Category: Marketing

A Closer Look at Celebrity Brands of Craft Spirits & Beer

Cyndi Leave a comment

By: Alyssa L. Ochs

Actors, musicians and other celebrities love craft beer and spirits just like the rest of us. Yet the difference is that they often have the means, resources and connections to make significant investments in the industry. An increasing number of famous individuals have been getting interested in the craft beverage business and putting their names onto labels of products they stand behind or perhaps have even helped create.

  Here’s what the celebrity craft beverage industry looks like right now, major players in this field and what there is to look forward to in the future.

Celebrity Involvement in the Industry

  Celebrities take a step away from their typical work to get involved with craft beverages for various reasons. Some have a true passion for the craft, while others are in it for the money or just looking for more exposure and additional ways to promote themselves. While some celebrities learn about the production process and engage in making beer and spirits themselves, others do little more than attach their name to a brand for cross-promotional purposes.

  Either way, celebrity-brand craft beverages are often unique because of their higher price tags and limited availability. Some celebrities use their beverage-related profits to benefit charities, and others use their star power to launch tasting rooms for VIP guests. However, there are unique challenges that come with producing, marketing and selling celebrity craft beverages that other beer and spirit companies may not encounter. For example, a beverage brand may suffer when an affiliated celebrity declines in popularity or is involved in a scandal. Meanwhile, a celebrity’s popularity may be affected if the beverage he or she promotes isn’t received well by the public. Some craft beverage fans believe that beer and alcohol belong to them personally and not the rich and famous. Therefore, they might be turned off by the concept of celebrity affiliations and avoid these products entirely.

  But for people who are loyal to certain celebrities or just curious to try celebrity-affiliated beverages, these are accessible products that can often be purchased in stores and online. More popular beverages are usually found in liquor specialty stores, such as Binny’s and Total Wine & More. But you might have to search for more obscure and exclusive celebrity-brand beverages online through sites like Cask Cartel and Sip Whiskey.

Examples of Celebrity Beverage Endeavors

  From musicians across all genres to television personalities and film actors, a diverse array of celebrities have been making their mark on the craft beverage industry in recent years. Some of these examples were limited editions that are no longer sold, while others are ongoing efforts that are changing the industry one bottle or can at a time.

  For example, actor and comedian Dan Aykroyd co-founded Crystal Head Vodka as a way to introduce additive-free vodka and bring more creativity to the vodka industry. Along with his business partner, artist John Alexander, Aykroyd envisioned a new kind of vodka without unnatural ingredients and has a true passion for the product.

  Several years ago, pop music star Justin Timberlake entered into a co-branded partnership with Sauza Tequila to create Sauza 901 silver tequila. The name 901 references the area code in Memphis, which is Timberlake’s hometown. Timberlake said that he developed a love for tequila after visiting Jalisco, Mexico and seeing the craftsmanship that went into each bottle of the spirit.

  Iconic hip hop legend Snoop Dogg partnered with his friend and co-founder of Trusted Spirits, Keenan Towns, to establish his own spirits brand. Known as the “King of Gin and Juice” because of his famous song of the same name, Snoop Dogg developed Indoggo Gin, which mixes seven premium botanicals with all-natural strawberry flavoring. In the past, the musician has also had marketing deals with the Corona beer brand, released his own rosé wine and made investments in the cannabis industry.

  Meanwhile, actor William H. Macy co-owns Woody Creek Distillers, which is based in Colorado and operates a distillery and tasting room just west of Aspen. Not only has Macy invested in the brand, but he has also rebranded himself as Willie Creeks, an alter ego who is a musician and offers life lessons that ultimately promote rye whiskey.

  Another celebrity who has been involved in the spirits industry is actor Ryan Reynolds. He teamed up with Aviation Gin in 2018 after falling in love with the spirit and investing in the company. Since then, Reynolds has become a co-owner of Aviation Gin and driven the creative marketing for the brand. In recent years, and staying true to the aviation theme, he and the brand have teamed up with businessman Richard Branson to serve the gin onboard Virgin Atlantic and British Airways flights.

  A financial success story in the celebrity spirits industry brings us to the actor George Clooney. The idea behind Clooney’s tequila brand, Casamigos, came about after he and his friend, Rande Gerber, were in Mexico and wanted to find a smooth tequila they could sip all day without the dreaded next-day hangover. This was back in 2013, but the friends still personally tasted every batch of tequila made four years later. The brand exploded in popularity, mainly through word-of-mouth and having Clooney’s name attached to it. In 2017, they ended up selling the brand to Diageo for $1 billion, which made Clooney the highest-paid actor of the year.

  Thus far, celebrities have been more involved in the spirits industry than in craft beer or wine. But to a lesser extent, those markets are also drawing the attention of the rich and famous.

