Retail Differentiation

The growth of the craft beer industry has spurred the rise of the specialty liquor stores – retail outlets that carry a wide array of craft beers. These stores have differentiated themselves in a number of ways – by carrying the most variety, having the staff with the most expertise, etc. One thing seems to be a constant though – the way they display their beer selection. Every retailer I’ve been to is the same – a long row of glass display cases with bright fluorescent lighting.

Sure, this is the industry standard, but why not shake it up a bit?

A liquor store could modify the doors and lighting in order to best preserve the beer. The refrigerators could be changed to operate more like standard home refrigerator – opaque doors with no lights on the inside until you open them. Bold visual depictions (using either brewery logos or images of the beer bottles) could be clearly labeled on the outside doors of the refrigerated cases to quickly tell the browsing customer what’s inside. This strategy would protect the bottles of beer from constant exposure to the fluorescent lighting of the refrigerated display cases (of course this isn’t a problem with canned beer.) These strategies could set a liquor store apart from its peers as the market leader in beverage storage.

However, there is a tradeoff with this strategy. Because the beer is hidden away it has lower product visibility which certain breweries and distributors would not be happy about. However, the liquor store would more than make up for any lost sales by positioning themselves as the retailer with the best preserved (and therefore best tasting) beer in their market. By focusing their marketing efforts on how much attention they pay to the way their beer is stored, they will be able to bring in new customers who are willing to drive further for the perceived better tasting product.

photo courtesy of www.lakeairebottleshoppe.com

The Startup Dialogues: Branding (Monday Night Brewing, Atlanta, GA)

Note: This is the first in a series called ‘The Startup Dialogues’ which will focus on a different aspect of starting a brewery in each post. For my first interview, I talked with Jonathan from Monday Night Brewing – an Atlanta-based craft brewery in planning with the mantra ‘Weekends Are Overrated.’ We discussed branding, labeling, and packaging.

When you were initially thinking about the concept, how forward thinking were you? Were you looking for something to show your friends or envisioning your bottles in stores across the country? Or somewhere in between?

When we first started planning a brewery, we were definitely thinking long-term. As we developed the brand over the next 2 years, we considered where people would have contact with our brand as a startup brewery and designed around that. We wouldn’t have money for commercials or billboards or print ads. Taps, bottles and six pack carriers would be our primary means of “marketing” so the brand had to work in those arenas, and had to be distinctive in context (versus other beers on the shelf or other taps at the bar).

What efforts did you take to create your brand?

A lot of brainstorming. Many a night was spent arguing with Jeff and Joel over beer names. As the Marketing Guy and Master of Mind Control, I had the most at stake, so I would think about our brand constantly. While falling asleep or showering. I also dabble in design, so I created the initial designs.

What efforts have you taken to develop your brand?

We’ve concentrated most of our resources on growing our brand presence on the web pre-launch, simply because we don’t have a lot of resources. We also view the actual brewing on Monday nights as an integral piece of our “brand experience.” It’s not like we have MONDAY NIGHT plastered up everywhere, but there’s a general vibe of camaraderie, transparency, meeting new people, and relaxing after a day’s work. We did a complete logo redesign about a year and a half in, which was emotionally exhausting.

What went into developing the name for the brewery?

The name was actually the easiest for us because it was grounded in who we are and what we are about. We started brewing every Monday night. Hence, Monday Night Brewing.

Did you have other ideas for the name? If so, how did you test the various names?

Nope. Monday Night was one of the first names we considered and there was a general consensus that it fit. My mom actually suggested “3 J’s Brewing” because all three owners have names starting with J. But I think Three Floyds would have put a hit out against us.

How did you develop concepts/ideas for logo and label design?

We knew we wanted our logo to stand out. And on labels we wanted our logo to be big, which meant it had to be changeable depending on the beer. Initially we started with a monk as our logo because monks brew beer and we were born out of a bible study. Which made sense at the time. But we realized that what we were really about was weeknights. Monday Night was where it was at, and there was no discernible connection between monks and Mondays in our logo. So we decided to change it to make our entire logo (and name) more weeknight-centric.

