Word on the Street: The 5-Pack of Disappointment

A monster lurks inside of every 6-pack…

In honor of Halloween, I’m going to tell you a beer horror story. This isn’t about exploding bottles, contaminated tanks, or even Duffman’s impending rampage, but something more common. We’re going to learn about the 6-pack boogieman, a creature I call “The 5-Pack of Disappointment” (5-POD). This monster haunts a consumer’s mind, and their fridge. Often you need a hero to rescue you from this monster. I’m talking about the 5 beers you’re left with if you bought the wrong 6-pack.

How a 5-POD is born

Yesterday, while leading a tasting, one of my guests asked how to navigate buying beer. She knows what she’s enjoyed in the past, but not hot to find what she’ll enjoy in the future. Moreover, the scary 5-POD was actively preventing her from exploring or buying 6-packs. In keeping with the Halloween theme, let’s look at the 5-POD’s origin story.

A 5-POD is born out of three main factors: uncertainty, unfamiliarity, and high costs.

Uncertainty

Source

Put yourself in the mind of a consumer. You’re looking for a beer and something catches your eye. It’s a beautiful off-white can with a psychedelic swirl and a bunch of body parts. Wow that looks cool, but what is it? What does it taste like? Most importantly, will I like it?

This isn’t a knock on minimalist packaging, which can be quite effective if done properly. These issues can persist on more detailed packages too. Florida Cracker, one of my favorite witbiers, has a fairly good description on their packaging and an even more detailed description on their website. Even this good description (below) doesn’t address how sweet the beer is, the yeast forward notes, the fact that it contains wheat and coriander, or other dimensions that may be important to a consumer. While many of these issues are resolved with beer/style education or trial, a 5-POD can easily be born from this fantastic beer.

“Citrus aromas of oranges and lime leaves mingle with bubblegum and dried flowers on the nose of this hazy and refreshing Belgian-style White Ale. High carbonation and herbaceous bitterness quench the thirst while lemon-lime esters and flavors of Valencia orange add unique depth of flavor and complexity.”

— Cigar City Website

Beer is a highly experiential product. While some consumers can describe specifically why they like a beer (i.e. deeply roasted malt, dry body, astringent bitterness linger reminiscent of coffee, and a killer aroma featuring notes of chocolate), my research shows many consumers simply use a thumbs up/down system. When looking at 6-pack, they’re trying to figure out “will I like this?”

If they don’t like it, a 5-POD is born.

Unfamiliarity

Again, jump into the mind of a consumer. Do you know what a ‘kettle sour’ is? How about a ‘barrel sour?’ Why are coolship beers so expensive? Are they made on a ship? How can a ‘Belgian’ beer be made in in the US?

There’s a lot of complexity in beer, and while that’s part of makes beer so amazing, it can also be daunting to consumers. Compound unfamiliarity with minimalist packaging, hundreds of options, and time pressure and daunting can become overwhelming. In my research, I’ve heard from consumers who have strolled the aisles, looking for something new, only to flee to the safety of something they’ve had before. Simply put, consumers might not know much about their beer, they may not be familiar with the terms brewers or marketers use, and even if the information is “right on the packaging,” a consumer may not see it, or the information may not be as clear as the marketer thinks. Unfamiliarity can result in surprises and disappointment.

“We thought the wonderful sweet, jam-like, berry flavors of raspberries could only benefit in the light, tart backbone of a slightly salty gose. We chose dried raspberries and made sure the gose extracted all the berry goodness it could before packaging. Pucker up to this refreshing gose that finishes with a nice raspberry touch.”

— Angel City Website

As an example, the ‘Gose’ style is defined by the BJCP as “a highly-carbonated, tart and fruity wheat ale with a restrained coriander and salt character and low bitterness.” Angel City Raspberry Gose’s description mentions sourness once (“tart backbone”) and sweetness or berries 7 times in the description. A consumer can read this is lightly tart or as light and also tart and without familiarity with the style a consumer could be surprised by this beer, creating a 5-POD.

Cost

Multi-packs in LA cost about $10-15+. It will come at no surprise that this is more than a single beer at a bar, which can be found for as little as $3 with a typical beer clocking in around $5-8. While the unit economics of off-premise beers are much more favorable than on-premise consumption ($1-3/beer), the total cost is higher. More than the actual dollar costs is the perceived cost that looms large in all the other decision factors: disposal. If a 5-POD is a ‘monster’ then the disposal cost is what makes the monster so scary!

We’ve all bought something we thought would be cool, but didn’t live up to the hype. If you search for “kitchen gadget” on Amazon, you can get some (possibly) useful items for the cost of a 6-pack including 5 bladed scissors, a grumpy looking fridge deodorizer, a ravioli maker press, an “onion holder,” or even an egg separator that looks like an egg/bird hybrid (which is worth a look). Any of these items can be an amazing or regrettable purchase, but if it falls into the latter category, it languishes in a drawer to be forgotten about. The key difference between 5 bladed scissors and a 5-POD is the beer sits in your fridge taunting you. You’re reminded of your poor decision every time you grab the milk, every time you have a snack, every time you have a (different) beer, and every time you play ‘fridge Tetris’ to fit all the groceries. You have lots of options to banish the 5-POD from your fridge, but nearly all are perceived costs.

Fighting the 5-POD

The hero your fridge needs

The best case scenario is that you’ve picked up a good beer that doesn’t suit your taste. If this is the case, you may have a friend you can call in to help. This friend likes these sorts of beers, and is happy to ride to your rescue, no judgement, no questions, just happy to help you out and drink some free beer! Everyone wins!

The other way this can play out is your friend isn’t so noble and chides you for your purchase or is suspicious of this beer. They want to know what’s wrong with the beer that you want to get rid of it; why they’re the person you’re pawning off sub-par beer to; what does that say about me; and, seriously, what’s wrong with it?

While most people are happy to have free beer, the anxiety of this scenario is real and the 5-POD feasts off of it. So why don’t I just dump the beer?

Why you don’t ‘just dump the beer’

If we were all perfectly rational people, we’d try to find someone who wanted the beer, or just get rid of it. Beer you don’t want is a ‘bad’ (an item with negative value), and just as rational individuals want more ‘goods,’ rational individual want fewer ‘bads.’ Dumping the beer down the sink takes 2 minutes, you can recycle the bottles/cans, and the problem goes away. Or does it?

I was brought up in a family where we were expected to eat all of the food on our plates; to take care of the things we had, and not to be wasteful. I’ve only had the one upbringing, but I feel this was a pretty normal childhood. I also had friends who were much more frugal (some by extreme necessity), so the idea of literally pouring beer or anything down the drain grates my soul. Each time you crack a can, you’re reminded that you’re pouring money down the drain. Examining this behavior demonstrates the strong power these customs and social norms (frugality and not being wasteful) and how that overcomes the rational decision to dispose of a ‘bad.'

