Craft Breweries Rockin’ Unique Business Models

By John Mitchell

A long-standing marketing adage counsels to “be first, be cheapest or be different.” For craft beer, this advice only partially applies. The growing force of craft beer brewers do not, for example, offer a cheaper product—much to the bedevilment of corporate brewers. Although a brewery may still be the first in the odd market here and there, this advantage is pretty much tapped out too. So for craft brewing innovators, what is left is to be “be different.” Being different takes vision, and usually risk, but this risk is paying off for new entrants and stalwarts alike.

 Wicked Weed Brewing | Asheville, N.C.

When Wicked Weed Brewing was launched in 2012 by homebrewing brothers Walt and Luke Dickinson, there were already 14 breweries in the Asheville region.

To convince investors, Wicked Weed made a unique decision to specialize in drier, hoppier West Coast-style beers, as well as Belgian and French-style saisons. This direction meant an operation with the first open fermenters in the Southeast. Barrel aging is also central to their business plan as these flavor-marinated beers bring much higher profit margins.

“We drank a lot of the beer around town,” Walt Dickinson said, “and we knew this would be a cutting edge, niche addition to the local beer scene.” Tasters and diners at Wicked Weed can choose from a lineup of 24 beers that include Coolcucumber American, Watermelon Saison and Black Angel Cherry Sour, just to name a few.

“We serve the standbys that drinkers like,” founding partner Ryan Guthy explained, “but beer drinkers also want to try something different—and that’s our market position.”

New Belgium Brewing Company | Fort Collins, CO

It’s impossible to not consider New Belgium when talking about innovation. Like many craft brewers, the company was started in its founders’ basement, and has grown to become the third largest craft brewery in the county, producing 712,800 barrels in 2012. New Belgium’s success, while outstanding, has been the every epitome of different.

According to Bryan Simpson, New Belgium’s public relations director who has been with the brewery for 16 years, their quirky image was born out of necessity. “We didn’t have a marketing budget in the early days, so we had to figure out how to essentially market barstool-to-barstool—to be great story tellers about the art and soul of our beer culture.”

This no-budget approach, commonly known as “guerrilla marketing,” led to a brand identity heavily invested in eclectic events. These events include their hallmark Tour de Fat, a Mardi Gras on bikes, that now happens in 13 cities each summer. Tour de Fat garners intense media coverage and local participation with an “awareness” reach of over 100,000 people per market.

“We always see a bump in sales around a Tour de Fat ride,” Simpson said. New Belgium is expanding with a second brewery set to open in—no surprise—Asheville, N.C.,  in 2015. Simpson predicts the company will remain invested in local and regional event marketing, including growing its new Clips Beer & Film Tour, which made 18 stops this year.

But perhaps the most unique aspect of New Belgium’s approach was its early recognition that an engaged workforce is its core product. To that end, the company became 100 percent employee owned in 2012. “When people are owners, they come to work with an owner mentality which is a huge competitive advantage,” Simpson added.

For example, the company recently implemented a simple production change recommended by its packaging line staff. The change reduced the amount of cardboard the company uses, yielding an annual six-figure savings and reduced the company’s carbon footprint. Its no wonder new Belgium has a 97 percent employee retention rate among it almost 500 associates.

Town Hall Brewery | Minneapolis, MN

While New Belgium has realized success through pedal power, for Town Hall Brewery, established in 1997, the future is in rolling strikes. Owner Pete Rifakes (who holds an MBA in finance and is a self-professed “numbers guy”), also happens to be a brewer who likes to bowl.

Since the beginning, Rifakes has had the challenge of navigating through Minneapolis’ three-tier system which does not allow craft brewers to sell their beer at retail or to other bars. “We have to be creative in getting our beer into new markets,” Rifakes explained. “The bowling alley venue allows us to reach a new segment of beer drinkers. As more and more bowling alleys close, avid bowlers are willing to travel for well-conditioned and maintained lanes.”

So the path to a larger piece of market share is marketing a new beer experience in a rehabilitated 10-lane bowling ally originally built in 1950s. Rifakes kept the great features—such as solid wood floors—and added state-of-the art pinsetting system, electronic scoring system and a lot of beer taps.

“It’s a place to go, a destination,” Rifakes said. And like the addition of his most recent Tap Room brew-pub, Town Hall Lanes is located in a viable neighborhood. It’s the kind of community where a solid customer base can walk from their homes to drink a beer and bowl a few sets.

To celebrate his new beer destination, Rifakes went contrarian for a craft beer maker and launched Super Strike Light Lager to help keep bowlers nimble on their feet. Of course, the entire line of Town Hall Brewery beers are also available, which Rifakes reports is selling in qualities well ahead of his business plan.

Southern Wine & Spirits | Nevada

Meanwhile, 1,600 miles away from Town Hall Lanes in the glitz of Las Vegas, craft beer is the newest tool to market one of America’s premier leisure centers. Las Vegas, which can spot a consumer trend bubbling up faster than a foaming head of beer, has identified craft beer as its next big thing.

The gambling town is scrambling to join the ranks of beer destinations as several craft beer centric restaurants and pubs have recently opened for business. Another sign of the trend is seen through the efforts of distributor Southern Wine & Spirits of Nevada (SWSN), who has announced plans to improve the market’s beer savviness with formal beer education for all of its employees using the Cicerone® Certification Program. Russell Gardner, a Certified Cicerone himself, has been charged by SWSN to lead the program.

“Las Vegas is a little behind the craft beer movement,” according to Gardner, who said there are only three craft breweries of eight in town that package beer. “We want the travel city to be the beer mecca of America. Visitors come here who are used to drinking good craft beer in their hometown and that’s what they want. We also want them to drink better beer while they are in Las Vegas.”

Gardner said SWSN is putting its staff through the first level Cicerone training to assist clients who range from bar owners to restaurant managers and even beer drinkers who their staff interacts with at festivals and tastings.

“As much as 55 percent of our case sales is now beer—and craft beer is driving the market, “ Gardner noted.

Such moves—by craft brewers and now wholesalers—to define and drive the supply chain is a classic indicator that craft beer has moved beyond just existing and is now creating and defining the market.

For small craft brewers this means America’s beer taste will likely support neighborhood, local and regional breweries and tasting rooms into the foreseeable future. But for a craft beer innovator, being different right now is the extra tweak of hops in their potentially successful business recipe.

John W. Mitchell has served from sailor to CEO, with stints as a reporter and writer. He is a published writer and award-winning photographer. John is the owner of SnowPack Public Relations in Cedaredge, Colo., and lives with his wife, who—on most days—loves him more than her horse. John is writing his first novel, and if he manages his day right, he can be found in the late afternoon sipping a microbrew and reading a good book.

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