THE GIST
On Dec. 8, software company Next Glass announced it would acquire Hop Culture, a digital beer magazine and event company founded in 2017, for an undisclosed sum. Next Glass CEO Trace Smith says the move is a step forward for the company’s plan to “integrate software platforms to enable efficiencies in the three-tier system and for consumers.” What that means: Next Glass is working to offer a suite of software products that will touch each rung of the beer industry, from brewery to end consumer.
Next Glass also owns beer-ratings site Untappd, which it bought in 2016, as well as beer forum website BeerAdvocate (purchased in February), and ecommerce site Oznr (purchased in October). In all these moves, the company has increased its ability to gather data and information about customers and their interactions with beer. Next year will see Next Glass further integrate its roster of 2020 acquisitions, linking and leveraging its events, marketing, editorial, data collection, and ecommerce capabilities to sell advertising and attract new users.
This latest acquisition will allow the growing company to collect data and potentially use it to personalize experiences and influence purchasing options, while providing Next Glass with an even deeper look at how consumers are creating digital touchpoints throughout beverage alcohol.
Hop Culture’s three-person staff will join Next Glass, and Hop Culture’s founder, Kenny Gould, will step into the role of creative director for the parent company. Next Glass says Gould will help build out the company’s fledgling marketing department, which began with the hiring of its first marketing employee, chief marketing officer Tisha Hulburd, in September.
Smith tells GBH that Next Glass has its eye on future acquisitions to create efficiencies across tiers of production, distribution, and retail. Hop Culture might be its final buy of 2020, but there will be more to follow after the January calendar page turns.
WHY IT MATTERS
Next Glass’ buying spree furthers its aspirations toward vertical integration of different tiers within the industry. In appointing Gould creative director and building out a marketing department, Next Glass also shows it’s intentionally thinking about how its suite of properties can work together to promote both the company’s B2B arm, Untappd for Business, as well as its B2C platforms, like Oznr.
This reflects the goal for most software or tech companies: create a system in which users never have to leave their suite of products, and collect data at every step of the way. Think of Google, which gathers information across email, search, content like YouTube, document creation, and more.
Gould gives a tangible example of how this might look for a user of the Next Glass collection of companies.
“There are huge opportunities … whether it’s putting an Untappd rating and a BeerAdvocate rating on [Hop Culture] pieces or even for Hop Culture’s ‘5 Best Beers We Tried This Week’ [article series], if one of those beers is featured on Oznr, we should say ‘as seen on Oznr,’” Gould explains. “That’s a huge value-add for a consumer who may have read about a distant, hidden-gem beer they want to try and historically they haven’t been able to do that. Now because of the network that we’re building, they’re able to get that.”
This isn’t to say consumers can’t buy such beers through Oznr right now; it’s about making that purchasing option clear to a Hop Culture reader who might not be aware a complementary ecommerce platform exists. The upshot for Next Glass is clear: Customers and readers leave a data trail the company can analyze. This gives the company greater insight into how to digitally market and sell beer, events, and other products to consumers.
This goal has precedent in the beer sphere. ZX Ventures, an investment arm of Anheuser-Busch InBev, has been working on such projects for years. Globally—working in countries where these types of arrangements are legal—ZX owns beer ratings websites, delivery services, and online retail shops, and executives have said the company has interest in ecommerce, ID verification, logistics, retail analytics, and more.
Having all these pieces as part of a vertically integrated set presents unique opportunities to excel in a marketplace where breweries, distributors, retailers, and customers generally interact with separate points of contact. Owning data—and using those insights to reach the end consumer—has obvious sales and marketing implications.
“Historically, we’ve not done the best job at being able to leverage our own internal data to tell stories,” Smith says. “We want to mature the organization in 2021 and get better at that.”
Notably, before the Next Glass acquisition, Hop Culture had also begun acting as a sort of sales intermediary between breweries and consumers. Its virtual FML 2020 festival, held in August, sold 1,300 boxes for $175 each to customers in seven states. Every box contained 18 beers, including an exclusive festival collaboration, and two branded glasses that accompanied the event programming. Effectively, the beer box was a foray into direct-to-consumer (DTC) sales for Hop Culture, which brought in shipping and distribution partners to legally facilitate the sales. The site has also hosted sponsored content versions of its recurring “5 Best Beers” articles that are partnerships with specific online retailers, such as Best Damn Beer Shop. Such moves inch Hop Culture closer to direct competition with beer shipping sites like Tavour.
