributes from the descriptions. Machine language processing is the same kind of technology underwriting state-of-the-art AI tools like OpenAI’s ChatGPT. We then crossed those product features with the places where people are drinking and summarized the result in the below figure.
In the market research world, we call this a correspondence map. The simple way to interpret it, is places located closer to different flavours/features are more associated with those flavours/features. There is more depth you can go into with these numbers, but high level, some big patterns begin to emerge. We see for example, the cottage is more associated with dynamic flavour profiles (bitters, citrus, etc.) food pairing, and increasingly looking for low calorie alternatives. As we move away from the cottage to in-home and friend’s home locations, descriptions begin to focus more on cereal flavours and light golden colours (i.e. Lagers). In home, the desire appears to be for more medium-bodied brews while ‘someone else’s home’ emphasizes more clean, easy drinking, and light bodied attributes.
In short: when taking drinks to a friend’s house, people tend to look for easy drinking light beers.
Does this mean there is a limit to innovation in this channel? Of course not, this only describes the current state and there is absolutely room for craft producers to provide something new. But the conservative approach would be to innovate at the boundaries of this taste profile, rather than jump in there with a chocolate stout.
So how should craft producers go about doing this? There is no shortage of quality product out there, even at the lighter end of the scale, but the real hurdle tends to be at retail. We also investigated this and found a few surprising things… and a few not so surprising.
Top of the list, when people are shopping to take to a friend’s house, they are looking at two main things: Price and temperature. Price is intuitive, given this occasion skews a bit lower income. And temperature makes sense, since you may want to show up with cold beer.
But what’s surprising is ‘the where’ and ‘the what’ of this shopping occasion. People are looking for affordable cold beer to take to a friend’s place overwhelmingly at the LCBO and in 4-packs.
The LCBO preference appears to be connected to greater access to transit and accessibility on route to a friend’s place – something critical for younger consumers who may be less inclined to drive. While the 4-pack preference makes intuitive sense: Enough to satisfy your needs but not so much you have to share.
So, what’s the opportunity for craft producers? There’s clear room to grow by capturing those Beer-at-a-Buddy’s place occasions. Success will probably be found with lighter easy drinking brews, although by no-means should producers feel restricted to this style. Most important would be 4-pack packaging and finding space in the fridge so product is available cold. Of course, all retail outlets are worth developing with this strategy but particular focus on the LCBO, especially stores with good transit connections serving younger consumers, holds notable potential.
*If you would like to know more about how consumer insights could support your brand, contact us at firstname.lastname@example.org