From the Field — 31 May 2012

The Shakedown

It’s no secret that the macro beer and liquor marketers have fiercely competed and spent countless millions over the years looking to gain market share through creative advertising and other more cutthroat means. You see with commodity beer, there’s little difference among the liquids. So the marketers can only create value and differentiation outside of the liquid….thus the various marketing campaigns that we have grown to adore over the years…clydesdales, attractive females, or how about blue mountains or the swirl neck bottle thing? Although, I must admit, the wide-mouth can was actually a useful benefit…gotta give them credit there. Point is, anything but the liquid was the focus.

Similarly, on the distributor side, an entire culture of quid-pro-quo was born. I think it means “this for that.” You know what I mean, “free” stuff. Everything from all the branded swag (what hasn’t had a beer logo slapped on it?) to event tickets, tied-in sales, an extra case or keg falls of the truck, even a “free” draft system. You could imagine how lucrative this is for some retailers…pitting all the suppliers against one another constantly. I call this the “shakedown” – when operators expect you to come up with a quiver of giveaways and offers to win their favor.

I have to admit, when I first signed on with Hunterdon I was hoping for some season tickets myself. I could deal with that.

It’s what’s inside that counts

The craft industry has not followed in the footsteps of the macro industry leaders. These craft brewers know that some discount deal will not garner a trusting, long-lasting relationship. We can see the results from the macro experience – constantly battling it out with each other until both are less well-off. You see, what craft brewers want is to sell beer because the retailer knows “it’s what’s inside that counts” NOT because of all the pseudo “free” stuff and tie-ins.

Craft offers a lot of value to retailers, that’s why its gaining market share even though the overall beer market is shrinking. If you haven’t been paying attention, here’s a short list of why craft is working:

1. Demand- People want it, more and more of them everyday.
2. Retailers make more money per sale.
3. The consumer is loyal.

So, the “true” craft brands won’t touch that old-school “quid pro quo” system. Why not? Because the liquid is the value. The liquid is in demand by a consumer who frequently returns to spend more money. You do the math. Craft-forward retailers have seen that running a craft beer program with integrity pays dividends through this equation. They know it’s whats inside (your business) that counts! A craft beer program needs integrity as mediocre, macro-owned “craft” brands will only get you so far. And you need to have a passionate, educated staff to stoke the fire of your fans. Choose the best products, present them with knowledge and care and you will have the foundation of a successful craft beer program. And THAT is more valuable than any free stuff the “shakedown” offers up.

Cheers!

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ashley.stima@gmail.com

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