Mark and has spent many years in the Bay Area marketing and distributing some of America’s leading craft beers. He is passionate and thoughtful about craft beer.

Jim Koch – Chairman, Boston Beer Company

Mark Colburn has developed into an inquisitive thinker and marketer of beer. He is continually searching for creative ways and distinctive methods to develop beer brands. He has become a student of the beer industry over the past decade and constantly uses his marketing background and focus to trumpet the KDA’s of beer brands. Check out his new book to expand your knowledge of the beer industry and learn new ways to see how brands are built!

Bob Stahl – Former President of DBI Beverage and Golden Brands Distributing

With the craft beer market experiencing phenomenal growth, Mark Colburn has been integral in educating Walgreens team members about the many details of this category. His efforts have allowed us to make more informed decisions in respect to the merchandising and promotion of craft beers. With Mark’s help, Walgreens store managers can make better decisions on which brands to promote. Mark has discussed the direction of the craft beer market, and helped position Walgreens to capitalize on emerging trends.

Gorman Moy – Walgreens Senior Manager – Retail and Pharmacy

I have worked with Mark for ten years and have not met anyone that has the creative marketing energy and passion that he has. I have no clue how he comes up with his ideas but they have certainly helped Mendocino Brewing. In this book you’ll learn about beverage marketing and distribution. The real life case histories that Mark shares will provide you with ideas and methods to succeed in today’s tough beverage environment. I strongly recommend this book for any beverage professional.

Joseph Frankel, Regional Sales Manager, Mendocino Brewing Company

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CRAFT BEER MARKETING & DISTRIBUTIONBrace for SKUMeggedon

MARK COLBURN

CRAFT BEER MARKETING & DISTRIBUTION –

BRACE FOR SKUMEGGEDON

By Mark Colburn Shinerunner Publishing, Walnut Creek, California, USA Copyright Pending 2015

© Mark Colburn 2015

All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission of the author except in the case of brief quotations embodied in critical articles or reviews.

ISBN 9780692503911

Praise for Craft Beer Marketing & Distribution

Mark and has spent many years in the Bay Area marketing and distributing some of America’s leading craft beers. He is passionate and thoughtful about craft beer.

Jim Koch – Chairman, Boston Beer Company

Mark Colburn has developed into an inquisitive thinker and marketer of beer. He is continually searching for creative ways and distinctive methods to develop beer brands. He has become a student of the beer industry over the past decade and constantly uses his marketing background and focus to trumpet the KDA’s of beer brands. Check out his new book to expand your knowledge of the beer industry and learn new ways to see how brands are built!

Bob Stahl – Former President of DBI Beverage and Golden Brands Distributing

With the craft beer market experiencing phenomenal growth, Mark Colburn has been integral in educating Walgreens team members about the many details of this category. His efforts have allowed us to make more informed decisions in respect to the merchandising and promotion of craft beers. With Mark’s help, Walgreens store managers can make better decisions on which brands to promote. Mark has discussed the direction of the craft beer market, and helped position Walgreens to capitalize on emerging trends.

Gorman Moy – Walgreens Senior Manager – Retail and Pharmacy

I have worked with Mark for ten years and have not met anyone that has the creative marketing energy and passion that he has. I have no clue how he comes up with his ideas but they have certainly helped Mendocino Brewing. In this book you’ll learn about beverage marketing and distribution. The real life case histories that Mark shares will provide you with ideas and methods to succeed in today’s tough beverage environment. I strongly recommend this book for any beverage professional.

Joseph Frankel – Regional Sales Manager, Mendocino Brewing Company

As Britain’s Director-General of Trade and Investment in the United States for four and a half years, I have seen the work of Mark Colburn at both first and second hand. Mark’s efforts at helping UK companies in the food and beverage industry have been outstanding. He has brought to his work unbounded enthusiasm, complete dedication and in-depth knowledge, which he continues to replenish, of the United States food and beverage industry, at all levels.

Sir Alistair Hunter, KCMG – former Director of Trade and Investment – The Americas

“Your (Mark Colburn’s) passion and advocacy, not just for the Guayaki Brand, but for all brands that you represent, is something I have not seen paralleled as I have gone around the country working with industry DSD partners, seriously!”

