15 PACKS ARE A HARBINGER OF DEATH FOR CRAFT BEER

There has been a lot of talk and writing about 15 packs lately. I was there for the first 15 pack, a long time ago, as a young marketing manager just starting out in the beer business.

It actually started out as a 30 pack. It was the Stroh Brewery in the early 1980s. Volume for anything not named Budweiser was down and Stroh’s beer was declining in volume. Instead of the usual year-end price promotion on suitcase (24 loose) cans, management decided to offer an in-and-out 30 pack for the same price as the 24 pack.

It went gangbusters. So we did it again the following summer. And again at year-end because we had big numbers to cycle from the first year’s 30 pack. The following year, Stroh introduced 15 packs at alternate periods versus the 30 packs. For a couple of years volume increased significantly. Then, there was very little 24 pack or 12 pack business left – it all went to 15’s and 30’s. And the margin went with it and so, eventually, did the company.

This is playing the big beer game. It will not work long term. The breweries that are selling 15 packs will find their short-term competitive advantage eroding. More “craft” brands will be produced in 15 packs and a lot of them will just happen to be owned by the big brewers. (note that Goose Island 15 packs were recently introduced (wanna play the price game?)

There go the margins, the incremental volume, and probably some breweries. A more sustainable strategy is to present the consumer with a brand they want to pay more for. That’s what craft beer is and it’s the only way to survive.