Craft Beer Marketing and Distribution Strategy

BeverageTradeNetwork.com Interviews Jon Reynolds who has 32 plus years of beer sales experience and talks about how craft breweries need to market and covers craft beer distribution strategy and craft beer marketing plan. BTN covers the challenges that craft breweries face in distribution today.

1. CRAFT BEER MARKETING AND
DISTRIBUTION STRATEGIES
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2. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
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Interview with Jon Reynolds (JR), Founder, BrewPlanInc
and Craft Breweries Marketing Advisor
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3. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
•Jon Reynolds, based in Wisconsin has
32 years of beer sales experience.
•In his tenure Jon as sold beer to
retailers and to large beer
distributors.
•He has worked with small breweries
and large breweries. Jon's diversified
backgoundin beer sales and
experience with both small and large
breweries sheds light on the
challenges that craft breweries face
today or down the line.
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4. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
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•"On Craft Beer Distribution"
•BTN: What are some unique selling points from craft
breweries that distributors like to see when building
their craft portfolio?
•JR: Variety, uniqueness/brands with a point-of-
difference, catchy brand names, edgy, powerful icons,
unique ingredients/spices, unique hops and oils,
unique packaging/marketing (bottles, kegs and
taphandles) and higher alcohol

5. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
•BTN: Where is the
disconnect?
•JR: Tends to be from the
entrepreneurial spirit of the
brewers and what they
think will make them
successful and the reality of
the marketplace with
wholesalers and retailers in
what is achievable and
practical--this sometimes
creates logjams for shelf
space and/or tap handles.
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6. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
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•BTN: What about marketing budgets? Do many small breweries
often see marketing as an expense instead of an investment?
•JR: Smaller craft brewers have limited marketing budgets, so they
extend their budgets by doing things themselves or on a much
smaller scale.
•Branding is important once you have a core market business--many
small breweries do not successfully position themselves in their
local markets. I strongly think that they need to have a large
customer following in their home market before they expand to
other states.
•Sometimes their growth is coming by being part of a growth
segment,not because their branding is working well for them.

7. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
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•On the other hand, brands like Sierra Nevada, Dog Fish, Fat Tire, Deschutes, and Yuenglinghave
done a solid job in securing their core markets and then have expanded across the country with
distributors who see what they are doing at their starting point.
•Social media (Facebook, Twitter and Craft beer Blogs) have created a "buzz" for their brands and a
cult following for their brand has established them in the Craft beer World with home brew clubs,
Craft beer bars, and Craft Beer Festivals/Special Events across the country.
•hey have marketing campaigns,outdoorboards, magazine/brewspaperexecutions, radio
programming and even TV spots that showcase their marketing message. Fat Tire uses "Follow Your
Folly" and delivers that with their fat tired bicycle in all execution elements (POS, lighted signs,
coasters, ads, dealer loaders and even giveaways for employees for their 10th year anniversary with
the Company).
•They also are heavily into being "environmental friendly" which gives New Belgium Brewing's Fat
Tire a "green image" to all of their loyalists--this is classic branding and accentuates the "relaxtion
of enjoying craft beer." (i.e. mountain bikers are some of their best customers.) $5.00 per case is a
norm for marketing budgets for Craft Brewers.

8. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
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•BTN: What about supply issues and inventory they keep?
•JR: Craft Brewers are constantly battling the choice between funding
marketing or buying the next piece of equipment which will increase their
capacity and allow them to expand.
•Cash flow severely limits their ability to compete in both categories. Many
use "build it and they will come" strategies for the future--this is where
most fail.
•Limited investment capital and funding causes the largest problem for
Craft Brewers who strongly believe they have to rush to market to beat the
other guy, when they should probably wait a year or two to build their
brands to higher market shares in the core market, before jumping on to
the next one.
•

9. CRAFT BEER MARKETING AND DISTRIBUTION STRATEGIES
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•When you are over-sold, this can actually be a "good thing." It creates
pent up demand, and allows the Craft Brewer to be very selective about
who he gives beer to.
•They can manage their cash flow and balance sheet correctly and ensure
payment from distributors are current. They can also re-trench back to
the markets (or states) where the brand is turning the fastest and match
supply to demand.
•It gives the Craft Brewer the upper hand with wholesalers and retailers,
and makes consumers salivate even more when the brand finally comes to
market--the perfect example of this was Yuenglingnot going to Ohio until
Q4 2011 (The next door state to their Core State of Pennsylvania had to
wait almost15 years!--Yuneglingmay have outsold Budweiser in Q4, 2011
in Ohio!!))
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