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JULY/AUGUST 2017

For the Craft Brewing Professional

Doug Veliky, CFO, Revolution Brewing

For the love of the

game PLUS: Eight essential strategies for achieving business longevity Craft beer’s ace in the hole

Inside the magic that is Revolution Brewing


VOL. 1 : ISSUE 3

contents

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EDITOR’S NOTE What’s in a name? Well, everything INSIGHTS Industry News FOR THE LONG HAUL Eight essential strategies for achieving business longevity

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FOR THE LOVE OF THE GAME Inside the magic that is Revolution Brewing CRAFT BEER’S ACE IN THE HOLE THINKING (IN AND) OUT OF THE BOX How do you stand out in a global marketplace

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editor’s note

What’s in a name? Well, everything

Michael J. Pallerino

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Offering good beer with unique and eye-catching marketing and branding (like cool names) gets you on the map, and a cool drinking space gives them a reason to come back.

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Hoppy Balboa vs. Apollo Green. It was so cool I had to try it. I mean, really, Hoppy Balboa vs. Apollo Green. The name scrawled out in chalk across the board at our local craft brew pub was just too cool not to try. If you’re keeping score at home, the Imperial IPA with an 8.8 alcohol content was as good as its name. But wait. There were more. Ta Ta Cream Ale. Irish Red I Jedeye. Dylan’s Dubbel. West LA Hopaway IPA. The Monkey Hammer Hefe. They’ve Gone To Plaid Scotch Ale. O.A.S.I.S- Old As Shit Imperial Stout. And the Summer Fling Watermelon Blonde Ale. And this is just one craft taproom – our Cherry Street Brewing Cooperative – on one day. In my little neck of the craft beer woods in Cumming, Ga. We love the names. We love the creativity. Oh, yeah, and we love the beer. In a time when a recent Nielsen CGA report says one in six neighborhood bars have closed since 2004, craft brands have a unique opportunity to fill in the gaps. The key, as Nielsen CGA senior VP Scott Elliott said in the report, is to make sure people stick with you. Let’s face it – people are still drinking beer. Along with the 12,766 neighborhood bars that have closed over the past 12 years, 60,906 new restaurants have opened. The report shows that 52 percent of restaurant goers are drinking a beer when they go out. So, how do you do it? Being small and new and creative gets you on the map. Offering good beer with unique and eye-catching marketing and branding (like cool names) gets you on the map, and a cool drinking space gives them a reason to come back. And it’s working. The Nielsen report shows that draft craft beer accounts for 84 percent of all craft sales. And you have some really encouraging factors in your corner. For example, craft beer consumers are willing to pay more, Nielsen says. The survey also found that craft beer drinkers are willing to pay more than they are being charged for 12-ounce bottles ($5.73 vs. $4.60/bottle) and 16-ounce draft beer ($6.35 vs. $5.30). And Millennials love you. According to the survey, 23 percent of them say they visited a brewpub or taproom; 13 percent visited a “grocer-aunt,” 12 percent took a brewery tour; and 25 percent visited a “premium bar.” So here’s the thing. Pull out your best marketing strategies (we’ll help you with that), take square aim at your consumers and fire away. Okay, now I’m ready. Laptop down. Let me try the Balzac the Invincible. I’m feeling kind of daring today.

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insights

The Anatomy of a Perfect Landing Page Nobody wants a landing page with a high exit rate. And if you’ve put a lot of time into making your web page as cool as your craft beer, well, that’s not good. Here’s the thing – there’s more to a high-converting landing page than just its looks. Relying on your page’s aesthetics alone isn’t going to cut. If you want to create a landing page that’s going to give your visitors what they want, here’s seven tips worth writing down:

» 1. Use compelling copy Just because your copy reads well doesn’t mean it’s compelling. Truth be told, compelling copy features psychological elements embedded into it like social validation. These elements are often what compels your audience to take action. » 2. Have a call-to-action As a general rule, your call-to-actions should be in areas where you’ve provided massive value to your readers. If your customers want to engage with you, make it easy. Adding a floating CTA also works. » 3. Make your relevance apparent Those who arrive on landing pages often have a goal in mind, so be relevant from the get-go. Don’t make them start clicking around looking for things. Address their questions and concerns early on. » 4. No distractions Use one type of call-to-action per landing page. You don’t want your audience to get confused or distracted. Never ask your audience to

