I’ve been reading quite a lot of the writings of Huggy Rao recently. Huggy (or Hayagreeva to give him his Sunday name) is the Atholl McBean Professor of Organizational Behavior and Human Resources at Stanford University. One of Professor Rao’s research interests is the study of collective action within organizations and in markets. And one of the markets that he has written about is the beer market; in particular the rise of the craft beer market in the United States.
One of the fundamental issues addressed by Professor Rao in his research is understanding how a new idea, product, or technology can overcome the odds and successfully challenge an incumbent idea, product, or technology. A key, according to Rao, lies in collective action. In his writings about collective action Rao talks about two main ideas – hot causes and cool mobilizations. A hot cause appears when members of society identify something about which they are dissatisfied; something that they might like to change. The existence of a hot cause, however, is not sufficient to create meaningful change – for that cool mobilization is required. Cool mobilization occurs when the dissatisfied engage in collective actions that move them towards and allows them to implement the required change. Collective action is necessary because no individual has the resources or the influence to trigger change by themselves. However before collective action becomes a reality it needs an infrastructure that brings together like-minded individuals who can promote, support, and implement change.
In the case of beer the hot cause (back in the 1970s) was the bland tasting homogeneous beer that dominated the American beer market. A segment of the American beer market were unhappy about their beer choices. The antidote to bland tasting homogeneous beer was, in theory, simple – produce a large variety of tasteful beer styles. However, the large brewers were not going to produce such beer. Their whole success was predicated on a business model that depended upon economies of scale in production, marketing, and distribution. And this model only worked by producing mass quantities of the same beer that satisfied the lowest common taste denominator. Someone else had to step up to the plate – and if they didn’t the status quo would prevail.
According to Rao “the key in cool mobilization is to engage audiences through collective experiences that generate communities of feeling, in which audience members don’t just have their emotions aroused but encounter what literary critic Raymond Williams has called social experiences in solution, where participants actively live meanings and values associated with a social movement”.
In the case of the social movement for better beer the cool mobilization manifest itself in a number of interconnected and reinforcing ways. First, there was the homebrewing movement. Legalized at the federal level in 1978 it was then legalized on a state-by-state basis. This opened the way for the establishment of homebrewing clubs, although some existed prior to 1978. These pre-1978 clubs, such as The Maltose Falcons of Los Angeles, CA (established in 1974), lobbied for the legalization of homebrewing. Homebrewing clubs were important for a number of reasons. They provided a venue where those interested in brewing their own beer could meet like-minded individuals with whom they would share ideas, exchange recipes, and discuss brewing techniques. By definition those who joined homebrewing clubs were dissatisfied by the beer being produced by the large breweries. They, according to Rao, “exacerbated the discontent among beer aficionados about the lack of choice and the dearth of fresh and tasteful beer sold at bars, restaurants, and other gathering places”. In short homebrew clubs were “communities of feeling”, where not only were “emotions aroused” but “social experiences in solution” were occurring.
Homebrew clubs were only part of the infrastructure that created an esprit de corps among those dissatisfied with macro-beer. The American Homebrewers Association was founded in 1978. In the same year the first issue of Zymurgy, a magazine for homebrewers, was published. In 1979 the first national homebrewers conference was held in Boulder, CO. All of these contributed to a sense of community among homebrewers.
In addition to providing a place of refuge for those dissatisfied with macro-beer homebrew clubs and the homebrew movement more generally functioned as the incubators from which microbreweries and brewpubs would spawn. Data from the American Homebrewers Association estimates that ninety percent of today’s professional brewers started out as homebrewers. In garages, basements, and kitchens all across America homebrewers experimented with ingredients, tweaked recipes, and worked tirelessly to perfect their craft. When brewpubs and microbreweries started to appear in ever increasing numbers the revolution was truly taken to the people. The genie was out of the bottle and the number of people exposed to and drinking craft beer gradually increased. Today there are over four thousand craft breweries in the United States and most Americans live within ten miles of a brewpub or microbrewery. One out of every ten beers consumed in this country is made by a craft brewery.
As with any social movement there are individuals who played a critical leadership role in the early years. The craft brewing movement have any number of those, including Fritz Maytag, Charlie Papazian, and Michael Jackson. Many of today’s craft brewers recognize that they are willing participants in the rebellion that is the craft brew movement and are cognizant of the part they are playing. Mike Stevens and Dave Engbers, the owners of Founders Brewing Company in Grand Rapids, MI note that “we don’t brew beer for the masses. Instead, our beers are crafted for a chosen few, a small cadre of renegades and rebels who enjoy a beer that pushes the limits of what is commonly accepted as taste. In short, we make beer for people like us.”
The sentiments expressed by Stevens and Engbers also highlight another important ingredient of the secret sauce that has brought craft brewers’ success. They “make beer for people like us”. In other words they identify with the craft beer drinker in a very intimate way. And it is an authentic connection they are making. Stevens and Engbers followed the same progression of almost every other American commercial craft brewer – craft beer drinker to homebrewer to commercial craft brewer. This progression ensures that a unique bond and understanding exists between the producer and consumer. While Stevens and Engbers see themselves as rebels and renegades Rogue Ales of Bend, OR see themselves as revolutionaries – “Rogue is a small revolution” whose beer is brewed “for the connoisseur, the entrepreneur, and the revolutionist”.
Rao has applied his idea of hot causes and cool mobilizations to a number of other movements other than the craft beer industry. In his book titled Market Rebels: How Activists Make or Break Radical Innovation he tells how opposition to the automobile in the late 19th and early 20th centuries was eventually overcome after car enthusiasts organized themselves into automobile clubs which, in turn, sponsored reliability races to generate public interest in the new technology and also to allay concerns over its reliability. By 1912 reliability races had ceased such was the American public’s cultural acceptance of the automobile. In another chapter Rao invokes the same ideas to explain the cultural acceptance in France of nouvelle cuisine over classical cuisine.
No matter which measure you use the craft beer revolution has been wildly successful. And, in my opinion, there is no going back. I cannot imagine under what circumstances the craft beer drinker will return to drinking macro-beer. You don’t trade in your Rolls Royce for a bicycle. And as I have argued elsewhere demographic momentum favors brewers of craft beer.
Further Reading:
Rao, Hayagreeva. Market Rebels: How Activists Make or Break Radical Innovation. Princeton University Press: Princeton, NJ.