24 Aug 2009 @ 9:50 AM 
 

Brewery Startup: Deciding on a Flagship.

 

One of the most bizarre parts of starting a brewery is planning that’s far away from buildings, business plans, or venture capital, and it’s probably one of the most important decisions that you can possibly make: What kind of beer do you make first?

It’s vital. It’s the beer that first defines your brand to customers; it’s the beer that will most likely, but not necessarily, be with you for the entirety of your existence.
The ubiquitous sampler.

So, how do you decide? Do you want a session beer that people can drink a lot of? Something big and memorable that people won’t drink a lot of? Do you want to make an incredibly popular style and subject yourself to a ton of competition? Or make a hard-to-get style and hope that people will go out of their way to try it? What’s more – is there a way to balance all of these considerations?

A few years ago, when I took Siebel Insitute’s inaugural Start Your Own Brewery course, one of the largest things I took away from it was Jason Ebel of Two Brothers Brewing Company and Windy City Distribution saying something like, “If you’re trying to sell a porter, for the love of god, don’t even bother calling me. Everybody’s got a friggin’ porter.”

When I was shopping at Whole Foods this weekend, I took a stroll through the beer section and noticed that 75% or more of the beers that they had in there were IPAs or APAs.

In one panel at the Craft Brewers Conference this year, I remember a slide (wish I had a reference for you, but I don’t) noting specifically that most customers expected and wanted to see a stout on tap at their brewpub, but that it was continually the lowest-selling beer on tap.

A study by the BA in 2002 (which I can no longer find, so you’ll have to trust my AWESOME memory) suggested that craft beer drinkers who said they had a favorite beer drank that beer, on average, once per month. So on some level, all of this is subject to whim, no matter what.

It all seems like crazy conflicting information? So how do you deal with it?

For me, it’s been a weird process of elimination. I started by looking at the beers that I like. It is my personal feeling that a flagship should be with a brewery as long as possible, as a strong part of their brand definition. With that in mind, it had better damn well be a beer that I enjoy since I’m going to be the one around it most.

I cut it down to beers for which I had already made recipes that I enjoyed, so that I could then work on perfecting those recipes over the next few years as I work on the nuts and bolts of the rest of the startup … you better believe I have a beer in my hand every time I work on my business plan.

That left me with a half dozen beers to choose from. I eliminated the really high gravity stuff with the thought that I would prefer if people bought a lot of my first product, and the best way to get people to buy a consumable product is to make sure they consume it.

That left me with three. One of which I eliminated because it involved an herb that I thought would be a tough sell out of the gate.

That leaves me with an IPA and a Porter.

Tough sell.

Of course, I’m still early on in the process – it all may change in time, especially as I develop new recipes that I – and others – like.

But what about others?

Beer drinkers: What are you most likely to try from a new brewery?

Breweries: How did you arrive at your final decision for your flagship?

Other startups: How are you approaching this process?

Tags Tags: , , , ,
Categories: distribution, industry, marketing, startup
Posted By: erik
Last Edit: 24 Aug 2009 @ 09 58 AM

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Responses to this post » (20 Total)

 
  1. ingrate says:

    Not surprised that you are left with those two. I am of the opinion that those two draw from two different pools of taste. Most of the Porters I drink are not hoppy (there are some out there, but I avoid them). Most of the people I associate with who prefer IPAs are not keen on Porters. I don’t know which group is larger, but I suspect there are more beer drinkers in the US that prefer IPAs over Porters. My honest opinion: Flagship the IPA and then get the Porter in house as soon as you can. Listen to what the distributor said.

    Generate some numbers on consumption habits. Go to Top of the Hill or the Carolina Brewery or Tyler’s and take a pen and paper. Spend a few nights just recording how many and what types of beer a sample of the crowd is drinking. Are the dark beer people having 2 per? 3? Are the IPA people having 4? If you are torn between the two and your deciding factor comes down to what is going to sell more volume…you need to model some real environments.

    That said: my instinct tells me your IPA is a solid bet. But if you don’t make that porter….(obligatory threat implied but not typed out).

  2. Curious Reader says:

    Not sure why you would only feature a single brew as your feature beer? If you’re starting a brewery, it seems to me that you would be best advised to offer a few different beers rather than a single flagship beer. I can’t think of any breweries which I am a fan of, that have a flagship beer, they all make a variety of beers, some of which I enjoy and others I don’t. Just my 2 cents…

  3. erik says:

    @curious

    Not sure why you would only feature a single brew as your feature beer?

    Because it costs money to make beer. I can’t just throw a ton stuff out there in hopes that it will sell – unless I have a lot of capital banked.

    I can’t think of any breweries which I am a fan of, that have a flagship beer, they all make a variety of beers, some of which I enjoy and others I don’t.

    They all, now, make a variety of beers. But they had to start with one, maybe two, and expanded their portfolio from there as they were able to make sales on the original brands. It’s all about return on investment.