Book Rec The Innovation Code: The Creative Power of Constructive Conflict By Jeff DeGraff, Staney DeGraff In their new book, “The Innovation Code – The Creative Power of Constructive Conflict,” Jeff and Staney DeGraff talk about the importance of clashing. Innovation, they write, happens when you bring people with contrasting perspectives and complementary areas of expertise together in one room. We innovate best with people who challenge us, not people who agree with us. It sounds like a recipe for chaos and confusion. But thanks to a simple framework the DeGraffs

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share, buy or contact you all at the same time. Be careful not to distract your visitors from your main goal.

» 5. Carefully crafted headlines Your headlines must be clear, concise, relevant and punchy. These characteristics will ensure (somewhat) that your audience will continue reading the copy on your landing page. » 6. Add testimonials Adding testimonials builds credibility. What makes it so effective is the fact that testimonials are not sales pitches. They come across as unbiased. To make the testimonials more credible, add your client’s profile picture and a short bio about who they are. » 7. Use images or videos that are relevant to the copy Countless case studies show that images and videos boost conversion rates. Images and videos help create a clearer mental picture of the ideas you want to convey. Source: Source Bug Media

introduce, you will see how different kinds of thinkers and leaders can create constructive conflict in any organization. This positive tension produces ingenious solutions that go far beyond “the best of both worlds.” Drawing on their work with nearly half of the Fortune 500 companies, they help you harness the creative energy that arises from opposing viewpoints. They identify four contrasting styles of innovator – the Artist, the Engineer, the Athlete, and the Sage – and include exercises and assessments for building, managing, and embracing the dynamic discord of a team that contains all four. You can also figure out where you fit on the continuum of innovator archetypes. By following these simple steps, you will get breakthrough innovations that are both good for you and your customers.

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leadership

By Jill Johnson

For the long haul

No. 2 E  stablish a Realistic Vision for the Future Lasting business leaders also match their vision to their abilities. They leverage one success into another rather than rapidly making huge leaps beyond their capabilities. Those who don’t have a realistic vision risk everything because they reach too high before their cash, talent or operational capability is ready for higher levels of success. Enduring leaders actively and effectively manage their transitions and hire sophisticated talent to match their future needs. Their success is sustainable because they build it on a viable foundation that is based in reality, not on wishful thinking.

Eight essential strategies for achieving business longevity

No. 3 U  se Disciplined Approaches to Developing Leadership and Executive Skills You've settled on the perfect craft beer. Now, all you can do is dream of passing it along to everyone and anyone who is a craft beer lover. The formula is perfect. But what about the future? Everyone who starts or leads a business dreams of passing it along to the next generation, but few are successful in making it happen. Every year, countless businesses and organizations fail. Excuses are made and fingers are pointed. Long-term success takes more than hard work and a little luck. Leaders and entrepreneurs who achieve exceptional business longevity share eight business practices that moved them to long-term success. They think differently. They operate differently. They lead differently. Here the eight essential strategies for achieving your business longevity:

No. 1 Engage in Ongoing Planning Successful executives and entrepreneurs prepare for success on an ongoing basis, not just when they are in start-up mode. They move beyond their initial business plan to augment their success by leveraging new opportunities and seeking ideas to enhance operations and profitability. They are disciplined in writing down their plans, reviewing them and sharing them with their key employees and advisors. They know ongoing planning keeps them focused and moving forward. These leaders continually, and formally, evaluate what's working and what needs to change.

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Leaders who operate enduring enterprises understand experience is critical; not just with the operational or technical expertise, but also with the ability to lead, manage and weather the daily challenges of not having someone tell you what to do. These leaders understand they need to continue cultivating their ability to manage and create strategies. Leaders with enduring success continue developing and enhancing their skills to build their business arsenal. They read. They hire the consulting and professional talent they need to augment their internal expertise.

