Friday, January 17, 2014

Diary: On finding your market, because that's what you have to do, or you die.

My diary entries are aimed at capturing moments of consciousness without my habit of editing, writing, and re-writing. These thoughts may later lead to a finished essay. Or not.

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Like many others, I tended in the past to look approvingly at statistics documenting craft beer growth, and always came away from it encouraged. During the past couple of years, I started to be more skeptical. It’s all good, but maybe not always.

It comes down to veering away from the simplistic habit of viewing growth as an all-in statistic. Yes, rising tides continue to lift all boats, although perhaps not as much as you’d assume, given that craft beer is sufficiently mature to be multi-faceted. Sierra Nevada’s $15 twelve-pack of Pale Ale at Target is one segment. The sours of Jolly Pumpkin are another. Brewpubs without packaging apart from growlers form yet another market-within-a-market.

In 2009, NABC went from being a brewpub to producing enough beer to distribute outside. We looked at the preferences of our in-house consumers, and at the market outside our walls, and borrowed enough money to produce certain beers at a certain level. Naturally, there were assumptions. Just as predictably, many proved to be inaccurate. We’ve done well with draft and bombers, although we could have done better, and perhaps as yet will.

There’s nothing unusual in any of this. I bring it up because it mentions in passing what has been the single most difficult part of it. The beer’s great. How do we sell more of it?

Owing to economies of scale, we cannot compete in big boxes and groceries on price point with $15 twelve-packs of Sierra Nevada.

Owing to their diffused interests and tendency to cater to market perceptions, wholesalers are less help than you might guess.

Owing to what I view as statistical anomalies inherent in the results gathered by ratings aggregators, we find it difficult to rely on “good” scores to dramatically increase demand and make us into the trader’s choice.

Owing to the constitutional inability of the majority of self-described beer geeks to simultaneously embrace economic localism, we cannot depend on them to be consistent customers, either. This is not intended as a slur, but merely an expression of reality. I recently explained it during a consideration of the book “Tastes of Paradise.”

What do we know about our customers? Well, we’re our own best customer when it comes to NABC beer served in two NABC on-premise locations.

We know that our beer still moves elsewhere, because it keeps going out the door. But to where?

We know that the industry standard for multi-taps and better beer bars is to rotate their beer choices constantly. That’s good, but it’s also bad. These sorts of establishments are the highest-profile exemplars of what the craft beer cognoscenti already know to be true, but craft beer cognoscenti make up a minority of a minority, as much as it pains them to hear it.

Look at the percentage of craft beer in the nationwide beer market. Look at which craft beers sell the most (a clue: this list includes Sam Adams). Can there be any other conclusion than beer geeks (whatever the definition) as a smaller than imagined bloc comprising a proportion, albeit influential, that isn’t big enough to support “everyone’s local”?

As far as NABC is concerned, there are no closed markets. Anyone and everyone are free to buy our beer, and we hope they do. However, day to day life with limited resources suggests that one must select targets with a game plan in mind. Lately, our plan has been to find the craft beer market that might eventually be known as the silent majority – people who are into craft beer, but not to the extent of those classifying themselves as beer geeks (or, as I’ve been calling them, the priestly caste).

Is this counter-intuitive? Perhaps, except that when other potential markets prove again and again to be unreachable or disinterested, isn’t it our obligation to think outside of self-limiting boxes? If we don’t, won’t we risk failure?

For instance, consider Match Lounge in Jeffersonville. Community Dark has been on tap since it opened. Cluckers has NABC draft, too. Down the street, Kingfish has been pouring NABC for more than two years, and it goes great with raw oysters.

Across the street from Kingfish, there’s the Jeffersonville branch of Bristol Bar & Grill, and Beak’s Best has been on tap for four years running. It’s not a stretch to suggest that with the possible exception of Match, these establishments cater to few militant beer aficionados; after all, the overall choice of beer at each is far more limited than the typical multi-tap and thus not attractive to those craving the next big thing. And yet, these establishments continue selling through kegs of our beer. That’s encouraging, isn’t it?

Like I said, there are no closed markets – well, apart from the ones that close themselves. Match, Cluckers, Kingfish and Bristol are selling fine local beer to people who appreciate it. They’re the next 10%, aren’t they?

It happens that the fine local beer they’re drinking is produced by us, and their loyalty in supporting our flagships makes it possible for us to brew seasonals and specialties. I’m laboring mightily to find anything wrong with this scenario. Isn’t it standard in the business to reward their day in, day out loyalty with better treatment when those seasonals and specialties go out the door?

All they need do is ask … and yet they seldom do. Maybe it’s because folks buy what the beers they’re selling now. Folks are loyal to these places, and loyal to a beer pouring there. We’re loyal to the places pouring these – our – beers on a daily basis. And, for those asking me where they might go for wider beer selections, I never fail to point them the right way, whether our beers are available there or are not.

Sounds like the American Dream to me. So why am I an outlaw for saying it aloud?

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