DECEMBER 2020 • VOL 4 • ISSUE 10
The Voice of Craft Brands
Your time is now The Brewers Association’s Chief Economist Bart Watson on why marketing and branding are more important than ever
Cypress Brewing: Charles Backmann, Bill Lutz and Jason Kijowski
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VOL. 4 : ISSUE 10 : DECEMBER 2020
YOUR TIME IS NOW
The Brewers Association’s Chief Economist Bart Watson on why marketing and branding are more important than ever
IN EVERY ISSUE: 3 EDITOR’S NOTE Learning to forget 2020 4 INSIGHTS Industry News
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THE YEAR OF LIVING ADAMANTLY 7 things every business owner should stop doing in 2021
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CLEARING A PATH Gaining strategic clarity when your crystal ball is cloudy
editor’s note
Learning to forget 2020
O
Okay, it has been a year. You know, in fact, this past year has been, well, I am constrained by decency to say what I really want to say. On both a professional and personal level, 2020 has been one long teaching moment. Sure, it might be the longest minute in the history of minutes, but the lessons learned have been duly noted. I laughed. I cried. I winced. I screamed. I laughed some more. And with each emotion, each second of trying to decipher what the next moment might bring, I learned that no matter what happens, I can stand my ground. That meant something. If you think about it, you can say the same thing. Here we are on the cusp of another new adventure. A new year. New goals. New promises made. New promises broken. New ways of figuring out how to do what we do. The biggest lesson? Is that what you want to know? The biggest lesson(s) I learned are as follows: > I really don’t know everything > No day is ever the same > Don’t take anything for granted > Time either flies by or drags, depending on how you approach the situation > There’s nothing you can’t do if you put your mind to it > Embrace every memory > Follow the science > Seek the truth > Be a leader, not a follower (that’s a big one right there) > Lies are the enemy of faith > Home-cooked meals are really cool > Binge watching rules > Classic sitcoms are the best (“Seinfeld,” “Everybody Loves Raymond,” “King of Queens,” “The Office”…) > I really miss concerts > I really don’t miss the crowds > Dogs really are man’s best friend > Kids are a blessing > Alone time is a salvation > Morning and evenings are equally best for working out > Long walks are a spiritual gift
Michael J. Pallerino
Here we are on the cusp of another new adventure. A new year. New goals. New promises made. New promises broken. New ways of figuring out how to do what we do.
As for you, the craft spirit world, there may not be a more spirited, committed, passionate bunch of people. Embracing the New Normal meant finding innovative ways to keep things moving forward. Curbside pickups. New partnerships. Pivots into new and exciting avenues (hand sanitizer anyone?). Thank you for allowing us to be a part of your journey in a year that none of us will forget anytime soon. Here’s to what 2021 holds for each of us. Okay, I said my peace about you 2020, now move along.
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insights
Helping hands Brewer Association’s mentorship program to foster emerging craft beer professionals Workforce diversity. Leadership. Ownership. These are some of the qualities that the Mentorship Program by the Brewers Association (BA) is offering to today’s craft brewers. The 12-week mentorship program will pair aspiring craft brewing professionals with a group of experienced industry leaders by offering assistance and advocacy in key areas of interest. Those areas include technical brewing, serving and tasting beer, guest experience, brewery safety, event planning, human resources, management, marketing, sales and distribution, and finance. Thanks to the program, participants will develop invaluable relationships within the craft brewing industry, gain access to the
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Brewers Association’s library of resources, and receive hands-on assistance with employment search and resume review. Participants who successfully complete the program also will be eligible for scholarship support for their next steps in industry education and professional development. Applications for mentors currently are being accepted (and will be accepted) on a rolling basis throughout the year. Applications for the inaugural cohort of program participants are now open. The deadline for participant applications is Feb. 28, 2021. For more information, visit www.brewersassociation.org.