This type of “read about it, buy it” capability is more important than ever as COVID has discouraged on-site drinking and put a premium on ecommerce. In light of expanded shopping features on Instagram and Facebook that launched this year, the beer industry is realizing that DTC and ecommerce sales represent a significant and underutilized opportunity. Digitally linking data, editorial, marketing, and sales to the end consumer is what makes that possible—and Hop Culture potentially bridges the gap for Next Glass.
This points to a potential future in which multiple platforms within the beer industry become more enmeshed than ever. As digital properties reveal consumer data to producers, and bring producers’ beers to consumers, the feedback loop between what consumers want and what breweries sell—and even how they sell it—becomes much tighter.
The more pieces of the puzzle a company owns, the more integrated its advertising campaigns can be. Imagine a scenario in which Yelp also owned GrubHub, and then sold advertising to restaurants serviced by both.
“Next Glass has built what is functionally the largest single network of beer drinkers in the world—millions and millions of downloads on the app and millions of page views across BeerAdvocate and Untappd,” Gould says. “[Trace’s vision is] creating tools that connect the different tiers in the three-tier system, so that as someone working in the business of beer you are not using seven different tools to manage your inventory. There is one unified ecosystem that creates connections and that your product can move through.”
But much more of the integration is likely to happen behind the scenes, where readers don’t see it. (Smith says he doesn’t want any of the apps or websites to start to “look like NASCAR where there’s brands all over the place.”) In picking up Hop Culture, Next Glass gains three marketing staff as much as it does three editorial staff. Smith notes that bringing Hop Culture into the fold increases the events and marketing opportunities advertisers can spend against: “There’s opportunity to go back to those partners to say, ‘Here’s more to offer to you.’”
Gould says that until roughly eight weeks ago, Next Glass didn’t have a marketing department.
“And that is functionally what we do,” Gould says, citing 30 live events and festivals Hop Culture has produced (some of which went virtual this year), as well as its line of apparel and glassware, plus its social media following of roughly 127,000 users across Facebook, Instagram, and Twitter. Hop Culture has built a reputation for covering hot, up-and-coming small breweries on its website and social media, giving Next Glass a link to the breweries consumers are most excited about.
Instagram is where many of those lifestyle stories around beer are told. Hop Culture has built an Instagram following of nearly 90,000 users, who double-tap the account’s boldly colored, label-centric beer photos. What if Hop Culture could also link to those beers for sale through Oznr, or direct Instagram followers to rate those beers on Untappd?
This isn’t a far-fetched vision. Tavour, a beer delivery app, uses Untappd ratings to decide which breweries to partner with. An email provided to GBH shows Tavour has gone so far as to tell a brewery the company won’t consider working with it until the brewery has five or more beers boasting above a four-star rating. ABI’s ZX Ventures took a minority stake in rating site RateBeer in 2016 (later purchasing it outright) and launched an editorial site, October, in 2017 with an eye toward linking beer drinkers with decision-making and purchasing tools. Ratebeer’s reviews helped populated the October beer ratings database, which was appended to editorial coverage.
[Disclosure: GBH’s studio team was a strategic and creative partner in launching October under Pitchfork Media and Condé Nast, but ended that partnership in February 2019. It does not have an ongoing connection to the project, nor its parent companies.]
Gould says Hop Culture is the bridge between the three-tier system and consumers, and the missing piece that rounds out Next Glass’ suite. (It’s yet to be determined how traditional retailers fit into this model.) While BeerAdvocate is also a consumer-facing website and producer of festivals like Extreme Beer Fest, Smith says BeerAdvocate and Hop Culture have attracted different audiences: BeerAdvocate’s core users skew older than the Gen-Z and Millennial audiences Hop Culture has deliberately courted. Untappd itself put out more content—including videos and virtual events—during the pandemic. BeerAdvocate has been quieter on the content-creation front, shutting down its magazine in 2019 and shifting focus to its online message boards, which have seen traffic drop in recent months. But Smith adds that with Gould as creative director, branding for such properties could change next year.
“Creatively, in 2021, for all Next Glass brands is going to look a lot different from a design perspective than 2020 has,” Smith says.
Words by Kate Bernot