From Brewery to Brand

Canadian Breweries Are Crafting More Than Just Beer

By: Alyssa Andres

These days, it’s not enough for Canadian breweries to just produce great beer. Canada’s craft beer industry is growing rapidly, with over 1000 craft breweries nationwide and more opening their doors each month. It is crucial that each of these breweries attempt to set themselves apart from the competition in order to establish a following and draw customers into their tasting rooms. From logos, slogans, packaging and merchandising to marketing, advertising and social media, each decision a brewery makes impacts how the public identifies with their business. Some of Canada’s most successful breweries have taken this notion and created their own personalized brands that extend way beyond beer and allow them to garner more interest in their businesses.

  Many of these breweries use original artwork to create more exciting brands and produce merchandise that sells out just as quickly as their beer. Some breweries use their brand identity to create a voice and speak to an important cause or issue. Others organize festivals, concerts or charitable events. Many incorporate local ingredients or use their unique location as inspiration for their brands.

The Grizzly Paw Brewing Company

  The Grizzly Paw Brewing Company in Canmore, Alberta, uses its unique Rocky Mountain location to create a diverse brand that appeals to locals and tourists alike. Established in 1996, Grizzly Paw has grown from a brewing company to a brand that extends from sodas and hot sauces to clothing, housewares and even soap. The brewery recognized the potential for a successful retail business early on, especially being a tourist destination, and started creating an array of branded merchandise to sell in their taproom.

  After launching The Grizzly Paw retail store, the brewery continued to expand its offerings. They added a line of handcrafted sodas to their repertoire in 2006, made with fresh water from the streams of the Canmore reservoir. This move allowed the brewery to expand its brand to include children’s clothing and goods. Sales and Marketing Manager, Kristina Cardinale, said the brewery developed a second logo to use for the sodas and used that logo to establish their children’s brand.

  “When it comes to the kid’s side, we’re not promoting kids wearing beer brands,” she said. “We always put the soda logo on the kid’s merchandise, so now we can hit all the demographics and age groups.”

  The brewery finds that many of its visitors want to take memorabilia and souvenirs home as a memory of their time in the mountains and aren’t necessarily just looking for a beer tasting when they visit The Grizzly Paw Brew House.

  The Grizzly Paw retail shop releases a new line of merchandise seasonally that includes lots of plaids, branded toques, hockey jerseys and even collector’s items like their Grizzly Paw “Thumberjack Throw,” a fleece-lined, red and black sherpa throw that retails at $75.00 CAD. Cardinale said they are looking to add floaties to the list of Grizzly Paw merchandise this summer. While brewing great beer remains their focus, their retail shop continues to be an important part of their business.

Blood Brothers Brewing

  Many Canadian breweries choose to expand their brands to include more retail offerings as the interest in craft beer continues to grow across the country. True beer drinkers love to sport their favorite beer brands, and they’re not just pulling these T-shirts out of a case of beer anymore. Consumers are willing to pay good money to showcase their favorite breweries, which creates a real opportunity for brewers to allow their following to promote their brand for them.

  Blood Brothers Brewing in downtown Toronto is an example of a brewery that has taken its business and developed a recognizable brand of street-style that can be seen all over the city. Owners and real-life brothers, Dustin and Brayden Jones, started with a simple logo designed by artist and close friend Meghan Kramer. They then started commissioning Kramer to illustrate all of their beer labels, using her unique style of artwork that is now easily recognizable as the Blood Brothers brand. The Jones come up with the name for the beer and share the backstory behind why they chose it, and from there, Kramer has complete creative freedom to interpret. These labels are then transformed into T-shirts, hoodies, posters and other merchandise to sell in the brewery taproom.

  The Jones brothers had no idea what the demand for merchandise would become. The glassware sales initially tipped them off to the importance of having a retail shop when they opened their taproom in 2016. Today, this paraphernalia is so highly sought after that it’s hard to get your hands on.

  Blood Brothers continues to expand its offerings, and today, their shop includes not only clothing and glassware but also pins, patches and playing cards. There’s even a bottle opener resembling a folding butterfly knife that the brewery can’t keep on the shelves. The brand appeals to a specific sort of hipster beer-lover and has become a signature look amongst Torontonians. Each new beer is an opportunity for a new piece of art and more merchandise in the Blood Brothers retail shop.