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Everybody in
Book Rec
Report shows how customers interact with brands
Building a StoryBrand:
Getting your customers to interact digitally with your brand is key in the engagement process. Not surprisingly, younger generations participated more often than older ones. According to Deloitte Insights’ “Global Marketing Trends 2021” report, 73% of people ages 18-25 interacted with brands online. Participation drops off to 64% for ages 26-45, and only 42% for those over 46. So, how are they interacting? Here’s a look:
Clarify Your Message So Customers Will Listen By Donald Miller
Developed and posted content about a brand
Participated in online conversations
14% 32%
Wrote online reviews
28%
15%
Provided direct input on the design of a product or service
21% Gave online advice to others on specific products or services
They said it... “ A person’s world does not revolve around a brand’s product, service or website… People are only ‘users’ and ‘consumers’ for small portions of the day.” — Peter Hartzbech, CEO of iMotions, on why connection, convenience and value will determine stickiness of behavior changes “ The world of social commerce is booming, and we can only expect to continue to see further investment, particularly in social and livestream shopping apps.” — Lucas Tieleman, executive VP of product at Bazaarvoice, on why e-commerce continues to be a way of life for brands “ I look forward to more restaurants offering complete meals to go, with plating instructions and beverage pairings so the dine-in experience can be recreated at home.” — Blogger Takera Gholson with Flights and Foods on a pandemic-era innovation that may stick after the pandemic ends
Donald Miller’s StoryBrand process is a proven solution to the struggle business leaders face when discussing their businesses. Miller’s seven proven elements of powerful stories will dramatically improve the way you connect with your customers and drastically grow your business. His insights will reveal the secret for helping your customers understand the compelling benefits of using your products, ideas or services. Building a StoryBrand accomplishes this by teaching listeners the seven universal story points all humans respond to, the real reason customers make purchases, how to simplify a brand message so people understand it, and how to create the most effective messaging for websites, brochures, and social media. Whether you’re the marketing director of a multibillion-dollar company or the owner of a craft brewery, Building a StoryBrand will forever transform the way you talk about who you are, what you do and the unique value you bring to your customers.
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The Voice of Craft Brands
Your time is now The Brewers Association’s Chief Economist Bart Watson on why marketing and branding are more important than ever
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DECEMBER 2020
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By Thomas Glare
Bart Watson’s findings on recent craft business are stirring up the market of microbreweries. How shall you compete with the global giants? Which aspects of branding should you focus on? Should you venture out beyond local fairs? How can you advertise cheaply? With more beer consumers being conscious of their purchases, Watson, the Brewers Association’s Chief Economist, says the competition is soaring. So, how do you address the changing demands of today’s customers? You can start by adding some interesting moves by giving presents for some actions like sending photos for a specific topic or mentioning your product on social channels with posts, etc. Or, you could try partnering with some production companies and offer presents for buying their product, i.e., “buy some food and get a bottle of beer for free.” It works like a welcome bonus in the online casino and attracts users or customers to your brand. Here are five marketing strategies that your craft brand can use to cut a path in the new year:
No. 1 — Local events are your field Breweries must compete with people who invite consumers to their breweries. How can you manage to promote your beer with comparatively lesser resources? Does your club host beer-drinking events? Why not advertise your product there? You can sponsor a local sports club that is popular, and offer discounts and merchandise to those who attend the games. Does your brand have a seasonal or limited release policy? Don’t wait. Approach the organizers for a booth or about sponsoring any of the attractions.
No. 2 — Be honest about your craft branding Do you know why Budweiser achieved the No. 1 ranking among top beer brands in 2019? It is because they have been open about the consistency of their beer and always maintained a unique air. But then, craft beer has taken up almost as much as 14% of the beer industry. How did this happen? First, the craft market focused on locally-sourced ingredients. Don’t be afraid to tell your audience about your brewery. Be vocal about how committed you are to quality and promise your consumers the local taste. That’s why they have chosen your ale over some multinational conglomerate.
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Brewers Association department head
No. 3 — Find a partner Looking for a partner? Here’s a hint: While beer customers and casino fans might seem widely different in their tastes, the trend is to bring them together and inspire sales. Mobile casino games are on the rise as gamblers are rejecting glam attires and luxurious casinos in favor of mobile gambling. They continue to look for something they can enjoy in the comfort of their own homes. After all, who wouldn’t like to sip on a refreshing beer while earning free 20 pounds in blackjack? You can place the promo codes for bonuses on your beer bottles.
No. 4 — Social media networking is more useful than you think
Don’t be afraid to tell your audience about your brewery. Be vocal about how committed you are to quality and promise your consumers the local taste.
