A recent article in the New York Times suggested the emergence of a new trend in the world of craft beer. In an industry where brewers have provided consumers with an almost endless choice of beer styles and variations thereof, Joshua Bernstein suggests that brewers and retailers are cutting back on the number of different beers they offer. As an example, Bernstein cites Suarez Family Brewery in Livingston, NY who used to offer its customers eight different beers. That was pre-COVID-19 pandemic. Post-pandemic they have shrunk that number to two craft beers. Indeed as I started writing this blog entry I visited the Suarez website and, sure enough two beers were available for taproom visitors to purchase – Qualify Pils and Hecto Hoppy Pale Ale. Retailers such as Whole Foods have also been reducing the number of different beers they offer customers, partly to be able to devote more shelf space to faster growing segments such as Ready-to-Drink cocktails.
In making the decision to produce only two beers, the owners of Suarez Family Brewery are partly inspired by “the model of traditional European taverns and breweries that serve only one or two beers at a time”. On two recent trips to Europe I experienced this phenomena. In Osnabrück, Germany I spent an evening in Rampendal Brewery where my choice of beers were a Dunkel, a Weizen, and a Helles Lager. At Brasserie du Molard, a nice little brewery in the heart of Geneva, Switzerland, I was similarly offered a choice of three beers – a Witbier, a Lager, and an Amber Ale.
Craft breweries who have opted to downsize (or who never upsized in the first place) offer a number of explanations. According to Dan Suarez of Suarez Family Brewery, too many beers on tap can cause customers “a lot of agony over choosing”. This is an interesting observation, and one supported by Barry Schwartz, a Professor Emeritus in Social Theory and Social Action at Swarthmore College. One of his areas of research, sitting at the intersection of psychology and economics, is consumer decision making. In 2004, Schwartz published a book titled “The Paradox of Choice”, which carried the subtitle “Why More is Less”. It is a fascinating read. The basic premise of Schwartz’s thesis is Americans have too many choices, whether that be when purchasing a breakfast cereal, a coffee maker, or an automobile. Intuitively, we think of choice as a good thing and more choice as better than less choice. Schwartz, however, suggests that while some choice is good, too much choice is bad. It is bad because it generates anxiety for the individual making the choice.
As noted by Schwartz (p. 5), “autonomy and freedom of choice are critical to our well being, and choice is critical to freedom and autonomy. Nonetheless, though modern Americans have more choice than any group of people ever has had before, and thus, presumably, more freedom and autonomy, we don’t seem to be benefiting from it psychologically”
We are victims of and suffering from what some have termed choice overload. Too much choice taxes our cognitive systems. We feel overwhelmed. We second-guess ourselves, wondering if we made the best decision. The more choices we have, the more likely we are to be less satisfied with the decision we make, perhaps even regretting it. Anyone who has stepped into a Home Depot and picked out a new paint color for their master bedroom will know what I mean. If a company offers a product (say a coffee maker) with a large number of feature variations and in a wide variety of styles/colors consumers may struggle to figure out which one is best for them. Choice overload can cause us to feel overwhelmed and even delay decision-making.
Interestingly (at least I find it interesting) the term choice overload was coined by Alvin Toffler in his 1970 book Future Shock. Not only did he coin it, but he predicted it. Looking to the future Toffler suggested “the people of the future may suffer not from an absence of choice, but from a “paralyzing surfeit of it.” (p. 264). While Toffler was primarily focused on information overload, his basic premise also applies to products.
In their 1998 Annual Report, the Federal Reserve Bank of Dallas provided data on the overwhelming number of choices facing consumers. They did so by comparing the early 1970s to the late 1990s. For example, in the early 1970s Colgate offered consumers the choice of two different toothpastes. By the late 1990s consumers could choose from 17 different toothpastes. Over the same period, the number of television screen sizes increased from 5 to 15, McDonalds’ menu items from 13 to 43, and Frito Lay chip varieties from 10 to 78.
