by Dr Will @ Iconic

Brand Differentiation in Craft Breweries ... Market Gap Analysis

Posted by Will Bralick on Sep 20, 2017 2:08:41 PM

Here is an interesting story ...

WBB_INSTAGRAM_LOGO_180x.jpgWellbeing Brewing Company of St. Louis, MO introduces non-alcoholic craft beer. Excuse me? Non-alcoholic?

Well, yes.

Their story is a fascinating exercise in brand differentiation.

As many craft brewers strive for the highest ABV possible ... with some brands reaching for the End of History (I'm looking at you, Brew Dog) with an ABV of 55% and delivered in the skins of roadkill (no, I am not kidding) ... Jeff Stevens of Wellbeing decided to go a different way.

In an increasingly crowded craft brewing market ... and increasingly stiff competition for tap handles and shelf space (irrespective of the band of brothers camaraderie of the brewhouses), survival - if not success - will be based on finding and exploiting gaps in the market. As Dennis Wehrmann of Franconia told me one day: "If your only appeal as a brewery is that you are new then you have to understand that you will only be new for a couple of months. Then what happens? The crowd that you attracted because you are new move on to the next new thing."

Stevens - who is a recovering alcoholic - noticed that there were few non-alcoholic options when out with friends when the buzz kill (so to speak) of ordering a cola was a non-starter. Having worked in beer/spirits marketing for years (admittedly an intersting career choice for a recovering alcoholic), he had discovered a "market gap."

Taking the alcohol out of beer without killing the taste is difficult and requires expensive, special-purpose equipment. The equipment and brand-building expense can only be justified by the ability to penetrate - or create - a market.  Part of the attraction of craft breweries is their ability to adjust their value proposition with great agility.

Now, I like a hoppy IPA as much as the next guy ... I brew my own at home. But how many can the market support? How different can you make it without becoming a caricature (15 different kinds of hops ... IBUs off the scale) rather than a craft?  Or what comes after ghost pepper stout - and who would ever want to find out?

Non-alcoholic beer is one way to build out brand recognition by expanding beyond the traditional confines of beer brewing.  

There are others.

m_sticker_supp.jpgSprecher Brewery of Glendale, Wisconsin not only brews exceptional beer, but also makes a widely recognized (and sold) Root Beer but also Cream Coda, Cherry Cola, Grape Soda, Orange Dream, Ginger Ale (they also make a hard ginger ale), Cherry-Cran, Lo-Cal Root Beer, and Puma Cola as well as specialty sodas during the year. When I toured their brewery, they said that one advantage to bottling soda was that the sodas do not sit in a fermenter for weeks allowing them to more rapidly turn their inventory and keep the rest of the equipment busy.

Redhorn Coffee House & Brewing Co. of Cedar Park, Texas has combined coffee roasting and beer brewing in one establishment - a combination that is not that rare (google "brewery roastery" sometime).  Many craft breweries are offering kombucha (fermented tea with low/no residual alcohol content) as well.

Economists like to point out that it is important to understand what your business really is ... based on the availability of substitutes. For example, are you in the automobile business or the transportation business?  Are you in the beer business or the craft beverage business?

The answer to that question will focus your attention not only on gaps in the market (properly understood) but also on how to differentiate your brand.

Want to discuss branding and differentiation?  Contact Iconic for more info.

Contact Iconic

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Topics: craft breweries, branding

Iconic BMS is dedicated to helping you make your brewery Iconic ... by providing the techniques and technology to improve your operational excellence.

Your brewery is focused, as it should be, on your beer and your customers.  The "business of the brewery" is that set of activities common to all businesses that make your organization effective and efficient.  Improvements in the "business of the brewery" help you improve by freeing resources to focus on what is most important - the Customer ... and the beer!

This blog will cover more than just techniques and technology, though.  Included will be all manner of information that takes a brewery from fantastic to Iconic.

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