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BMTC20: Marketing: Achieving Growth in the Craft Beer Industry

BMTC20: Marketing: Achieving Growth in the Craft Beer Industry

Many in the craft beer industry have been lucky enough to achieve high growth rates as the industry has boomed. In this session, we’ll have two presenters who have two opposite views on achieving growth. Jeremy Ragonese is President of Uinta Brewing Company in Salt Lake City, the 42nd largest craft brewery in the country. Leigh Harting is co-owner along with her husband of 3 Daughters Brewing in St. Petersburg, Florida, which has grown to become one of the largest independent breweries in Florida in only five years. Jeremy and Leigh will talk about defining what growth means to an individual business and present strategies for how to achieve the growth you are after.

Zephyr Conferences

February 05, 2020

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  1. A BIT ABOUT YOU-IN-TA Located in Salt Lake City, Utah,

    Uinta’s current state-of-the-art production brewery was opened in 2001 and most recently expanded in 2014, with more than $30M in total invested to-date.
  2. Source: Brewers Association 2019 Growth (Early Scan Data); 2017 US

    Brewery Data Independent Craft — IRI Multi-Outlet plus Convenience, Total US for YTD ending December 29, 2019 THE BIG SQUEEZE 84% 8% 8% 98% of US breweries % of US Production Thanks Bart!
  3. LOOKING FOR GROWTH • Many paths to get there •

    Some (many) fall short of their goal • Obstacles aplenty • Conditions can change quickly
  4. BUSINESS OBJECTIVES Growth will help us achieve… • Capacity utilization

    / overhead absorption, which in turn will improve margins • Increase market share, especially at home, where we’re most profitable • Wholesaler engagement • Support for CapEx / maintenance improvements Profitability will allow us to… • Drive total company performance; execution of sales and operations plans • Build team culture and motivation (retention goals) • Debt service • Providing cash for investment opportunities 2017 – Peak Sales Volume 2018 – Destabilization and Decline 2019 – Year of Retooling and Restabilization 2020 – Year of Growth and Profitability
  5. Market Penetration: focus on current products and current markets with

    the goal of increasing market share Market Development: use existing products to capture new markets Product Development: create new products that can be sold in existing markets Diversification: create completely new opportunities by developing new products (or new businesses) that will be introduced in new markets A COMMON TOOL…
  6. …APPLIED TO OUR BUSINESS Current Portfolio Pack Types PODs Placements

    Promo $ Innovation Extensions Hard Seltzer “Other” FMB Specialty Direct-to-Consumer Demographic Focus Non-Craft Drinkers Add Territory Export CBD Beverage Spirits Hard Cider NA Beer Water Acquisition Products: Current Products: New Markets: Current Markets: New Higher Risk / Higher Investment Lower Risk / Lower Investment

    OF IMPACT TO ACHIEVING GOAL IMMEDIACY OF IMPACT NINE BOX EXERCISE Current Portfolio Pack Types PODs Placements Promo $ Innovation Extensions Hard Seltzer “Other” FMB Specialty Direct-to-Consumer Demographic Focus Non-Craft Drinkers Add Territory Export CBD Beverage Spirits Hard Cider NA Beer Water Acquisition
  8. What It’s All About: Sales of current portfolio would be

    supported by additional flexibility in pack type, aligning with current retail trends/consumer preferences. Additional marketing investment would pursue higher brand penetration of Utah and surrounding core markets. Why This Will Work: • Can variety packs are the fastest growing SKUs in UT grocery (we have 1 rotating SKU); bottle velocity continues to decline; also a consistent request from wholesaler partners • Large format opportunities will continue to come up, especially around venues and tourism destinations (we have no consistent answer) • Increased marketing spend gets wholesaler attention, aids in securing placement opportunities with retailers, and has long-term brand-building benefits Range: • Full sales territory Investments Required: • Packaging capability for automated variety packs • Can line flexibility (size and format) • R&D equipment • Marketing investment Degree of Impact Immediacy High Short-Term Attractiveness Strength or Development? Strength Current Portfolio Pack Types PODs Placements Promo $ Products: Current Markets: Current HOMEWORK
  9. AVOIDING ROADBLOCKS Growth comes from a shift in thinking… •

    Get your team on board • Secure the foundation • Incorporate outsiders • Embrace failure • Trust your crazy ideas • Inject oxygen early and often • “Redefine” success…
  10. Don’t chase success. Decide to make a difference and success

  11. How Many Beers Does it Take to Put 3 Daughters

    Through College? Company created and named after 3 girls: 16, 15 & 10
  12. By the Numbers • 6 years in business • Produced

    over 10 MM cans • Capacity up to 60,000 bbls • 19 packaged options • 4,000 – 4,500 retailers • 150,000+ people per year in tasting room Largest independent craft brewery in Florida
  13. Craft Beer in Florida • Rapidly changing industry • Between

    350-400 breweries in the state • New products CBD, Seltzers, mixed vodka cocktails • Acquisitions of breweries changing landscape
  14. Innovation • Lead in the industry • Lab • Manage

    inventory turns and deliveries for distributors • Proactive approach to selling • Brewing Arts Program • Hops program