Craft Brewery Marketing Strategy
Because of the rapid increase in competition in the last few years, the brewery marketing tactics and strategies that have worked in the past are now becoming saturated.
Once upon a time, just being a craft brewery was enough to send flocks of people to your door.
These days it feels like every suburb now has its own craft brewery.
It’s more important than ever to find out how to stand out for the crowd.
The goal of this guide is to show you how you can market your beer directly to the consumer and answer some of the questions you might have about this strategy.
The problem with retail
Many breweries want to get their beers into as many places as possible to maximise sales.
Therefore you turn to retail stores.
Liquor retail stores allow breweries to access new areas without all the overhead involved with opening a new location and leverage the retail stores targeted customer base.
There are issues with this approach.
One of the main problems with retailers is quality control.
Unfortunately, most liquor retailers do not have the facilities to be able to store your beer at correct temperatures and can often sit on shelves for excessive periods of time. This will impact the final product that the customers drink.
What that means for you is that your customers could be potentially consuming one of your products that is not up to your standard.
This can be even worse with big retailers as they will often store the bulk of their stock in big warehouses where the beer will rapidly decrease in quality due to the high temperatures.
The second issue with leveraging retailers for distribution is that you have no way to keep in contact with your customer.
Building lifetime customers
What are the successful retailers doing the craft breweries aren’t?
Capturing customers data…
All the major Australian liquor retailers have one thing in common, that they have the ability to communicate with their customers post-sale.
They do this with loyalty programs such as Flybuys and Dan Murphy’s member’s card.
Customers can sign up to these programs and claim points for each sale.
The retailer can use the data from these programs and create targeted messaging for their customers to help them become repeat customers.
The big retailers understand one thing, lifetime value is king.
Because their margins can often be so small, they know they need loyal customers who will become regulars.
These loyalty programs are designed to encourage customers to repurchase form their stores to maximise the lifetime value of each customer who comes through their doors.
The goal is to create a system where you have a direct communication channel between you and your customers.
Think of iceberg.
Most people see a sale, which is the exposed part of the iceberg, but there is so much unseen below the surface.
But you should be focusing on creating such a great customer experience that each customer wants to purchase again and again.
By having a system where you can communicate directly with each of your customers, you now have the ability to serve each person who tries your beer at a higher level.
Direct to consumer marketing
Direct to consumer is the future of beer marketing.
What direct to consumer allows us to bypass traditional retailers and create our own distribution channel where we have a direct line of communication with our customers.
The benefits of this approach are that we can capture a higher percentage of each sale as profits, increase revenue, understand our customers more and provide our consumers with the freshest products that meet our standard.
The main two ways breweries can sell directly to the consumer is in their cellar door/tap house or through their own online store.
I personally prefer online as you can only scale so much selling beer from your tap house, compared to online which we are yet to see the ceiling of its potential.
Selling beer online
In order to be successful in selling your beer online, you need to understand the two main consumer behaviour patterns.
You have two main types of customers that will interact with you in vastly different ways.
These are customers who have never tried your beer.
Typically the hardest to convert, but understanding how to market these types of customers is the key to scaling.
This customer typically will not respond to offers on bulk items such as cartons of beer.
You will find it almost impossible to sell a carton of beer to someone who has never tried your beer before.
What you will find is that cold customers will respond much better to smaller offers, in particular, sample packs.
Sample packs give cold customers a low-risk opportunity to try your beer without investing too much.
I often refer to these as front end offers.
A front end offer is designed specifically for someone who has never tried one of your beers and is a cold customer.
Front end offers to tend to be lower in cost and lower in profit margins but is an ideal way to introduce someone to your brewery.
Which is why mix packs/sample packs work so well.
It is significantly easier and cheaper to sell to someone who has already purchased from you than it is to sell to someone who has never tried your beer.
This has often been referred to as your 1000 true fans.
Hot customers interact significantly differently with your brewery than cold customers do.
While cold customers enjoy sampling a range of your beers, this may not appeal to hot customers.
Hot customers will typically know which beer of yours they like and are more likely to buy cartons.
These customers are more loyal, easier to convert and have significantly higher profit margins per sale than cold customers.
The core of craft brewery marketing
At its core, your goal is to acquire cold customers, turn cold customers into hot customer and remarket to your hot customers.
This is why selling via your own website is essential.
Because when a customer makes a purchase from your website, you now have the ability to create a list of hot customers, who you can promote offers to.
To make this work there are 4 things we need to master
- Generating traffic
- Selling front end offer to cold customers
- Transitioning customers from front end offer to back end offers
- Promoting more back end offers to hot customers
The money is in the list
There is a saying amongst direct response marketers that the money is in the list.
What that means is that if you have a list of customers that you have direct access to, via an email list or retargeting ads.
You have the ability to promote offers that can help generate sales on demand.
If you make a limited release of a beer or have a fresh batch of beer for your customers, you now have a direct line of communication to your best customers that have already purchased from you and are willing to purchase from you again.
Currently, my favourite way to generate traffic for my clients is Facebook Ads.
While I understand, most people want organic traffic, it’s far too unpredictable to build a sustainable business around.
Facebook Ads are quick, and currently undervalued.