No. 4 I mplement Sound Fiscal Management Fiscal discipline is fundamental to long-term business or enterprise


success, yet few leaders have the self-discipline to manage their cash flow for the inevitable peaks and valleys. They respond to immediate pressures and spend money they don’t have. Too many leaders spend money on the flash and glitz trying to impress people. They never prepare for the future because they’re focused on living in the moment. Some make ill-advised decisions that create financial crises, rather than making prudent commitments they can realistically handle. Successful leaders of enduring enterprises focus on building real net worth by being masters at financial discipline and tightly controlling what they spend.

No. 5 A  dapt to Changing Circumstances Markets change and technology advances. Those who are successful over the long-term understand and adapt to change. They invest in people and technology to enhance productivity. They stay on top of competitors and respond as necessary. By continually adapting, they are able to leverage the evolving trends that are fundamentally transforming their industries. Enduring leaders create enterprises that last well beyond their tenure, always looking ahead to identify tools, resources, ideas and technology that can enhance their organizational success.

No. 6 B  uild Substance Into the Enterprise Businesses and organizations have come and gone over the decades. Some succeeded brilliantly, but most failed to meet the expectations hyped by their founders and owners. The primary reason is lack of sub-

stance to the enterprise; most of what was promoted was smoke and mirrors. Sustainable enterprises have substance. They deliver on their promises. Clients, vendors and employees can count on them. These enterprises demonstrate a consistency of product and service quality that can be trusted over time. An ongoing reputation for dependability is often a real predictor of long-term enterprise success.

No. 7 Control Growth Those who survive long-term carefully and deliberately manage the size and growth of their enterprises. Those who focus on growth ensure they have adequate finances, equipment and staff to meet their evolving needs. Those who maintain a smaller size often find they can better manage the stability of their overhead and fixed costs. Maintenance-oriented enterprises may even make more money and have less stress than their growth-oriented peers. Both growth and maintenance-oriented leaders who succeed over the long term effectively manage their appetite for risk and keep business scope within their comfort zone. They maintain leadership enthusiasm through controlled growth or by achieving sustained financial success.

Leaders who enjoy enduring business success have learned to constantly adapt and evolve.

No. 8 Maintain Motivation

Staying motivated is tough in any enterprise after the euphoria of taking over or starting up dies down. Once the day-to-day activities begin to become routine, most people lose their enthusiasm. Even harder is dealing with the real stresses of leadership. Boredom is often a leader’s worst enemy. Leaders of enduring enterprises motivate themselves and their employees by continuing to look for new opportunities to better meet client needs. This provides an atmosphere of innovation and ongoing success measured in revenues, customer satisfaction and employee retention. Leaders who enjoy enduring business success have learned to constantly adapt and evolve. They respond to continuing competitive pressures by finding ways to meet evolving client needs. The secret to long-term sustainable success is doing things with discipline and excellence. Leaders of enduring enterprises both big and small do more than just dream of success; they make their success a reality by taking the actions necessary to achieve it, and make it last. Jill Johnson is the president and founder of Johnson Consulting Services, a speaker, award-winning management consultant, and author of the forthcoming “Bold Questions” series. For more information, visit www.jcs-usa.com.

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For the love of the

Inside the magic that is Revolution Brewing By Michael J. Pallerino

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game

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A

fter quitting his job at Goose Island, Josh Deth had one mission – to start his own craft brewery. It was a big move, especially since he had just been promoted to brewer. But the dream is something that captivated Deth for a long time. It started in college at the University of Michigan, where he took up the fine art of home brewing, and wound its way through stints at Golden Prairie and Goose Island. It waited while he worked in an affordable housing-related non profit, earned a degree in urban planning, opened a vegan restaurant and held down an executive director post at neighborhood chamber of commerce. And even after he was spurned by a dozen banks and a handful of investors, Deth's dream picked up steam in 2008 when he found a large space with a tin ceiling in the up-andcoming trendy Logan Square neighborhood in Chicago. With a newly approved bank loan, he and his wife, Krista Sahakian, pushed onward. Two years later, Revolution Brewing was born with its first brewery in Avondale. Today, between its brewery and brewpub, Revolution produces dozens of different beer styles every year, including IPAs, porters, pilsners, Belgian-style ales, pale ales, barrel-aged beers, and the list goes on. Craft Brewing and Marketing sat down with CFO Doug Veliky to get his take on what the future holds for Revolution Brewing and why the market is ripe for growth.

