Demographics of Craft Beer

For any statistical analysis of the locations of craft breweries to be established, one must first develop a profile of what sort of person is likely to drink craft beer. If the hypothesis of the paper holds, areas containing an especially large number of breweries should also be full of the type of people who drink craft beer. Therefore it must be made clear what sorts of people are being identified as likely craft beer drinkers and why. There are a number of reasons why this is somewhat perilous territory, particularly because it assumes that craft beer is enjoyed by the same demographics over time. While this seems to be the opinion held by those in the marketing world (see below), it does not seem like something that should necessarily be taken for granted. For instance there’s nothing to say that India Pale Ales will not suddenly catch on and become the favored drink of middle-aged African American men. Certain people (those who worry heavily about a beer’s caloric composition and less about its taste, for instance) are very unlikely to ever catch on to this phenomenon. Others (those who really love the taste of beer, respect the work that goes into making it, and enjoy discovering new and interesting beers they had never tried before) will probably always hold a place in their heart for craft beer. However, while the craft beer market has seen a remarkable last few years, it is not entirely impossible to foresee a situation where many of its newest converts move toward some new beverage of choice, or stop drinking altogether due to a sudden change in cultural norms about health and alcohol consumption. Equally tenuous is the notion that different types of craft beer are enjoyed by the same sorts of people. Again, this is probably the case. A quick look around any bar specializing in craft beers will demonstrate a somewhat homogenous demographic enjoying a great variety of different beers. However, that says nothing about individuals who purchase their craft beer for home consumption. It could be that while Belgian Whites and Pale Ales are heavily consumed by young, hip, affluent individuals, the stouts and porters which are also lumped into that category are consumed by the sorts of older, wiser, hardier men who often adorn the bottles of those particular varieties.⁵ Whether or not this actually matters is another question that should be asked, since many, if not most, breweries have a diverse portfolio of brews that could cater to a wide variety of consumers. In this case, if the hypothesis in question did hold, the breweries would locate where there was the strongest demand and other demographics that may enjoy some of their other varieties would not be so lucky.

Most of the published works addressing craft beer demographics are from the marketing world, not the academic world. As such, it is somewhat difficult to tell just how robust the existing literature is. In lieu of that, a number of different studies reaching similar conclusions will have to suffice.

One study that received a good deal of attention within the craft beer community was conducted by Ad Age Magazine and Mindset Media, a company described as a “market researcher specializing in psychographics” (Snyder Bulik). They offered a profile of the lifestyle and attitudes of the consumers of Budweiser, Bud Light, Michelob Ultra, Corona, Heineken, Blue Moon, and a lump category for craft beer. They also point out that Blue Moon, while considered by some to be a craft beer, does not, in fact, meet the criteria given by the Brewer’s Association, a Boulder-based trade organization, to qualify as a craft brewery. Their main offense: being owned by the same international conglomerate that owns Miller, Coors, and Molson.

The somewhat humorous but probably not incorrect assessment of the study on craft beer drinkers is as follows:

These specialty made beers get lumped into one category both because there are fewer fans (and thus less statistically significant data) of them, but also because the personalities of one type fairly well describe another. This group is more likely to spend time thinking about beer rather than work. They are more open-minded than most people, seek out interesting and varied experiences and are intellectually curious. Craft-beer drinkers also skew as having a lower sense of responsibility—they don’t stress about missed deadlines and tend to be happy-go-lucky about life.

Craft-beer lovers are 153% more likely to always buy organic, 52% more likely to be fans of the show “The Office” and 36% more likely to be the ones to choose the movie they are going to see at the theater. (Snyder Bulik)

Elsewhere in the article, when describing craft beer drinkers in relation to other beer drinkers (different) and to Blue Moon drinkers (similar), some interesting comments are made. For instance, the assertion is made that

people who prefer domestic beers over craft beers or imports are generally middle of the road in their politics. They’re not nearly as conservative as people who don’t drink beer at all, but not as liberal as people who prefer more exotic beer. (Snyder Bulik)

After noting that Blue Moon drinkers tend largely to follow craft beer drinkers, it is said that “Blue Moonies are socially liberal and usually quite willing to go against convention,” and that they are “105% more likely than the average person to drive hybrid cars, 77% more likely to own Apple Mac laptops, 65% more likely to purchase five pairs or more of sneakers every year, and 32% more likely to not be registered voters” (Snyder Bulik).