We spent a lot of time brainstorming new directions and whining to friends, but couldn’t land on anything that felt right. From there we crowdsourced our logo to get new ideas from a lot of designers. There was one that stood out in terms of idea, but needed some help in execution, so we paid them for their work and took it from there ourselves.

Once we had a logo in place, the labels, taps and 6 pack carriers pretty much designed themselves. They came together in my head and all I had to do was spend hours in Adobe Illustrator bringing them to life. We also ran our designs past consumers on our blog and a few people in the industry and made revisions throughout the process.

Did you hire an outside design firm?

We did not. We did crowdsource ideas for the new logo. The final execution is actually a silhouette of Joel, our Operations Guy. We had a little photo shoot at Joel’s house one Saturday to get the outline right, and then edited it ourselves. In terms of direction for the crowdsourcing, we were looking for diversity of ideas, so our primary direction was explaining our brand… We’re a witty, white-collar, Southern cosmopolitan beer brand, and our logo needed to reflect that.

How did you decide on colors?

We tried to choose colors that would stand out on the shelves, so we did a little inventory of the colors most used in beer brands and tried to avoid those. Of course, it’s not an exact science. But we wanted to use bold colors that we loved. The way we built our brand, black and white are the primary colors, and each beer will get 2 shades of one bold color. It should be pretty versatile down the road.

What were your final reasons for selecting the logo?

When we were clearly communicating one unified idea simply with both our logo and our name, we knew we had arrived.

Thanks again to the guys at Monday Night Brewing for their help with this article! Make sure you check out their website and if you’re ever in the Atlanta area, stop by and brew with them on a Monday night!

Brew With Your Favorite Brewery

UPDATE 1/6/2010: Thanks to heads up readers like @killpineapple and @hockeyandbeer, I have learned that there are at least two breweries that utilize this concept. The Brew Kettle in Strongsville, Ohio and Brewbakers in Huntington Beach, California each let you brew on their systems.

Have you ever dreamt of working at a brewery? If you’re reading this site, chances are you have – or you’ve already realized it and currently work at a brewery. Congratulations on that. But for the rest of us, we each have our dream breweries we’d love to work at. Imagine if you could go to this dream brewery and brew on a professional system with real brewers helping you. This leads to my idea for breweries:

Create a program where anybody can pay to come into the brewery and brew a small scale production.

Of course, no amateur is going to come in and brew on Sierra Nevada’s main production line. But many breweries now have smaller brewing systems and facilities specifically designed for small batch brews.

Why not open these up to the public on certain occasions?

It would be a new way for breweries to engage with their fans, consumers, and communities.  Breweries could take this idea in any number of directions, both for profit and not. Breweries could charge BIG dollars to come in and work on their equipment (more than they’d sell the lost beer production for). Many people dream of this experience and I’m sure some are willing to pay well for the opportunity (it would be considerably less than what they’d have to pay if they purchased their own professional equipment). And the people who pay to use the brewing equipment aren’t just paying for the brewing experience – at the end of the process they’ll have A LOT of beer to take home to friends and family. Some of the target customers would include:

·         Home brewing clubs looking to gain knowledge and experience on larger systems

·         Beer fans who want a once in a lifetime brewing experience

·         Organizations and companies looking for fun team outings

·         Avid home brewers who need to make a large quantity of beer for a special occasion

·         Extravagant birthday, bachelor, etc. parties

This concept could also be used as a way for breweries to give back to their communities. Breweries could work with different non-profit organizations hand in hand to develop a beer that fits the personality of their group. They could then brew this beer with officials from the organization on hand learning about the process, and then sell this beer in their tap room or brewpub, all the while giving a portion or all of the proceeds back to the specific charity.

This could not only provide a new revenue stream for breweries, but it could create a new product that the brewery offers – the experience of brewing. Breweries’ products used to be one dimensional – the very tangible beer you held in your hand. Then came tours, tasting rooms and restaurants and breweries all of a sudden had two aspects – the beer and the experience you have while visiting the brewery.  Certain breweries have an opportunity to add a third aspect to this – user participation. By giving consumers the chance to collaborate with breweries, they can turn casual buyers into fans and fans who will tell everyone about it. Imagine if you had the opportunity to work with a professional brewer on a system at your favorite brewery – who wouldn’t you tell about it?

