Tag Archives: marketing

Size Matters

I had an interesting conversation with a brewery rep last night. It was the Eugene stop, the final stop, on Bigfoot Beverages’ trade show route. The Bier Stein had the fortuitous idea to host the after party, taking over the majority of its taps with Bigfoot breweries. For a guy who needs to be in touch with brewery folk in order to keep ticking, it was a feeding frenzy for yours truly (sorry, it sounds like I think of brewery reps as meat; that’s not the case. I was just hungry.).

I had this interesting conversation in the middle of the thrumming Stein, which is an inspirational place to begin with, where I should be writing more often, with a rep who works for a successful medium-sized brewery (around 20,000 barrels produced last year) in Oregon. His employer doesn’t have trouble selling its beer, he noted happily. The beer is basically sold before it hits the loading dock. He remarked that another, much larger brewery would often have stacks of full kegs waiting to be sold. At the same time, his brewery is struggling in the Bend market.

That’s no surprise; Bend is a statistical outlier. With enough breweries to supply at least two more of its population (not counting tourist traffic), a Boneyard tap in every bar, and the number 10 largest craft brewery in the country by volume: Deschutes. For an outside brewery to snag a tap handle in Bend, it really has to show up and go through the motions (grocery store tastings, face time with beer buyers) to occupy a nook of that besotted market.

The brewery with beer sitting around has much wider distribution (it is also on the top 50 list), and I noted that running out is not an option; an empty shelf slot or dry faucet will quickly be filled in, possibly by this rep’s beer (nature and beer drinkers abhor a vacuum, the saying goes. Just ask my kitchen floor. Ba-dum-ch!). Having some overstock that’s managed well is security in a fluctuating market.

At the same time, this brewery rep’s bosses are trying to grow 20% or more this year. 20%! Twenty percent! A bit alarming considering the retarded market growth. Not impossible, but a bold expectation. The movie version of this scenario involves a spreadsheet-addled young salesman pushed to extreme, vulgar, illicit lengths to meet the numbers, then taking the fall when it all comes crashing down. In the final scene he is contentedly serving food at a homeless shelter. Spoiler alert!

bigsmallbrewery

An increase of around 5,000 barrels is, like, a million pints. With many breweries growing into bigger systems (Great Notion, Bend Brewing Co., and Migration come to mind) is there a divide between the market realities and the perception of available space on shelves, tap lists, and bellies? I would wager that starting a small brewpub is a better idea at this point than continuing a model of linear growth that goes against the current.

So yeah, size matters. Various conversations focus on quality issues, overhead, styles produced, but few (that I’ve read, at least) address the proportional size of breweries, output and geographic spread, and marketing issues. I’ve spoken with several brewers at smaller breweries who have named a modest maximum desired output. Their goal is to serve their communities first. Making waves in new markets and maintaining relevance there is less important.

I’d be interested to hear some other perspectives on this issue, either from beer industry folks, or any other production-sales-retail sector; the reality is that beer is special because it is the foundation of human civilization, not because it’s some unique widget.

We, the Consumers

Who controls whom? Increasingly, advertisements for products show up after a  conversation, rather than a dedicated internet search; our phones are indeed listening to us unless we tell them not to (and even then I’m not so sure). Want to buy a new TV? Instead of heading to the electronics store and conversing with a knowledgeable employee, we turn to the peer reviews, read ratings on the high and low spectrum, and make “our own decision,” or go to a store that sells everything from TVs to baby food and hunt down a roving person in uniform hoping for a reliable answer. Or, worse, we click on an advertisement and take a blind risk on a product; later, we are proud to have saved money on the potential piece of junk. Just as the consolidation of specialized brick-and-mortar businesses has lowered knowledge, breadth of choice, and quality of product at Walmart and its ilk, the consolidation of information and goods online and the rise of “Yelp culture” via proliferation of peer reviews has made everybody “an expert;” thus, nobody is an expert. We, the consumers, are complicit in this cycle when we choose to base our consumption on the advice of laypeople.

This dour, generalized view of middle class humanity plays out in the beer world when beer drinkers choose to base their buying habits on unqualified information from beer rating sites, and then either add their feedback, which feels more valuable than it is, or don’t, which defeats the purpose; the system works better, supposedly, with more input. In a fascinating New York Times Magazine article about cryptocurrency, internet protocols, and blockchains, author Steven Johnson quotes a former Google strategist, James Williams: “The dynamics of the attention economy are structurally set up to undermine the human will.”

This topic may seem too heavy for an enjoyable beverage like beer. It ought to be, but in this age of information access, subtle marketing techniques, and “likes” as social cachet, attention is what it’s all about (see previous post and subsequent Facebook debate for proof of my own foray into the attention economy). When a beer receives good attention–positive reviews–its desirability increases. And while questions of quality arise from this conversation, public perception and reaction are arguably bigger factors.

“If you like this, you may like that…”

Rather than a catalog of new items with raw details, pricing, and availability, beer rating websites create roadblocks and distractions by telling the consumer what they want (again, I’ll use the non-binary third-person singular terms “they” and “their” rather than he/she; it’s becoming grammatically easier), rather than encouraging the consumer to make their own decision based on data provided by the brewery. The ability of technology to tell us what we [think we] want is pervasive now; identifying when that’s happening and making a rational decision to adopt or reject the opportunity is the least we can do to remain autonomous. If a consumer chooses to read ratings, they should be prepared to make the same rational decision. But rejecting the opinion of one’s peers infers that one’s own opinion is just as insignificant; a loss for the attention economy.

In the less dramatic scenario of a catalog, the onus of descriptive ability would fall on the brewery. It would ideally prohibit active marketing techniques. It would force users to choose based on their own preferences and riskiness. It would encourage consumers to seek the advice of trusted individuals, or institutions. (Here is my bias: with eight years working in both commercial beer and homebrewing retail, I would like to think that my training, and that of my peers in the industry, matters. When a customer asks for a recommendation and then chooses, right in front of me, to opt for the suggestion on their phone, it’s a slap in the face. Is that what free will looks like?)

The Times Magazine article goes into some depth about the philosophy of open-source material and the potential for internet users to have control of their own identities rather than parting them out to corporations. The upshot is that it decentralizes and democratizes information and currency. The concept is a huge threat to our current economic infrastructure and forces people to become more aware of their virtual space. One doesn’t need to know coding language to understand that having control of one’s personal information reverses the power structure. For the beer consumer, having an intimate knowledge and control of their senses takes power away from marketing and centralized sources of potentially unqualified information. It provides an opportunity to engage more personally and honestly with friends and qualified people in the industry, and encourages others to do the same, organically.

The beauty of this evolving philosophy of decentralization, though it is quite complicated, is that it makes room for free will in virtual space. Right now, our physical world is partially informed by the internet, which is highly consolidated. Our engagement with others on solid ground is altered by internet memes, often passively and unironically. We are at risk of losing ourselves. For we beer consumers, it is imperative to rise above the noise, to take stock of our senses, and to use all external resources carefully. Seek qualified sources. Take risks, they won’t kill you. Question my recommendations, or use me as a metric in your own experiment. Just don’t let anything tell you what you want.

favoritebandsucks
I used to own this t-shirt.