Give us a snapshot of today's craft brew market from your perspective.

I see the craft beer market as a confusing place right now. Consumers are overwhelmed by choice and want to join the movement, but aren’t always aware of who is truly “craft” or who is even local. In some cases, consumers are making purchases while thinking they're supporting a local brand, when the beer in fact is brewed on the opposite side of the country.

What trends are defining the space? I have a couple. Hop-forward beers still seem to dominate the space, particularly IPAs that are aggressively hopped and bring out a fruity, tropical or citrusy taste and aroma. There’s also a movement into bigger packages from craft breweries compared to what we’ve seen in the past. There are 12 packs and beyond, as well as tall boys. This is allowing craft to continue to chip away into new sections of the coolers where they were once too small to play.

What is the Revolution story from a brand perspective? Revolution Brewing was built on the idea of “beer for the people” at the cusp of the recent craft beer revolution. To parallel the theme, our founder Josh (Deth) drew on a number of elements from Russian Constructivist propaganda and incorporated them into our graphics. Several of our early beers were inspired by the theme of revolution, including Anti-Hero, Bottom Up Wit and Eugene Porter. The branding of our seasonal beers match that of these three-year round options. In order to maintain our fun and easygoing personalities, some more playful characters were created and incorporated into the seasonals, including our Oktoberfest Tuba man, Fistmas Santa and even our brewer, Matty with A Little Crazy. The Hero Series of rotating specialty IPAs provides a platform for our brewers to work with the most exciting and often experimental hops available. We also use this line as a means to summon our inner comic and superhero geek. Lastly, we have a series of easy drinking beers that we brew for our local fans here in Chicago. We haven’t given the line an official title

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yet, but the branding has a clean, classic vibe, while paying tribute to our city’s imagery.

What's the biggest issue today related to the marketing side of the craft beer side of the business? Authenticity is the biggest issue. The breweries that have the best intentions at heart tend to have the most loyal following. Communicating these intentions to consumers is a constant challenge faced by craft breweries. For consumers to buy in to their brand story, the stories must be honest, genuine and built internally. Paying an outside party to develop your brand story for you would be inauthentic, in my opinion, and likely sniffed out by today’s well-educated consumer.

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We lead by example and find ways to work with other organizations who we respect and admire. That’s how we view marketing.

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What is the one thing that every craft beer brand should be doing in the way of marketing? Every craft brewery should be soliciting ideas from their employees at the company for how best to celebrate the brand and work their suggestions and faces into the finished product.

What is today's craft beer consumer looking for? Not too long ago, I wouldn’t have hesitated and said "variety." In 2017, however, I’m seeing the shift from variety to reliability. Consumers want to pick up beer knowing that it’s going to be great and taste exactly like the last time they had it.


Define your consumers. What are they looking for? I feel confident answering this question having been a Revolution consumer for six years before joining the company. Revolution consumers appreciate the high degree of quality and consistency achieved, while remaining the freshest beer in our market. Additionally, our fans appreciate how accessible and approachable the beers are. For specialty beers especially, some breweries love the idea of long lines for their beers, while we’re constantly looking for ways to avoid them and get everyone their beers as quickly and conveniently as possible.

Describe a typical day. There’s no such thing and I hope that never changes. I’m in an unusual role as the CFO with a significant number of marketing-related responsibilities. The last month included the preparation of our Q2 Financial results, preparing over 17 new distribution contracts and coordinating the development of more than 20 new can and carton designs. It’s been a doozy. I used to try to distance myself from the term jack-of-all-trades, but now I just embrace it.