A Hidden Brewpub

I recently returned from a short trip to San Diego and while I was there I had the pleasure of stopping by the Karl Strauss restaurant in Sorrento Mesa. As I was pulling up to the address the GPS directed me to, I looked out and only saw office buildings and a parking lot. It looked more like a corporate campus than the strip malls, high traffic intersections, or commercial districts that brewpubs are generally found at. I decided to pull into the parking lot and check it out. Low and behold, beneath a small, inconspicuous wooden archway was a Karl Strauss sign (take a look around and then zoom in to see if you can find the entrance to the restaurant).

I parked and walked underneath the arch on a dark pathway to a bustling restaurant. The place was packed on a weekday evening with a 30 minute wait for a table – all without bold neon signs or exposure frontage on a major street. How did all of these people find this place? The answer was simple:

They were seeking it out.

For this location, Karl Strauss doesn’t depend on people wandering by to find it. Instead, they rely on people who know about the restaurant and want to check it out – people who looked up the address in their GPS, people who heard about it from their friends and family, people who knew where they were going for dinner/drinks before they set foot out of the house. This strategy wouldn’t work well for a new Chili’s or an upstart restaurant with no name familiarity, but for a legendary brewery with name recognition in San Diego, it’s perfect.

When I discovered the energetic brewpub amidst the rather pedestrian office park, it felt a little like discovering a hidden gem. Consumers (and especially craft beer drinkers) like to feel smart or in-the-know; that they are privy to some sort of information that the masses don’t yet know about. When you hear about a ‘hidden’ restaurant from a friend as opposed to from a large neon sign, you probably have greater interest in trying it. Similarly, when you hear about a new beer that isn’t well known, you want to seek it out and try it – exactly because it is not the Budweiser, Miller, or Coors your friends and neighbors are drinking.

Stone World Bistro and Gardens, another San Diego county institution, is also using this strategy (take a look at their building from the outside and what’s inside here). Again, they’re located on an inconspicuous road and don’t have any major signage indicating what’s inside. Because of their clientele, they don’t need to. As a brewery (or any company, for that matter) this is an envious position to be in. Less time and money spent on advertising and positive word of mouth marketing are two of the benefits of this. Anytime your customers are seeking you out, you win.

What other ‘hidden’ gems do you know of? How does it change your perception of a brewery/bar/restaurant? Are you more or less likely to go to places like this?

Brewery of the Month: Maui Brewing Co.

As I’m listening intently on the phone, I hear a loud crash, as if something heavy has just been set down. “Sorry I’m working while I’m talking, I just picked up a bunch of parts for the next project.” And so our interview continues. I’m speaking with Garrett Marrero, the founder of Maui Brewing Co. Garrett has been running this operation since 2005 and with a high demand for his product, the work at Maui never seems to stop. “We’re constantly expanding. We’ve got silos going up in a couple of weeks, new tanks going in next week…those types of things so it’s always something. As soon as one project’s done a new one starts, and sometimes we’re juggling multiple.”

Maui began canning their beers in March of 2007 with distribution around the islands and shipped their first product to the continental United States in 2008. As of now, their distribution is limited to Hawaii, California, Oregon, and Japan (though you can get their beer through an online beer distributors such as Beverages4Less) “The most simple and cost effective shipping (from Hawaii) is everything on the west coast. From there, every mile inland costs a little more. Our goal is to get to Colorado by the next Great American Beer Festival.”

When you think of Hawaiian beer what comes to mind? For many of us, it’s probably Kona Brewing. Kona is headquartered on the big island but if you’re drinking their beer on the mainland, it was made in Oregon. If you’re looking for a true taste of Hawaii, you must look over an island to Maui and the Maui Brewing Company.

Maui places an emphasis on the freshness of their beer, which as you can imagine is extremely important when shipping across the ocean. “Right now it goes so fast, it’s not like we have beers sitting on the shelf. We’d rather create out of stock situations than overstock with beers sitting around. Because our beer is in such demand …we don’t really see that ending.” It’s one of the reasons Maui Brewing Co. chose the can – because it keeps the beer fresher longer. “You don’t run the risk of oxidation as you do in bottles. The cans not only make it easier to ship further distances because they’re much lighter and you can fit much more in a container, but they’re sheltered from the light.” Additionally, Maui Brewing Co. mandates refrigerated storage with ALL of their distributors so the beer is always kept cold on the long journey.

