CBAM June 2020

JUNE 2020 • VOL 4 • ISSUE 4

The Voice of Craft Brands Jason Barrett, Master Distiller, founder and president, Black Button Distilling

The real deal Black Button Distilling and the chase for craft perfection

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VOL. 4 : ISSUE 2 : JUNE 2020

THE REAL DEAL

Black Button Distilling and the chase for craft perfection

IN EVERY ISSUE: 3 EDITOR’S NOTE Proceed with caution 4 INSIGHTS Industry News

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(RE) OPEN FOR BUSINESS 11 tips for making your craft rebound work for you

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TIME TO GET SERIOUS The 3 disciplines of strategic thinking

editor’s note

Proceed with caution

M

Most wore masks. Some did not. Most tried to honor the socially mandated distance requirements. Some did not. All reveled in the exercise of trying to bring some normalcy to a world that is in desperately need of some.

It was a trip to a winery to celebrate a friend’s birthday. That the transportation included a van is a story for another time (see some wore masks, some did not). The majesty and beauty of the North Georgia Mountains should never be discounted. It is a place where it seems that God saved some of his best brushstrokes for our viewing pleasure.

So we celebrated. We bonded.

We sampled. We ate. And we tried to tell ourselves that even in circumstances that are strange, weird and uncanny, we can persevere.

I cannot tell you how I felt about putting myself into a situation where you are playing a 50/50 dice game where depending on which side the dice fall lies your fate. But what I can tell you is that it felt good to believe that if people are smart enough, brave enough and diligent enough to play by the rules that the game—any game—must be played by, we can win. And let us not kid ourselves right now, these are little victories, but victories none the less.

These are different days. One group believes one thing, the other another. Facts being facts, science being science, and data being the ultimate decider, we must face each and every day with a sense of sanity.

My first foray into this new and uncharted world was strange, but satisfying. And knowing that you

are doing something that is helping all of us take those next steps is reassuring.

The craft spirit world has done just as much as any other industry in helping restore normalcy.

We are here for each other. And while some will make it through this smarter and more tactful than before, others will have to go back to the drawing board.

Michael J. Pallerino

My first foray into this new and uncharted world was strange, but satisfying. And knowing that you are doing something that is helping all of us take those next steps is reassuring.

But that is not a bad thing.

Drawing boards are not signs of failure; they are signs that we are capable of learning from the situations that dictate how we are forced to deal with any given situation.

Here is to better days ahead.

They are out there. And eventually, we will find them—together.

Cheers.

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insights

Be heard 3 ways craft brewers can respond to crises

We are reopening. We are pausing. Start. Stop. There is a lot to process right now. How your brewery responds is critical.

Crisis brings uncertainty in all of us. That is why you must deliver value. Here are 3 ways you can continue to respond to crisis, thanks to the folks at Branding Strategy Insider:

Book Rec

Think and Grow Rich

By Napoleon Hill

1. Optimism Life throws curves, so quick ducking. Be a beacon of positivity and lift up your customers. Good attitudes are contagious.

2. Nostalgia Think of the better times before the walls closed in. Sooth your customers with nostalgia. Remind them that you have been with them through the good and the bad, and that things will get better.

3. Value & price

In times like these, everyone is making cuts. Your craft brand must provide value, and it needs to come at a reduced price.

Offer savings and discounts to motivate customers. Provide value packs that offer more for less.

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In a time when everyone could use a little pick me up, Napoleon Hill’s epic “Think and Grow Rich” has been updated from its original 1937 run with success stories from some of the world’s most influential leaders.

Called the “Granddaddy of All Motivational Literature,” Hill’s first book boldly asked, “What makes a winner?” He was the man who asked and listened for the answer.

In the original book, Hill drew on stories of Andrew Carnegie, Thomas Edison, Henry Ford, and other millionaires of his generation to illustrate his principles.

In the updated version, Arthur R. Pell, Ph.D., a nationally known author, lecturer and consultant in human resources management and an expert in applying Hill’s philosophies, shares anecdotes from the likes of Bill Gates, Mary Kay Ash, Dave Thomas and Sir John Templeton.

