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Generalisations about beer culture marketing opinion

Habits of Successful Breweries

Detail from the cover of Trouble Shooter 2 bySir John Harvey Jones.

There’s been an outbreak of fretting about the sheer number of breweries in operation in the UK, and people in the industry speak to us in ominous tones of a ‘great shake out’ being due. Summary: she cannae take much more, Captain! She’s breaking apart!

British ‘alternative’ beer has been an aggressively competitive climate for decades, though, and it is only natural for there to be slightly more breweries in operation that the market can support. Breweries will come (‘Surely there’s room for a little one?’) and go.

Of those ninety-five small breweries open in 1981, only eighteen were still in business in 2001. However, a survival rate of one in five over twenty years compares very well with most small business sectors, where the average age of a new company when it dies is said to be just four years.

Martyn Cornell, Beer: the story of the pint, 2003.

Taking as given that they make beer which at least some people like, what seem to us to have been successful brewing businesses tend, we think, to do one or more of the following.

  1. Identify a new market and get in first, rather than waiting for others to test the water. For example, Sean Franklin’s Rooster’s (still going, under new management, after twenty years) was on the forefront of the trend for hop-aromatic golden ales; and David Bruce kickstarted a brewpub craze from 1979, despite everyone telling him there was no demand.
  2. Build a successful brand and put it at the centre of their business. Hopback (26 years and counting) have Summer Lightning; Thornbridge (approaching their first decade) have Jaipur; Butcombe (founded 1978) have their flagship bitter.
  3. Invest constantly, often using borrowed money or government grants. Bottling and canning lines, for example, though expensive to install, generate income and open up new markets. (PR bonus: their expansion becomes a story in its own right, generating news coverage.)
  4. Have the nerve to charge a premium. People really will pay more for something new and exciting, and they really are daft enough to believe that if it costs more, it might be better.
  5. Own a pub, or at least have an idea where their beer will sell. It’s no good starting a brewery and having your fingers crossed that you’ll find an outlet in a landscape dominated by pubcos and regional brewers.
  6. Hire star players. Magic Rock, for example, hit the ground running partly because Stuart Ross had built a name for himself at the Crown Brewery.
  7. Demonstrate a strong, distinctive ‘personality’. Other companies might be cheaper, or imitate the style, but customers are drawn to sincerity, individuality and originality.
  8. Behave with a certain arrogance. Once they’ve decided on a course, they stick to it, ignoring critics and pressure groups. (Meantime spring to mind here.)
  9. Or, alternatively, respond to the market. If their beer isn’t selling, they find out why and fix it. If they can do so convincingly (without looking like Dad in a backwards baseball cap) they reinvent themselves for each new era. (Crouch Vale, 32 years old, might be a good example of the latter, as might Moor.)
  10. Bottle and/or keg beer for export. For example, St Peter’s — hardly our favourite brewery — has been around for seventeen years, the vast majority of its beer being sold overseas. Relying on one market, e.g. cask ale in pubs, is very risky.

Have we missed anything, or even completely missed the point? Let us know what you think, especially if you’re a business person or brewer.

Here’s what we said on the subject of the boom in January. We await this year’s figures on new brewery openings with interest.

25 replies on “Habits of Successful Breweries”

I guess embrace social media seems to be a point #11 for the modern age and perhaps #12 don’t be afraid to try something new

Are there any statistics on how big (in volume) were those breweries when they initially started? I’ve got the feeling that many new micros start a bit too small and could become victims of their own success, so to speak, if they need to enlarge capacity relatively soon.

A trick is knowing when to expand, we think: when most people would say, ‘Just to be safe, we’ll give it another year or so,’ the most successful entrepreneurs just go for it. We asked someone who had stopped brewing about this and this was the answer:

‘The issue comes with a small (5bbl) kit, that it doesn’t really produce enough beer for you to be able to employ someone else to help out in any reasonable level. So, all the deliveries, brewing, sales. accounts etc has to be done yourself.’

At this point, you need to decide whether to go ‘all in’ and, as Jon points out below, you need the money to do so, which comes either from investors (loss of control) or loans (risky, and harder to get these days).

4.1 …but don’t take the p., unless you want to get a bad name for being rip-off merchants as well as a good name for brewing.
4.1.1. Previous point doesn’t apply if you’ve got enough hipster fans to sell *all* your beer at silly prices (who cares what people who aren’t your customers think?).
4.1.2. Also doesn’t apply if you can spin “getting a bad name” as “being controversial and edgy”.

Not sure about 1. Marble, Abbeydale and Pictish are fine breweries, but they’re not megastars in the Pale’N’Oppy area, despite indubitably being early on the scene. I think all three of them have neglected point 2 – Marble/Pint doesn’t roll off the tongue like Magic Rock/Curious or Dark Star/Hophead, and I’m not even sure what the equivalent would be for the other two.

With Marble in mind (particularly in their earlier days), I’d add:

– Keep the innovations in check. If you like playing around with new stuff, draw a line that everyone can see between the core range and the experiments, and stick to it (Toby RedWillow’s “Faithless” series is a great example of this approach). Similarly, if you like extreme and unbalanced flavours, resist the temptation to make everything come out that way.

“Keep the innovations in check. If you like playing around with new stuff, draw a line that everyone can see between the core range and the experiments, and stick to it.”

I think this, along with point 2 in the article, is important and often ignored. In a crowded market, you’ll sell more beer if most ordinary people try one of your beers, like it, remember it, and can find it again.

