Critical Drinking

Critical Drinking — The Craft Brewers Conference + Getting Weird

This week at the Craft Brewers Conference in Portland has been revelatory. First, this town seems to be changing faster than I can keep up with year after year. I don’t think there’s a city on the planet with a more diverse, passionate, and focused beer culture than Portland. And I feel that way every time I visit, even as it re-invents itself year over year. Also, there are no cabs — but who cares when you can walk to a dozen breweries over a couple miles in perfect 75 degree sunshine. More on that experience later. We’re going to talk about the business side of things for a minute. 

Inside the conference center, over 11,000 craft brewing professionals gathered to share knowledge and exhibit new technologies. I sat through a series of seminars, from experimental hop tastings to “How to go Pro” which felt like my uncle showing me how to tear down a car engine for the first time. In other words, my head is still spinning. Opening a brewery is complicated. But you knew that. 

Amidst all the seminars and conversations, a few themes stood out as being especially prescient. The business of craft beer is getting more complicated and critical than ever as it strives for its stated goal of 20% share by 2020. And with a goal like that in mind, some aspects of the business are transitioning from its artisanal roots to a more competitive and capitalized mode of doing business. The way craft beer is made, sold, and consumed now has 30+ years of experience behind it, and it has a ramp ahead that no one can see the end of. So how are we doing? Here are three indicators, for better and worse, and a little bit about how the business of beer is getting weirder than ever.

 

It used to be that the geekiest consumers were to blame for the rise of Imperial Stouts and other high abv beers at the expense of a more diverse appreciation of beer styles. The ratings tell the story, where double IPAs and Imperial anything consistently makes up the top ten lists on RateBeer and Beer Advocate. But now we’re learning that the bias toward high ABV is more than just a misperception of quality — it’s also a bias in the way that beer is sold and shared with consumers. 

Ray Daniels, founder of the Cicerone program laid out some signifiant statistical deviations from the Certified Beer Server exams that show what beer servers are more and less knowledgable about. It turns out, servers consistently test higher in their knowledge of high abv styles, and test lower in styles like golden ales, wheat ales, and lagers by a meaningful margin. Daniels was reluctant to ponder the cause and affect of such a difference, but it struck me as obvious — young people make up the majority of test takers at the entry level (Certified Beer Server), and those people tend to be recently passionate about the industry, focusing their palates and their brains on new styles, extreme or rare beers, and finding it easier to sell these trendy styles at higher margins (with higher resulting tips). It’s likely beer geeks talking and selling to other beer geeks, using a very narrow, however passionate, set of experiences, and leaving everything else out. 

The implications are more concerning for me. If these more extreme styles are the ones the new generation is most knowledgeable about, and are most effective at selling, then the service experience is perhaps increasingly tone deaf to the beers that the vast majority of Americans drink. Lagers, wheat ales, and pale ales (which tested remarkably low as well) are the beers that most Americans drink because they’re refreshing and taste good. But if they’re not learning about what they’re drinking, and the servers aren’t able to teach them about what they’re drinking, it’s a huge missed opportunity to create a meaningful bond in the craft beer service experience. 

And perhaps worse, servers are recommending beers based on their own niche appreciations, and lacking the empathy for the customer that a more diverse knowledge set could provide. Anyone can sell a bourbon barrel aged stout using a few buzzwords. It takes a real pro to properly present a pale lager in the right context and impact a customer’s day with new knowledge, and an appreciation for subtlety. And that’s probably who should be passing the Cicerone Exam. 

 

In the run-up to CBC, John Barley and I worked on some talking points for a panel discussion he was on with Tommy Gannon of Sierra Nevada and Jeff Billingsley of Deschutes on flagship brands, and how they are, or are not, relevant to today’s audience. 

Deschutes is opening one state after another in the last couple years, and they’re quickly running in to a flagship vs master brand challenge — many drinkers know Mirror Pond and Black Butte "however they choose to pronounce it,” but they don’t seem to associate them with Deschutes. New Belgium faced this challenge years ago when everyone outside their home market thought the brewery was called Fat Tire. In response, Deschutes is redesigning its entire packaging line to place the proper emphasis on the brewery name and secondary branding. But an even bigger challenge awaits as the market adapts around them. In the last year, they’ve seen their Fresh Squeezed IPA become the best seller in 20 of the 28 states they’re in, rather than their historical flagships. “That was a shock to our system,” said Billingsley. 

