10 KEY INGREDIENTS TO CRAFT BEER SUCCESS

Neal Stewart

10 Key Ingredients for Craft Beer Success

1. Blocking and tackling2. Have a home base3. Create conversation opportunities4. Authentic story5. On-premise strength6. Feet on the street7. Exploit the power of influencers8. Activate the icon9. The marketing is baked in10. Listen to your gut

Blocking and tackling

Most craft beer brands have extremely small budgets so the first marketing allocation goes toward tools that directly help sell beer - POS

POS is always first on the distributor wish list. If they don’t have any tools to sell with, they don’t sell.

Craft beers also pay a higher price for higher quality/bigger/more unique POS pieces.

Examples: Sweetwater, New Belgium, Odell

Have a home base

Being that authenticity is so important, successful craft beer brands focus their efforts around their brewery where their story is more meaningful to consumers.

It’s easier to activate the brand’s story in a home market: It’s repeated more often (by brewery employees) It is reinforced via brewery tours

Craft brewers are also more profitable if they sell a higher percentage of their beer in their home market.

Expansion is not made until there is sufficient consumer demand in adjacent markets

Examples: Summit, Harpoon, Bell’s, Abita, Boulevard

Create conversation opportunities

Craft beer brands are built on conversations. One consumer at a time.

The story and the passion in which it is presented is critical. Craft beer consumers respond to small companies that have deep passion for their business

Consumer interactions are best when they are with the brand’s “religious zealot” or spokesperson. Jim Koch for Sam Adams, Garrett Oliver for Brooklyn and Sam Caligione for Dogfish Head are great examples.

Conversation opportunities: Beer festivals On-premise promotions Off-premise hand-sells Social Media

Authentic story

Growing craft beer brands have an authentic story at the root of their communication.

More importantly, they live it. Employees don’t forcefully tell stories, they

live them. People who represent the brand ARE the

brand. Examples: New Belgium, Dogfish Head,

Sweetwater, Stone

On-premise strength

On-premise strength = off-premise pricing power. Craft brands that are weak in the on-

premise channel never get the respect needed to become a power brand

On-premise strength also leads to sampling, credibility and top of mind awareness

Example: Brooklyn, Goose Island

Feet on the street

Craft beer brands need people in the market to build distribution and interact with consumers. Distributors cannot be relied upon to build

awareness or execute promotions Representation in market adds to the brand

authenticity Distributors take craft brands more serious

when there is representation in market. The feet on the street are there for sales and

marketing execution Example: Sam Adams, New Belgium, Magic Hat

Exploit the power of Influencers

The only craft beer brand that advertises nationally is Sam Adams. Outside of some print in niche print publications, most craft beer brands rely on word of mouth to build their brand.

Many craft beer brands dramatically overspend on influencer consumers Influencers are viewed amongst their friends, family and co-workers as

knowing the trends and what’s new and exciting Craft beer is a segment that offers more than the image-based brands Influencers are credible

There are various ways to reach influencer consumers: Heavy sampling – give them beer to give to people Support their passions In-depth product experience (brewery tours, behind the scenes) Make them feel like they have a say in the brand

Examples: Flying Dog, Sweetwater, PBR

Activate the icon

“Big” sales promotions are mostly ineffective Consumers don’t expect them from “upstart” craft brands Budgets prevent many brands from being able to do this

Craft brands must be creative and bring the spirit of the brand to life at retail by activating their “icon” Fat Tire = cruiser bike Sweetwater = fish sculpture Shiner Bock = Mountain Goat Goose Island = Goose

Craft beer brands also have success bringing their “icon” to life via branded events Tour de Fat Bocktoberfest GonzoFest Magic Hat Mardi Gras

Examples: New Belgium, Sweetwater, Stone, Magic Hat

The marketing is baked in

Craft beer brands don’t have big enough marketing budgets to build awareness, adoption and loyalty the traditional way. Craft brands have to be remarkable so that consumers experiment and recommend to others.

The remarkable nature needs to be in the product itself, not the marketing.

Example: Dogfish Head, New Glarus,

Listen to your gut

Very few successful craft beer brands are grounded in deep consumer insights (Blue Moon is the only one that comes to mind). Most are built on passion and are the product of someone’s lifelong dream. The people who build these brands NEVER have consumer research to support their decisions, they just do what they want to do and they bring it to life through hard work and dedication. Craft beer is truly a business where passion ALWAYS wins.

Examples: Dogfish Head, Sam Adams, Stone, Widmer, Magic Hat, Boulevard,