Local craft beer consumers don’t like it when larger companies acquire their favorite brands, and they show their displeasure through their spending habits.
That was the finding of a new study on brand loyalty and craft beers published in the INFORMS journal Marketing Science. The peer-reviewed article — “Local Market Reaction to Brand Acquisitions: Evidence from the Craft Beer Industry” — was written by authors from Koc University in Istanbul, Turkey, the University of California in San Diego, and New York University.
The study found a 15% drop in baseline product demand in local craft beer markets following larger companies’ acquisition of specific craft beers.
As of 2019, the beer industry in the United States had sales of roughly $120 billion per year, encompassing 6,400 breweries. The authors conducted an empirical data analysis on roughly 40 acquisitions of regional breweries between 2006 and 2016.
As part of their research, the authors scrutinized news coverage on local and regional media and consumer reactions on social media surrounding acquisition news announcements. They also studied Google search and Twitter activity that coincided with acquisition news.