  The late-1990s and early-2000s pop band Hanson, comprised of three brothers who love craft beer (now that they’re old enough to drink it), launched the Tulsa, Oklahoma-based Hanson Brother Beer. They created their own craft beer business in 2013 with their flagship beer, Mmmhops, a 7.5 percent English-style pale ale. Since then, the brothers launched the Hop Jam Beer and Music Festival, collaborated with other breweries to create unique beers and dedicated a portion of their beer-related profits to clean water wells in Africa through a nonprofit organization they created.

  Another celebrity beer collaboration involves The Grateful Dead and Dogfish Head Brewing, based in Milton, Delaware. The psychedelic rock band has been involved with the brewery since 2013 and has worked together since then to create a third version of American Beauty HazyRipple IPA. The band’s “American Beauty” album and famous track “Ripple” inspired the beer, which features the iconic Grateful Dead dancing bear image on the label. However, the band’s involvement with other aspects of the beer production process is limited.

  To show how diverse and widespread the celebrity beverage industry has become, here are some additional examples of celebrities and their affiliated beer and spirit brands:

•    Kenny Chesney – Blue Chair Bay Premium Rum

•    Kendall Jenner – 818 Tequilla

•    Marilyn Manson – Mansinthe

•    Dwayne ‘The Rock’ Johnson – Teremana Tequila

•    Mark Wahlberg – Flecha Azul

•    Curtis ‘50 Cent’ Jackson – Effen Vodka

•    Bryan Cranston and Aaron Paul – Dos Hombres Mezcal

•    Sean “Puff Daddy” Combs – Cîroc Vodka

•    Channing Tatum – Born and Bred Vodka

•    Drake – Virginia Black Whiskey

•    George Strait Código – 1530 Tequila

•    Bob Dylan – Heaven’s Door Whiskey

Considerations and Looking Ahead

  The celebrity-brand beverage industry continues to be exciting because there’s always something new in the works to look forward to. There is always a strong public fascination with rich and famous people, and that trend is not likely to disappear anytime soon. As an increasing number of celebrities enter this industry, the competition increases and drives the demand for superb product quality that goes beyond just a popularity contest of celebrity status.

  Yet there are significant legal considerations that celebrities must keep in mind as they venture into the beverage industry for the first time. Collaborative efforts between celebrities and spirit-makers can take on various forms. These include development deals that give celebrities greater control over the final product and endorsement deals that offer little more than using a celebrity’s name. Other deals involve simply using a famous person’s image to promote an existing brand all the way up to full ownership, in which a celebrity owns both the brand and the means of production.

  Specific state and federal laws separate the roles of beverage producers, distributors and retailers, which can make it challenging for celebrities to navigate if they want to be involved in more than one part of the business. Other issues that celebrities must consider before diving into the beer and spirit industry are background checks needed to obtain alcohol beverage licenses, the age of their target audience, morals clauses in their contracts and endorsement disclosures required by the Federal Trade Commission.

  Alcohol production is proving to be an enjoyable and profitable side gig for numerous celebrities interested in connecting with their fans in new and unique ways. But to get beyond the initial hype and keep craft beverage customers coming back for more, it is time to embrace the spirit of innovation and achieve long-term growth with products able to stand on their own, even without a familiar name and face behind them.

Enhanced Single-Serve and Ready-to-Drink Markets Need Updated Point-of-Sale Systems   

Cyndi Leave a comment

By: Gerald Dlubala

Whether online ordering for pick up, requesting additional items to-go or purchasing single-serve containers from a local market, these options reflect the alternative and increasingly essential revenue streams for craft beverage producers. Additionally, they have proved to be a popular and effective way for craft producers to get their products into the hands of new and potential consumers. According to data supplied by Arryved, a leader in Point-of-Sale (POS) systems for food and drink businesses, many of the consumers that participate in the online and to-go craft beverage markets are different than those that choose to frequent brewpubs, tasting rooms and taprooms in person.

  The good news for craft beverage producers is that participation in the single-serve, ready-to-drink and to-go markets continues to grow. Consequently, it makes sense to nurture those relationships and make the off-premises consumer experience an event that provides value and enjoyment while enhancing your bottom line. The proper POS system can do that.

Your Business, Your Point-of-Sale System: Arryved

  “Of course, there was a sea of change beginning with the pandemic,” said Nancy Trigg, chief people officer for Arryved. “It seemed like, over the course of one night, the brewpubs, wineries and taprooms all had to scramble and pivot business models to come up with a functioning online and to-go ordering system, as well as a safe and viable delivery or customer pickup option. Point-of-Sale systems had to evolve and quickly match that change in direction. In haste, many businesses simply installed a separate system for this newfound revenue stream. It all seemed good until the businesses realized that, in reality, they were using two separate systems pulling out of a single inventory base, causing supply confusion and accountability problems. Point-of-sale systems, like Arryved, that looked at the situation and responded in a more business-sensitive, proper way were the ones that not only helped their clients survive but also helped them grow their consumer base during the uncertainty and shutdowns.”