Sierra Nevada continues to reluctantly diversify their portfolio, watching to see which beers increase their share incrementally, and which beers cannibalize their sales of Pale Ale. When they introduced Torpedo, an “extra IPA”, they saw both incremental sales and a down-tick in pale ale as an overall percentage of their sales. The market proved that it will move in the direction of a more hoppy offering, all things being equal. In response, they released Pale Ale in cans, providing more occasions, and better price points than Torpedo, which helped lift both brands. Such is the double-edged sword of a flagship brand you can’t afford to let go — at the level of Sierra Nevada, it’s not always effective to brew what you want and hope the market will accept it. Gannon described the mental and operational shift the company made recently: “We made a big switch from being a production-driven brewery to being a sales and market-driven brewery.” 

Solemn Oath has experimented with a “north star” approach, wherein the master brand becomes known for a direction or an ethos rather than becoming known for a specific beer or two. This enables the brewery to make a wide variety of beers that loyalists are more comfortable taking a small purchase risk on because they understand the type of profiles the brewery tends to favor. Over time, Solemn Oath brings back favorites, about every 3-6 months, and gradually the portfolio settles in to a more predictable set of styles. And for their larger beers, which can put a consumer on their heels when considering a $10-12 bomber purchase, they build in stories that connect both the brand and its flavors. “If someone liked our Kidnapped by Vikings, then they have a pretty good idea that they’ll like Ravaged by Vikings and Death by Viking when they come out. We’re not starting from scratch with every beer and every brand.” Getting trapped into specific styles or having to operationally support a specific brand or two can be the slow death of young brewery as hundreds of new breweries start up behind you every year and chip away at your uniqueness. 

 

As mid-size and larger craft brewers continue to bring on veteran sales and marketing folks from within and without the beer industry, a troubling trend is emerging in the way craft beer is sold and marketed — and a lot of that has to do with the way we talk about beer and our customers.

“Product.” "Liquid.” “Share of throat.” These are the ways that brand and marketing teams talk about beer when they come from other industries that make widgets and want to move units. And to some extent, it's how any sales channel talks about their product to one another in a sort of short hand. It’s jargon. And it’s a social way of identifying who knows about the hard-nose realities of the business of selling beer, which is often far from the passionate, creative side of the business we all picture when we hear the words “craft beer.” But increasingly, I’m hearing this language spreading outside the sales channel as more and more people are hired from outside the beer industry to fill critical roles in sales and marketing to meet the dramatic growth of the segment. There just isn’t a large enough talent pool from within the industry any longer to feed these machines. 

This might seem like a minor sin for the industry, but the implications are anything but minor. When you adopt the language of the corporate world, you inevitably adopt their worldview. Language is a powerful tool of oppression and revolution that way. And sometimes without realizing it, we can take up the banners of the very ideals we struck out against. So, when I heard a top 5 sales director summarize his recent strategy by saying “we needed to find a way to get more liquid down their throats,” and barley anyone seemed to blink, my heart broke a little bit.  Talking about “liquid” and “throats” instead of beer and beer drinkers, objectifies your customers and degrades the product you want others to be passionate about. It’s the beginning of the end for a culture, regardless of your position in the value chain. And if the decision-makers in your brewery are already speaking this way — looking at customers as an abstract throat you need to pour more liquid down in order to keep your grotesque machine running (this needs to be an animated Power Point slide), then your entire workforce will follow suit, or your most passionate employees will leave for better breweries.

This was an industry gathering, so there’s always going to be a certain amount of short-hand. But cynicism has no place, even in the most behind-closed-doors gatherings. A top 5 brewery sales director on a stage in front of about 600 eager brewers and salespeople will have a profound affect on the psychology of his or her audience. You can inspire them. You can disenchant them and ground them in helpful ways. Or you can teach them they’re just another generation of widget-makers making products for the consuming masses and that your shitty attitude, along with a sizable paycheck, is all they have to look forward to someday. Either way, you’re a leader in that moment for better or worse. This was for worse. 

Words + Photos by
Michael Kiser

Michael Kiser

Michael is the founder of Good Beer Hunting. He travels the globe — writing, shooting, and collaborating with breweries of all shapes and sizes. This site is his chronicle of a life in beer as he witnesses the cultural explosion first-hand and finds the people, places, and products with amazing stories.

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Critical Drinking™

Beer is so much more than what's in the bottle for the men and women who make it and sell it. There are real livelihoods at stake, and they spend an inordinate amount of time thinking about the industry they serve. These are their forward-looking thoughts, and their critical thinking on what's happening now.

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