This establishes one prevailing perception about craft beer consumers; they tend to be liberal and, for lack of a better word, hip. While this will be included in the final regression, political liberalism can take many forms, and some of the demographics that form the bulwark of support for the Democratic Party (for instance, African Americans and blue collar union workers) are not typically seen as the primary customer base for craft beer, so more insights are required. While many statistics are available, they tend to be from sources not extremely well known for citing their work (newspapers and marketing documents). For instance, Steve Adams, writing for The Patriot Ledger, says “People aged 25 to 34 make up the biggest segment of craft beer drinkers, at 26 percent, and 38 percent of craft beer customers have incomes of $ 100,000 or more. More than 40 percent are college graduates.” (Adams). Paul Gatza, director of the Brewer’s Association tends to agree. Being quoted in an article for Nightclub and Bar Magazine, he states that “The new beer drinker, at least those that are providing growth for beer, include 25- to 34-year-olds, women and those with household incomes [either] below $ 45,000 or over $ 100,000” (Gosselin).

This view is not universally held. One of the more thorough reports available is a statistical table of consumer characteristics on beer consumption generated by Simmons Market Research Bureau, Fall 2006 Study of Media and Markets. According to this survey 9.1% of craft beer consumers are between 21 and 24, 24.7% between 25 and 34, 22.8% between 35 and 44, and 24.6% between 45 and 54 years old. For comparison, the percentage of Americans above 21 in those age bracket is 7.7%, 18.6%, 18.6%, and 20.4% respectively (2010 Census). Another dissenting opinion when it comes to what demographics drive beer consumption comes from another undergraduate economics paper on craft beer. Steve Spurry of Mary Washington College, writing in Issues in Political Economy, concurs with an earlier study by Craig Levitt in Discount Merchandiser showing that the growth in craft beer has been fueled by the baby boomers aging, accumulating wealth and becoming more selective in their choices of beverage. Before giving too much weight to this apparent disagreement about whether it is the hip millennials or the refined baby boomers that are fueling growth in craft beer, it should be noted that the Spurry and Levitt articles were published nearly ten years before the others, and may reflect a different economic reality at that time. However, the same cannot be said for the Simmons research. All the same, both ideas will be tested later in this paper.

So far, political affiliation, age, and income have been suggested as good variables to capture the typical craft beer consumer. Although it is considerably more controversial, one more variable should probably be added here, that being race. According to the Simmons research, 90% of craft beer drinkers are white, compared to 79.1% of beer drinkers in general. As for the other 10%, it breaks down as 2.7% African-American (as opposed to 10.4% of all beer drinkers), 2.8% Asian (as opposed to 4% of all beer drinkers), and 6.4% Hispanic (as opposed to 12.6% of all beer drinkers).⁶ This discrepancy in who enjoys beer has received some attention on craft-beer related forums and blogs, but little industry attention.⁷ Most of the musings as to why that is the case range from somewhat inane to completely ludicrous,⁸ but one concept that some people have suggested may hold some merit. Since craft beer is more expensive than most beers, and since a disproportionately large share of the national wealth is known to be held by whites, it makes some amount of sense that whites would purchase a larger share of craft beer than they would beer as a whole. This is another concept that will be tested later in the paper.

This generates the demographic profile of the craft beer drinker that the remainder of this paper will use. If the hypothesis holds, then breweries would chose to locate themselves in areas with high median income, strong liberal political affiliation, a large number of 25-34 year olds or, alternatively, a high median age, and where there are a large number of White Non-Hispanics.

⁵ A casual observation would be that the darker and heavier a beer is, the more likely it is to feature a lumberjack-type gentleman on the label. However, this will not be tested in this paper.

⁶ The overlap here is noted, while Simmons does not explain itself it is assumed for these purposes to be due to overlap in racial identification.

⁷ The reason for this is somewhat obvious. There’s nothing inherently wrong with white people enjoying your product, but it’s hardly hip and cutting edge to be the producer of something that only white people drink.

⁸ For example, that since there are more white people, they will drink more beer, not taking into account the somewhat significant difference between the percentage of Americans who are White Non-Hispanics and the percent who are white craft beer drinkers, never mind the difference between craft beer and other beers... or that, since the styles of beer are often based on traditional European styles, perhaps it’s in the genes of white people to love craft beer?