Flash Sale and Daily Deal Sites for Craft Beer: Are They Here to Stay?

Over the last couple of years, wine flash sales and daily deal sites for wine have taken the Internet by storm, allowing customers to have access to a number of hand-selected wines at a discount.

Capitalizing on the surge of the craft beer movement, it was only a matter of time before the Groupon of Ale and Stouts tapped into the loyal market of craft beer lovers. Today, with online retailers such as CraftBeerKings.com, BeerAuctions.com or CraftShack.com, rare craft beers are just a click away. Or are they?

By numbers alone, online craft beer business are thriving: the craft beer industry is growing 18% a year by volume; there are over 3,200 breweries in the country, and 500 new breweries open every year in the United States.

And judging by the success of discount online wine sites, which has grown to $100 million in annual sales and accounts for a quarter of the overall online wine market proves that the demand is there and that the public is receptive.

However, if you are a particular, educated craft beer drinker with a particular fondness for artisan-made small-batches, flash sale sites for craft beer may not be able to effectively meet your needs.

If you are familiar with Wine.Woot or CinderellaCave, you already know what flash sale sites for craft beer are about: limited amounts of craft beer at discounts that are so steep, it’s almost too good to be true. The deals are also highly temporary and last for no more than a day or two. And you also know that there’s a reason why these sites offer deals that any craft beer store can’t come close to touching: you may find your favorite ale here and there -and if you do, you’ve got to act fast! – but overall, the curation is quite disappointing.

By nature, mass-market flash sale sites and artisanal craft beer is a match doomed to failure: on the one hand, daily deal websites are based on the principle of one-time-purchases designed for people looking for a deal, not a brand. Their customers are typically price-sensitive and the majority of them won’t generate repeat sales to your company unless a deal is offered.

On the other hand, artisans are looking for customer loyalty and to generate sales on a consistent basis. Therefore, daily deal sites may be helpful for a business needing to move surplus inventory fast, but it is a short-term fix.

Flash sites are function under various types of business models. Retailers sites negotiate discounts, buy the beers either directly from the brewery or through wholesalers, and fulfill the orders themselves. Craftshack.com, which has over 1,800 types of craft beers and wine in stock, is in this category.

The other model for a flash site is the marketing agent that sells craft beer but never takes possession of it, leaving the hassles of shipping and order fulfillment to the breweries.

The other model for a flash site is the aggregator site that merely lists available deals and flash sales but doesn’t sell or handle anything. These sites are typically commission-based and simply put a customer in a relationship with a third-party, the discounter.

These sites, like BeerAuctions.com or Homebrewfinds.com aggregate craft auctions from around the web, from auctions sites like eBay and, more rarely, directly with breweries that would offer sales.

In theory, these latter two sites are better positioned to succeed because they can help breweries build their brands, communicate directly and creatively with customers and create interactive communities of buyers. In practice, daily deal sites may not be the proper marketing tactic for artisans on a consistent basis.

The special nature of craft beer makes shipping and handling difficult, and often results delays, problems – and disappointed customers.

Judging on the difficulties of daily deal sites for wine and daily deal sites, in general, industry experts already predict that flash sale sites for beer are doomed to obsolescence in the next few years.

The difficulty to scale and offer heavily discounted products on a consistent basis raises questions on whether flash sales craft beer sites are a sustainable business. Flash sites typically have lower quality products than a store, as flash sites are often a medium to move old goods or private label wines with high-profit margins.

As a result, a growing number of websites have shifted the focus on the lifestyle aspect of the craft beer culture and specialize in flash sale of ancillary products related to beer, such limited edition glasses, beer lovers tee shirts, beer barrels, beer bottle openers, or even guided tours of breweries across the country.

Beerloved.com, love2brew.com but also Groupon and Living Social have been quick to jump into that segment of the flash sale sites industry, largely because it comes without the challenging operational and legal aspects associated with the sale of alcohol and small-batch products.

For the future holds for flash beer sites is uncertain, but the most durable concept so far has been membership-based sites for craft beer lovers, such as Craftbeerclub.com. For over 20 years, this California-based company has supported the artisans behind the craft beer culture and movement by curating rare, small-batch crafts to their subscribers.

Every month, they ship 12 to 24 bottles of beer of their choosing right to your doorstep – a fun way to discover and experience new brands and tastes. Although each shipment typically includes a variety of styles, the customers aren’t involved in the selection process, nor are they able to inform the curator of their particular tastes. Think of it as a chocolate box: you may or may not like what you’re going to get.

For all their flaws, the sites are drawing new customers into the space and are increasing their comfort level in buying beer online. Ultimately, selling small batch, localized and quality driven products will lead the new charge.