Tell us what makes the Revolution brand so unique? The Revolution brand is unique in that it serves as a symbol for everything great about the entire craft beer industry. We aren’t just revolting against the mass-produced beer lacking flavor and complexity. We’re leading a

What do you see as some of your biggest opportunities moving ahead? In my opinion, our biggest opportunity still remains right here in Chicago. Despite being the largest independent craft brewery in the state, I still feel like we have an endless amount of opportunities to seek out here at home.

What's the biggest item on your to-do list right now? I can only pick one? We are getting set to announce our much-anticipated barrel-aged beers, which will be arriving this fall and winter. The beers will be in a new size and format, with updated branding and involve new processes to ensure they are of the highest quality. I’ve been working round-the-clock to ensure the packaging properly exemplifies the vision of our brewers and leadership team, while developing the means of communicating all the changes to our excited fans.

The Revolution brand is unique in that it serves as a symbol for everything great about the entire craft beer industry. CRAFT BRAND AND MARKETING

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Doug Veliky, CFO Revolution Brewing What’s the most rewarding part of your job? I wrote an email over Thanksgiving break last year to our Innovation Committee, a little more two months after joining Revolution that pitched four new beer ideas. Watching Tropic Hero cans go through the canning line in June was a special moment for me as a longtime beer enthusiast who has never home-brewed in his life. The artwork for a second beer from that same email is currently with our can company and will be released in October.

What was the best advice you ever received? Bill Simmons, my favorite sports/pop culture personality, was interviewing Katie Nolan in 2015 on his ESPN podcast. Katie was a bartender in a college town who eventually started a sports blog on the side, grinded away at it for years, and eventually wound up with her own show on Fox Sports. Early in the conversation, a quick sidebar comes up that I’ve never forgotten: Bill: “I always get that question from people, where people are like, ‘How do I get into the business? What should I do? Give me advice.’ There’s no advice other than outwork everybody else. That’s really literally the only advice” Katie: “Do something so often that when you wake up every morning, it’s like, well this is my job, I just have to do it. Then you get to a point where you’re in a routine and you stop worrying so much and you just say, ‘It’s my job, I have to do it.’” Katie is referring to her side passion of sports blogging, not her day-to-day job. Around this time, I had faced a big disappointment with

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a promising opportunity that fell just short. But this podcast put me back on track with my goal of finding my role in the beer industry. I quickly decided that rather than feel sorry for myself, I’d take this simply put line and just outwork everybody else instead.

What's the best thing a customer ever said to you? The first thing that comes to mind is a comment I read on a beer forum after our Deth’s Tar release last year, our biggest beer release of the year. This meant a lot to me because this is exactly what we strive for: “What I'm saying is that Revolution is doing something I like. If they have the capacity to brew all of that beer, they also have the capacity to host a big stanky "Deth Day" to be held the weekend before Christmas, annually. Tickets $300. Limit four beers, $20 each. But a free Deth's Tar can koozie. They could do all of that (or something far less hyperbolic). The Chicago Beer Scene has shown a near infinite capacity for limited release hype. I have no doubt that with their resources and size, they could capture a lot of that hype with their limited releases. It appears to me that Revolution could do all of that hype stuff, yet they choose not to. As long as they keep doing that, they get all of my e-high fives.” This meant a lot to me because it’s exactly what we discuss internally all the time. Respect and be fair to our customers.

What is your favorite brand story? As a visual guy, I don’t think anyone visualizes their brand story better than Allagash.

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social revolution in which we make and promote environmentally conscious decisions and investments, while always engaging our communities to develop unique grassroots partnerships. We lead by example and find ways to work with other organizations who we respect and admire. That’s how we view marketing.

