Category Archives: advertising

Beer Displays and Brand Equity

You probably don’t notice it. It flies under the radar. The phenomenon of which I speak? The organization of the beer fridge in bottle shops.

To start this discussion, let’s examine the way wine is organized in most any given bottle shop or market. You walk in and you see shelf-talkers or hanging signs that all have a varietal on them. “Cabernet Sauvignon” is over here, “Pinot Noir” is over there, etc, etc, so on and so forth. Region and producer are most often ignored in favor of easy categorization.

The beer fridge however, tends to reveal a bit more variation. If you go to a supermarket, you’ll most often find a wall of two or three macrobrewer products (in many different packaging formats) that create the banner effect these companies covet in such retail outlets. What craft beer they carry tends to be organized by brewery. This of course applies only where they carry more than one beer from a given brewery.

Where we see a bit more variation is in bottle shops (those places whose focus is beer, wine and spirits). It is in these stores that the wine approach sometimes takes over the beer fridge. Rather than seeing all of a brewery’s product in one place, things get spread out by style. Tripels over here, IPA’s over there, Stouts all in one place, etc, etc, so on and so forth.

The question becomes, what to make of this? Having seen the brand-building power of social media in the craft beer world, I can’t help but worry a bit about the effect that organization by style may have. As far as wine goes, people tend to purchase by varietal, rather than by winemaker. In beer however, people still base their purchases heavily upon brewery.

If you enter a shop organized by style and want to buy a couple things from Ballast Point, you have to go to the IPA section to get Sculpin and the Porter section to get Black Marlin. Not good for the consumer, not good for the brewery. Obviously, if you’re looking to try a bunch of IPA, then its easier if the beer is organized by style, but I don’t believe such organization is good for craft brewers in the long term.

Organization by style completely destroys brand equity in the eyes and mind of the consumer. Rather than recognizing a bunch of beers from a given brewery, all the consumer sees is a bunch of Pale Ales. Breweries all have their own strengths and their own unique personalities. Many of them have used Social Media to let consumers get to know them, their philosophies and their personalities. They have spent a tremendous amount of time and resources defining themselves to the consumer.

Working in the beer industry, I find that more people ask what beers are available from “Brewery X” at a given time rather than what beers of a particular style are available. This is especially true at better beer bars, whose focus is a variety of style. You’re unlikely to find more than one Witbier or Porter on tap. However, customers consistently ask questions like, “What do you have from Stone?” or “What’s on tap from Russian River?” These and many other breweries have built a reputation for brewing excellent beer and customers will often drink whatever beer happens to be available from that brewery, regardless of style.

When bottle shops spread beer out by style, they degrade this brand equity and unknowingly move beer consumers into a frame of mind that mirrors wine consumers. Brand starts to matter less than style. Craft brewers and sellers of craft beer must be aware of this phenomenon and fight it. Craft brewers need to maintain brand equity. Sellers of craft beer must realize that they can leverage that equity to sell more beer. Put a brewery’s beer all in one place and you’ll sell more of that brewery’s beer. Do this for every brewery and the math does itself. You sell more beer and you create customers that are more loyal to a given brewery and a given bottle shop. It makes sense for everyone.

Photo Credit: Mike Beningo

The Goose Island Sale: Another Reason to Go Local

Like many others, I was none too pleased to hear of Anheuser-Busch/InBev’s purchase of Goose Island. However, I was less concerned with Goose Island’s motivations than I was with AB/InBev’s. As far as Goose Island goes, Greg and John Hall were understandably weary from running the day-to-day operations of a business for as long as they had. They wanted the company to grow and needed an infusion of capital. No problems there.

However, knowing what I know of AB/InBev’s sales strategies, I will likely stop buying what little Goose Island product I already did. My previous purchases consisted entirely of Bourbon County Stout, Sofie, Pere Jacques and Juliet so I won’t put much of a dent in the bottom line, but I will miss those products. What are the motivations behind my new shopping strategy? Well, as far as I can tell, AB/InBev bought Goose Island for two reasons. Firstly, Goose Island is an attractive, profitable commodity with lots of room for growth. It’s a great addition to AB/InBev’s portfolio. Secondly, AB/InBev seems to be trying to shore up its slipping market share by snatching up one of the companies that put a decent-sized dent into that market share in the Midwest.

In other words, if I buy a Goose Island product now, the profits go into AB/InBev’s coffers (to at least some degree). I cannot abide such an outcome. Go to the supermarket beer section and you’ll find out why. See that giant wall of Bud Light products? How many different formats do you count? Ten? Twelve? Fifteen? The “wall of product” sales strategy is despicable. Glass bottles, aluminum bottles, aluminum cans, all of various sizes, all in boxes and packs of different quantity, all limiting consumer choice (taking shelf space from competitors) by flooding the market with a load of different formats that all contain THE SAME PRODUCT! It makes me a little sick to my stomach.