Can you return it?

Sometimes, if the beer is uncharacteristically bad, you can return the beer to the store or inform the brewery. If you’ve identified a quality issue in the beer, you will probably get a full refund and maybe even some SWAG or credit as a gesture of good will. But in all likelihood, you’ll have to explain to a store why you’re returning 5/6th of a 6-pack. While many grocery or liquor stores don’t want to deal with an argument or lose a customer, this is not a conversation most consumers look forward to, and for $10-15, who wants to go through the hassle?

How most 5-PODs are slain

So what happens to these 5-PODs? Just like the ghost stories that inspired this one, 5-PODs have thousands of unique endings that all feel basically the same. We’ve detailed a few of the happier endings above, but another ending is the 5-POD lingers in a fridge until they fade into memory. Some consumers drink the beer begrudgingly, which can result in negative brand perceptions since that beer/brewery caused this negative experience. Other times, a consumer brings the beer to a party where the 5-POD is released into the communal cooler (and may end up in the host’s fridge to languish). The beer may be past its prime by this point, further impacting the perception of the beer. The guest may avoid the question about what they brought because they’re embarrassed to be using their friends to dispose of something they didn’t like. By this point, the consumer is just happy to not be the consumer of the beer, not the happy ending a brewery had in mind.

The monster’s weakness

Looking back to the 5-POD’s origin gives us clues on how to resolve the 5-POD problem. Uncertainty and unfamiliarity are combated with description, experiencing the beer, and general beer education. The simplest way to defeat the 5-POD is to buy single beers, either a la carte, or in a ‘mixed 6-pack.’ Another opportunity is through a curated purchasing experience, led by a store employee, a friend, or crowd sourced. Additional weapons in the 5-POD fighting arsenal include in-store samples, on-premise consumption (i.e. on draft at a bar), a detailed description of the beer, richer advertising that includes reaction/tasting videos, or targeted marketing that suggests a beer to someone likely to enjoy it based on past purchases.

Addressing the psychological costs can be trickier, but looking at other industries provides some useful approaches. When car companies want to project quality, they offer a warranty; if they stand behind their vehicles for 10 years, they must be high quality. In the world of food and beverage, the ‘warranty’ takes the form of a “100% satisfaction guarantee” (example 1; example 2). Breweries have done product recalls or bar/retail buybacks for quality concerns, and could possibly do a product swap for consumers (I’ve emailed Boston Beer Co. to see if they do product swaps).

Do you know of any interesting/innovative ways breweries are addressing this? Send me a note!

Beer Business Basics: Occasional Drinking

Occasional drinking isn’t a ‘once in a while’ thing, but an ‘every time’ thing; here’s why

The English Language is fun. Occasional Drinking doesn’t refer to infrequently drinking, but instead describes drinking in conjunction with a specific occasion. With this definition in mind, being the preferred beer for a given occasion can be critical for success, and also help you define your brand. Some great examples of a single brand owning an occasion are Corona being the beer you drink on the beach and Guinness as the beer for St. Patrick’s Day. Other occasions have strong affiliations with beers, such as marzens during Oktoberfest, pumpkin spice everything in the fall, a beer at the baseball game, or regional traditions like standing in line for the Goose Island Bourbon County stout.

Many of these occasions were built by years of cultural tradition, consumer trends, or millions (sometimes billions) of ad dollars. While performing well for established and widespread drinking occasions is important, so is selecting a few ‘grounded,’ day-to-day occasions to win. Let’s take a look at three ‘daily’ occasions and how breweries/beverage companies try to win these.

From Dry River Brewing: Link

Brunch

Culture demands we have beverages with our brunch. These beverages are typically bloody marys and mimosas, but rosé, micheladas, even Hennessy are trying to lay claim to this occasion.

Brunch is usually a ‘fancy’ occasion; one where people get dressed up, spend time with friends, and luxuriate in their day. It’s a mini-holiday that can happen every week, and associating your beers with brunch can be a way to suggest that your beverage is a bit of luxury or a way to relax.

Hennessy can also be a brunch beverage: Link

2 Towns Cider

2 Towns wants you to enjoy while camping and with friends

Link

Woodchuck Cider

Link

Stone Brewing

Suggesting customers “Pack it in [and] pack it out”
Link

New Belgium

New Belgium encouraging people to hike, bike, and otherwise enjoy natural areas

Link

Coors Banquet

Coors wants you to know that a scenic lake with your dog is the perfect time for a Coors

Link

Camping and Hiking

I love camping, hiking, backpacking, canoeing, and outdoor activities. For some people, camping is just going to a wooded area and drinking with friends. Often, when backpacking, people bring spirits, as they’re high in ABV (you need to pack in less weight/volume) and are fine at room temperature. Hiking and casual camping is a bit more forgiving with many rewarding hikes that are only a few hours, so a cold beverage, or even a cooler is possible. Several beers and ciders would like to win this occasion and build their image as part of an active lifestyle. This also helps a brand appear more ‘rugged,’ relatable, or even showcase their regional roots (think of redwoods signaling ‘California’ or cypress trees signaling ‘Florida’)

Sports

One of the biggest occasions is sports. People willingly (even if begrudgingly) pay as much as $19.25 for a beer at a baseball game (source: Sports Illustrated). Notably, some beers are only available at the stadium (Veza Sur in Miami, NY Mets’ on-site Mikkeller brewery, or Barrelman Ale in Milwaukee). Outside of baseball, there’s Saint Archer’s roots in skateboarding, Natural Light sponsoring the Big 12 conference, and Red Bull’s heavy involvement with extreme sports.

Throwing a watch party for the local team, offering discounts based on the outcome of a game, collecting used sporting equipment to benefit local youth teams, or simply putting your product in the hands of athletes or spectators can build the association and shape your brand image.

Mikkeller’s Brooklyn Citi Field beer: Source

Are you in it to win it?

Winning an occasion is great! If you’re someone’s go-to beach beer, every time they go to the beach, you make a sale. If baseball in your town means it’s time for one of your beers, you can move a lot of beer and that can fund growth, pay down debt, or help launch new products. By showcasing occasions that your beers complement, you can ‘teach’ consumers how to enjoy your beers or stay top-of-mind.

Not every occasion will be part of someone’s life, yet the occasions you showcase your product in can still be useful. Very few of us jump out of balloons from record breaking heights, but Red Bull’s sponsorship of this activity strengthens their ‘extreme’ image. Similarly, not all consumers skateboard or surf, but if they want a ‘California beer,’ Saint Archer’s SoCal roots might make them choose their Mexican lager over one of the many available competitors. Lastly, while most of our meals may be more functional than glamorous, a beautifully set table, complete with Funky Buddha beer may elevate their beer to something worthy of high quality foods or your next dining experience.