Social media is the least expensive, yet most accessible platform for your craft brand marketing. By reaching out to your target audience on social media, you can easily get the hang of the latest trends in consumer demands and technology. Be as innovative as you can with your brand’s social media promotion. Don’t just post the latest beer varieties or new sales hours, tell them a story. Tell them how your brand
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emerged and succeeded in reaching the place where you are.
No. 5 — Your customers are your loyal friends
Honestly speaking, every brand thrives on the goodwill of its consumers. However, craft business operations are even more dependent on a loyal fanbase. Why? The reason is that local breweries do not have the necessary capital to invest in print media and telemarketing. Word-of-mouth is a consistent and proven method to increase your sales. Millennials are more eager to visit taprooms to get the experience of drinking craft beer. Here’s where you will capitalize on that. Engage with these enthusiastic beer-lovers who are interested in your craft. The chances are high that your customer will be well-versed in beer making. Hence, you should communicate with them, honestly and openly. Following these craft brewery marketing tips will help you stay relevant and put forward a unique label to quench the customers’ thirst. So, what are you waiting for? Advertise your craft beer brand in the local fair and let us know how you fared.
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Brewers Association department head
More from Bart 5 craft spirit areas to watch in 2021 Brewers Association Chief Economist Bart Watson dishes on five areas craft spirit should keep an eye on in 2021. For more insights from Watson, as well as news across the industry, visit www.brewersassociation.org.
Growth Models are showing growth of 6% to 7% over 2020, but with production levels that will fall below 2019. That means it will take craft until 2022 to recover to its previous levels, and longer to fully return to the growth trend it had been following of 3% to 4% per year.
On-Premise The on-premise has borne the brunt of the pandemic’s market disruptions. According to analysis from Nielsen CGA data, around one-fifth of on-premise consumers are waiting for a vaccine or treatment before they return to the on-premise. That means there will not be any significant recovery until late Q2 at the earliest.
Openings Openings had been declining for around a year before the pandemic hit. As much as two-thirds of it is related to that longer-term trend rather than the impact of COVID-19. Next year may see a further decline, as fewer breweries plan to enter the pipeline and other structural factors such as lending make it more difficult to do so until the pandemic passes.
Closings Next year will see closing numbers match the current market reality more closely, as closings rise sharply. Market conditions returning to normal may accelerate closings, both as breweries take stock of the hole COVID-19 has made in their finances, and as other players, such as landlords, end extensions or forgiveness on rent.
Demographics Craft has been growing its consumer base steadily over the past decade. Nielsen Harris data shows that the percentage of the 21 and over-plus population who drink craft has risen from 35% in 2015 to 44% in 2020. These demographics are likely to continue improving in 2021—and for the next several years—as an aging millennial population stays in or moves into the core craft age range.
E-Commerce If on-premise was the loser of 2020, e-commerce was the winner. Prior to the pandemic, estimates were that 2% or less of beverage alcohol volume flowed through e-commerce. Beer was a small portion of that. E-commerce sales for both beer and all beverage alcohol remain far beyond where they were a year ago. Thomas Glare is renowned for his marketing strategies among the best of the brands. He shares his tips and suggestions through blogs. Also, he attends business seminars to provide valuable information on how to market a business right. He believes in helping people to grow and live. People do trust his tips and get great results.
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business
By Ed Hess
The Year of Living Adamantly 7 things every business owner should stop doing in 2021
“The times they are a changin’”… And so is the nature of our work. As our familiar world crumbles around us (thanks, COVID-19), and technology keeps snapping up more of the tasks humans do, we’ll need a whole new set of skills. That means business owners have some bad habits to break. If you’re looking for a good resolution for 2021, don’t focus on new things to start doing. Instead, vow to quit some old, counterproductive leadership behaviors that don’t work in today’s world. The new world we’re entering has flipped everything upside down. The skills, mindsets and ways of being that were once prized and sought after have actually become liabilities. And yet too many leaders can’t seem to get with the new program.