What should people expect from Revolution moving forward? For starters, they should expect to see us continue investing in the quality of our beer. While we’re happy with where we are right now, we’re always looking for

ways to ensure our beer lives up to the high expectations of our consumers. We have a new $1 million filler and seamer arriving in September, an investment driven almost entirely by the reduction of dissolved oxygen in the can, allowing our beer to taste fresher for longer. We’re going to stay on the cutting edge on multiple fronts, including our Hero Series. Our League of Heroes variety pack has provided a platform to ensure we stay on top of the latest cutting-edge hops and continue innovating within the IPA category. Each pack changes approximately every four months and promises a new hero making his “first appearance.”


Craft beer’s

ace in the hole By Eric Balinski The stats about the growth and success of the craft beer industry are the things business legends are built upon. From its humble beginning only a few decades ago, it is a true marvel to witness what the army of passionate craft brewers has created. According to the Brewers Association, craft brewers in 2016 accounted for 12.3 percent of U.S. beer sales. What? Wait? You mean 87.7 percent of the market is still served by non-craft brewers? But there are more than 5,300 motivated craft brewers working on this? I know what you’re thinking – it’s Big Beer that has stacked the deck. They hold all the aces. They’re just too big, have too much distribution power, and hold too much money and resources to go against. Consequently, craft brewers need to primarily play to their strong suit – collegially community serving the tastes of the most discriminating beer drinking consumers.

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Before going further, here is a true story to challenge that belief. A number of years ago there were three major Global Fortune 500 players that owned a particular product category. (No names are needed, as it's more important to understand the lesson rather than dismiss the lesson with the notion that craft beer industry is “different”). They competed only with themselves, controlling the vertical and horizontal of every new technology or idea and how the market worked. Ironically this industry started as a craft industry, grew and scaled through mass production. Ultimately, the industry consolidated leading to these three players, who upon gaining control, turned themselves back into being craft producers, with each company offering a magnificent variety of higher priced product variations and combinations (400 to 700), or in craft beer terms, any type, flavor or style any customer could ever want. Then, along came a start-up who took the time to understand the customer’s world. They conceived a world of very few choices for the customer (only five or six), but one in which the customer received greater and more meaningful benefits through a completely new sales and distribution model.

All about the outcome Though there is a lot more to the story, the outcome is what matters. They played their cards to end-up holding a Straight Flush: In only 10

years, this start-up became larger and more profitable than all three of the global players combined by remaking the industry back into a mass production industry again. Who would have thought? The lessons for the craft beer industry are relevant and worth pondering the implications: • Understand your customers’ world • Understand the world of potential customers • Accepting all industry beliefs likely limits your opportunities • Focusing on your product leaves you vulnerable to someone who takes the time to understand how to make the customer’s world better Now ask yourself this: Who are our customers? My hunch is most craft brewers would not typically describe their customers as any of the people who make up the 87.7 percent. After all, a craft brewer makes an artisan product that the 87.7 percenters would not appreciate. Sure, if they were to wander into your taproom, they would get served. But how many craft brewers are eager to see them walk through the door? And how much do brewers really understand them to encourage them to come in? No question the craft beer’s history is impressive. But let’s puts the cards on the table. Until the industry intentionally and decisively goes after the other 87.7 percent of the market, its sales growth will continue to flatten. Doubling down on only your current

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customers likely will have less pay-off too. Worse, Big Beer already raised the ante and taken the game directly to the craft beer industry by buying many of its larger and successful players. In other words, they want your stake of the 12.3 percent. Hold on, the new “Independent Craft” label recently launched by the Brewers Association will surely save the day for a craft brewer. Won’t it? Isn’t this designation to tell the beer drinking world that craft beers are better and locally made by people who care more than the nefarious Big Beers do? Frankly, if that is the strategy for the industry, the Association is as cocky as the King of Spades. The 87.7 percenters, and probably many of the 12.3 percent percenters, likely could care less. Trying to convince them a beer made in the same U.S. facility is no longer craft because it is now owned by Big Beer, is playing a weak hand. Penalizing these larger craft brands simply because they became popular and grew to the point that someone bought them, is overplaying a weak hand in a fast moving game. It even sounds more like some sort of bluff which will do little to enhance any brand’s reputation with beer buying customers. Here is the good news; the industry has a few Aces to play, starting with the 87.7 percent of the market craft brewers are not selling to. To do so, craft brewer must read the cards to discover how to bring a better experience to this end of the market. In the May/June issue of Craft Brand and Marketing Magazine,