But I’m not all that worried that I won’t buy Goose Island products anymore. Surely some in the Midwest, for whom Goose Island is a regular purchase, will experience greater difficulty. In my case though, I will simply continue to focus on the plethora of world-class, local products readily available for my consumption. I need only look a couple hours to South to San Diego to find Port Brewing/The Lost Abbey, Stone, Ballast Point, AleSmith, etc, etc, ad infinitum. One can likely make the same argument in the Midwest. There is no shortage of non-AB/InBev-owned breweries in the middle of the country turning out well-made, readily available craft beer.

My point, then, is simple. In the short term, the sale of Goose Island is really much ado about nothing. As long as those who care about where their money goes keep themselves educated, they can make informed purchases. If you don’t care about AB/InBev’s sales strategies, then you needn’t change a thing. If you do care about those sales strategies, and they make you a little queasy, then don’t buy beer from companies in which AB/InBev holds a stake.

In the long term, I suppose we’ll see whether AB/InBev tries to use Goose Island as a means to muscle smaller beer producers out of the market. If they do, I am confident that there will be a strong consumer pushback. There are few, if any, consumer bases that are better or more informed than the craft beer-drinking public. And their ranks are growing every day. People care more than ever about where their purchases are coming from and where their money is going because it’s easier to find out than ever before. The internet, and the ready availability of relatively reliable information is the great equalizer for smaller companies whose focus is quality and integrity. Let’s hope those companies continue to leverage the internet and social media to get their message out and keep the public well (and accurately) informed.

Photo Credit: AB/InBev Goose Mock-Up: Girl’s Guide to Beer

More Information. Smarter Consumers. Better Beer.

In this article, Budweiser is quoted as attempting to re-attract the under-30 crowd through the offer of free beer. They even have a catchy slogan: “Grab some Buds.” Perhaps this is meant to evoke a feeling of camaraderie in the consumer. It seems Bud wishes to create some sort of Pavlovian response which tells the drinker that it must be a good time with friends if one is drinking a Bud.

Foolish attempts at image marketing are something I’ve recently discussed at great length with close friends. Granted, these friends share a great number of my opinions, but they’re also very smart and are also members of the under-30 set (for the most part). We’ve come to an interesting consensus.

Those of us in the target age range have basically had the internet at our fingertips for our entire adult lives. Over that time, we have learned to use the internet as an informational resource. Further, we have learned to avoid the pitfalls of sourcing one’s information from the web. As a result of the availability of at least quasi-accurate information, our bullshit meters have gotten a lot more sensitive.

We look for products that appeal to us due to their quality and value, not due to the image their marketing projects. It is this writer’s opinion that this phenomenon stems largely from the fact that looking for such products is far easier than it used to be. I loathe the term “crowd-sourcing”, but it has allowed younger and older folk alike to find the opinions of like-minded people and base their purchasing decisions on those same opinions.

The availability of information also democratizes the marketplace to a higher degree. People need no longer be satisfied with the products thrust in front of them by ad men who work for the highest bidder. Easy information means it’s easy to find alternatives to mass-produced, mass-marketed, low-quality goods.

And so it is with beer. There are few industries that have used the internet more effectively to raise awareness than the craft beer industry. Just look at the Monster Energy fight with Rock Art Brewery a little while back. The beer geeks of the world rose up against a large corporation and beat them back with an e-stick. People are increasingly aware that there is something better than [insert industrial macro-lager here] because it is easier to tell them so and it is easier for them to find out.

Since more people know that there are vastly more flavorful and higher-value alternatives to products like Bud, Bud’s advertising has become increasingly more offensive to the intelligence of the under-30 consumer-with-disposable-income that they’re going after. When people are buying for taste and value, image matters less and less. While the ads are very clever and even enjoyable at times, they have become less effective at driving sales. Yet Budweiser continues to sell an image, rather than a product. And Budweiser market share continues to ebb, because people want to buy something from a producer that cares about what they make.

Nowhere is the difference more palpable than in beer. When one sips an artfully crafted beer such as Victory’s Prima Pils next to something like MGD, there is no contest. The former is clean, spicy, crackery and delightfully bitter. The latter tastes like carbonated urine (or at least what I imagine that would taste like). This comparison is precisely why I think Bud’s free beer “strategy” will ultimately fail.

Offering a free taste of something fundamentally untasty seems like a poor business decision to me. Just because you hand me stale bread for free doesn’t mean I’ll suddenly become hooked on it. I assume that is why Bud needed a snappy title such as “Grab some Buds” in order to sell the “event.” More and more people are finding out that, in terms of advertising and product quality, Bud and its ilk are the McDonald’s of beer. You drink it when you don’t care about flavor or quality. So here’s to Bud’s ad strategy continuing to fall flat on its face. Further, here’s to the internet providing easy self-education and thereby spreading greater consumer intelligence, higher-value products and allowing people to avoid a massive…