It is the perfect book for the most imperfect of times.

Old school

Survey shows why traditional marketing still works Your customers are out there—COVID-19 or not. So you have to keep in touch with them.

According to The Manifest's "7 Digital Marketing Tips for Small Businesses in 2020," 63% of small businesses use traditional marketing to facilitate a personal connection with their clients. While some might think traditional marketing techniques may be a thing of the past, most small businesses, surprisingly, still use items like print marketing such as direct mail, flyers or banners.

Here are some numbers to keep in mind:

63% still use print marketing 76% believe their digital marketing efforts are effective

56% plan to use more website marketing 32% plan to use video marketing 54% plan to use email marketing **Hyperlink to survey above: https://themanifest.com/digital-marketing/small-business-digital-marketing

They said it... “ We’re keeping our fingers crossed. The people we get that are coming in are very encouraging. They tell us they can’t wait to come in and have a beer, but we don’t know about the rest of them. I think the question that we’re all holding our breath for is what does public feel is appropriate right now?

Just because restaurants can get to 50-percent capacity doesn’t mean the public is comfortable.”

— 192 Brewing owner Derek Wychoff on the “make or break” environment for today’s craft breweries “ All of our revenue streams are drying up, we’ve gotta find new ways of bringing in revenue. A lot from Philadelphia and the surrounding boroughs, but most of our orders, I would say, are in a radius of 50 miles from here.”

— Jim Cain, owner of Vault Brewing Company, on how on some Pennsylvania breweries are tapping into new revenue streams like statewide shipping “ As the craft beer scene in Nashville continues to grow, I think it is exceptional that we are still honoring the history of beer-making here. Every new marker that we install just adds to the richness of our understanding of early life in Middle Tennessee and the integral part that brewing had in it.”

— Metro Historical Commission historic preservationist Jessica Reeves on why it is important that the community is honoring brewing’s past

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The Voice of Craft Brands

The real deal Black Button Distilling and the chase for craft perfection

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By MJ Pallerino

Jason Barrett’s family started making men’s suit buttons in Rochester four generations ago. Since 1922 these buttons have been sewn on suits worn by presidents, popes, kings and businessmen all over the world.

As a youngster, Barrett was privy to a work ethic that takes most people their whole lives to embrace. Work hard, work with your hands and create quality products. And while Jason took a different path, the lessons and their meaning stick with him still. As the founder, president and master distiller for Black Button Distilling—the legacy he forged to create on his own—Jason pays homage to the the world his grandfather knew—one where real mean worked hard and drank the real thing, i.e., real pot distilled whiskey.

His path to craft spirit glory started in 2012, where at the age of 24 he opened Black Button’s tasting room and retail store in Rochester, New York. Spirit tastings and craft cocktails. Tours. Public and private events.

With Black Button, he delivered a world-class operation distilled from New York area grains, and aged, bottled, labeled and hand-numbered locally.

And if you are looking for a little craft spirit irony—Black Button is the first grain-to-glass distillery in Rochester since Prohibition. The journey, which includes myriad awards, honors and accolades, has been the stuff of legend.

We sat down with Barrett, and Director of Marketing Carrie Riby, to get an inside look into the magic that is Black Button Distilling.

What are some of the adjustments you made with/to your business model surrounding the recent state of events?

From the time COVID-19 hit, we transitioned from liquor to hand sanitizer production in less than 48 hours. This in turn created a domino effect of other changes. For example, our tasting room expanded our product offerings from just spirits, to cocktail kits and virtual cocktail classes/events. We started offering curbside pickup and door-to-door delivery.

A good portion of our sales force now focuses on hospitals and critical facilities versus just retailers. In addition, we have expanded our e-commerce sales options, which now allows us to ship product to more than 38 US states.

Be honest and upfront about why certain products are not currently available because you had to focus on making hand sanitizer. They get it.