What about beer? In same report the Dallas Fed reported the number of SKUs (aka Stock Keeping Units) for a variety of retail items. An SKU code is a “unique code consisting of letters and numbers that identify characteristics about each product, such as manufacturer, brand, style, color, and size.” For example, if a manufacturer introduces a new product (e.g., a new breakfast cereal) or the same product in a different size (e.g., 36oz in addition to 24oz) it is assigned its own unique SKU. Between 1980 and 1998, the number of SKU codes for beer increased from 25 to 187. This was, of course, before the craft beer revolution went into overdrive. Between 2008 and 2015, the number of craft beer SKUs increased from 2,274 to 7,400. While the number of craft beer SKUs have dropped in recent years, the amount of choice availability to craft beer drinkers remains extensive.
The increasing number of craft breweries (there are now over 9,000 in the United States) and SKUs definitely give the craft beer drinker more choice. But is it too much? Carlos Brito seems to think so. In 2016 interview, the then CEO of Anheuser Busch suggested that craft beer consumers were “tired of choice”. Hardly a surprising statement from the man whose company was seeing their market share being eroded by increasing consumer demand for craft beer. As Bob Pease, President and CEO of the Brewers Association suggested, “It’s a hypothesis being willed into existence for the greater good of one brewery.”
Most craft beer drinkers disagree with Mr. Brito’s assessment. Indeed, a survey conducted in the same year found that 58% of craft beer drinkers craved even more flavor options than were available to them at that time. A 2013 study examining the behaviors of craft beer drinkers noted that a large number of craft beer drinkers “find satisfaction in discovering new beers and breweries” For such drinkers, “loyalty to one brewery will be difficult . . . if new products are not constantly being offered.” This is why most craft breweries offer patrons to opportunity to try five or six of its beers by purchasing a flight. The growth of beer tourism is another indicator that craft beer drinkers yearn choice. A 2016 study by Jennifer Francioni and Erick T. Byrd found that the main reason individuals engage in beer tourism is to taste new beer.
An interesting exception to choice overload are individuals who consider themselves to be ‘experts’ with regard to the product they are choosing. A 2014 paper by Alexander Chernev and his colleagues note that “it has been shown that for consumers who are unfamiliar with the product category, choices from larger assortments are more likely to lead to choice deferral and weaker preferences for the selected alternative than choices from smaller assortments. In contrast, for expert consumers, the impact of assortment size is reversed, leading to greater likelihood of choice deferral and weaker preferences for the chosen alternative in the context of smaller rather than larger assortments”. In other words, people with product knowledge may have a tougher time choosing when they have a smaller number of options from which to choose.
The extent to which craft beer drinkers are ‘experts’ when it comes to the product they consume can, I am sure, be debated. Some craft beer drinkers are undoubtedly more knowledgeable than others. Indeed, in the aforementioned 2013 study of the behaviors of craft beer drinkers, the authors identify four types of craft beer drinkers – enthusiasts, explorers, loyalists, and novices. Of the four types, enthusiasts are the most knowledgeable craft beer drinkers, priding “themselves on trying all the different beers from different breweries and seek to acquire knowledge about how the beer is made and the ingredients that are used in the process.” I know a lot of people who drink craft beer on a regular basis. Most of them, I would consider fairly knowledgeable. And if not knowledgeable, then certainly very interested in the product and sampling ones they have not tried before.
The examples of breweries cutting back on the number of beers they brew in the New York Times article are small in number, anecdotal even. I seriously question how widespread this phenomenon is. I visit a lot of breweries throughout the year. I can’t recall one that I have visited in the last twelve months that has what I would consider a small number of beers on tap. Indeed, one of the most popular craft beer bars in Toledo, OH (where I live) is an establishment called The Casual Pint. It regularly has at least 25 different beers on draft. It is a very popular venue for local craft beer drinkers. No one I see in there looks particularly stressed or anxious when they are selecting which beer to purchase. In all honesty, most seem quite happy and relaxed and, if anything, appear to find the extensive beer list as a benefit and not a burden.
Further Reading:
Chernev, Alexander, Ulf Bockenholt, and Joseph Goodman. 2015. Choice Overload: A Conceptual Review and Meta-Analysis. 2015 Journal of Consumer Psychology, Volume 25, Issue 2, pp. 333–358.
Schwartz, Barry. 2004. The Paradox of Choice: Why More is Less. HarperCollins Publishers.