Collective Arts Brewing

  The idea of original artwork is pushed one step further by Collective Arts Brewing in Hamilton, Ontario. This one-of-a-kind brewery “fuses the creativity of craft beverages with the inspired talents of artists from around the world,” using a different artist for each piece of art that goes on their cans. Today, the brewery has commissioned over 1000 artists, showcasing each of them in their taproom in a gallery-style display of tall cans.

  Collective Arts also promotes musicians, not only on their cans but through live festivals and events. In 2019, Collective Arts released their first Audio/Visual Lager: a music-inspired beer featuring a record label, four bands and one visual artist on each can. The brewery threw a week of free concerts in Toronto to celebrate the launch. They also organize the annual “Liquid Arts Festival” to celebrate beer, art and music, featuring bands, live art installations, food and, of course, Collective Arts beverages.

  Recently, Collective Arts expanded its platform and now uses its brand to promote larger issues, such as tolerance and equality. They released their “Amplified Voices” series in 2020, using limited-edition artwork aimed at “provoking challenging topics and creating space for groups that are too often left in the margins.” The brewery raises money for various causes through their Collective More. charitable initiative, aimed at supporting community, creativity and equality. Their goal is to financially assist charities that do work “to bring more equality and better the well-being of people in their communities.” The Collective More. initiative continues to sell merchandise, screen prints and limited-release beers, with proceeds funneling back into their charitable initiative.

  For International Women’s Day, they celebrated by teaming up with the Pink Boots Society, an organization created to assist, inspire and encourage women in the beer industry, to create a grapefruit-elderflower IPA.

  Collective Arts believes that making beer is a platform, and they take it upon themselves to speak out about issues that matter.

Beyond the Beer

  These days, people are paying attention. Social media and the internet have changed the way that consumers interact with brands. Beer companies have a real opportunity to make a statement and engage with their audiences. They can speak directly to their consumers, something that wasn’t possible even a decade ago. Every new post is an opportunity to share a message, draw attention to their company and build anticipation for upcoming products and release dates.

  Craft beer is a thriving online community, and new breweries are joining daily. Brewing companies must not only consider the beer they are producing but also their overall brand and demographic. The most successful beer brands in Canada have a recognizable aesthetic that appeals to a specific demographic. Many have eye-catching logos and beer cans that border on fine art. These breweries bridge the gap between beer and brand by developing merchandise and apparel, funding live and online events and using their platform to deliver a message beyond “let’s party.”

  As social media and online communities continue to grow, breweries must understand the power of their brand and the voice that comes along with it. Beyond the beer, clothing and accessories, breweries have the opportunity to share a message, often to a large audience. It’s important to take this opportunity and use it to create positive change.

  As the world continues to evolve through a global pandemic, enormous human rights movements and an onslaught of technological advances, it is more important than ever to create brands that inspire good. Whether they source local ingredients, support struggling artists, collaborate with other small businesses or donate to charitable causes, giving back is an integral part of creating a successful brand, and as consumers, it is a crucial thing to consider when choosing which brands to support.

Breweries: How to Price your Beer

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I recently bought a book called Priceless, The Myth of Fair Value. The book is 300+ pages long and provides great information about pricing and the role of human psychology in how purchasing decisions are made.

While the book contains a lot of interesting stories, studies, and research, it doesn’t do much to help with the fundamental question: How should you price your products?

Ideally, to price your beer, you would determine the costs, add a healthy markup, and sell it to your wholesaler (or retailer) at a fat profit. Unfortunately, the market forces and your competitors have some influence here.

So, how do you price your products?

You can look at what everyone else is charging and follow suit. You can take a wild guess and hope it will work out profitably in the end. Or you can go along with what your beer wholesaler suggests for pricing.

Regardless of how you may have priced your beer in the past, today we’re going to talk about how you can price your products profitably for the future. To make the concepts easier to understand, we’ll use hypothetical pricing numbers and examples. And we’ll walk through a template you can use to make pricing easy. Best of all, you don’t have to read a 300-page book to find the answers.