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It’s like we have an Industrial Revolution hangover. On some level, we know command and control doesn’t work anymore. We know we can’t boss people into being engaged, innovative, and collaborative. We know fear doesn’t motivate. And yet we just can’t help ourselves from falling into old, counterproductive leadership habits. We must all be able to continuously learn, unlearn, and relearn by adapting to the reality of the world as it evolves. This is not easy, considering our inherent ego-driven need to defend what we think we know. It requires a whole new way of being and a whole new way of working— which, in turn, requires a whole new way of leading.
judgment wins, regardless of rank, compensation or power.
Here are seven bad leadership behaviors to quit doing in 2021:
No. 4 — Quit pushing so hard. In less complex times, hard-driving, Type A leaders thrived. Needed results were clear, and leaders could push (themselves and others) until they were achieved. In a global economy rife with uncertainty and ambiguity, nothing is clear. Rather than driving results, leaders must slow down and foster engagement so people can work together to find solutions. This means leaders must exist in a state of inner peace—and help employees to do the same.
No. 1 — Quit telling people what to do. Command and control works well when you’re running a factory. In that setting, you expect people to be cogs—to do rather than to think, problem-solve, and connect. In the Digital Age, you’ll need to lead people whose jobs require innovation, creativity and emotional engagement. You cannot coerce or command people to do these things. Instead, you must create the conditions that enable them. No. 2 — Quit scaring them into submission. Fear is an effective motivator when you need people to mindlessly comply. The problem is that if employees are afraid of negative consequences (from verbal abuse to being fired), they won’t take risks, suggest new ideas, report problems, critique others’ thinking. A brand that tries to motivate by fear can’t become an “idea meritocracy” where the best data-driven idea or
No. 3 — Quit thinking you’re so smart. Pre-internet, the more you knew, the more valuable you were. In school, the higher your grades and fewer your mistakes, the “smarter” you were. That is old-school “smart,” and it is actually a liability in an age that requires constant learning, unlearning, and relearning. You’ll never be able to store as much information in your head as much as a computer, and you will not have fast, perfect recall like a computer. Leaders and employees alike must be good at not knowing rather than knowing. That takes humility, which is the opposite of a big ego.
No. 5 — Quit making snap decisions. In the past, when the leader’s word was law, being able to make decisions quickly and enforce them was a strength. Not anymore. The best leaders are able to slow down, engage with others, and really listen with a nonjudgmental, open mind. They know that the kinds of high-level conversations that need to happen take time to unfold. Innovation and exploring the new is a process where the answers change as you learn.
No. 6 — Quit pitting employees against each other. Back when companies were military-style hierarchies, it made sense to compete for the boss’s favor. Leaders often encouraged such internal competition because it drove individuals to compete against each other. But now in the Digital Age, high-functioning teams should trump individualism. What you want is collaboration in an “idea meritocracy” setting. Leaders must create environments that result in caring, trusting teams where employees are naturally motivated to work together and help each other. No. 7 — Quit discouraging messy emotions. Back when employees functioned as human machines, emotions were unnecessary. In fact, they were liabilities. Employers expected people to leave their humanity at the door. Today, the opposite is true. Positive emotions are at the heart of learning, connecting, collaborating, and creating. They’re the building blocks of caring, trusting relationships. Great leaders will have to “get” and value the power of emotions. And they’ll need to make a point of showing employees they see and value them as unique human beings. In the Digital Age, our human uniqueness will be highly dependent on our emotional capabilities and how we manage our emotions. It will not be “all business.” It will be all about people and enabling the highest levels of performance in concert with technology. Becoming a Hyper-Learner isn’t easy, but it is doable. It’s all about unlearning skills and behaviors that no longer serve us. I think most will agree that creating workplaces where people can thrive, grow, and become their best selves is worth the effort.
Edward D. Hess is professor of business administration, Batten Fellow and Batten Executive-in-Residence at the Darden School of Business and author of “Hyper-Learning: How to Adapt to the Speed of Change.” His work has appeared in more than 400 global media outlets, including Fortune, Fast Company, WIRED, Forbes, Inc., Huffington Post, Washington Post, Business Week, among others. For more information, visit www.edhess.org.