While Maui Brewing Co. has its sights set on the mainland and beyond, it is still an avid booster of the island it grew up on.  “We’re a big supporter of buy local first. We support the community by buying exclusively local produce for our restaurant, supporting local farmers and ranchers by donating our spent grain for feed. It keeps more money on the island…Instead of sending ninety cents of every dollar to the mainland, we want to keep it here on the island.” Maui Brewing locally sources as many ingredients for their brewpub and beer as possible. “It’s based on what we can get on the island. If we can’t get it on the island, what can we get from Hawaii? If we can’t get it from Hawaii, then obviously we have to bring it in. We start with that sourcing concept in mind, so we’re always trying to get it here first.”

The brewery also supports a variety of local charities and causes. They host a pint night entitled ‘Save the Whales, Drink Some Ales’ where portions of every pint sold goes to the Pacific Whale Foundation. Other foundations they’re involved with include the Maui Humane Society and the Maui Forest Bird Recovery Project.

In addition to helping charities, Maui Brewing Co. has been engaged in their community by helping to start Brew Maui, a home brew club where they teach the art and craft of home brewing to eager learners. Garrett’s stance is that it all comes down to education. “We believe that will help enhance the craft brewing culture here. They’ll brew more and it will expand their minds about what beer is and what it can be. We host their meetings as well, if they want to have them at the brewpub or at the brewery. We’ve also brewed on our system (with the home brew club) so they could see the similarities.” Maui Brewing provides would-be home brewers with the supplies and components needed to make the beer and also sells ingredients at their own cost. Because Maui Brewing is able to import in bulk, they can save the home brewers money by selling at their own cost as opposed to the marked up price they’d normally pay, generally saving five or six dollars per pound on ingredients.

One of the main draws of Maui is the taste of the islands that it provides the mainland consumer. Maui Brewing Co. creates a draw for people who have either been to Maui or dream about visiting – it conjures images of coconuts, bikinis, and surfing which is fitting for their three beers they currently can for shipment – CoCoNut Porter, Bikini Blonde, and Big Swell IPA. By creating a truly local product that consumers associate with these images, they have created a brand power that will resonate with consumers far beyond Hawaii.

Fan Interaction

I want to start by mentioning that I can’t say enough good things about New Belgium. They are a pioneer, a leader, and a model business. They are a trailblazer in new technology and they are certainly no stranger to social media – they have built up one of the largest brewery fan followings on Facebook with 59,000 fans (to put this in perspective, Sierra Nevada only has 22,000 fans).

But a recent move they made on their fan page puzzles me; they have disabled fans from writing on the wall. If you visit their page, you will only see their posts and select fan posts from the past. By removing fan access to the wall, they have closed the door on the conversation that Facebook has helped to create between the brewery and its fans. In the past, businesses watched this conversation from the sidelines. With the advent of Facebook, companies have been able to join in by reading postings on their wall and responding. As consumers, we’ve seen an extraordinary shift occur in the way we can communicate with our favorite companies. As businesses, this shift is even more pronounced. Now we can interact directly with our biggest fans – we can discover their wants, interests, needs and form genuine connections. This has added a human element – it is no longer company and consumer, but rather two individuals conversing.

New Belgium has decided to disengage from this conversation. Sure, it opens a company up to some criticism. But by opening themselves and (responsibly) responding to criticism, they can build greater trust in their consumers. The Internet used to be a place where people could rant about anything when they were upset. If you had a bad bottle of Sunshine Wheat (which frankly, doesn’t exist in my book), you might want to rip New Belgium on a message board. Then came Facebook, and you could take this issue up directly with the company (at a website you use daily, without having to search their website for contact forms, etc.).  Sure this puts New Belgium at some risk in a public forum, but it also allows them to handle these issues in a public forum, which can go a long way in building trust.  Additionally, companies that do not utilize their Facebook walls are missing out on the fun part – interactions with their fans who just want to talk about their beer with them!