Mateo Sluder – Regional Sales Manager, Guayaki -Yerba Mate

Introduction Mark Colburn, an East Bay native born in Oakland, California earned a Bachelor of Science in Business Administration, concentration Marketing and a Master of Science in Marketing with a concentration in Advertising and thesis on product cannibalism in the beverage industry. As a youngster he preferred to “channel surf” ads instead of watching regular programming. He still thinks there is hope for a 24 hour all advertising cable station (!). After graduate school, Mark went into the advertising agency business as a research analyst. Working for Grey Advertising, he was on the team that launched Kikkoman Light and enjoyed working with the creative teams on strategy and new business presentations. He got his first “taste” of the beverage category when Grey pitched for the then-popular, California Cooler account. For his efforts on California Cooler he was tasked to help prepare the presentation on Shasta soft drinks where he built a market share representation of Coke, Pepsi, and other competitors out of assorted soft drink packages. This combination of bottles, six packs, PET Liter bottles and others graphically depicted the uphill battle that Shasta faced then – all on the executive conference room table. After Grey, Mark went on to win the American Association of Advertising Agencies’ Advertising Excellence award for his team’s presentation to Levi Strauss and Foot, Cone and Belding’s senior management group. The presentation was a competition amongst Northern California advertising and marketing professionals (six teams of 6-8 each) who were given the task of preparing a marketing plan for the soon to be introduced Levi’s Dockers. Mark’s team was declared the winner. Much of the strategy from that marketing and merchandising plan was used by Levi Strauss for its number one selling brand in the Company’s history. From the advertising agency business, Mark worked in the gourmet food sector as a brand manager for Honey Hill Farms. Mark was responsible for launching the company’s super premium frozen yogurt which targeted Haagen Dazs in the upscale pint category. He quickly learned the consumer packaged goods business while working with the company’s ad agency, overseeing a national sampling program, presenting the marketing plan with the sales team at key chain meetings and assisting/recommending R & D on new flavor introductions. After Honey Hill Farms, Mark went to work for the British Trade and Investment Office (BTIO). His background in food and beverage helped him secure this highly sought after international position. While with the British, Mark earned the status of, “lead post” on food and drink in the

United States for his marketing plan prepared for a prominent Scotch whisky distiller. He enjoyed working for the British for seven years, ultimately reporting to Sir Alistair Hunter, while gaining expertise in the beverage industry. In those seven years he worked with many brewers, cider companies and distilleries. Mark was also a speaker at London’s International Food Exhibition (IFE) where he presented his published reports on the US Food and Beverage sectors. Mark was also interviewed live for his research on the US hard cider industry by the British Broadcasting Corporation (BBC) at their studios in London, England. Once his contract was up with the British, Mark worked several years for Earthgrains calling on Safeway as their Brand Champion, Category and Account Manager. After Earthgrains was purchased by Sara Lee (now Jimmy Dean), Mark joined the powerful beer distributor, Golden Brands, later purchased by DBI, located in South San Francisco, California. Mark has worked for Golden Brands and DBI for nearly thirteen years as their Marketing Manager. At DBI, Mark manages a brand team, is responsible for a variety of brands as well as the company’s special events that are executed in both San Francisco and San Mateo Counties. Mark enjoys the pace and the variety which can range from launching a new micro/craft brand to devising a creative sales incentive program around an international beer brand’s marketing plan. More recently, Mark was invited to participate in Boston Beer Company’s, “Brewing the American Dream” competition for beverage entrepreneurs. Mark acted as a “marketing coach” for a variety of companies that attended the June 2013 and May 2014 events held in San Francisco, California. Mark also has twelve years of adjunct professor experience teaching Marketing and Advertising at both the undergraduate and graduate levels. He has also been published by the American Marketing Association for his article on Guerilla Marketing in the food and beverage industry. Mark is also proud of his football coaching days when he coached with former teammates and had two undefeated seasons with two players ultimately playing pro football. His passion and fascination for beer dates back to the 1980’s when he had one of the largest beer bottle collections anywhere. Unfortunately he ran out of shelf space (that endless quandary!) and his parents made him take the colorful assortment down.

From his first taste of Pabst Blue Ribbon as a teenager (shhhh) he was hooked on beer and continues to love the category, the passion and the people within it.