Disclaimer: Since we are talking pricing, all examples listed are hypothetical only and used for illustrative and informational purposes. Prices, costs, and margins will vary widely based on market conditions and other factors.

How to Price Your Products

  • Pricing Terms: PTC, PTR, PTW
  • How Pricing Works in the Real World: Margin needed by the brewery, wholesaler, and retailer
  • Use the Pricing Model: Plug n’ play Pricing tool for your Beer

Pricing Terms

The typical beer sales cycle looks like this: the brewery sells to the wholesaler, who then sells to the retailer, who then sells to the end consumer.

At each stage in the sales cycle, there are different prices and markups that are charged. The Price to Wholesaler, or PTW, is the amount the brewery charges to the wholesaler. The Price to Retailer, or PTR, is the price the wholesaler charges to the retailer. Lastly, the Price to Consumer, or PTC, is the amount charged to the consumer. This is the amount listed on the store shelf for your beer.

You won’t be surprised to hear that the price the consumer pays for your beer is significantly higher than what you sold it to the wholesaler for. The reason, of course, is that each stakeholder in the sales cycle needs to make money. The brewery, the wholesaler and the retailer all have margins that they need on the sale of the beer in order to run their business profitably.

Those terms again…

  • PTW = Price to wholesaler
  • PTR = Price to retailer
  • PTC = Price to consumer

How Prices Work in the Real World

To properly price your beer, it may be useful to work backwards from the Price to Consumer. This is the price of the beer on the shelf at the retail account. If your competitor’s brand is selling for a hypothetical $12.99 a six-pack, you may want to price your beer accordingly.

The challenge is to figure out how much to charge your wholesaler, who then will charge the retailer, who then will price the beer at the $12.99 price point. How does all that math work? We’ll take this in small steps.

Here’s a hypothetical example. Let’s say you charge the wholesaler $25 for a case of beer. The wholesaler needs to make, for example, a 30% margin when they sell it to the retailer. To get a 30% margin, the wholesaler then charges the retailer $36 for the beer.

The math: $36 minus $25 = $11 Margin for the wholesaler. $11 divided by $36 = 30.5% Margin percentage.

Continuing the example, let’s say the retailer also needs to make 30% on the beer. Since they will sell it in six-packs, they markup the beer and charge the customer $12.99 per six-pack.

The math: 4 six-packs times $12.99 = $51.96 total sales to consumer for the case of beer. $51.96 minus $36 cost of beer = $15.96 margin.  $15.96 margin divided by $51.96 sales price = 30.7% margin percentage.

Each stakeholder needs to make their margins at each point in the sales cycle. This is what keeps the world going round, and the beer being sold. The numbers can get confusing fast. Thank goodness we have a Pricing Model that will do the math for you.

Use the Pricing Model: Plug n’ play Pricing for your Beer

There are many variables to consider when pricing your beer. You can break out the calculator, pen, and pencil, or you can use this Pricing Model spreadsheet. Below is a snapshot:

The first step is to determine what your beer costs to make. These costs include direct labor, direct material, and overhead. Next, determine the margin that your brewery needs to cover operating costs and realize a net profit.

In the example above, the total costs of the package are $14.80. The PTW, price to wholesaler is $25, and the brewery margin is 40.8%.

The next step is to understand the required margins for the wholesaler and retailer and expected price to consumer.

In the example above, the wholesaler sells to the retailer at $36 per case. The retailer then sells the case in four units (four six-packs) at $12.99 each. This is the price to consumer. 

The pricing model takes all the variables involved in setting the price and combines them into an easy-to-use spreadsheet. Simply enter a few numbers and you’ll have the information to get your beer on the shelf at a competitive price.

Wrap Up + Action Items
Read and understand the pricing terms – Price to Wholesaler (PTD), Price to Retailer (PTR) and Price to Consumer (PTC). Know that everyone needs to make money at each step in the sales cycle. The wholesaler needs to make their margin, and so does the retailer. Most importantly, so do you, the brewery owner.

Don’t guess or follow the herd when it comes to pricing. Use the pricing model to properly price your beer and achieve profitability. Your income statement will thank you.

You can download a copy of the pricing model at www.CraftBreweryFinancialTraining.com.