It’s the moment you’ve been waiting for: a great-tasting product has grown into a thriving business, and you’re ready for the next challenge. But what is the next step for your business? Brewery expansion? You may consider opening a new location, packaging your product for off-premise distribution, or investing in new equipment to increase your production capacity.
Before you begin, however, take a breath. It takes strategy and patience to sustain growth over the long run, especially in uncertain times. Craft brewer volume decreased 9% in 2020, according to the Brewers Association.
We recently caught up with two craft producers who shared their insights on navigating growth transitions over the last year. Here are the takeaways we learned.
Stay True to Who You Are
When business is thriving, opportunities are everywhere, and it can be tempting to chase each one that comes along. Take a moment to consider how they fit within your overall brand before moving forward.
For instance, Ratio Beerworks has a strong sense of identity. The Denver-based brewery was founded by punk rockers in the River North Art District (RiNo), and the DIY ethos is present today. Ratio had been looking at brewery expansion to another taproom for several years, but the brewery wanted to keep the artistic urban feel it was known for.
Then, the COVID-19 pandemic happened, and Ratio heard about an available spot at a recently closed brewery in an up-and-coming area called Overland. The space has a bigger yard, which can help Ratio host more events.
“This just happened to be in a similar neighborhood,” said Jason zumBrunnen, Ratio co-founder and brewmaster. “It’s far enough south that it doesn’t really overlap with our current brewery, but yet it’s still an urban setting, just like our original. So, we didn’t have to change our main focus.”
Today, Ratio is renovating the space and plans to open sometime this summer.
Respect Your Turf
For Societe Brewing Company, beer is about community. Societe maintains a focus on West Coast IPAs and building relationships, as evidenced in the tagline: ‘Beer Folk Unite.’
Until recently, the brewery has focused on its home market San Diego, and that strategy helped it adapt during COVID-19. Societe installed a canning line at the end of February 2020, and that timing proved impeccable when the pandemic began. With mass lockdowns, cans were suddenly all the rage.
Societe’s sales team worked with retailers and mom-and-pop locations to get cans into stores, and the year proved successful. Even with the volatility of 2020, Societe nearly doubled its barrel count. Teddy Gowan, director of brewing operations, believes staying close to home made a big difference.
“We’ve always wanted to win in our home market,” Gowan said. “That has been the focus since the beginning. It’s where we have the most relationships and where we’re the most rooted. We believed if we grew from there, it would allow us to grow healthy and strong, and the pandemic is a good example of that.”
Don’t Forget to Plan Ahead
An important part of managing a growth trajectory is keeping every facet of your business functioning properly. Using resources such as business management software can provide you with reliable data, so you can plan with confidence.
During the pandemic, Ratio navigated multiple shutdowns. To maintain inventory, zumBrunnen emphasized the importance of inventory monitoring during this period.
“It’s really back to watching inventory buffers once or twice a week,” zumBrunnen said. “It’s just a tight follow on that. Do grow when you can and add incremental volume as it comes.”
Having a plan has also been a tenet for Societe. Gowan said the brewery wanted to make sure that it could produce canned beer to the best of its ability.
“We did our research on the canning line, and we realized the canned beers were really stable,” Gowan said. “We’re really confident in them.”
It’s Okay to Delegate
Often when a business is thinking about brewery expansion, it needs new resources to see it through, and that can mean involving new partners.
Distribution is a prominent example of this. Societe relied on self-distribution for its first seven years. Then in recent years, it began working with a wholesaler. Gowan said that the decision to involve a wholesaler allowed Societe to focus on what it knows: beer.
“We realized if we wanted to keep pushing it at self-distribution, we were going to essentially have to become a logistics and a distribution company.” Gowan said. “We realized that there were other people out there that already had the infrastructure and understood the process better than we did. So, it was sort of a no-brainer transition.”
As of January, Societe is expanding their brewery to Los Angeles County and has signed with a full distributor.
Keep Moving Forward
There is always uncertainty in business, and the pandemic was uncertainty on steroids. Otherwise growing businesses changed their routines to keep up with health and safety guidelines and their effect on consumer tastes.
Before COVID-19, Ratio hadn’t planned on canning beer, but COVID-19 prompted it to change course and purchase a canning line. Today, canning is a big part of Ratio’s future plans, and its new Overland location has a substantially larger canning facility. Jumping into off-premise sales rekindled Ratio’s DIY punk rock spirit, according to zumBrunnen. He said good opportunities came because the company grinded through.
“Some of it was easier than we thought,” zumBrunnen said. “The silver lining was we thought, ‘Hey, let’s get moving on this. Maybe off-prem is not that crazy.’ You have to make that first step.”