Cider: is it More Like a Beer or a Wine?

Cider: is it more similar to beer or wine? More importantly, does it matter?

Which do you think it is?

Let’s make an oversimplifying statement: we all know what beer and wine are. Cider, however, is more niche. As with any niche product, it is often explained in terms of more familiar products; in this case, wine and beer. So please take a few seconds (under 60, I promise) and share your perceptions by clicking below.

Now that you’ve voted, why does this matter?

Expectations vs. experience

Before we talk directly about ciders, let’s use the metaphor of burgers and spaghetti. When I bite into a burger, I expect a certain experience: bread, beef, probably cheese, and various toppings. If I bite into a burger and it’s stuffed with delicious spaghetti, I’m upset, or at the very least, confused. Why? Because, of the many toppings I like and expect, pasta isn’t one of them. Due to years of exposure to burgers, Italian food, TV, ads, friends’ BBQs, recipes, and culture in general, pasta and burgers are just two separate categories of things. Simply put, they don’t go together.

If I think about it, there’s no fundamental reason a burger and pasta couldn’t work (food experts, feel free to reach out and we can engineer this!). But that’s the thing; I have to think about it, it’s not natural. To abstract this situation, I have two, maybe three, sets of foods in the world: 1, things that are burger; 2, things that are not burger; 3, things that might be burger. A surprise french fry on this burger is ok, because french fries and burgers are in the ‘burger’ category. To bring objects from the ‘might’ or ‘not’ burger sets into the burger set, requires work. This work can be a waiter describing this chef creation, a friend suggesting it, or a table nearby having a transcendent burger experience. Aiding or hindering this work is atmosphere. If I’m at a friend’s backyard BBQ and there’s pasta on my burger, I’m a bit afraid they’re trying to make space in their fridge, while if I’m at a famous restaurant, I assume they know what they’re doing.

So let's now bring this back to cider. What is it? The true answer is it’s its own category of thing. But if you’re not familiar with the process, a bartender may say “cider is like apple wine” or this server may say “cider is like apple beer.” If the cider is described as ‘like beer’ than I expect carbonation. If I’m then served a still cider (no carbonation) then I’ve been set up to expect a burger, but I’ve gotten spaghetti. If I’m promised “apple champagne” and I get something sweet, I may be upset. So the way a relatively unknown product is described set expectations that can make or ruin an experience.

Comparison set

We’re constantly comparing things, it’s on our nature. For example, “that was a great movie!” implies that some movies aren’t very good; “this meal was great value” implies that other places aren’t offering as good value. When selecting, and evaluating anything, people create a “comparison set.” Essentially these are all the other things that your subject item are measured against. Going back to burgers and spaghetti, when rating your burger, you’re thinking of the burger spots around town, not the spaghetti spots. But when you’re thinking of your dining experience, you’re comparing the service quality at the burger joint, food quality, prices, convenience of parking, wait time, and a number of other things, and when evaluating the overall experience, you can compare burger and spaghetti dining experiences.

Comparing cider to beer or wine changes the comparison set. The comparison set is relevant while you’re drinking the cider (should it be carbonated, tannic, dry, sweet, sour, etc.), but it’ll also have many other effects. Should a cider be served in a 16oz shaker glass or a 6-8 oz stem glass? Should it come in 12 oz cans, like beer, or a 6-8 oz slim can, like wine? Does a 750 ml bottle of decent cider cost $10 like a beer or $15 like a decent wine? Where does it go on your menu or store shelves? Should it be cold or room temperature? These are some of the questions derived from which comparison set cider falls into. Ideally, cider is compared against other ciders (much like beer or wine is).

What does the industry do?

So if setting the right expectations and positioning cider in the right comparison set is so important, what do cider companies do? The short answer is there’s a spectrum; some ciders are nearly indistinguishable from beer, while others look just like wine brands. There are some brands that do both; positioning their standard ciders as beer-like products, while their specialty ciders and apple wines are packaged more like wine. Nearly all cider makers talk about the positioning challenge but then discuss education, because, in reality, cider is neither beer nor wine, it’s cider. With education, consumers can come to know cider as its own thing, and when they’re comparing cider to other products, they will do so in the same way that one might decide if they want a beer, cocktail, or wine.

P.S. as of 10/14/19, with 101 votes cast; 77% of people think cider is more like beer than wine.

Word on the Street: The Guinness Experience

What makes the Guinness experience?

I love having a Guinness every now and then. When I do have a Guinness, I always admire how complete the experience is. With sales of about £2b, according to their 10k, they must be doing something right.

So as a successful product, it’s worth wondering what makes the Guinness experience? I’ve broken it out into several components and offered some of my thoughts on how to replicate some of this success at the end. The main experiential components are:

• Brand Identity

• The Pour

• The Visual Appearance

• The Flavor

• The Drinking Process

The Brand Identity

A few examples of Guinness ads. You can see more here

Guinness is synonymous with Ireland, Irish culture, St. Pattric’s day, Irish pubs, etc. When you have a Guinness, you’re feeling connected to all these things, just as when you have a Corona, you imagine yourself on a beach or associate it with a sunny vacation in Mexico.

This strong association is built by pubs hanging neon signs displaying proudly that they they serve Guinness inside, the harp in the logo, with sponsorship deals and ads, as well as their famous brewery tour in Dublin.

Most importantly, Guinness ‘owns’ the category. They are the measuring stick against which other Irish dry stouts are compared, and one can even argue they ‘own’ the Nitro beer category, with other nitro beers being described as “like Guinness.” By being the standard, Guinness can remain top-of-mind, because even when you’re having a competitor, you’re thinking of Guinness.

Furthermore, requiring a dedicated nitrogen line makes it harder for them to win a new handle (a bar may have to install a separate system), but it also makes their accounts more sticky, since the competitors in this category are more limited.

The Pour

How to pour a Guinness in 6 steps

Photo Source

For an interesting video about the physics behind the Guinness pour and how it may be improved, click here

A pillowey head of foam that you can even draw a shamrock in

Source

Whether you’re at a bar with Guinness on draft, at home with a Draught can, or anywhere else, the pour of a Guinness is an experience. With a ‘widget’ or ‘rocket’ in their cans and bottles respectively, or with their “two-part pour” when you’re in a pub, having a Guinness is different than an ordinary beer. This focus on the ‘proper’ pour may produce a better pint as a result, but it also functions as theater that sticks in a consumer’s mind long after the beer is gone.

What I personally love is the ‘woosh’ of the widget in the can and the way the beer appears to ‘build’ from the bottom up. This is a result of the contrasting dark beer settling through the cream head that makes it appear to ‘fill’ a glass from the bottom upwards.