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strategy
By Jill J. Johnson
Clearing a path Gaining strategic clarity when your crystal ball is cloudy
Today’s business climate continues to be exceptionally complex and volatile. Even as we move into a “new normal,” we no longer can take for granted that shifting trends will be visible or customer needs will be stable. Now is the time to clarify what’s required to ensure your future success. Take advantage of any emerging opportunities and insights you have gained from your strategic triage efforts. Reassess your strategic investments in all of the assets of your enterprise. Most importantly, shift your focus from a reactive planning mode to one that takes a more proactive planning approach that pivots around your customers and those you want to bring into your sales cycle.
Your Shifting Planning Focus Many leaders currently are experiencing “planning fatigue.” The
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intensity of operating in a continual planning mode has been stressful and has taken its toll on many leaders. Some say it’s impossible to keep engaging in strategic planning every three months. They’re exhausted. You have strategic objectives. These are the overarching goals you’re trying to achieve. The time horizon most companies use for achieving strategic objectives typically is three years. The reality is you’re not actually engaging in strategic planning. Rather, you’re engaging in evaluating your strategic execution, which focuses on
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assessing the effectiveness of your tactical implementation. While the circumstances of the past year have required many to engage in a major reassessment, as your situation has stabilized much of the activity going forward is on reevaluating the tactics by which you’ll achieve your desired or readjusted longer-term strategic objectives. Just recognize that your planning horizon has shifted. We’re often more focused now on short-term tactical execution that builds profitability and stability. By recognizing that you can continually adjust your
tactics to achieve your strategic goals, some of the planning pressure can be removed.
Evaluating Your Tactical Effectiveness Establish regular meetings, typically on a weekly basis, to evaluate the data and information you are tracking. This allows you to review and discuss which tactics are working and which are not. Engaging in micro adjustments to some tactics allows for more rapid assessment of what works best to meet your customer needs. This can help maintain team morale as new ideas are brought forward. By engaging with your team and involving them in discussing the evolving situation, you are building both their strategic thinking and their critical thinking skills. Both skill sets will be exceptionally valuable as you strengthen your strategic effectiveness. You can continually implement new ideas and identify pilot projects that will enable you to test new opportunities without making a major investment. This enables you to tweak new ideas so that you can find the best match for your enterprise and your customers. Evaluate your streamlining efforts. What has worked well and what has limited your ability to operate efficiently while meeting your customer needs? Re-examine your budget and spending patterns to identify any expenses you may have cut too deeply.
Reconsider Your Strategic Investments Your company has many assets. These include your staff, your financial reserves and your product inventory or intellectual property. Review each of these to identify how you can better
leverage them for revenue or profitability in light of your revised strategic assumptions. Can you use the knowledge you have gained in the past year to redeploy your assets in a more cost-effective or profitable manner? Have new opportunities emerged that you have not acted on yet? If you need additional resources to take advantage of these opportunities, identify the strategic investments you need to make. These can include investing in the education of your staff, buying new equipment or diverting current expenses into new opportunities that will provide you with a better return on your investment.
future. By drilling down into who is buying from you and why, you have a new foundation of insight to use going forward. Get close to your customer. Understand how much their decision criteria may have shifted during the past year. Are you prepared with your marketing messages, sales team, and social media strategies to match these criteria and build (or rebuild) relationships with your customers? Understanding exactly where your customer’s mindset is today provides you with new insight on what it will take to remain competitive and drive revenue consistent with your strategic vision.
By recognizing that you can continually adjust your tactics to achieve your strategic goals, some of the planning pressure can be removed. If you need additional team members but are not ready to invest in full-time positions, identify opportunities to expand your relationships with vendors who can fill the gap. Or find subcontractors or contract staffing firms who can provide you with the flexibility you need as you make a spending transition.
Get Back to Basics Focus on your customer and the activities that drive revenue. Identify the key information you’re going to track and the data sets that will help you identify the micro trends that have emerged in the last six months which may set a new course for your
Gain emerging insights from your vendors about what others in your sector are successfully implementing. Can you glean any new ideas to incorporate into your enterprise or help to better meet your customer needs? Few strategic approaches are ever perfectly executed. The complex marketplace we operate within ensures that some adjustments will be required. By realistically assessing the marketplace and evolving trends, you exponentially expand your potential for long-term strategic success. Just continue to adjust your tactical execution and deepen your value to those you serve.
Jill J. Johnson, MBA, is founder and President of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than $4 billion worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information, visit www.jcs-usa.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