What is the best piece of advice you can offer to other brands in how to deal with the unthinkable like this?

Here are two pieces of advice: No. 1 — Trust your instincts. You know your targets and markets better than anyone else. The numbers suggested in the early days that everyone would be hunkering down with a well-stocked liquor cabinet. We later learned that they did, they were just not venturing into the craft arena.

No. 2 — Hire people who care. Our Black Button employees are family and, in the end, they were the reason we were able to bring hand sanitizer to market so quickly.

The “can do” spirit is alive and well at Black Button and employees were willing to do whatever had to be done to make the hand sanitizer happen.

What kind of conversations are you having with your customers?

We have always been in and part of the community, but with COVID, we have more time than ever to consider the community first. We all live here. How do we keep our friends and family safe? After taking care of the community, we ensure that our employees have a job. It may not be the same job they had in the tasting room, but everyone knows they are working for all the right reasons.

The irony is that when customers see you taking care of the community and your employees, they rally around and take care of you.

What role should a brand play in being a leader in a distressed market?

Do the right thing. We live in a small viral world, and customers know when you are only thinking about yourself.

Give us a snapshot of today’s craft spirits market from your perspective.

According to the Distilled Spirits Council, only 43% of craft distilleries expect to survive at the end of this pandemic. This is scary, but at the same time, it forces us to rethink our current sales model. Things will not be going back to the way it was anytime soon.

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Black Button Distilling

What is likely to happen next?

What is your story from a brand perspective?

Consumer behaviors have shifted. In many cases, this will not change even after COVID. We believe e-commerce is going to get more active in the craft category.

For example, Drizly alone grew over 400% over the last few months. Once people know they can buy spirts quickly and easily, they may not want to go back to their old habits.

We are proud to say we are the first grain-to-glass craft distillery to open in Rochester, New York since prohibition.

Founded in 2012, Black Button Distilling is a New York State-licensed farm distillery. We use over 90% New York State all-natural ingredients to make all our spirits.

From a young age, Jason worked alongside his grandfather in his family’s button factory. There, he learned that hard work, dedication and a commitment to quality are the principles of any good producer. These core values would later become the foundation of Black Button Distilling. We work exclusively with farmers who take great pride in what they harvest, and we never cut corners in the pursuit of making exceptional spirits.

Consumer behaviors have shifted. In many cases, this will not change even after COVID. We believe e-commerce is going to get more active in the craft category.

Black Button Distilling is a family company and our products are handmade with quality ingredients—just like the hand sanitizer.

We have learned from this pandemic that we are about more than just crafting high quality spirits we offer lifesaving hand sanitizer. Jason’s grandfather would be proud.

Walk us through your branding strategy.

Our brand is like most: handcrafted, farm to table, quality ingredients offering unique products you cannot get anywhere else. Our spirits are award winning. We have global recognition being the second American to be inducted into the prestigious Gin Guild. (A highly respected, worldwide

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CIRCLE NO. 46

Black Button Distilling

promoter of the gin category, the Gin Guild is supported by the four major gin distilling companies: Bacardi, Diageo, William Grant and Sons and Chivas Brothers.)

What is the biggest issue today related to the marketing/sales side of the business?

Our biggest issue is that there are many distilleries out there. How do we break through this clutter and differentiate ourselves? Couple this with a robust e-commerce community that is designed to support major brands and not the craft. Now, top that off with having to make a totally different product, hand sanitizer, for a different audience set. These are complex times for our industry indeed.

What is the secret to creating a branding story that consumers can buy in to?

This is no longer about creating a brand story; this is about keeping our consumers safe so that they will be here for us in the future.

What is the one thing every craft beer brand should be doing in the way of marketing?

What do you see as some of your biggest opportunities moving ahead?

Craft distilleries and breweries need to be curious when it comes to marketing. What worked five months ago will most likely not work now. Trial and error are the keys to knowing if something is working. If it does not work, ask why. And then start again.

These are uncertain times. There is no science to what we are doing. If you are to make one marketing investment, hire a good public relations consultant. The ability to announce a story quickly makes all the difference in this rapidly evolving marketplace.

