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Monday, December 19, 2011

Guest Commentary: 3 Things We Can Learn from Craft Beer.

By Kelsey Roth of The Management

When the economy is bad, the knee-jerk reaction from national retailers and brands is to offer discounts and lots of them. This year’s Black Friday and Cyber Monday were the busiest yet, fueled by midnight openings, loss leader doorbusters, and limited time discounts. It’s clear that people get excited for coupons, discounts, and deals. But small businesses aren’t able to offer the same discounts as national retailers - and they certainly don’t have the budgets for huge multi-channel advertising campaigns. Yet, in spite of tough economic conditions, limited advertising, and higher prices, the craft beer industry has seen double digit growth for the past two years and should surpass that level of growth for 2011. What is this industry doing right and what can the rest of us learn from their success?

1. Quality and Value Trump Price

In a casual poll conducted on the CraftBeer.com site, people voted Quality as the most crucial trend to continue the success of craft beer. They choose to drink craft beer because they view it as a higher quality product and are willing to pay more for that quality. Value is built into the brand through exclusivity and regional ties. Most craft beer is distributed locally and is brewed in much smaller quantities than the big brewers. Therefore, craft beer drinkers believe they are getting something special (which they are) and are willing to pay more for it.

When the economy is tough, people make buying decisions on price, value, or both. As a small local business, it is often difficult to compete with the national chains on price. They have bigger distribution networks and stronger buying power. But price isn’t as important if your customers see your products or services as having better quality and value than something from a big box store. People will pay a little more for a pair of shoes if they are of a higher quality. Think about what makes your product or service special, what separates you from the rest, and promote that.

2. Be a Part of the Local Community

Without huge advertising budgets, small craft brewers have to hit the streets to get word-of-mouth advertising for their beers. This often means sponsoring local festivals, fairs, markets, and concerts to pour samples. This builds a strong connection with their communities. By supporting local events, the craft brewers add value and build brand loyalty to their beer by showing that they care about the people in their communities. By supporting that craft brewer, people feel good that they are also supporting their community. It’s a win-win situation.

The same can apply to almost any local business. Here in Somerville, there are local events going on all year-round, and many welcome sponsorship from local businesses. Find events that dovetail with your product or service and contact them about sponsorship. For example, if you own a camera shop, consider sponsoring an expo of local amateur or student photographers. It is less expensive compared to other forms of advertising and the brand value you build is often much greater. You are targeting a focused and interested market, and by supporting local events, you demonstrate that you care as much about your community as your customers do. That’s something a national brand cannot do in each and every town.

3. Embrace the Local Movement

The “buy local” movement was embraced by craft beer brewers from the early days. “Drink Local Beer” is still a chant often heard around the craft beer world. They differentiate themselves as local alternatives to the macro brewers who brew beer wherever it is cheapest, often requiring it to be shipped long distances before reaching a local store. Many craft beer brewers embrace their local ties by naming themselves and their beers after local towns, landmarks, and legends, and will often include popular local ingredients in their beer, like blueberries in Maine or coffee in Seattle. It’s a strong marketing message that says, “You can drink a beer made by strangers from someplace far away, or drink our beer made by people you know from your hometown.” By personalizing it, craft brewers create instant connections with their customers that can lower barriers to purchase. There are economic benefits as well. By supporting local brewers, people are spending their money locally and supporting companies that provide local jobs.

Take pride in the fact that you are a small local business. Localize your business in ways that the big corporations cannot. People are proud of their hometown and are happy to support businesses that are just as proud of it as they are. Become active in area organizations that support local businesses. This helps the local business community grow with a stronger voice, and it’s a great way to network and share ideas. Find opportunities to partner with other local companies when you can. For example, decorate your office with flowers from a local florist and let them advertise with a small sign. This shows your customers that you support local businesses, too. There are probably plenty of companies in your area that you can do business with if you look. If you are in Somerville, you can check out this handy directory.

As Garrett Oliver, head brewmaster for The Brooklyn Brewery, said of the local craft beer movement, “People often fail to note that the rise of craft brewing is not a fad or a trend, it's a return to normality.” What he says is true of the local movement in general. It’s not a new concept, it’s returning to the way things used to be. Local businesses have always been an important part of a strong community. Support it, and it will support you back.

Happy Holidays!

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