Wednesday, October 13, 2010

Wednesday Weekly: Locavore in a Kentuckiana glass.

Two weeks ago, I began musing in the general direction of locally-based marketing action by metropolitan Louisville area breweries.

It is an understatement to note that my thoughts have engendered controversy, and seeing as generating discussion always is my intention, I cannot deny a measure of contentment with this reaction. Unfortunately, a slew of misconceptions have accompanied the ensuing chat.

One is that my interest in positive reinforcement for local brewing constitutes a reaction “against” recent developments. But this is mistaken, and paranoia is not an argument. These thoughts of mine did not spring forth overnight. They have been gestating for a very long time, ever since two developments combined in a dialectical fashion to give me pause.

One of these is my ongoing, personal involvement with downtown New Albany revitalization efforts, during the course of which I have found myself exposed to a world of ideas loosely configured as New Urbanism. Running parallel to such tenets is the “buy local” movement, which as a small businessman strikes me as the perfect antidote to the high cost of low price (Wal-Mart) and the subsequent outsourcing of America. Craft brewers have been saying this for many years: Think globally, drink locally.

The second is NABC’s brewery expansion project, primarily as viewed from the context of craft beer’s national explosion. We have invested heavily in the production side of craft beer. At the same time, in spite of this being the “golden age” of craft beer, its percentage of market penetration remains very small, albeit it healthily growing. How do we make the pie appreciably bigger, grow faster, and reach those who haven’t yet experienced craft beer?

The answer for me as a brewery owner in metropolitan Louisville is to apply “locavore” tenets to craft beer and craft brewing, widen efforts to cultivate the grassroots where we all live and work, examine the added value of local craft brewing, and create an appellation of origin that summarizes this value, combining these ideas and ideals into an actionable program for telling our story to people who may not have heard it, while reaffirming what makes us special for those who have.

Contrary to rumor, I have no interest in protectionism or negative campaigning. My aim is to inventory Louisville area craft brewing and cull from it a positive explanation of value.


An objection I’ve heard repeated more than once is that because we do not grow cereal grains and hops in metropolitan Louisville area, “locavore” principles cannot possibly apply to craft brewing here. I used to feel the same way, but the fact of the matter is that brewing and agriculture are very different practices.

Agriculture systematizes the growth of foodstuffs, from which value is created. To brew is to add further value to them by fermenting them. Fermentation is a natural process, but significantly, beer does not brew itself. Without man's active intervention to plan and guide the activity, there would not be beer as we know it today.

Nature’s raw materials must be assembled, modified and finished according to the mind, and the hand, of man. As such, the process of brewing adds value to natural ingredients by transforming them into a finished product.

This added value can be measured tangibly, albeit simplistically, in a somewhat open market economy. Simply stated, the finished product sells for a price higher than the combined cost of natural materials and affiliated production costs – utilities, labor and the like.

However, the calculation of this added value also embraces a wide range of intangibles. These intangible values are harder to measure, but unlike purely objective technical standards of quality, they can be altered and enhanced in the mind of the consumer through instruction.

Or, as a consultant might ask: “Given a set of tangible product features, what is the price premium a consumer is willing to pay for my brand compared to a competitor's brand or an unbranded product?”

As an answer: Because the product is brewed in Kentuckiana.

Intangibles are consumer perceptions attached both to individual brands and entire classes of product. Consumers perceive value in craft beer as a whole; in craft beers brewed in Michigan; in craft beers brewed by Founders of Grand Rapids (to name just one); in favored craft beer styles (say, IPA); and in specifically favored craft beers, perhaps Founders Centennial.

Defining the way these circles intersect, and placing emphasis on certain of the intangibles, are two ways of illustrating added value. All of it belongs to the realm of consumer information, telling the story of beer and brewing. Ideally, at an individual brewery, telling this story is the job of sales and marketing, working alongside the brewery team.

Groupings of businesses can achieve an economy of marketing scale, enhance intangibles and add value by telling this story in a collective way, according to pre-determined criteria of membership.

The Brewers Association does it for American craft breweries – not craft breweries in Canada, and only for those that qualify for inclusion by standards of ownership and production.

The Brewers of Indiana Guild does it for those located in the state of Indiana, not Wyoming or Singapore.

In Germany, only those breweries in and around Cologne can sell ale called Kolsch, and one elsewhere, one looks for the Trappist symbol on the label to ensure that the beer is certified as authentic. A monastery can achieve certification, but only by compliance with the rules of the game.

Historically, appellations of origin always have mattered in positive terms of local ownership and local marketing, even if admittedly they’re occasionally misused by protectionists. If the city of Plzen had it to do over, Pilsner would be a term exclusive to the area, and never would have been permitted to describe watery imitators brewed in St. Louis or Nairobi.

If one truly believes that one's locale is special, then obviously "special" can be defined and delineated. These definitions and delineations reflect principles that add further tiers of value to locally brewed craft beer.

Membership is free to those who meet the criteria, which must be sufficiently sensible in terms of eligibility to make the exercise worth pursuing. It does not upset me that NABC cannot belong to the Michigan Brewers Guild, because we cannot meet the criteria for membership (brewing in Michigan), but you can bet that belonging to the guild has benefits for Michigan craft brewers, and we in Kentuckiana are free to emulate the MBG on our own terms … or, naturally, not at all.

I believe it would be a mistake not to explore the advantages of such a grouping and such a common marketing exercise.


Yes, it is possible to pick a thousand nits, and as noted, my overall purpose is to incite thought. In the end, I believe it is perfectly acceptable, and in the economic climate highly advisable, for Kentuckiana breweries to be unified, to define the facets that make them special, and to positively brand and market themselves accordingly. We creatively produce the freshest local craft beer, period, because we brew our beer right here.


Nothing in any of this, anywhere in this, suggests excluding beers from elsewhere. This is not either-or. It is an argument in favor of one grouping, existing alongside other arguments for other groupings. Most, even all, might be valid simultaneously. A Kolsch brewed in Cologne, an ale brewed by Trappists, and Genuine Kentuckiana; choose the one that fits your needs.

The NABC Pizzeria & Public House will continue to sell wonderful beers from America and the world, with draft taps designated as Michigan Brewers Guild, and Brewers of Indiana Guild, and Monsters of Craft. All these beers exist for a certain time and place, as do beers brewed locally, right here in metropolitan Louisville. All fit the good beer mosaic, and I merely suggest that we, ourselves, be pro-active about dictating the terms of the exact fit.

Nothing here refers to individual personalities, or to attacks on them, or to anything at all beyond a rational consideration of options that pertain to the craft brewing business and the art of craft brewing, both in localized contexts.

It is principle, not personality.

It is the primacy of ideas and ideals as the perhaps the finest marketing strategy yet devised.

That's all it is, and that's enough for me.

1 comment:

Robert Lutz said...

Good clarification, Roger. I just finished a growler of Founders Centennial, but probably 75-80% of the beer I buy is local -- and with Hoptimus, She-Devil, BBC APA etc. available, why not?