On the cerveza to craft beer transition

A Texas company has compiled market analysis suggesting craft-beer producers have been missing out on a potentially valuable market segment: Hispanic millennials.

Gerry Loredo, director of business analytics for Houston advertising agency Lopez Negrete Communications, tapped into consumer data indicating Hispanics in the U.S. spend $3.6 billion annually on beer.

"But then when you look at craft beer, there's really a gap there with consumption," Loredo says, noting the current Mexican imports boom includes European brands such as Amstel and Heineken. "When we look at Hispanics and how much they drink import, to me it seems like they're a ripe target for the craft industry."

He thinks this holds particularly true among millennial populations. Millennials account for a third of the craft-beer market. However, while 21 percent of millennials are Hispanic, they only make up 14 percent of craft-beer consumers. Loredo speculates navigating the many choices of beer brands and styles prove intimidating to new customers. According to his numbers, more than half of Hispanic millennials say they would try craft beer if they knew more about it.

"This segment has demonstrated by the beer they drink that the quality of their beer is important to them," Loredo points out. Craft breweries, he says, "haven’t done a good job of bringing this product to their attention…. When you start looking at individual markets, it can be the difference between a craft brewery being able to make it or not."

Which brings us to San Diego, where Hispanics are estimated to be a third of the population. That ratio flips in National City, where the population is roughly two-thirds.

That's where Eddie Trejo and Joann Cornejo opened Machete Beer House two years ago, serving a clientele that reflects the makeup of their community.

While they agree with Loredo that educating Hispanic beer drinkers about beer styles can open the market, they caution against breweries appropriating cultural tropes to capitalize on this segment. "People can see true authenticity," Trejo contends. "Being Latino is still a huge component of who we are, but we are also craft-beer drinkers. We don't need to be sold or marketed as the new hot commodity."

They say, for example, that while beers flavored with horchata, hibiscus, or Mexican hot chocolate may evoke nostalgia, they're not the answer to changing beer-drinking habits; that has more to do with geography.

"Neighborhoods with large Latino populations have generally been overlooked from a craft-beer business standpoint," Trejo says. Instead, craft breweries and bars cluster in neighborhoods that already enjoy "a surplus of craft-beer options." In their bar — the first craft-beer destination in the area — they've found success turning beer drinkers on to craft by being there to offer suggestions. "This type of personalized experience is often possible if the bar isn't too busy and you have an educated staff who can match your customers' palates."