Facebook Ads allow you to grow and scale at a rapid rate and put your products in front of people who are interested in craft breweries.
We have the ability to get just about instant results and start generating and ROI quickly.
By far, the main question I get in regards to selling beer online is shipping.
Which is completely understandable, beer can have significant weight, especially if you’re talking about cartons of beer.
I have 3 suggestions when it comes to shipping.
The leading website that is selling craft beer online is Dan Murphy’s.
They have a program that allows smaller manufacturers who don’t produce the quantity required to get into their stores to sell via their website.
So Dan Murphy’s sells your beer and you mail it.
Dan Murphy’s takes a 25% cut from each sale so I would leverage this to your advantage.
If the cost of shipping is less than 25% of the sale, you could offer free shipping and still make more profits than if you had sold that product via Dan Murphy’s, and best of all you now have a direct line of communication with that customer to sell more products to.
I would save the 25% rule for your front end product.
Because customers hate paying for shipping!
We want to reduce as much friction as possible, so providing free shipping is a great way to help new customers experience our products.
Free shipping over $X
This uses a similar concept to the 25% rule.
Most shipping companies will allow you to bundle up together products and pay one set shipping fee (check with your fulfilment company first!)
So what you could do is offer an incentive such as free shipping over $150, and because you’re paying one shipping fee, this could consumer a significantly less % of the total sale than the 25% rule.
This method has the potential to generate higher gross profits than if you charged full shipping because even though you’re eating the cost of shipping into your profits, the average cart value has increased enough to accommodate.
This can even be used as a promotion.
Some e-commerce solutions such as Woocommerce allows you to create coupon codes that you can give out.
This can help create a scarcity that will help encourage a sale.
Free local pickup
People love to drink locally.
What you’ll find is that most of your customers will be local.
Offering free local pickup could be a great option for your local customers save on shipping fees.
This feature is offered by Woocommerce for free, if you are doing this on Woocommerce, I would recommend limiting regions by postcodes. This will help prevent people from choosing this option who aren’t local to your area and avoid the logistics of refunding or finding an alternative.
How do I set up an online store if I already have a website?
This depends on your situation.
If you have a website you aren’t happy with and could do a much better job of representing your brand, this could be a good opportunity to get your website redesigned, your online presence is important and having an easy to use website can really help.
If you currently have a website that you’re happy with, you have two options, if you’re still in contact with your web designer and they have the ability to add an online store you could ask them to add the feature.
Personally, I don’t add e-commerce functionality with pre-existing sites that someone else has built, there is too much risk involved for me especially if it’s using a WordPress theme I’m not familiar with.
A third option is to set up an online store on a subdomain.
A subdomain acts as a separate website to your main website, instead of your website being www.example.com/store, your store would be on the URL www.store.example.com.
This can be an easy way to set up a store without touching your main website.
If you’re looking at building a website, I highly recommend my article on how to create an online store, where I take you
What if you don’t have time to fulfil orders
Running a craft brewery is intense
Especially if you’re new and can’t afford a large team to delegate tasks to.
While selling your beer online can be a great idea, the act of fulfilling orders and sending them could take the time that you can’t afford currently.
However, there are options.
You can use a fulfilment centre, these are set up to stock and ship your orders on your behalf.
This can be a great option while getting started until you can reinvest the profits into new staff to handle the orders.
There is a secondary benefit to using fulfilment centres, by spreading your stock around a variety of fulfilment centres across the country, you can decrease the shipping time for the customer.
One of the biggest drawbacks for online sales is the shipping time.
So if you can leverage fulfilment centres for your brewery, your customers can access your beer faster which helps provide a better experience.
Cracking the GABS 100
How could direct to consumer marketing help with people’s choice awards?
One of the trends I’m seeing at the moment is breweries using Facebook ads to ask people to vote for their beer for the GABS 100.
The problem is…Their targeting people who may not have tried their beer.
Because they don’t have any data on their consumers, they have no way to contact them.
So breweries are resorting to a shotgun approach, targeting anyone who likes beer on Facebook who likes craft beer, this is a fantastic way to waste money.
This is where direct to consumer marketing comes in because you have a direct line of communication with your customers, you can send targeted messages to people who would actually vote for your beer.
It’s kind of like a sniper vs shotgun.
With a shotgun approach you’re spraying and praying, whereas, with a sniper, you’re targeting with pinpoint accuracy.
Is an online store right for me?
It depends on your circumstances.
I believe for most craft breweries this can be a great option.
While I’m not suggesting this is going to be the be all and end all marketing for breweries and completely eliminate the need for retail stores and pubs.
Direct to consumer marketing for beer could be a great way to generate more revenue and have a stronger connection with your customer.
Direct to consumer marketing also doesn’t have to work in isolation but can enhance other marketing avenues.
For example, you could sell your front end offer exclusively from your website, ship your products from your fulfilment centres which mean you limit your manual handling, but then retarget people on Facebook who have purchased from your website to promote offers on your beer at their local bottle store.
Another strategy is to retarget purchases on Facebook and geolocate ads to people who live near a pub that serves your beer.
Having a list of people who have tried and enjoy your beer could be such a powerful asset to utilise.