The pour delays the delivery of the beer, but rather than being a negative, it adds to the experience. The visual theater and a proper pouring procedure also lend itself to social media and offline interactions, whether you’re proud of your un-mixed black and tan, your traditional Guinness, or the way the “surge” settles. The end result are organically generated advertisements on each of our Facebook, Twitter, Instagram, or other feeds.

“In the pub or bar the perfect pint of Guinness Draught is served using our famous ‘two-part’ pour. First, start with a clean, dry glass. Pour the Guinness Draught into a glass tilted at 45 degrees, until it is three-quarters full. Allow the surge to settle before filling the glass completely to the top. Your perfect pint, complete with its creamy white head, is then ready to drink.”

— Guinness website

The Visual Appearance

The official Guinness pint glass

Source: Guinness website

There’s overlap between the pour and appearance, especially in the early moments of the beer in your glass. Once the beer has settled, you end up with a dark beer that is “not actually black but rather dark ruby red” (according to the Guinness website) and a starkly contrasting cream colored head of foam on top.

The glassware is designed with the beer in mind and features a white label that contrasts the beer as well as helps one notice the off-white colored head. The golden harp pops as the only colored feature on or in the glass. The official glassware is a proprietary shape that accentuates the pouring theater, but also is visually striking due to the contours and sharp edges. Even in a static image, the glass seems dynamic, asymmetrical, and memorable. So along with consuming the liquid, someone who’s having a Guinness is also looking at something interesting too, and unlike the liquid inside, this glass can be ‘sold’ to someone many times, providing value each time someone uses it.

The Flavor

Guinness gets its roasty character from dark malts

Source

Guinness is often referred to as “heavy,” but it is actually one of the lighter beers on the market, clocking in at 4.2% ABV. Furthermore, there’s only 125 calories per 12 oz, compared to 236 for the same amount of Sierra Nevada Torpedo IPA. What it does have is a roasty character and very little hoppiness to cover up the malt.

On a nitro pour (mine came from the can with the widget), the beer has a creamy mouthfeel and slight sweetness from the nitrogen and a touch of maltiness on the back end. The middle of the beer feels a bit thin, but the beer lingers with roastyness that invites you to take another sip. While Guinness no longer stands out based on its flavor profile, for a while, it was the only dark option in wide distribution amongst a field of macro lager.

The drinking process

Lacing rings typical of a Guinness

Source

How many beers do you know that keep a score card while you drink them? When you’re having a Guinness, the lacing results in these ‘rings’ that tell you where you’ve paused. Some folks even end up with a foam mustache if they go for their Guinness a bit aggressively. This provides another visual component, even after the beer is gone, further extending the experience.

So what can we learn?

Guinness doesn’t do any one thing that’s entirely unique, but it does a lot of rare things in combination. For example, its branded glass reminds me of Belgium where many beers have their own unique glassware. The nitro pour, once a rare feature, is now found at small, local breweries. The Irish identity is also claimed by Smithwick's and Strongbow. But Guinness is able to combine a lot of these components in a way that no other brand or product can claim. From the theater of the pour through the last sip and the rings left behind, Guinness provides a complete experience. The strong ownership of the Irish identity and beautiful glass evokes memories and feelings beyond the scope of a malted barley beverage, wile the widget driven hiss of cracking open a Daught can is a little shot of dopamine every time. By combining these features the way they do, they’ve created differentiation that is hard to imitate.

So to beers and breweries that aren’t Guinness, the key takeaway is to understand the complete experience that Guinness provides. Understand that little details like which color you choose to print your branded glasses are important. The contrast of the printed logo and the beer color helps your brewery stand out while a consumer is drinking your beer or photographing it. Also worth noting is that Guinness successfully shaped the market to demand the perfect pour, even though it’s not the most time efficient. They were able to find entertainment value in time that is an annoyance for other beers. In LA, many local spots have recreated this theater by introducing a cask pour option to some of their beers. For customers who enjoy this style of beer, they can watch the bartender pull the tap and pour them their perfect beer, adding to the anticipation and eventual enjoyment once it’s served.

Think about what your points of differentiation are and how you can round out your beer experience to make it more complete.

Site Visit: 6th and La Brea Brewpub

Exterior view of 6th and La Brea Brewpub

A Saturday Afternoon Stop at a Hopping Brewery!

First off, sorry, not sorry for the pun above!

This past Saturday afternoon, I stopped into the 6th and La Brea brewpub for a quick beer. With a nice, but not particularly crowded patio, I expected a fairly laid back vibe inside. What I found instead, was a vibrant and bustling brewpub. There was a line to get beer, and the really packed half of the bar made it a bit hard to move around (I found out later, that a private party had reserved half the pub). This large crowd helped set a energetic exciting energy for the space.

The Beer: Pillows (nitro)

Pillows (nitro) at 6th and La Brea Brewpub ($8 on draft)

Going….going………gone!

Pillows is a Pale Ale served on nitro. It pours a golden, straw color and comes out with a billowy head of foam that’s quite delightful. In fact, the beer’s appearance coming out was so fantastic, it inspired a post I’ll be writing another in the next few days. What I loved the most about the appearance is the glass, the way they pour to the top of the hop cone, the billowy head all the way to the top, and how the beer was still ‘building’ the way a Guinness, cask ale, or other nitro beer sometimes does (a bit of a surprise, so I didn’t get these on camera). The glass’ shape complements this experience with the hop cone volume marker (I assume), subtle bulge at the top, and minimalist design.

After my eyes had their fill, I got down to the business of tasting the beer. It had a light body that finishes quite dry. The hops are assertive, but not overly aggressive. You get some good bitterness up front that fades into a spicy linger after you’ve swallowed the beer. There isn’t too much malt profile and the dryness allows the hops to take center stage. They didn’t have a C02 variant on draft, so I didn’t have anything to compare to, so I wonder if there’s a more aromatic hop profile for the carbed version.

As you drink the beer, you get some lacing on the glass, but not that traditional Guinness ‘ring’ that shows everywhere you’ve stopped for a little bit.

Overall, a solid beer. Nice and refreshing on a hot summer day in LA

The Brewpub

Bar View

As you walk in, there’s an area of the bar where you order. This may be set up that way to allow patrons to sit and eat at the bar without someone leaning over them to order.

Bar View 2

A bit further down the bar

Beer signs on the wall

More Beer Signs

Going for the retro look here

Brewing Tanks

The fermenters are visible as you walk in and from most seats in the pub. The large stainless steel helps customers imagine the brewing process as they enjoy the final product.

'Lawn Games' on the patio

Ladder ball and cornhole outside with two tables of shuffle board inside. Notice the view of the brewing area through the windows.

The brewpub seems to be going for an old fashioned feel. It has metal beer signs, photos of old cars, and other rustic feeling decorations. The furniture pieces are a mix of Chipotle-esque industrial and a comfy couch. They display their physical brewing awards as well as highlight them on the rotating slideshow on their electronic menu screens. They serve some Stalking Horse beers (listed as “Family Beers”) as well as 2 offerings from “Breweries We Like.”