E-commerce is growing fast in this category. Companies like Drizly, Instacart, Whiskey Lovers, Spirits 360, Mash and Grape, etc., offer ways to our promote products in seamless online environments.

What is the biggest item on your to-do list right now?

How do you balance hand sanitizer demand with our passion for making award-winning bourbon/whiskey, gin and bourbon cream? What does our future look like?

Understanding this dynamic is key to our future.

Sitting down with …

Jason Barrett, Master Distiller, founder and president, Black Button Distilling What is the most rewarding part of your job?

What was the best advice you ever received?

Seeing a product go from concept to fruition, and then seeing consumers enjoy our creations.

The only real difference in business anymore is the people. Focus on having great people and the rest will take care of itself.

What is the best thing a customer ever said to you?

What is your favorite brand story?

“Can I get a Black Button Old Fashioned?” I was at a bar not in branded gear, and it was the first time someone ordered our product by name without needing to be prompted.

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Ford Mustang. You really do feel a sense of freedom while driving that car. Just like a pony on the plains.

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CIRCLE NO. 47

business

By Dr. Cindy McGovern

(Re) Open for business 11 tips for making your craft rebound work for you

Breweries, taprooms and pubs are slowly (and we mean slowly) getting back to business—but it is not business as usual. Who knows if it ever will be. Many brewers have scrambled to make at least some sales since the pandemic shuttered bars and businesses. Without much warning, they made changes on the fly and had to learn what worked and what didn’t as they tested their ideas in real time.

Reopening is a different story. You know it is coming.

So plan for it.

Before you swing your doors open—at least all the way—gather your team and create a firm strategy for regaining your footing in an economy that is sure to recover very slowly.

Here are 11 tips for making a solid sales plan that will help your brewery recover:

1. Brainstorm Often, the most creative solutions come from employees who work on the front lines. They know what is working and what is not. They hear customers and vendors talking. Gather your team and bat around ideas. Require attendance. Close the doors. Spend all day. Allow for pie-in-the-sky talk; some sliver of an out-there idea might actually be practical. Write every idea on a white board or

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flip chart so it is visible and does not get forgotten. Tweak the ideas. Talk about them. Truly consider them. If you rule out any suggestions, have a good reason.

2. Research Find out what other brewers are doing. Call acquaintances you have met at conventions. Read articles about innovators in the field. It is possible your brewery needs to reinvent itself to survive government restrictions and reluctant patrons. If another brewer has a great idea that might work for your shop, get in touch.

3. Innovate

Pre-pandemic operations inevitably will look different post-pandemic. Resist the temptation to stick with what worked before, even though that is the comfortable option. Chances are, it will not work anymore—at least in the short-term.

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Instead, look for new ways to sell your product.

Look for a new audience of buyers. Some brewers are successfully selling their craft beers online, directly to consumers. Others—in areas where to-go brew is legal— have started curbside service. Consider it. Decide if it is for you. Plan your strategy. Try it.

enough to know that. Also plan for how many tables will fit according to social distancing rules; whether you need umbrellas or patio heaters; how your staff will accommodate customers if it rains; which hours you will be open; and who will prepare and serve the food and beer.

4. Comply

9. Anticipate

Know precisely what your state and local governments are allowing and not allowing—and then follow the law to the letter. Among the worst things that can happen: You get shut down as soon as you reopen, especially if you sell your brew in a pub or taproom, beer lovers need to feel safe and relaxed. A government sanction will chase those paying customers away.

A good plan takes today’s circumstances into consideration. A great one anticipates what’s next and helps the business prepare for it.

What will your brewery do if the pandemic worsens over the winter, as some health experts are predicting?

How will your business survive if the governor orders it to close again? If fewer customers than expected show up when you reopen, how will you attract more? If sales to distributors remain slim, how will you get them to buy more?