DEDICATION

This book is dedicated to my dad, Ron Colburn, who helped me greatly with my marketing education and my grandfather, Ken Colburn, who taught me the importance of relationship building in business and how

that translates into sales. I must also thank my darling fiancé, Starla, for her support over these four long years of writing and for her editing of the book. Thanks also to Kim, Rob and Kevin for your helpful input!

TABLE OF CONTENTS i - Preface – INDUSTRY OVERVIEW ii - DEFINITION, DSD & THE THREE TIER SYSTEM

CHAPTERS I – MARKETING – WHY BOTHER? II – THE PRODUCT LIFE CYCLE III – THE BOSTON CONSULTING GROUP MATRIX IV – BRAND POSITIONING & KEY DIFFERENTIATING ADVANTAGE V – CROSS POSITIONING & CO-BRANDING VI – THE FINAL “P” DISTRIBUTOR-WHOLESALER SELECTION VII – DISTRIBUTOR-WHOLESALER DYNAMICS VIII – CONVERTING THE TROOPS IX – TIME STARTS NOW X – CLUTTER BUSTING INCENTIVES XI – DRIVING YOUR MARKETING PLAN DOWN to DISTRIBUTOR LEVEL XII – ON vs. OFF PREMISE DISTRIBUTION XIII – BRAND PROLIFERATION and CONSEQUENCES XIV – SENSIBLE SURVIVAL XV – MEMORABLE OFF PREMISE PRESENTATIONS and PREPARATION XVI – EXPLOIT YOUR PACKAGING and YOUR ORIGIN XVII – GUERILLA MARKETING

XVIII – SOCIAL MEDIA – SO MANY OPTIONS XIX – SELECTING MARKETING TALENT XX – EXPORTING and IMPORTING – WORTH THE TROUBLE? XXI - EPILOGUE - FADS, TRENDS and IDEAS to WATCH FOR XXII – CLOSING iii – Appendix 1-New Supplier Questionnaire 2-Industry Interviews 3-Craft Beer Semantics 4-Marketing Brief and Annual Brand Overview 5-Footnotes i - PREFACE This book is intended to assist the small to medium craft brewer with marketing, sales and distribution questions on how to succeed in the US beverage industry. It will also be of value to beverage professionals and recent college graduates who are curious to learn more about consumer packaged goods marketing, sales and distribution. I have written the book based on my own educational and professional training and experiences in the field, citing these continuously throughout the book. My style is based on a funnel principle whereby I begin at the top with broad based overviews such as market size and trends then spiral down to the bottom with specific examples and recommendations. I hope you will enjoy and benefit from my experience and recommendations. I say this with a caveat in that I do not guarantee that my recommendations will work for your specific company as all situations are different and require tailored marketing plans to fit a company’s nuances and competitive situation.

Mark and has spent many years in the Bay Area marketing and distributing some of America’s leading craft beers. He is passionate and thoughtful about craft beer.

Jim Koch – Chairman, Boston Beer Company

Mark Colburn has developed into an inquisitive thinker and marketer of beer. He is continually searching for creative ways and distinctive methods to develop beer brands. He has become a student of the beer industry over the past decade and constantly uses his marketing background and focus to trumpet the KDA’s of beer brands. Check out his new book to expand your knowledge of the beer industry and learn new ways to see how brands are built!

Bob Stahl – Former President of DBI Beverage and Golden Brands Distributing

With the craft beer market experiencing phenomenal growth, Mark Colburn has been integral in educating Walgreens team members about the many details of this category. His efforts have allowed us to make more informed decisions in respect to the merchandising and promotion of craft beers. With Mark’s help, Walgreens store managers can make better decisions on which brands to promote. Mark has discussed the direction of the craft beer market, and helped position Walgreens to capitalize on emerging trends.

Gorman Moy – Walgreens Senior Manager – Retail and Pharmacy

I have worked with Mark for ten years and have not met anyone that has the creative marketing energy and passion that he has. I have no clue how he comes up with his ideas but they have certainly helped Mendocino Brewing. In this book you’ll learn about beverage marketing and distribution. The real life case histories that Mark shares will provide you with ideas and methods to succeed in today’s tough beverage environment. I strongly recommend this book for any beverage professional.

Joseph Frankel, Regional Sales Manager, Mendocino Brewing Company

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CRAFT BEER MARKETING & DISTRIBUTIONBrace for SKUMeggedon

MARK COLBURN