I didn’t get a chance to investigate the food menu, but the food I saw around me looked like mostly bar bites. They looked and smelled like standard bar fare, not particularly elevated. Nothing wrong with that, but nothing spectacular either.

The inside space had two main sections, the tabled area (that was packed by the private party) and a communal high top area. The high top area had the main bar as well as the shuffleboard tables. A few TVs around the bar tuned to the college football games seem to suggest this would be a great spot to watch your favorite team.

Outside was the patio that was how I first noticed the bar. I had been walking past (at 1:00 PM) and the patio was mostly populated by a few families and their kids. The lawn games made for good entertainment and catches your eye as you pass by. Later in the day when I stopped in, the patio was filled with young professionals enjoying their drinks and these same lawn games. Overall, a great feature!

Miscellaneous Thoughts

As much as I loved the presentation of my beer, due in large part to the glass, I think the glass was too minimalist. The brewpub’s tagline seems to be “you are here” as it was festooned on the employee’s shirts, the glassware, and around the bar. But if you’re not familiar with the brewery, you’d have no idea where “here” was. Given the loud murmur that was all the conversations around me, perhaps everyone else already knew where "here” was, but a brewery logo on the back or incorporating the brewery name into the logo would help with word-of-mouth as customers post photos. This stands out on Social Media sites like Instagram (I did a quick search for their venue and the first photo that showed the venue’s name was the 11th photo in; one that I posted). All of this can be a drag on brand awareness and make it harder to attract new customers.

In the same vein, I also noticed they have two main beer serving glasses; the pint glasses pictured above and tulip glasses (likely 10 oz pour sized). The tulip glasses had no customization or branding, which seemed like a missed opportunity. Having a recognizable glass is important not only when customers are taking photos, but also when considering that many of these glasses find their way into people’s homes.

I thought the patio space was one of the best features, one that many breweries lack in the LA area (usually due to space constraints). The patio has tables with umbrellas in one half and separated from the games, so if you just want to enjoy your beer and watch people go by, this would be a good spot.

Unless the patio is busy, there’s not much to indicate there’s a brewery inside. There’s an arrow sign that points you to the brewery, and a clock that says it’s “Time for a beer,” but the exterior is otherwise nondescript.

What's the Value of My Running Club?

What is a running (or any) club worth to a brewery?

I don’t listen to music while I run, so often I think about random things. This last run, aside from making wrong turns, I was thinking “What is the value of this club?” So let’s dive in and figure this out!

Sources of value

My running club meets every Monday night, the first Saturday of the month at the sponsoring bar (Mikkeller), the third Saturday at a different bar, and various ad-hoc events such as races, trail runs, etc. After our runs, we often gather for a beer or some food at the bar; on the first Saturday, that beer is even free! So, the first source of value will be the buts in seats of everyone coming to the bar, often during off-peak times.

In addition to showing up to the runs, we all festoon ourselves with Mikkeller running gear. Ignoring the potential merchandise profits, these shirts, hats, shorts, and other branded items act as mobile billboards for the bar. So the second value source is free advertising for the bar.

Next, outside of the times we are running, many club members will go to the bar for their various events, or just to hang out. Let’s call this additional patronage.

It’s also worth noting that the founders of Mikkeller have some strong personal feelings and sense of value from the running club (you can learn more about it in this excellent audio clip). Emotional value is certainly important; just think of someone who happily sinks money into their boat, car, or favorite money pit. Though emotional value is entirely valid, for the purposes of this exercise, we’ll ‘hand-waive’ it to zero.

Finally, by having a successful running club, the bar has access to the running community. This community value manifests whenever the running club goes to a race, interacts with other clubs, posts on Strava (activity tracking app/social media site), or other running community activity. Each member generates word-of-mouth for Mikkeller every time they tell a fellow runner to join them Mondays at 8 or signs up for a race under the MRC LA ‘team.’ Unlike the free advertising of running around DTLA with Mikkeller logos on our bodies, the run club lends credibility and relevance to a whole group of potential customers.

But first, what does it cost?

Before we look at the benefits, let’s briefly look at what this club costs Mikkeller.

Direct costs:

• 1 beer per person, once a month

• Signage, flags, other material for the club

Indirect costs:

• Opportunity cost of reserving a space for the run club (if we’re sitting there, someone else can’t sit there)

• Organizational effort

• Brand image effects (what if someone’s a jerk or the brand isn’t compatible with a run club)

In general, these costs are fairly low. If the club has 50-100 people attend a run, the beer cost is less than a keg (a 1/2 barrel keg is about 124 pints), and a 6’ banner costs under $50. In all, you’re looking at about $100/month or less in direct costs.

The indirect costs are also generally low. At Mikkeller, Monday nights are typically slow, so we’re not displacing other customers, the club runs itself, and club members are nice. This is due to our great running club captains that both set a positive, friendly tone as well as manage social media, routes, and all the other logistics of the club. I’d estimate this effort is between 5 and 10 hours a week, so at a high end, this could cost about $800 of time per month (10 hrs/week * $20/hour * 4 weeks). This is not insubstantial, but as I mentioned, our club runs itself, so this is effectively $0 for Mikkeller.

So, what’s it worth?

Now for the best part, estimating the value! As reminder, we have buts in seats, free advertising, additional patronage, and community value (remember, emotional value is $0 for this exercise).

Buts in Seats

First, when our running club is at the bar after our runs, we buy drinks and food. Our typical runs are about 30-50 people, and about 25 people hang around after. If each of these people get a beer, and 5 of them get food, that’s $250 in beer revenue ($10/per beer *25 people) and $100 from food ($20/ticket *5 people). Assuming a 50% gross margin on beer and a 20% on food, the bar nets $145 per night our club is there. If we’re there 5 times a month (4 Mondays and 1 Saturday), the bar is getting $725/month of contribution, compared to our $100/month direct cost estimate above. Not too bad, but there’s another good reason to have our buts in the seats.

My mom refuses to eat at a restaurant that has no one in it, and for good reason. Restaurants can be empty because you went at the wrong time of day, or because the last customers are still fighting off their food poisoning. This empty restaurant phenomenon is even more impactful at a bar. Bars sell drinks, but mostly, they sell the environment and atmosphere in which you consume those drinks. Since most bars sell easily accessible products, getting the atmosphere right is all the more important and having people in the bar is often critical to this experience. Even when you’re not interacting directly with the running club, having a lively, packed table increases the energy of an otherwise empty bar. This encourages other customers to enjoy themselves or remember Mikkeller as a lively/fun place.

Free advertising (shirts, shorts, hats, etc.)