5. Delay It might sound counterintuitive, but do not do too much too soon. Do not open until you are ready. In your plan, include a realistic timeline for opening, bringing employees back to work, introducing new features or products, offering specials and hosting events. Phase in your new processes and ideas. You do not have to do it all on the first day, but you should know—on the first day—what you will be doing over the coming months.

6. Add If you have a pub or taproom and indoor seating is not allowed, add outdoor seating. Create a full menu of gourmet snacks to pair with flights. Expand your food menu.

Introduce a new brew. “New” is enticing to existing customers and could bring in some beer lovers who want more than you used to offer.

A caveat: Do not throw spaghetti at the wall and hope something sticks. Introduce changes only once you have thought them through and feel well prepared to deliver on your promises.

7. Localize Consumers have a soft spot for local businesses and many are going out of their way to patronize them. Target your own neighborhood with ads in local media; fliers; social media posts; and even car wraps to let the hometown crowd know you’re back in business. Offer special perks to those with local addresses.

8. Overthink Delve into the weeds with your plan. Do not stop with the idea. If you are going to add patio seating, it is not

Plan how your company will react and respond to the unexpected: huge crowds; lack of business; sick employees; understocked vendors.

10. Write A well thought-out plan in your head will never be as successful as one that you write down. Create a written plan. Circulate it among the staff for feedback. Tweak it as needed. Put it in order so everyone will know what to do first and what is coming up.

11. Rewrite A sales or business plan should always be flexible enough to change when something unexpected occurs; when an idea winds up falling flat; or when a new opportunity presents itself.

During these uncertain times, revisit your plan every couple of weeks. Evaluate how the planned activities are working. Look at the next steps of your strategy. Do they still make sense?

Once you put your plan into action, you and your staff will learn from experience what is working and what is not. One of the best ways to know that is to ask your customers, distributors and vendors for their opinions.

That is also one of the nicest ways to show your appreciation to customers—especially those who choose your business once they have options again. Include them in your plan so you will know what they like and want. And then plan to give it to them.

Dr. Cindy McGovern is known as the “First Lady of Sales.” She speaks and consults internationally on sales, interpersonal communication and leadership, and is the author of the Wall Street Journal bestseller “Every Job Is a Sales Job: How to Use the Art of Selling to Win at Work.” Dr. Cindy is the CEO of Orange Leaf Consulting, a sales management and consulting firm in San Francisco. orangeleafconsulting.com.

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sales

By Rich Horwath

Time to get serious The 3 disciplines of strategic thinking

Do you get it? How many times have you heard someone ask that question? When people look toward a leader for guidance, what they want to know more than anything else is if you get it. Maybe what they really want to know is if you are strategic.

Well, are you tactical or strategic? Does it even matter? A recent survey conducted with 400 talent management leaders found that the No. 1 most valued skill in leaders today is strategic thinking. Unfortunately, research with 154 companies found that only three out of every 10 managers are strategic.

So, yes, the ability to think strategically for your craft spirit business, especially in today’s ever-changing business landscape, is essential. The real question is how can you continually hone your strategic thinking skills in order to thrive in today’s ever-changing business landscape? The fact is most managers are now required to be more successful with fewer resources. All managers have resources (time, talent and capital) to varying degrees within their organizations.

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Technically, all managers are strategists. But the reality is that not all managers are good strategists. Herein lies the pearl of great opportunity: the deeper you can dive into the business and resurface with strategic insights, the more valuable you’ll become to your organization.

Strategic thinking is defined as the generation of business insights on a continual basis to achieve competitive advantage. Strategic thinking is different than strategic planning. Strategic planning is the channeling of business insights into an action plan to achieve goals and objectives.

A key distinction between strategic thinking and strategic planning is that the former occurs on a regular basis, as part of our daily activities, while the latter occurs periodically (quarterly, semi-annually or annually). Strategic

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thinking is using a new lens to view the business. It’s not about adding more work. It’s about enhancing the view of the work and improving one’s ability to perform it.

To maximize your resources and profitably grow the business on a consistent basis, there are three disciplines of strategic thinking you can develop to continually ground your business in solid strategy: 1. Acumen — Generating key business insights.