    Brewpubs have the advantage of having what is probably going to have a quickly rotating stock. They can make small batches of stuff. If something really doesn’t sell, they just have to empty that tank and never make it again. It’s an operating loss, but it’s (probably) just the cost of brewing and ingredients.

    I’m looking at a packaging environment. In my 5-year plan on the startup I’d like to go through at least a dozen different styles, but I need to start with one (or two – shooting for two). If I make up a batch of something that doesn’t sell, I’m down the cost of brewing, ingredients, bottles, labels, gov’t fees for the labels, shipping, etc. It’s a much larger loss.

    Better to start with one or two, sell the crap out of it, get people to trust your brand, and then expand.

  4. Steph Weber says:

    For our start-up, we’re planning to have four flagships. We wanted to pick four different styles that would cover a wide range of flavors, colors, and strengths, with enough variety to satisfy most beer drinkers.

    So we started off by thinking about what different people might be looking for. Obviously, many people only want something light in color, body, and flavor, something approachable. Since we didn’t want to make a cop-out blonde ale that we as brewers wouldn’t like, we decided on a Bohemian-style Pilsener. While it is a lighter beer, there’s still plenty of subtlety that more seasoned beer drinkers can appreciate.

    Then we wanted something… medium-ish in color. We didn’t want to make a run-of-the-mill amber, so we’re going with an ESB. We’ll likely shy away from advertising it as an Extra Special Bitter since the word “bitter” can put some people off. Our ESB emphasizes the malt, it’s highly drinkable (definitely a session beer), and the bitterness is floral and pleasant.

    Then we needed something dark and a little stronger, since a lot of folks like to see stouts and porters at a brewery. So we’re going with a black, roasty stout, somewhere around 6% ABV.

    And finally, we wanted a strong, yet approachable beer. We’ve had a lot of non-beer-drinkers try our Belgian tripel, and surprised many of them with it, not only with the fact that they liked it, but that it was so high in alcohol (around 10%). That one will be served in small goblets 🙂

    Outside of those four flagships, we want to always have a rotating IPA on tap to satisfy the hop heads (and ourselves!).

    Anyway, that’s the thought process we went through. I’ll be interested to hear what you come up with!

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  5. nate says:

    “Better to start with one or two, sell the crap out of it, get people to trust your brand, and then expand.”

    I tend to think along these lines too. I’d like to a nice repertoire, but since I want to start small with minimal equipment to avoid debt as much as possible, one or two will be all that is feasible at first. I could be wrong.

    I’ve read up on several breweries I admire, and this is how they came to be well known/respected…mimicking the tortoise, not the hare.

    That said, I am not to the point you are in being able to decide on start up brews. Hopefully soon!

  6. AFicke says:

    I’m definitely liking the IPA route…although, as was mentioned earlier, I’ve been swayed by an offering of an ESB on several occasions. I always think of dogfish head’s 3 IPA’s…same brand, but a great opportunity for (vastly different) variations on a theme.

  7. Scott says:

    How about a twist on the IPA? Maybe a brown IPA, imperial pils, organic IPA, belgian IPA, ect?? Something good and hoppy, but not standard IPA- to distinguish yourself.

  8. It’s easy to forget that a number of breweries have — or end up with — a flagship, even if it’s not advertised as such. Beer geeks may anchor (ooh, unintentional pun) on Dogfish Head’s 60, 90, and 120, but as I recall, it’s Shelter Pale Ale that’s their big seller. Similarly, the somewhat standard Pale Ale is Stone’s big ticket item.

    And of course Sweetwater 420 became a huge hit for the brewery — not sure if they planned that or not.

    We’re very intentional about developing and branding a flagship beer, the eponymous Fullsteam. I’ve considered calling it a “Carolina Common,” but to me the opportunity to have a beer that’s synonymous with the brewery is too audacious to pass up. We’ll see if it works out.

    Great blog entry, by the way!

  9. Andrew says:

    Do you already have recipes in mind? If so, which are your best? Which will be easiest for you to get completely behind and sell the heck out of? Those are important questions. If you decide to make a porter, make sure it’s the best damn porter you can make. Are there ways to make yours a better porter or to make it stand out in a crowded market? There’s a lot of brands out there and a lot of both IPAs AND porters, how does yours differ or inspire a beer drinker?

    As someone who’s starting a brewery, you have to trust your tastes, and you should be of the belief that there’s absolutely a market for a great beer, it’s just a matter of making it profitably… You might even find that trying to define your flagship isn’t possible, as your customers will have the say in the end.

  10. Matt Hendry says:

    Hate to say it but your first flagship beer should be the lawnmower beer that will provide the gateway to other styles .This could be a Blonde ,Cali Common or Cream ale or other easy accessible style .

