The rising popularity of craft and artisanal brands can hardly be considered “news” to anyone following trends within the food industry. Formerly a niche market targeting an increasingly health conscious customer base, craft and artisanal businesses have grown exponentially over the past few years, with the craft beer industry alone having grown 15% in 2014 and continuing to grow despite beer growth in the US more or less flat-lining in recent years. 2016 should expect a continuation of this kind of growth amongst businesses boasting artisan and craft products, as well as these terms being adopted by larger companies and conglomerates, looking to cash in on this current trend.
What makes a product “craft” or “artisan”?
Before trying to understand the popularity and expansion of this market, the characteristics of what exactly makes a product craft or artisan must be established. It is generally agreed upon that a craft or artisan product has:
- An obvious place of origin or production
- A unique recipe
- Distribution amongst more intimate locations (think boutiques, bars, and lounges)
- Natural ingredients
- Production by independent companies
- Human involvement in the production process, as “artisan” implies
Who is buying these products?
To properly market themselves to buyers of craft and artisanal products, small and large businesses alike must understand who is driving the popularity behind these labels. It is the younger generations, Millennials in particular, who seem to have formed an affinity for craft and artisanal brands, finding in them the personalization and customization they have come to expect in the products they consume as well as the level of corporate social responsibility they value. As Louise Kramer, of Specialty Foods Assn. in New York, observes, the artisan label alone appeals to customers as it evokes a sentiment of having a personalized product, and this is especially true for Millennial customers.
Smaller independent business will certainly have an easier time winning the loyalty of younger consumers, but conglomerates and mass producers may not have as much trouble fitting the definition of what makes a product artisan or craft as it may appear. Mark Eisenacher, a senior director at Back to Nature, Naples, Fla., argues that while these products imply a handmade or natural element, it’s more important to “develop and deliver a uniquely differentiated product that’s desirable to certain customers.”
Undeniably the processes behind the production of artisan and craft products is an important factor to many customers, but even more important is evoking a certain story and identity that sets them apart from other products. It is this sentiment that Kramer mentions which will win over customers, both young and old, rather than fitting perfectly the characteristics associated with artisan and craft labels.
Why is this trend important?
The Future of Small Business Report, as well as the Institute for the Future, as early as 2008, predicted rise of the artisans as a formidable economic force, calling their prediction “The New Artisan Economy.” The Future of Small Business Report continues on to characterize the artisans as “small and personal businesses…producing…for an increasingly large pool of customers seeking unique, customized…products.” Eight years after this initial report, the artisans are flourishing, their strength and popularity bolstered by the spending power of a younger customer base.
Jared Koerten, Senior Analyst at Euromonitor International, stresses the importance of capturing the interest of younger generations, and in turn, benefiting from their spending power, thought to be somewhere around one trillion dollars. With roughly all of the estimated 71 million Millennials now in their twenties and the oldest of their successors, Generation Z, beginning to flex their spending power as they go through high school and college, it’s becoming increasingly important for both small and large businesses to tap into the demands of these demographics. As Koerten states “They’re growing…and they’re going to become an important demographic, so it’s very important to connect with them now”, and directly referencing the artisanal market, as he asserts that “[Millennials] want something…more artisanal and unique.”
As 2016 is shaping up to be the year for artisanal and craft brands, and the Future of Small Business Report notes that small businesses will be a source of innovation there’s growing pressure for larger companies to adapt to the changes in the food industry, if they wish to survive the New Artisan Economy.
As customers begin demanding customized, healthier, natural, and, most importantly, unique products from the food industry, it is imperative that large businesses and food conglomerates tap into the success of these products, especially as the rising popularity of artisan and craft brands seems to be hitting its stride in 2016.
The adoption of craft and artisan labels does not come without difficulties, particularly for the very businesses that would benefit from attaching these epithets to their products. Lacking the homegrown, small business back story that is most often found with craft and artisan brands, it would seem impossible for larger companies and conglomerates to break into the market, and with increasingly distrustful customers, the challenges only multiply.
Kramer points out that consumers “will surely view “artisanal” claims from mass producers with a grain of salt”. This rings especially true for the food industry’s younger and increasingly influential customers, the Y and Z generations, who are largely immune to traditional advertising and marketing schemes that worked so well on their parents and grandparents, and, along with their Generation X predecessors, are known for their cynicism and skepticism. So skeptical are these generations, that they have taken artisanal and craft claims by large companies to court, suing them for what they argue are misleading and deceptive labels.
Attracting these unbelieving customers, arguably now the majority of the consumer population, will require these companies to do more than simply slap the label “artisan” onto their products, especially if they want to avoid legal issues.
While there will always be debates over whether food conglomerates and mass producers can truly be artisan or craft based on vague and poorly defined criteria, more important is acknowledging what characteristics customers value and incorporating them into existing production models in order to win them over.
A panel of three successful artisan business owners were gathered in 2014 to answer some of the difficult questions concerning the artisanal market, and together compiled a list of characteristics considered vital to being an artisan business:
- Commitment to local farms and community
- Flexibility and creativity
- Transparency and education
- Hands-on quality control
- Employee health and respect
- Innovation in moderation
- Passing on their craft
- Collaboration, not competition
With several of these qualities also predicted to be trends in 2016, namely transparency, food safety, collaboration, and trustworthiness, it would appear that the artisan business model trumps the label itself, ushering in new methods and techniques that both small businesses and large food conglomerates can put into practice, and in the process establish a changing relationship with their customers, giving them the personalization, corporate social accountability, and unique products they demand.
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