the article, "Strategic Thinking: The New Game Board," shares an approach to how to figure this out. Don’t deal yourself a bad hand by believing the craft beer industry’s claim that there are real preference and taste differences between craft beer drinkers, which tend to be younger, and Big Beer drinkers, who tends to be older. In a 2013 survey of more than 41,000 consumers, Nielsen found that “delicious, smooth taste and refreshing – remain consistent regardless of age when it comes to buying beer.” This belief between a younger craft beer drinkers and older Big Beer drinkers is more myth than reality. This perception will leave any business who believes it worse off because they are not pursuing customers who likely would buy from them.

Big Beer drinker may have much more in common with your current customers than you might ever consider.

Defining the perception

Paul Taylor, executive VP at the Pew Research Center in Washington, D.C., and author of "The Next America," isn't convinced the perception is real either. Taylor and his colleagues reviewed decades of demographic data. They found no signs of an intergenerational tension or storm brewing across a variety of topics. They did find the myth is “all media smoke and no fire.” "The generation war just feels like a nonstarter," Taylor says. "Look at the attitude of the combatants. On these much deeper levels of whether they represent each other's values and get along, we found very little conflict." In other words, the Big Beer drinker may have much more in common with your current customers than you might ever consider. And the most common characteristic is they all like to drink beer that is delicious, smooth and refreshing. Finally, if you only focus on a better experience for the 12.3 percent market, you will continue to have 5,300 competitors to divide up the smallest share of the market. Instead, deal yourself into the opportunity with Big Beer drinkers by finding out Eric Balinski is what would make a better experience for them. the owner of Not to mention, this demographic also makes up Synection, LLC, the richest portion of the U.S. population, with an which is a strategy estimated accumulated wealth of $30-plus trillion and growth held by older generations now looking to enjoy the consultancy reminder of their days. firm. For more As you consider how to grow, consider pulling information, visit: the Ace out of your sleeve to draw older customers synection.com. into the game.

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legal

By Tawny Alvarez

Thinking (in and) out of the box

When you ask the greatest companies the secret to their success you’ll often hear a phrase repeated – we thought outside of the box. The statement sounds cliché, but when was the last time you took a chunk of time to actively think about your strategy, where you want to be in the market in five years, and what – if anything is going to differentiate you in a market that continues to become more and more saturated. As we see more research indicating that consumers often go to a point of sale without knowing what specific beer they want, and instead choose beer based off of the label, we find ourselves with an ever expanding dilemma. First, with increased limitations on flashy (sexy) images under the Brewers Association Marketing and Advertising Code update, images may be less successful for brand purposes then in the past. Second, as more and more breweries enter the market – brewing more and more beer – scooping up fun and relevant beer names is becoming more and more difficult. Thus we are faced with the importance of breweries identifying a way to differentiate themselves from competitors – and one way to do that is to think globally. In an industry that is as highly regulated as beer, sometimes it is hard for brewers and owners to stay outside of the box with concepts other than recipes and marketing, but breweries need to stop thinking within these limited parameters and to really think big picture.

How do you stand out in a global marketplace

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I know when I say geographic reach or global you immediately start thinking regulations, legal bills, accounting nightmares, but honestly, if you’re not thinking outside the box right now, and taking steps to differentiate your beer – and your brewery – what will the future hold? Also with the right team – these “nightmare” concepts should not be the nightmare you’re envisioning. Take for example the Maine Brewers Guild – not a brewery in and of itself, but definitely an organization looking out for the beer scene in general. In June, I was lucky enough to join the Maine Brewers Guild and brewers from all over the state of Maine to Reykjavik, Iceland with a contraption affectionately known as the Maine Beer Box.