Having 27 different experimental and wildly varied beers is highly commendable but unless you’re very good indeed (ie Kernel can just about pull it off) it’s a high risk strategy to give them similar names and branding and expect the punters to remember which of the random selection of them that’s currently available in their local offie / pub they’ve had and which ones of those they liked. Whereas Thornbridge do well because the casual punter can try Jaipur, like it, remember it, and get it again more or less anywhere that sells any Thornbridge beers, while the serious beer geeks can get excited about hunting down the rest of their range…

12. Start in the past? (time machine required).
13. Be in a position to get yr hands on a shedload of money.

“13. Be in a position to get yr hands on a shedload of money.”

Well, yes, but even that can’t guarantee success if it’s not used properly. The trick, based on those we’ve looked into, seems to be turning small amounts of money (including small loans and grants) into larger amounts of money on an incremental basis by moving up to the next level when most people would be too nervous to do so.

You might also add ‘Be really lucky’, the line between success and failure being fairly slim. Would Meantime have been as successful if Progressive Beer Duty hadn’t come along just as Alastair Hook was looking to expand?

Is this a conspiracy theory? Or just a reference to the hiring of a former Miller executive?

Well, there is quite a bit of that implied in and threaded through the list above. For example, lots of breweries have caved because they just couldn’t find a route to market, hence point 5.

Well, it’s not just one is it? CEO, Non-exec, Head of Sales, anyone else? It’s colonisation in reverse, by crikey. Not knocking anything Mr Hook did, of course.

I think the most important thing is to make a super-excellent product. Everything else will follow except for the degree of growth, which is more dependent on the other factors mentioned.

In fact the obverse is true, if you get the non-brewing factors right (branding, financing,social media, etc.) you can do pretty fair even with an indifferent product, but again only up to a point.

So, either master fine brewing or business basics or ideally, both. Sierra Nevada covers all the bases, hence a lot of success. Ditto Sam Adams (despite the plethora of non-core brands). Ditto Anchor Brewing since the revival of the late 1960’s. I would say Brewdog in the U.K., Thornbridge too, and lots of examples in Belgium. In Canada, Beau’s is coming on strong.

Gary

You’re right. Won’t bother updating it for one word, but, yes, that would have been clearer.

Brewdog have done spectacularly well at this, I think, via a neat marketing sleight-of-hand – they do a load of wild and wacky stuff that builds up their overall brand as being crazy, anarchic, exciting, edgy etc, but also have Punk IPA as a readily available, reliably good and comparatively drinkable flagship beer. So Joe Punter can buy into the “extreme beer” brand without the downside of having to trek out to some obscure bottle shop and spend £17 on a bottle of something that might taste like cough medicine.

A bit like how many fashion designers make a fortune selling white T-shirts on the high street.

Calvin Klein -> Calvin Klein jeans -> “Calvin Klein Jeans” t-shirts and accessories.

(I loathe “Calvin Klein Jeans” t-shirts and accessories, in case you were wondering.)

Couldn’t agree more, also agree with the first comment that embracing of market/customers through social media is now essential. ‘Meet The Brewer’ nights at pubs are no longer the be-all-and-end-all of interaction with the punters. Many breweries (most) don’t have lovely old premises to show people around, so making someone feel part of your brand through social media is a free, sure-fire way of building loyalty.
Personally, If I was setting one up (which i would *never* do) I’d specialise in one area (as in the Rooster’s example) – at first, at least. Lager. Fruit beer. Wheat Beers. Wild, perhaps, are a good example of this – all of their beers carry that farmhouse, rustic quality.

Yes, we had Wild Beer Co in mind. Our money is on them to last.

Camden might be another, though they weren’t the first to focus on lager, even in London!

No, you’re right, but I know what you mean. The old standard of ‘one pale, one stout, one best’ – or even a ‘core range’ – isn’t even that popular these days, it seems. Straight into IPA, straight into lager. And yes, Wild will last. They offer enough difference.

I think you need to grow from a strong local presence as well. If you send your beer all over the place you will forever be just another micro, but if you get into a core of local pubs you will begin to be recognised and sought after. Even when trying something new, people are often more comfortable knowing that it’s made just down the road.

Surely key to everything is making distinctive and excellent beer. So many people opening breweries have no brewing qualifications or experience. You can set up a small brewery pretty cheaply, a few grand buys you a reasonable 2-5bbl kit, and all of a sudden you’re a commercial brewery. I get contacted weekly by people setting up breweries who have no idea what they want or need, but just have the idea that they are going open a brewery as they can see it’s a growing industry. I had a call from someone a couple of weeks ago and I was totally amazed; no brewer, no industry experience, no kit, no idea of what beer they wanted to make, no passion for beer, nothing but the money (and a fair bit of it) they had received from being made redundant, a registered trading name and a twitter account. TOTAL MADNESS… So for me a successful brewery has to be based around great beer or at least good beer, and that usually means someone with some brewing experience or qualifications.

To me the next most important thing is to know your market, and fully commit to it. Cornwall is a ‘Traditional Brown Beer’ county on the whole and we didn’t want to make that style of beer our flagship, so we didn’t target Cornwall as ‘the key’ part of our business. Instead trying to get our beer to bars and to distributors who specialise in more modern and varied beer styles.

I also think a balanced sales book is also a must, and relying on any one area is leaving yourself open to the slightest market change. We aim for a even spread across Cask/Bottle/Keg and also through direct sale, distributor and export. So if we have a dip in sales across one or another sector we aren’t up shit creek.

Once you have good beer, sound branding, a sales network to get your beer out and about. Social media plays a massive part. It’s awesome for getting your message out, getting direct or indirect feedback, and building a relationships, and it’s fun!

Oh and one last thing, bags of cash to keep growing and plenty of passion for the job, cause it’s hard work, and you don’t earn that much.

Finally, I have no idea if any or all the above is absolute Bollocks as we have only been going 18 months and who knows if we’ll be here in 5 years let alone 20. Just my thoughts!

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