Day 567

Rick Mercer’s visit to the Teaching Brewery was aired on CBC last night, and yours truly was a star, dahling. Yes, I was on camera for at least 8 seconds! And Rick chugged my Blackheart IBA straight from the bottle while I stood watching. Amazing.

Alas, my agent failed to return my calls this morning, so it was back down the QEW in time for Promotion & Sales. We had a special guest: Phil Kerwin of Chimpanzee, a marketing and communications firm. Chimpanzee actually started in the Niagara region in 2003, but over the past decade, they have expanded to places as disparate as Sturgeon Falls (Northern Ontario), the UK, New York, and Serbia. They count among their clients Pimm’s, Archer’s, Guinness, Smirnoff (Black Ice) and Fielding Estate Winery.

They were also the marketing agency chosen by Niagara College to brand and market the college beer when the Brewmaster program started up two years ago. Apparently they were given permission to go “edgy”–dangerous words for a marketing agency, and judging by some of the, uhhh…. interesting…. ideas Phil showed us, they certainly were skating close to the edge. However, what they didn’t realize is that the people who told them to go edgy were not the people who would be approving their ideas. In the end, all of the innuendo was replaced by the relatively tame “First Draft”, “Certified Originals” and “Brewmaster” series of college beers.

We Brewmaster students can certainly commiserate with Phil–when we create our own beers in the Teaching Brewery, we also name them. However, when the beer hits the campus store, more than a few racy names and clever double entendres have been arbitrarily replaced with something a bit tamer. Even my own Vice Populi–which I thought was pretty innocuouswas renamed something fairly gormless.

To avoid this problem at a professional level, Phil did suggest that a valuable strategy for a marketing team–and a great way to reduce wasted time and energy–would be to sit down with the actual decision-makers right from the start of the creative process and find out how far they want to push the envelope.

In Brewery Management, it was all about planning a brewery expansion. This project can break a brewery into very small pieces if done wrong, or if done for the wrong reasons, so the first step is to establish a need for expansion.

The most obvious one is sales demand–people want to buy more beer than you can make. There may be other reasons, though: lack of space in the brewery, equipment limitations, keeping up with the Joneses, customer demand for new styles, and a belief that future trends are pointing towards a need for greater production.

Those are all good reasons on the surface, but before you start getting quotes on a new brewhouse, do a bit of cost-benefit analysis. This is going to be the biggest project since you opened the brewery, so make sure your reasons are long-term (more than 2-3 years). Remember that increased production may trigger higher taxes–how will that affect your bottom line? In addition, will all the ancillary equipment play nicely with your new equipment, or will you find yourself replacing steam and water lines, buying larger diameter hoses or replacing the brewery electrical? What about storage–do you have a place to keep all your new beer? Will you have to hire more people? Do you have the logistics in place to deliver all your new beer? Do you have proper quality control in place to make sure your new beer has shelf stability? Can your current ingredient suppliers keep up with your increased needs? Will the municipality be happy with the increased Biological Oxygen Demand (BOD) going down the drain?

Mike Arnold raised an interesting strategy. You want to delay expansion for as long as possible due to the cost, so instead of simply increasing supply by expansion or contract brewing some of your beer elsewhere, why not try to dampen demand? If you have a popular beer that isn’t very profitable, and a much more profitable beer that sells less well, make more of the profitable beer at the expense of the cheaper beer–sales will drop off, but you will probably make as much or more money because of the higher profit margins.

As a matter of fact, don’t expand because of demand for a cheap, low-profit beer–it will take too long to see any cost-benefit. Do expand because of demand for an expensive, high-profit beer.

The bottom line seems to be: expand only if absolutely necessary, and only expand to your planned needs.

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4 Comments on “Day 567”

  1. Best 8 seconds of my day. šŸ˜€

  2. Andrea Says:

    Only 8 seconds, but RM liked your beer! A new customer??

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