Blog CRAFT BREWERS WILL NEED TO BE EXTRA CRAFTY TO SUCCEED IN 2017 2/5/2017 1:51:47 PM “British Independent Craft Beer is in high demand on the global marketplace,” states the Society for Independent Brewers on their web site. The same can be said for the US.  According to the National Beer Wholesalers Association, the United States Alcohol, Tobacco, Tax & Trade Bureau (USTTB) announced there were 7,190 brewery permits issued in 2016.  This represents an all-time high for the US beer industry. Just how big is the US beer biz? The Brewers Association, based in Boulder, Colorado reported the market is valued at $105.9 billion of which Craft beer carves out $22.3 billion. That’s up 16% for Craft in dollar share growth while representing a 12.2% volume share of the category.

So what’s hot in the US craft biz?  IPA’s still dominate with as much as a 35% share in major metros like San Francisco.  The consumer “craft indoctrination process” typically begins with domestic/mainstream beers then evolves to higher quality craft lager or hefe. They quickly graduate to amber then to pale ales. Once they taste the hops found in pale ales, they are addicted and climb onto the IPA bandwagon.  From there they try double IPAs, “citrus-forward” or West Coast style IPAs (the rage currently) and even triples.  The same evolution is taking place in the cider market.

But with so many breweries coming on line, how will all these beers get to market?  This will be the challenge due to finite Off Trade retail shelf space and limited open handles in the On Trade.  The battle will be an interesting one in 2017 as some craft brewers are either gobbled up by international mega brewers or join together to achieve production and distribution efficiencies. 

Once established, I advise the small-regional brewer to consider a “Castle Keep” strategy.  This focused concept restricts distribution to a manageable geography or “selling perimeter” where brand awareness and sales pull are strongest amongst consumers, retailers, the On Trade and wholesalers.  Under my castle keep theorem, the geography is adequately defended by experienced brewer sales representatives who have cultivated long term relationships which continue to serve the brand franchise.  These relationships are the life blood of the brand and the brewery.  Think of them as the supply lines to the castle.  The brewery should also invest significant capital into a showcase tasting room where new beer samplings take place and account buyers are invited for new product kick offs and entertaining.  Picture this as the Castle’s Inner Ward or “Bailey.”  The sales reps use the bailey often which reinforces the brand’s local relevance and freshness.  Being “local” is a high priority for US consumers and retailers.

The castle keep’s territory perimeter is dictated by the brewery’s distribution network reach and by its On and Off Trade sales personnel coverage.  Imagine your wholesalers/distributors as your knights on horseback.  How far can the knights ride and still get back to the Keep by nightfall?  Now think of your sales team as the archers – how far can they fire their arrows and still hit their targets accurately?  Overextending either of these vital brand assets would certainly jeopardize the strategic foundation of the castle keep tenet.  Lastly, imagine that the width of the Keep’s moat directly reflects the relationships that your sales team and wholesaler reps have with local accounts.  The wider the moat, the tougher it is for competitors to poach your handles or to take your Off Trade real estate.  Conversely, the more narrow the relationship, or more shallow the moat, the easier it will be for competitive encroachment. 


The goal of the castle keep is for the brewery and brand to remain ingrained within the community fabric – thereby solidifying ties with loyal drinkers/supporters.  This brand strength also acts as a deterrent, or “moat” to competitive brands searching for new distribution territory.  This competition may include a multi-national brewer or distant craft brewers seeking to expand volume through real estate expansion. 


Some brewers are investing in tasting room restaurants in major metros - away from their breweries.  The tasting room, which requires a special license, serves as a trial/sampling mechanism while positioning the brand as a local beer in the mind of the target consumers.  Sort of a, “hey we are local too, just a bit further up the road than some of the other brands you may be drinking.”


These tasting rooms are used to introduce new beers which help to maintain the brewer’s craft/micro position and relevance within the savvy consumer mindset.  The room is often used by sales reps to sample account buyers in a tasting-friendly environment but also represents a competitive threat acting as a “research scout” evaluating new market potential.


So, how do interested British craft brewers succeed in the US? Marketing and distribution are key as your brand must have a “key differentiating advantage,” a concise positioning, a detailed launch plan, and be supported by financial and managerial investment.  Come to think of it, who invented the IPA?




Mark Colburn, author of, “Craft Beer Marketing & Distribution – Brace for SKUMeggedon” has been in the beverage alcohol business 25 years and possesses a master’s degree in Marketing. He worked 7 years for the British Trade & Investment Office as their “Lead Post” on the US Food & Drink sector and was a speaker at the International Food Exhibition. While working for the BTIO, he was interviewed by the BBC for his research on the US cider industry. He is also Cicerone certified, has been published by the American Marketing Association and is a winner of the American Association of Advertising Agency’s Advertising Excellence Award. 

Recurving the Product Life Cycle 5/8/2016 3:45:32 PM The Pursuit of Enduring Relevance - Recurving the PLC over the Precipice of Decline

One of the hardest things a marketing executive is tasked with is recurving a brand as it begins its Product Life Cycle (PLC) slide from Maturity to Decline. This is truly a marketing mix challenge as so many variables enter the demise equation.  In the craft beer industry, I work with quite a few brewers that have been around for some time.  Sales for these brands have been tapering off to a slow dwindle which makes investment difficult to justify.  What are these companies to do?  How do they become “retro?”  Further, how does a brand or even an industry become “re-relevant”? The “retro” craze has hit in the music industry where vinyl records are once again popular as seen by today’s rejuvenated interest in albums, turntables and heavy-gram vinyl. How can mature beer brands that have lost relevance tap into that “retro” coolness, too?

I parallel the plight of the ’70 - ‘80’s brewer to the classic rock bands from the same era. How does each maintain its relevance?  Take the band Foreigner, for example. They had some popular hits but what happened to them?  Compare them to the Who, the Rolling Stones, Aerosmith or Metallica.  Each of these four bands has been able to extend their PLC for decades.  Just how do they do it where Foreigner was unable to?

In the craft beer business, the older beer companies rely on their in-house brewers to “write the hit songs” for the company.  Is this a reasonable expectation?  Take New Belgium Brewing, for example.  They currently have a smash hit with their Citradelic IPA.  Is this just a swan song? Not necessarily. This great beer is leading the way for consumers to “buy the album” and try some of their heritage brews like Fat Tire, thus recurving the PLC via hit song momentum.  Karl Strauss has revived its brand with their amazing “Aurora Hoppyallis.”  Aurora is Karl Strauss’ Free Bird.

But should the master brewers solely be responsible for finding that next big hit?  Do they have it in them to brew a beer that will bring the company back from the edge?  Maybe, but there are other songwriters out there to tap into.  I am referring to the home brewers.  With more than 1.5 million across the country, they compete in local and national brewing competitions.  Maybe this is where the heritage breweries should send their brew masters – to meet these creative song writers in search of “Sculpin fighters.” What an excellent source for that next hit song.  The old brewers should talk to these upstarts about their ideas and recipes and even consider hiring this new talent into their “band.”  The point for the mature to decline stage craft brand is: don’t rely on your long time master brewer to write that hit song, it just might be in your back yard.  Go listen with your tongue and you just might find some hits out there that will keep you around for another decade or two.

Mark Colburn

Author of “Craft Beer Marketing & Distribution – Brace for SKUMeggedon”

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