    Brew this beer with consistency and you will be on a winner because your drinkers who want the more challenging beers will forgive you if its a brew is different from batch to batch but a Light Lager drinker that your trying to convert will want a beer that is a easy transition from their usual American Light style of beer ,

  11. Mary says:

    I’d go the IPA route, partly because I feel like there’s a lot of range in IPAs and even amidst a lot of competing beers, you can distinguish yourself. My main reasoning though is that I think of it as a good every-season beer. As someone who likes virtually everything, I drink lighter beers like blonds or American style hefeweizens primarily in the summer, and I drink more porters and stouts in the winter. I drink IPA all the time (same with a pale ale, but I like your reasoning that brought you to the porter & IPA choices).

  12. erik says:

    I love this. It’s great hearing from other startups and potential startups, as well as people who are just interested in enjoying the product.

    To answer a few questions and comments:

    – Yes, I do have recipes in mind, and in fact, in development. I’m tweaking. They hit my local audience (read: my wife, my pets, and whoever wanders anywhere near my taplines) on a regular basis. I do have reasons why I think they differ from other examples, but I hesitate to list them out here because – hey – I’ve got to keep my poker hand a secret for a while.

    – I totally disagree that the first beer needs to be a lawnmower beer that would convert Light Lager drinkers. 🙂 I wouldn’t expect those people to be the ones to try beer from a new brewery. I would expect the audience of people who are comfortable with craft beer. Later on, once my brand is established, I’ll worry about converting the non-believers. I think you have to have believers first. That will come from the people who are ready to believe.

    – I think this thread of comments is a testament to just how popular IPA is. You should try mine. It’s pretty awesome. And if you have it in your hand, I’ll tell you why it’s different after you tell me that it is. 🙂

  13. Lew Bryson says:

    I was just digging in my fridge full of beers that I’ve either bought or have been sent, looking for something to take along on vacation. And I noticed that all the beers that are still in the fridge, sitting there for months, even years, are high alcohol, sour, spiced, brett-laced, or really highly hopped. The porters, pale ales, IPAs (not DIPAs), ESBs, stouts…had all been taken out and enjoyed already. I realized there may be some meaning to this.

  14. Randy says:

    I don’t understand exactly what you mean when you say “tough sell”, with respect to the IPA and porter styles. Are you joking? IPA is not a tough sell at all, and porter is quite popular, too. And as for whoever it was that said they didn’t want to even hear about another porter on the market, I’d like to know just how many American porters are out there that are really all that memorable. I think the real problem is that too many breweries put a “stock” porter on their roster just for the sake of having it, not that there’s anything wrong with the style. And just because IPA has been more or less done to death doesn’t mean that you can’t do something really distinctive with it. How about a single hop IPA, with a variety that throws people off, like Saaz, or Fuggle? Give it some thought.

  15. erik says:

    Thanks – I should have elucidated that a little more.

    The reason that I think a release with an IPA and a porter is a tough sell is because:

    – IPA’s are common. Unless mine is *brilliant*, then I’m easily passed by for an already-existing one, especially if people are already fans of a particular brewery. On the East Coast 60 Minute IPA is becoming ubiquitous, and it’s one of the most popular beers in the country. How do you compete with that? Now, I happen to think my IPA is brilliant, but I’m also willing to accept the possibility that I’m a little biased because it’s mine.

    – Porters aren’t really all that popular in terms of sales. While it’s one of the styles that polls say consumers most expect to see at a brewery, they are one of the lowest bought styles (next to stouts). You make a great point in that there aren’t that many memorable American porters, and I whole-heartedly agree. Maybe those numbers would be different if the beer was better. I have only really been happy with one American porter, and it’s no longer in production. My porter is a fruit beer and not a straight up porter, and I’m hoping that would make an impression out of the gate, but I think that dark beers are still tougher to sell.

    I guess what I’m getting at in those being a tough sell, is that as a new business I’d hate to go to market with a product that reflects what’s already on the market. What’s the incentive to the distributor to pick up my stuff? Or a restaurant to stock it or put it on tap? Labeling? The fact that I’m new? The consumer, sure, will try new things, but when you’re selling as a wholesaler to a distributor (and a distributor made the comment about porters), that distributor needs an incentive to pick you up. If you’re more of the same, why should they?

    I’d rather carve my own niche – and like you say, maybe that’s taking a different tact for that IPA or Porter – but to me, that’s just as much of a gamble. Sure, I can make a Saaz IPA, and that’s really different, but is it any good? Do you want sales for being different or for being good?

    All that said, I think that, right now, almost any brewery has to go to market with an IPA. It seems ridiculous not to. And I’m going to stick with my Porter recipe, but I don’t think that either of them are sure bets, simply because there’s so much pre-existing competition built in around them.

    I also have another couple recipes up my sleeve that *are* a little different … maybe in a followup post.

    • meg says:

      A best bitter! You should go to market with a best bitter!!

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