2. Allocation — Focusing resources through trade-offs.

3. Action — Executing strategy to achieve goals.

Discipline No. 1 Acumen — One of the interesting paradoxes of strategy is that in order to elevate one’s thinking to see “the big picture,” one must first dive below the surface of the issues to uncover insight. A strategic insight is an idea that combines two or more pieces of information to create new value.

One of the reasons most people do not enjoy strategic planning is because the plans do not contain any new thinking. They are repeating Albert Einstein’s definition of insanity by doing the same things over and over again and expecting different results. A key premise in business is that new growth comes from new thinking. Carve out time for you and your team to sit down and strategically think about the business, using the group’s insights to identify new approaches to the business.

core of strategy. Discussions of strategy boil down to how to allocate limited resources to maximize business potential. Where are you currently investing your resources—time, talent, budget—and are they focused on your goals and strategies? While everyone has a to-do list, only the best managers also have a not-to-do list. Remember that great strategy is as much about what you choose not to do as it is about what you choose to do.

Allocation Question: What trade-offs will I make to focus resources?

A key premise in business is that new growth comes from new thinking. Carve out time for you and your team to sit down and strategically think about the business.

Acumen Question: What are the key insights you’ve learned about the business and how are you using those to achieve your goals?

Discipline No. 2 Allocation — While it is one thing to have a neatly written strategy on paper, the truth is the actual or realized strategy of an organization is a result of the resource allocation decisions made by managers each day. Therefore, it is critical to have a firm understanding of resource allocation and how to maximize its potential for your organization. With multi-billion dollar companies going through bankruptcy on a regular basis, it’s obvious in today’s market that having the most resources guarantees nothing. It is how we allocate resources that truly matters.

The definition of strategy begins with “The intelligent allocation of resources...”. Resource allocation is at the

Discipline No. 3 Action — How often has your team invested time in developing a plan for the year, only to see that plan slip by the wayside once the fire drills begin? Fire drills come in the form of customer complaints, competitor activity and internal issues that are urgent, but not important. The key is to let these fire drills flame out and stay committed to the plan you’ve developed by focusing on your priorities, not the flavor-of-the-month tactics.

Action Question: What are my top three to five priorities and am I focused on them or fire drills?

The most important level of strategy is not corporate, business unit, or functional group—It is you. The individual level is where strategy is actually created. Unfortunately, 90% of directors and vice presidents have never had any learning and development opportunities on strategic thinking. The good news is that by developing the three disciplines of strategic thinking, you can elevate yourself from tactical to strategic. The better news is that in doing so, not only will you become more valuable to your organization, you’ll separate yourself and your business from the competition.

Do you get it?

Rich Horwath is a New York Times bestselling author on strategy, including his most recent book, “StrategyMan vs.

The Anti-Strategy Squad: Using Strategic Thinking to Defeat Bad Strategy and Save Your Plan.” As CEO of the Strategic Thinking Institute, he has helped more than 100,000 managers develop their strategy skills through live workshops and virtual training programs. Rich is a strategy facilitator, keynote speaker, and creator of more than 200 resources on strategic thinking. To sign up for the free monthly newsletter Strategic Thinker, visit: www.StrategySkills.com.

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It’s easier to sell during a pandemic if everyone on your staff is selling Every one of your employees, from the brewmaster to the cellar workers, can and should be selling for your craft brewery.

Does your team know how to spot an opportunity to sell?

Do they know what to say when the opportunity presents itself?

In the Wall Street Journal best-selling business book Every Job Is a Sales Job, Dr. Cindy—also known as the First Lady of Sales—motivates your entire team, even non-sales employees, to bring in new business and nurture the customers you already have.

Visit www.DrCindy.com and get Every Job Is a Sales Job for your employees today.

Use promo code CRAFT to get a special bonus with purchase.

To contact Dr. Cindy for a personal consultation, visit www.OrangeLeafConsulting.com.

Dr. Cindy McGovern