It's about the beer
Gina Miller and Bill Keeper
Hey Bill, our last back and forth article about saturation in the craft beer marketplace must
have touched a cord with a lot of people judged by all the e-mail I received. To save more
people from writing let me categorically say that I'm convinced that the barrier to entry for
starting a new brewery has never been so low. And the competition has never been so high.
Nanos are the fuel for the fire to be sure closely followed by production breweries. These
deals all feature several partners, including some blend of a brewer, a financier, a marketer,
and an operations manager. My advice for all of these upstarts is to always remember that it's
critical to develop a loyal community to support growth. The winning breweries will have a solid
business plan while the failures, and expect many, will simply be operating either on instinct or
taking it day to day, trying to figure it out as fast as they can.
The breweries that will surrive must also have a strong network of people from a wide variety of
areas/ They must cultivate relationships in the industry with the best breweries, restaurants,
and bars not only locally but even internationally. This community is invaluable since they've
likely already had to deal with the myriad of problems a start up business will face. Most will
gladly offer advice and maybe a helping hand. Hey, small breweries do help each other more
times than not, not unlike you Bill who help me with my writing (that's a joke folks.) Formal
brewing training is good but there's no substitute for learning about the business hands-on,
from the bottom up. So for the many who asked my single best piece of advice it's simply that
you have to work in the industry before starting a new brewery. Technological knowledge is
essential but not enough to guarantee success.
The real problem for new small producers is that a typical neighborhood bar won't put in the
time to do research to learn about your brewery. They have a Stone or Founders rep come
by on a regular basis and that's their main source of information on craft beers and there's no
reason for them to tout your beer. The practical concern for the new guy is to first get a
distributor (legally required in many areas - no easy task) and then get them to actually push
your beer. Look, Bill, even the best distributor can't sell every brand with the same
commitment at the same time. And it's the new brands that get passed over.
The competition isn't just between the big brewers and craft guys, it's within the craft group
itself. Many new craft-focused bars might not even have a Budweiser handle to steal anymore.
And if they do, it's one of 75, backed by a bottle list that goes into the 100s. Bill, the little
secret that nobody seems to talk about is that the number of breweries opening up is not on
pace with the number of new accounts and available new tap handles. The numbers say there
will be losers many of whom are probably making great beers. When those breweries go
under we all lose and craft beer in general is set back. Call me a worry wort but I remember
the days when macro swill ruled and I don't want to return to them. Ever.
That's it from me, chug-a-lug, Bill.....see you next month.
Hey Gina, glad to see you're really into this subject as I agree it's important for the future of craft
beer as we know it. I agree (don't faint) with your analysis about the deadly competition in the
craft segment itself. Look, we get brands like Bells announcing their going to begin selling here
in New York likely because it's impossible for them to continue growing in their own market any
further and maybe too because there are new breweries in their own territory that are
threatening sales. It should be no surprise that, to put it simply, breweries are just trying to figure
out where they can sell beer.
Since we're giving advice out for free - remember you get what you pay for - let me advise new
brewers not to make or at least market beers with an obscure edge. Let me amend that. An
obscure edge in taste is okay but keep it simple when it comes to naming the style. For example,
you probably won't sell too many beers by saying it's a "dark mild" but people understand it
better if you said it was a light porter or session black ale.
If you want to be a success make a beer that is approachable. Let the likes of Dogfish go wild,
you want to stay in business.
New Breweries have to create a market for their product. Remember, people like new but
different is another story. To be a success in that league isn't easy. Gina, look at Blue Moon.
In my opinion they are great for craft beer (NO, I did not say they are a great craft beer so don't
start, Gina). That beer alone has brought countless people into the craft beer sphere. What
Blue Moon did was to create and market a really accessible beer that most people will drink even
if they think they don't like craft beer. That's an achievement.
Things like Blue Moon are entry beers that get people into the marketplace. If they weren't made
then the serious craft breweries would have to do it, wasting time, money, and materials on that
stuff rather than on the kinds of beers we both love. Blue Moon and the so called "crafty" beers
spend a ton of marketing dollars that small craft guys can't. MillerCoors has a huge advertising
budget for Blue Moon which spreads the word that there are beers to drink other than watery
yellow lagers. That's a good thing.
Here's on final thought these new breweries - personality counts. Show a sense of humor, have
a strong back story for your brand and charm your way at every possible event and forum you
can get to. In short, be lovable, just like you Gina!
Here's looking at you, kid! See you next month.