We’re all running around with Mikkeller Running Club gear, and since Mikkeller is in the name, this should be great for advertising, right? This gear is essentially ‘branded merch,' which is great for brand awareness. This awareness can generate new customers, increase customer loyalty, keep the bar top-of-mind, and more. But it probably won’t actively affect people’s purchasing habits. But, as the title states, it’s free, so any value is a net positive. There is a small amount of brand risk associated with people wearing your logo and being a jerk to factor in, but this hasn’t been an issue for our club.

Additional patronage

While each run is about 30-50 people, the running club has 100+ members when you include infrequent members. Let’s say there are 150 total members and 10% of them choose to go to the bar 1 additional time per month than they otherwise would. If these 15 people spend about $30 per visit at a 35% gross margin, the bar nets $157.50 per month.

Community value

Here’s where much of the running club value lies. Members of the club are frequently participating in races, events, attending other clubs’ runs, etc. This embeds the Mikkeller brand in that community, dramatically increasing brand awareness, and assuming the club is a good member of the community, creating a positive brand image within the community. Inside and outside the running community, Mikkeller is now a brand that’s associated with running, activity, fitness, healthy lifestyles, and related concepts. This opens up a lot of possibilities for Mikkeller. They can authentically sponsor races, release a beer marketed towards runners (they did), licence/sell running merch (they do), and more. In case you still aren’t convinced, Dogfish Head and Merrell just came out with a limited edition running shoe!

To a running enthusiast patron Mikkeller can demonstrate that they have shared values and this will increase brand affinity/perception. For non-running enthusiast patrons, there may be a halo effect as that patron may like the concept of running/activity and can vicariously engage in running through the club members over at their table.

The social media activity can also be a big boost, especially for bars that may not have an advertising budget. The Mikkeller Running Club LA posts on Facebook and Instagram at least once a week ahead of the Monday run, an often 3+ times a week. On Instagram, these posts go out to about 1,500 people, many of whom have never run with the club before (last night, we had 5 new runners join us, most of whom found the club on social media). If any of these new runners become regular patrons of Mikkeller, the customer acquisition cost is quite low; basically zero!

So is the club worth something? Final tally:

Short answer, yes! The club is likely a net positive for Mikkeller.

We estimated the club costs about $100/month. Aside from intangible value, the estimated direct additional contribution of the club is $725/month from direct sales after club runs and $157.50 from additional visits from club members. The resulting net ‘profitability’ of the club is $782.50/month. Not bad!

Beer Business Basics: Discounted Cash Flow

DCF…What’s that?

Lets start with the basics, cash flow

Before I offer you a discount on your cash flow, let’s first figure out what cash flow is. To do so, let’s imagine I own a beer bar. Now let’s do a bit of math. It’s a really simple beer bar that has 2 expenses, rent and beer, and one source of revenue, selling beer. I have a fairly successful, but small beer bar that seats 10, but we’re always full. I’m not too fancy so we’re cash only and I pay all my bills out of the cash register We sell our beer for $5/bottle and get it for $2/bottle. Each customer buys 1 bottle of beer, and we’re open 20 nights a month. I have a really good distributor who is somehow able to supply me with beer whenever I need it, and I pay in cash every time I get delivery of a beer, but I have to pay my landlord at the first day of the month. Let’s look at my Cash Flow for the month.

Example 1: Basic Cash Flow

The first day, I pay out $120, and I take in $50. But every day after that, I pay out only $20, I take in that same $50, for a net gain of $30 in the register.

For the whole month, I take in $1000 of sales, I pay out a total of $400 on beer (Cost Of Goods Sold; COGS), and I pay out $100 for rent; net $500. On the left is my Cash Flow Statement for the month.

As a bar owner, I’m making $500 of profit each month and that seems pretty good. But what about the flow of cash? What about days 1, 2, and 3 where I’m in the red? This is where your cash flow is very important. What if your patrons had a tab that they settled at the end of the month?

Example 2: Bar Tabs

In this example, I’m still making $1000 in revenue, spending $500 on rent and beer, and making a $500 profit. The difference is there’s a lot more red. All of my income comes at the end of the month, so for days 1-19, I need to finance my operations. I can finance with last month’s profits, I can get a loan, or I can ask my landlord and distributor if I can pay them at the end of the month too. If I am able to manipulate when I pay my bills, I’m managing my cash flow.

Now that we have cash flow, let’s discount it

In Part 1, we discussed the “Time Value of Money,” where dollars today are worth more than dollars in the future. But how much more? How much would you pay right now to get $100 in the future? That number represents the “Net Present Value” or NPV. In our $100 bill example, there are 2 main factors that determine the NPV: how long you have to wait to get the $100, and what “discount rate” you use. This discount rate captures risk, inflation, and other factors. Calculating the exact discount rate is often quite complex, but a general ballpark is about 10% for a large, stable company and 15% for a smaller, riskier company. With the simple $100 payment, here’s the effect of time on the current value:

Let’s make an investment!

So let’s say a developer comes to me and says they can double my bar’s size for $20,000. In this example, to keep things simple, let’s look at monthly profits ($500) and use a discount rate of 15%. So our cash flow looks like the following

Is this a good investment? Well we can use a DCF analysis to see if the Net Present Value is greater than zero. If the NPV is greater than zero, then the deal creates value. Using a 15% discount rate, the NPV is about $10k, so this is a good investment.

How can you use this?

Discounted Cash Flow is something that gets quoted a lot. Essentially it’s boiling down all the ‘later’ money into today’s dollars. You can use this to evaluate investments that require up front payments, or to evaluate things that have payments both today and in the future. It helps you make apples to apples comparisons. To get you started, I’ve posted my excel worksheet, and feel free to play around.

Beer Business Basics: Time Value of Money (1 of 2)

What is Time Value of Money (TVM)? And can you make beer puns to make this easier?

Pun alert!

The longer the payment is delayed, the lower the Net Present Value (NPV)

What is Time Value of Money?

Let’s say I offer you $100 right now, or $100 one year from now. Which one would you prefer? Most people pick the $100 right now. This is the Time Value of Money (TVM).

Simply put, the idea basic concept is the $100 bill right now is worth more to you than that exact $100 bill tomorrow, in a week, or in a year. So the value of $100 right now is…$100. But the value of that $100 in one year is less than $100. Why is that?

Think of everything you can do with your $100 bill

With $100 (or a whole briefcase full of them), you can buy malt, hops, equipment, buy an ad, a really expensive glass of beer, or any number of things. If you have to wait to get your $100, you either have to wait patiently to do these things, or you need to find the $100 some other way, perhaps by borrowing it. If you borrowed that money, you’d probably have to pay an interest rate, so by the time you’re paying it back, you’ve ‘lost’ money compared to having it in your hand right now. Remember this borrowing rate, because it’s important in the next post about Discounted Cash Flow (DCF).