Perhaps New Belgium has a completely legitimate reason for deactivating their wall unbeknownst to me. However, I still feel that this should serve as a lesson for any other brewery (or company for that matter) that is thinking about turning off the wall on their fan page – they will disengage from valuable conversation, they will weaken their online presence, and they will alienate their fans.

picture courtesy of New Belgium Brewery

Site News: Links Added

I’ve added some links to this sidebar that include blogs that I read or that are related to this site. Please check them out and if you see something you like, go ahead and subscribe! All of these links are related to either business or beer (go figure) and all are very well done (in my opinion). If you have a blog and you would like me to add a link to it on my site, email me and we can set it up.

A Focus on Viewpoints

30 years ago the big players in the beer market insisted on treating all beer drinkers the same. Then a paradigm shift occurred and craft brewing grew in popularity. Slowly, brands such as The Boulder Beer Company started to pop up. These brands found (perhaps luckily) that there was a group of people that didn’t want to drink the same old beer. They wanted something special: they wanted diversity, they wanted to be connoisseurs, they wanted to be in the know – and they were willing to pay a premium for it.

That is the viewpoint that craft brewing has grown up around – a viewpoint that places emphasis on quality and taste as opposed to advertisements during football games. This group long went ignored and it is now finally enjoying its renaissance.

This concept of different viewpoints can be applied to how craft breweries operate today. A brewery should never make the mistake that all their beer drinkers are the same (e.g. hopheads). A narrow viewpoint will lead to steady declines in revenue. The next big craft brewery will be the one that identifies a group that has long been ignored and satisfies their needs.

There Must Be Something in the Glass

In Belgium, glassware is a reflection and expression of the beer it is specifically designed to contain. Each beer has its own specialty glass. Hoegaarden is poured into it’s angular tumbler, Duvel into it’s shapely tulip glass, and Boon into it’s elegant stemware.

Specialty glasses enhance the beer drinking experience, and some would argue that they even enhance the taste of the beer they were designed to hold (though scientific studies would beg to differ). By creating these glasses, breweries such as Hoegaarden and Duvel have developed an image (beyond their logo) that people associate with their brand. Yet unlike a logo, these glasses can be kept in consumer’s cabinets and shared with friends and family.

But within the American craft brewing industry, the pint glass is the standard. Craft breweries large and small sell pint glasses with their logos emblazoned on the side. While there is certainly a market for these types of branded glasses among brewery fans and pint glass collectors, they do nothing to make the brewery or its beers stand out in the crowded craft brewing market.

Two American craft breweries have created their own glasses and not surprisingly, they are two of the most successful. The Boston Beer Company (makers of Samuel Adams) have developed their distinctive ‘bubble’ glass. Its unmistakeable silhouette has become an iconic image of Samuel Adams and its long list of features have combined to create a signature glass that will always be associated with The Boston Beer Company.

With it’s obvious Belgian influences, New Belgium has taken a more traditional approach to their glass. Yet they’ve nonetheless created a glass that has become a symbol of their brewery, just as they did with their fat tire cruiser bicycles. Like the Samuel Adams glass, this New Belgium globe is also loaded with features designed to enhance the drinking experience.

More craft brewers should design their own glasses. Designing a unique glass would instantly set a brewery apart and create a recognizable image associated with their brand. This idea certainly isn’t for every brewery. Because of the large initial investment associated with the design and roll out, this idea is probably best suited for the larger craft breweries.

But the breweries that do decide to distribute their own glassware need to go about it in a smart manner. They should make sure they are the only glasses in their tasting room at the brewery. They need to give away the glasses occasionally to people who come in to take tours or as a reward for people who are tweeting or blogging about the brewery. They need to be sold on the website, at the brewery, and in specialty liquor stores. The beer must be seen in the specialty glass as often as possible in order for the association to develop.

It’s time to retire the pint glass and create our own glassware movement right here in America.

Site News: Follow Me

Just a quick note to let you know that I am now on twitter. I’ll be updating when there is a new article here, but I’ll also have plenty of extras including links to interesting articles, nods to breweries that are doing great things, and interactive questions. You can find me on twitter here under the username ‘BusinessofBeer.’

On a side note, if you know of any interesting people I should follow on twitter, let me know in the comments.