The Maine Beer Box is essentially a 40-foot-long refrigerated shipping container that has been outfitted with 78 taps from 40 Maine breweries. The Guild calls it the “largest kegerator ever built.” So the Guild packed up this outfitted container box with beer, put it on a boat, and shipped it across the Atlantic. What happened to the beer once it arrived in Iceland you may ask? Well naturally we drank it (yes we travelled from Maine, to Iceland, to drink Maine beer – you know what they say about a change of scenery). The Maine Brewers Guild in collaboration with EIMSKIP and a number of other Icelandic and Maine companies worked together to provide Icelanders with the largest beer festival in the history of their country. And then, that kegerator re-crossed the Atlantic filled with Icelandic beer for sharing with Mainers at the Maine Brewers Guild Summer Session Brew Fest. Pretty cool if you ask me. But why, you ask, is an attorney sharing this with me – where does branding and the law collide with my brewery. First, like multiple people before have said, think outside the box – or in the Guild’s case creatively change the box itself. Think of creative ways to offer your beer to a market that may be underserved by the craft beer industry. That may be a segment of the population or a geographic location – whether here or internationally that simply doesn’t have the same access to the good craft beer that you currently provide in a more localized region.

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CRAFT BRAND AND MARKETING

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legal

Watching thousands of individuals in a foreign country experience the largest brew festival in their history, and drinking fresh quality beer from a place that is over 2,000 miles away, is an experience that is difficult to put into words but truly was amazing. When people are coming up to you and asking what stores they can buy the beer at, and approaching Maine brewers at Icelandic bars (treating them like kings and queens) when they learn that they are here to bring variety to the beer market, you know that you have a market that is watering at the mouth for something new to touch their lips.

In an industry that is as highly regulated as beer, sometimes it is hard for brewers and owners to stay outside of the box with concepts other than recipes and marketing.

I would presume that there are other untapped locations out there that have the same desire. And accordingly, it’s important to discuss the multitude of questions that must be answered before U.S. beer touches the lips of consumers in the international market including: • How does the beer physically get there? • As it’s leaving who (read government agency) do we need to tell it’s leaving and/or what paperwork is involved? • Once it arrives at it’s destination who (I’m talking government agencies again here) needs to be informed it’s arrived? • What are the tax consequences, both in the United States and abroad? • Do you need relationships with distributors? • How is beer sold in the country – in select retail facilities or everywhere? • What does the beer scene currently look like in this area? Yes, these are the questions that accountants, custom brokers, attorneys, and others can help you through. My recommendation – create a good team. A team to which you can say, this is my vision, how can we make it happen and then you go about and make it happen. The taxes may seem steep, the import/export regulations may seem tedious, but if you can sell your beer for $20 a pint in a different market and make a larger profit, is it potentially worth the investment? Do the upfront costs make the investment worth the while if it can brand you the first (or only) of something in a market?

Second, think about your brand without the flashy images and the names of the beers. What do consumers remember about you? I hope the answer is you make great beer, but even so, why would someone choose your great beer over someone else’s? What makes you stand out in a market where everyone is trying to stand out? Maybe you make great beer, and that in and of itself is going to be sufficient, but to me the beer that people crave are the beers with a story, whether it’s personal to their life, or just a great story in general – the first beer from Idaho in Icelandic bars, the collaboration beer specially crafted for the local beer-scene’s powerhouse couple’s wedding. Those are beers with stories, and those are beers that will sell when the market is oversaturated and tapped out (pun intentional). Watching Maine beer touch the lips of beer enthusiasts in Iceland for the first time is a memory that I think will always give me butterflies. Explaining the concept of a brew festival in general to a large contingency of the Icelandic guests was simultaneously educational and insightful – many had never attended a brew fest. But being involved in a project where a dream became a reality – and resulted in the formation of international brewery relationships and collaborations that saw no geographic boarders was immensely satisfying. But all those things were only possible because someone literally thought outside the box – and made the box into exactly what they needed it to be.

Tawny Alvarez is an attorney at Verrill Dana.

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CRAFT BRAND AND MARKETING

JULY/AUGUST 2017

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