Think of inflation

Things get more expensive over time. CocaCola was famously only a nickle for many years, but now a Coke will run you $1 or more. So future money is worth less than current money because all the things you buy with it will be (on average) more expensive.

Inflation is also relevant to DCF, but it will often get built in to other factors.

Think of how likely it is you’ll actually get paid

If someone promised you $100 in 1 year, there’s a chance they may be lying. Even if they’re completely trustworthy, there’s a whole number of things that can happen to prevent them from paying you. They can go bankrupt, they can misplace your information and not know how to contact you, they may pay you late, it’s even possible that in a year, we’re no longer using US Dollars (not remotely likely, but not impossible). All of these factors can be combined into ‘risk.’ Essentially the riskier the entity offering you the $100 bill, the less it’s worth right now. So if your friend who’s bad with money makes the offer, it’s worth less than if your savvy, rich friend makes the offer.

So how does this affect my brewery, bar, or business?

Every day, you’re investing your money. Each time you buy ingredients, a case of beer, new furniture, or anything else, you’re hoping there will be a payoff in the future. You’re spending today’s dollars for the hope of even more of tomorrow’s dollars. But how many of tomorrow’s dollars do you need to make today’s investment worth it? If you’re cellaring a beer that costs $10 today, how much should you charge for that beer 1 year from now? Or what if you don’t have enough money right now to invest in everything you’d like to invest in? This is where Time Value of Money helps. TVM is the conceptual foundation of the ‘Discounted Cash Flow,’ a tool that helps you figure out what all of these opportunities are worth right now.

The next post will dive into DCF and how it pertains to your business.

Word on the Street: Side-by-Side Tasting

💡 I can taste the difference! 💡

This past weekend, I led a beer tasting. We had 6 beers, opening with a heffeweizen, followed by a side-by-side tasting of a pale ale + imperial IPA, then an altbier, closing with another side-by-side of a schwarzbier and a porter. Each person had their favorites along the way, but the side-by-side experience was a hit.

Tasting lineup

IPA Side-by-Side

Our first side-by-side tasting was of two pale ales. The first beer was RiNo APA from EPiC brewing. This beer has lots of late hop additions and is a great example of hop flavor and aroma. The body is dryer and lighter than the second tasting, Revengeful Spirit IIPA from Stone Brewing. As an Imperial IPA and clocking in at 8.1% ABV (2.3% higher than RiNo), this beer is “more aggressive” and “pack[ed] it with extra hops” making it another hoppy beer, but in a totally different way

American and India:

A Pale Ale experience

So what did we learn drinking these two side-by-side? The first lesson is demonstrating the three expressions of hops: bitterness, flavor, and aroma. To those who’ve never brewed, seen whole cone hops in person, or may not even know what hops actually are, “hops” is just a word they know is associated with “beer.” Think of McLovin from Superbad. To explain what hops are, how they contain both oils and resin that provide flavor, and how this flavor develops in the boil, is all much easier when you can illustrate the two different expressions.

This real world experience tied one’s tastebuds to terms that often get thrown about. In addition, these two beers are also a great example to share about lightness & heaviness of beer body as a concept is generally unrelated to lightness & darkness of beers. In fact, Xingu Black Beer was the least alcoholic of the 6 we tasted (4.6% ABV). Speaking of Xingu…

Cola or Coffee?

Smooth drinking cola or tongue coating tannin

“Two of the Most Similar Looking Beers…”

In our final side-by-side, we tasted Xingu, a Brazilian made schwarzbier, and Einstok Icelandic Toasted Porter. Xingu has a semi-sweet note with a touch of roastyness, but also has notes of cola and caramel. These are contrasted with the jet black roast-forward aroma and taste of Einstok (full disclosure, this is one of my favorites!), augmented with coffee. While Xingu finishes softly and smoothly, Einstok has a tannic bitterness that lingers.

Most people see a dark beer and they say “it tastes like Guinness.” Demonstrating how these beers are different, and pairing them with some snacks, especially the fresh cherries, helped show the variety of seemingly similar beer styles.

So what did we learn?

By doing side-by-side tastings along with instruction and explanation, nuanced concepts stick more easily. Metaphors, such as roasted malt as analogous to food coloring (2 drops of yellow food coloring may have minimal effect, but 2 drops of purple may have a huge effect; a few oz of Munich malt may have minimal effect on color, but a few oz of roasted malt completely changes the color) are much more effective when people are tasting, observing, or experiencing a real-world example. Plus 2 beers is always better than one!

Beer Business Basics: Drinking Mindfully

Social and friend focused drinking: A fun night with Mikkeller Running Club - LA, but few beers will stand out later.

Mindful Drinking? What’s that?

I recently led a guided beer tasting. It’s really fun to do these in small settings because you have no idea what questions will get asked. This tasting I got to explain the difference between a standard and a nitro stout and what ‘cask’ beer is. This was great because people were thinking about their beer. They were drinking mindfully.

If this tasting was different because everyone was tasting mindfully, then how do people drink beer regularly? My research shows that when most consumers drink beer, they use a thumbs up, thumbs down evaluation method. If a beer is ‘good,’ then the consumer may think of a reason they liked the beer, or they may not. Similarly, if the beer is bad, there may be a thing they identify that they didn’t like about it. This process is ‘quick and dirty.’ The consumer isn’t really retaining much because they’re not stopping to think about the beer.

On the other end of the spectrum, when a brewer drinks a beer, they break down the flavor components, analyze for off flavors, assess the beer’s fit with the stated style, etc. If they don’t like the beer, they can point to too much astringency from the roasted malt, off flavors from stressed yeast, oxidation from poor storage, or (in the best case) a flawlessly executed beer from a style they’re not a personal fan of. This multi-component consumption is an example of Mindful Drinking. In Mindful Drinking, the beer is a main, if not central, focus, and there is a much higher likelihood the drinker will remember the specific beer.

How to facilitate Mindful Drinking

In order to drink mindfully, the drink must be one of the main focuses, if not THE focus. Hop onto Rate Beer, Beer Advocate, or any other beer rating site and you’ll find people who are breaking their beer experience down in a systematic way. This structured system is one way to create Mindful Drinking, but there are many other ways that can be used to a brewery’s advantage. Not every drinking occasion can be a Mindful Drinking occasion, but many are winnable.

The benefit is simple: loyalty. Mindful Drinking can help a brewery by increasing product recall, which keeps you top of mind when a consumer is considering a beer purchase. If a customer has a few of your beer over the course of a night, enjoyed them, and then can’t remember what they were, they’re much less likely to become a loyal customer. So the key is to help your customers slow down a bit, think about your beer for a few more seconds, and remember you fondly when it comes time for the next one. Here are a few ideas to help you achieve this.

Story

People love stories, they sit down for multiple hours (think Avengers Endgame’s 3 hour run) to consume stories. If fictional superheros can capture an audience, think what delicious liquid that makes you feel great will do!

