Check Your Business Strategy Early and Often

What makes the largest craft breweries truly successful is that they are about more than just great people making great beer: They are also about building great companies. Countless people have the ability to brew high-quality beer, but not many have the skills and desire to create a profitable company that enables their consumers to consistently enjoy their craft.

From the initial stages of business planning onward, brewery owners are forced to make difficult decisions that affect the direction of their business—from buying equipment, hiring employees and constructing facilities, to what types of beers to brew, packaging to use and methods for reaching the public. Successfully navigating these choices relies upon having a clearly defined vision and strategy.

New Belgium is an example of a brewery with a mission based on organization building. As described on New Belgium’s website, “Before they ever sold a bottle of beer, [Kim Jordan and Jeff Lebesch] hiked into Rocky Mountain National Park with a jug of home brew in one hand and pen and pad in the other. Together, they wrote down what they wanted to instill into this business dream of theirs.” The brewery’s strategy is defined by its purpose statement: “To operate a profitable brewery which makes our love and talent manifest.”

Writing down a clear mission is a start, but the true benefits of a business strategy come from making real decisions based upon these statements. At New Belgium, management awards employees ownership (and cruiser bikes) after only one year of employment. This alignment creates a culture of people who work hard to support the brewery’s mission, in turn supporting the profitability of the company.

For many craft breweries, strategies are often based on geography. For example, Harpoon Brewery in Boston and Brooklyn Brewery in New York City have executed upon strategies of becoming known as the leading local breweries in their respective regions. Golden Road Brewing, which launched in September 2011, is taking a similar approach, aiming to become Los Angeles’ largest brewery. This goal has impacted the decisions that the brewery has made across production, distribution and marketing: Co-founder Meg Gill says that Golden Road crafted a Hefeweizen tailored for LA consumers, chose to package in cans to best complement LA’s warm weather and outdoor lifestyle, and runs a regional-based marketing campaign. Since launching in August, Golden Road has already opened an on-premise pub and started a project to expand capacity to 60,000 barrels per year.

Another popular strategy is specializing in a certain beer style—Allagash in Portland, Maine, for example, focuses on Belgians, while Duck-Rabbit is known for their dark beers, and Alaskan Brewing barrel ages all of their beers.

Other breweries take a production-based approach, such as Stone Brewing and Sierra Nevada, which both focus on planning, operational efficiency and product control. Stone’s CEO and co-founder Greg Koch says, “We prefer to keep our attention focused on making awesome beer and keeping a steady supply of it out there to be enjoyed. By keeping our sights set on that, I truly believe that’s what’s taken us as far as we’ve gotten.”

The soon-to-launch brewery Singlecut Beersmiths, in New York City, also aims to execute a production-based strategy. For president and head brewer Rich Buceta, that means brewing 100-percent on-premise, launching with a 30-barrel brewhouse in order to ensure it can meet demand, and self-distributing to maintain a direct connection with retailers.

The reason that each of these strategies is effective is that they were not devised once these breweries were up and running; rather, they were all thoughtfully created to help guide the many decisions and actions that these breweries hoped would lead to their success. ■