THE GIST
Brooklyn Brewery announced yesterday it would lay off an unspecified but reportedly “significant” number of sales staff, according to Craft Biz Daily. The layoffs are a response to a changing market, and reflect Brooklyn’s strategic shift away from “hand selling” its craft beer and towards a greater emphasis on branding, marketing, and distributor partners to sell its beverage portfolio—which will include much more than beer.
In its announcement, Brooklyn stated: “In some markets supplier reps outnumber distributor reps, with craft brewers continually adding staff and creating a headcount race that isn’t sustainable. We have not been immune to this problem, and today took the step to reduce our sales force to a more rational level […] In short, we need to transform into a company that develops and sells unique and well-executed products, with strong marketing and PR support, that our distributors can sell on their own, and move away from the unsustainable hand selling approach of yesteryear.”
Speaking with GBH last week, Brooklyn president Robin Ottaway said that distributor and retailer buy-in were instrumental in giving the company “confidence” in its U.S. launch of Special Effects, the non-alcoholic beer Brooklyn debuted in select American markets last month. Ottoaway said it debuted in “key cities that are regionally representative and also had distributors that were supportive of it,” noting “when we first started talking about it 18 months ago, I don’t know that we’ve had the confidence we do now, particularly just from the distributor and retailer reaction.”
WHY IT MATTERS
A move away from the traditional model of craft beer sales represents another phase in Brooklyn’s evolution as a beverage company. In 2017, Brooklyn bought minority shares in Fort Collins, Colorado’s Funkwerks and San Leandro, California’s 21st Amendment Brewery, combining to form a joint sales and distribution platform. That joint sales team included 70 salespeople and 90 brand ambassadors covering 38 states. Around the same time, Brooklyn invested heavily in international markets, which Ottaway tells GBH now represent a majority of the brewery’s total sales.
If phase one of Brooklyn’s strategy was to become a majority-export brand, phase two will see Brooklyn become less a craft brewery and more of a beverage company. (See also: MillerCoors, Boston Beer Company.) In an interview with GBH for a Mother of Invention piece that has yet to be published, Brooklyn’s director of field marketing and new product development, Kaitie Lynch, acknowledged Brooklyn is broadening its focus to include much more than beer. “We kind of see beer drinking and the people who enjoy drinking beer as a lifestyle and we think that there are lots of other ways that we can probably contribute to that,” Lynch said.
She cited Brooklyn’s non-alcoholic beer, Special Effects, as well as a forthcoming ready-to-drink (RTD) canned cocktail based on an Aperol Spritz that’s set to debut in 2020.
Unlike craft beer, a more general beverage focus would require fewer hand-to-hand sales. Non-alcoholic beer can circumvent much of beer’s regulatory requirements, while beverages like RTD cocktails could lean more heavily on distributor engagement, venue placement, and outside activations. Placement and marketing will push those products—a sentiment echoed in Brooklyn’s announcement regarding its plans to invest in brand-building and marketing in lieu of traditional sales teams going forward.
It’s a start-up, influencer-like mindset, and an approach that’s visible in Brooklyn’s recent, New York-based collaboration with Daybreaker, an alcohol-free morning dance party event. Daybreaker effectively markets Special Effects for Brooklyn, no sales reps required. Brooklyn president Robin Ottaway tells GBH the company aims to sell 40,000 barrels of the brand globally next year; he thinks that, combined with other offerings, non-alcoholic brands could “absolutely” be a 100,000-BBL opportunity for Brooklyn.
In a 52-week period ending Nov. 3, Brooklyn’s volume sales in U.S. grocery, convenience, and other chain stores were down .2% as tracked by IRI, a market research firm. In contrast, non-alcoholic beer, RTD cocktails, and an overseas push all offer growth potential for a company that’s facing an increasingly competitive domestic craft beer market.
“Back in the ’80s when we were a pioneer, we had a lot to do with helping introduce consumers to craft beer,” Ottaway tells GBH. “Our research shows that we have enough of a name that consumers are willing to try new things from breweries they know and trust.”
Words by Kate Bernot