The good news is that every beer has a story, whether it’s inspired by a local park, a trip to Europe, a local agricultural product, or an old high school inside joke. You can use the story to highlight aspects of your beer and aid retention. For example, rather than stating your witbier is brewed with coriander and orange peel, you can describe your beer as “inspired by mother’s cooking. The fresh orange peels add a bright citrus counterbalance to the tartness of the yeast. The clove and coriander notes add a hint of sweetness that will remind you of waking up to the smell of holiday baking.” This story framework can cause a customer to taste for each component and think a few more seconds about the beer, and, hopefully, remember this wit next time. Stories help us remember things better, and your witbier goes from being one of many, to the one that tastes like momma’s cooking!

Experiential

6 years ago, I was at the Meantime Brewing Company in London for their pie and pint night. There were two beers I wanted to try alongside my shepherds pie, and they were kind enough to do a half pour of each one. As I’m enjoying my pie and half pints, one of their staff members stopped by to chat with me about the flavor notes of the beer, as well as show me how to agitate the beer to get a really good sniff. He covered the beer with his hand, swirled the tulip glass, and took his hand away so I can get all the aroma. I remember this moment and beer today (over 6 years later), but I don’t remember what beers I had at the bar last Saturday (a cream ale maybe?). I still will cover and swirl my glass if I want to pay particular attention to the aroma, such is the power of experiences.

The lesson here is that teaching someone about beer, or providing a memorable experience can create a lasting memory that can give your beer recall and equity many years later. I may not have seen their beers (if anyone knows where I can find it in LA, please let me know), but I know exactly who Meantime Brewing Company is. A simple way to bring an experience to your brewery is to grab a few tasting glasses and some of your ingredients. A row of malts ranging from light, 2-row all the way to roasted barley can be visually appealing (make sure your tasters have your logo on it, it’ll be all over Instagram) and a cool experience for the patron who now can pick out the Caramel-60 in their red ale.

Educational

People like to learn, and people tend to like the brewery that teaches them something. I’ve heard from a brewer in FL that has built a loyal following by teaching people about their beer and allowing them to spread the word. By tying a fun fact in a consumer’s mind to your brewery, they’ll remember your beers each time they show off their knowledge to their friends. This fact may spark deeper learning and discussion and you continue to develop their Mindful Drinking technique.

Beer Business Basics: What is Beer Data and Why Should I Care?

What is data?

As a former aerospace engineer, I am no stranger to data. I’ve analyzed stress data for a satellite structure under launch conditions or a jet engine blade on takeoff. This data is great if you enjoy satellite TV or ever fly in an airplane, but data can also help inform what’s the best way to market a brewery or what band to bring in to play tonight.

First, it’s important to understand what data is. Think of a data point like a puzzle piece. Each piece of data offers a little bit; some blue with a touch of green. Put enough of these together, you can see the picture is of a lake. When you have all the pieces in place, you see some fine details, such as the fact that this lake is in the mountains and has a swimming flock of ducks. Looking at a specific data point, you can’t really see much. Knowing there’s 40 people in your taproom at 8:17 PM isn’t very useful, but if you have data on the whole night, you’re putting the puzzle together. With more information you could see that you’re busiest between 8 and 9 and that an individual stays for 45 minutes on average.

Why is data helpful?

Unfortunately, in the real world, data isn’t exactly like a puzzle. There’s no photo on the box showing you what the completed puzzle should look like. In the example of number of people in the taproom, multiple data points throughout the night helps you build a picture of how long people stay. When you combine this with how many drinks were ordered, you can start to make specific business decisions. For example, if your bar is busiest from 8-9pm as the example above, you can use this to make staffing decisions.

That’s fairly simple, but what if parties of 2+ order more beers per person than single parties? This data can be used to design a promotion that attracts groups such as a cornhole tournament that requires teams of 2. Similarly, knowing that customers find you on online is useful, but finding out if they’re discovering your brewery through Google or Instagram can inform whether you spend money upgrading your website or creating a great photo spot in your taproom.

The goal is to make informed decisions. Every time you change something in your brewery, bar, taproom, recipe, packaging, etc. you’re running an experiment. People are seeing (or not seeing) the change, and making a purchasing decision based off of it. The data gives you a measurement of if the experiment was successful. If bringing in that band increased sales enough to offset their fee, if changing your can art increased sales, if advertising on Facebook actually lead to more young professionals discovering your brewery, etc.

How to get data?

If you’re a small brewery owner, you may be thinking data is too expensive or complicated to get. The good news is you have a ton of data already. If you’re at your taproom regularly, you see who walks through the door. You know how much beer is flowing. You know what kegs are selling, and what isn’t. This is all a great start. Taking some notes on how many people are stopping in on a given night can help you track whether a can release increases the taproom traffic or not.

Similarly, asking multiple customers the same questions can provide a good qualitative view across different groups. When a server asks if it’s anyone’s first time, they can follow up with “how did you hear about us?”

If you have a membership program, you can survey these members or invite them to comment on any changes you’re considering. These members are often your most committed customers and can have some great feedback. These are your unpaid brand ambassadors, and if they’re happy, they’ll carry your brewery’s flag amongst their friends and colleagues.

Finally, if your brewery has even more resources, you could always do some more formal data collection. This collection can include surveys, specific research, taste testing, focus groups, or customer profile tracking. It’s also possible your local brewers guild is collecting data or conducting research, so make sure to get involved with that.

Have questions, comments, or just not sure how this applies to your brewery? Reach out: ethan.siegler.2019@marshall.usc.edu

Site Visit: There and (bar)back again

My Trip to Brooklyn and Nashville

How’s beer different on the coast vs. the middle of the country

LAX —> JFK

Putting my game-face on!

I made the trip to NYC to record a podcast (Beer Sessions Radio) with Jimmy Carbone and the Heritage Radio Network.  We were discussing my beer research, where I was looking into how consumers select the beers and breweries they support in the LA area.  This is an interesting question since these consumers have so many more choices now then even just a few years ago, and the way they choose can have a huge impact on a brewery’s success or failure.

After hopping off the plane and making it into Brooklyn, I fought through the rain to find my way to some Brooklyn Pizza.  Eating NYC Pizza spoils the rest of the country’s pizza with its deliciousness.  After strolling the neighborhood, it was time to podcast!

The podcast focused on several topics, from how breweries communicate to their customers, what beverage trends are affecting brewers and drinkers, how these trends vary in different parts of the country, and even some business terms such as ‘mobility gap.’  In future posts, I plan to explain business concepts and terms as they relate to breweries, so stay tuned!  What I’ll get into in my next post is how the beer menus are different in Nashville vs. NYC and LA

Before hopping over to Nashville, my plane had a long delay.  The silver lining was the pilot let us come up and check out the cockpit!