  Trigg says that a proper POS system is one of the most crucial tools a craft producer has to understand and analyze for how they are doing business, and she urges owners to approach their businesses with that exact mindset.

  “If you have the proper POS system set up for all of your revenue streams, including on-premises, single-serve purchases and online ordering with customer pickup, you will immediately receive valuable insights into what you are selling, when you are selling it and how your products are being used,” said Trigg. “Are some products more popular at certain times, like lunch or dinner? Are some being consumed more with food? Which beverages are more popular at which times? Are they being sold in smaller pours? Larger pours? Are certain products more popular for carryout over in-house consumption? For flight purchases? So much data related to your specific craft products concerning single-serve and online-ordering revenue streams can be harvested from the right POS system.”

  Trigg told Beverage Master Magazine that the applicable laws about these types of sales will generally stick around because of the great work from the guilds, communities and cities to help food and drink businesses remain afloat during the height of the pandemic. Now, craft beverage producers must have a POS system that integrates these transactions into their daily business practices by highlighting and providing data tailored to their specific products, customer profiles and unique business situations.

  “When craft beverage producers start packaging their products, the inherent level of their risk rises, if only based on the costs of packaging,” said Trigg. “That little extra risk can be just enough to inhibit the creative experimentation that makes up the backbone of what a brewpub, taproom or tasting room is supposed to be. But with the right information derived from an inclusive and detailed POS system, that risk is minimized. Now they can offer the right products to the right consumers at the right time, including single-serves, ready-to-drink varieties or a wide range of to-go flight-type options or mix-and-match packs tailored to specific tastes. Unfortunately, not many POS systems properly provide these types of flight tools or pick-six options within their makeup. Arryved does just that, providing the craft producer meaningful insights into what is and isn’t working, and when.”

  Trigg said that Arryved is a POS system genuinely built to care for an all-inclusive beverage program, including those that, either now or in the future, want the option to offer food sales. In addition, Arryved enhances brewpub or tasting room atmospheres by allowing its customers to order drinks to-go, online or in single-serve, ready-to-drink options.

  “There are always developing options within the single-serve and ready-to-drink markets that craft beverage producers need to stay aware of,” said Trigg. “This includes the growing popularity of flight options and different sizes of mix-and-match take-home packs that the customer can customize. Craft producers need a POS system that recognizes these trends and supports mobile guests just as well as it does with on-premises guests. Arryved supports craft beverage producers in all facets of their revenue streams, while featuring unmatched support for the industry. In addition, we stay engaged in the business sector and always have someone available to speak with directly.”

Ready-to-Drink, Single Serve and To-Go Markets Thriving

  The ability to try and enjoy craft beverage products off-premises was, and still is, a game-changer for many craft brewers, winemakers and distillers. For the past couple of years, these markets have helped many establishments remain open and proved they could be a robust, new revenue stream. Breweries have traditionally offered their products in growlers and crowlers so their consumers could enjoy the beer at home. Additionally, the popularity of individual can seaming devices, like those offered by Oktober Can Seamers, gives craft beverage producers more flexibility in to-go offerings and allows consumers more flexibility in how and where they choose to use the beverage.

  In its primary function, can seamers allow craft beverage producers to get their product out the door and into the hands of consumers for off-premises enjoyment. But Dennis Grumm, CEO and lead engineer for Oktober Can Seamers, told Beverage Master Magazine that many clients realize additional untapped revenue possibilities by canning beer, mixed drinks and specialty cocktails for to-go orders. Brewpubs, distilleries, and wineries can all use a can seamer to offer their beverages, unique brews and house cocktails on a to-go basis. It’s an economical and very effective way to get new customers to try your products while satisfying your current customer base. Distillers have had great success canning their best-known, ready-to-drink cocktails, but canning is also an effective way to offer seasonal or limited-release drinks and cocktails.

  Pouches are another way to get your product in the hands of consumers that would not normally spend time in your place of business or would just like to take your crafted offerings with them on the go. Pouches range from those in the refrigerator for individual pours of wine to the single-serve cocktail and wine pouches that resemble the child-friendly juice pouches. The benefits of using pouches include offering a resealable, portion-controlled package that reduces packaging weight by up to 94 percent and can be shipped and packed using fewer resources.

Enhancing the Single-Serve and Ready-to-Drink Market: O-I Glass

  O-I Glass, based in Perrysburg, Ohio, is looking to elevate the single-serve, to-go and ready-to-drink markets to better reflect the on-premises, brewpub and tasting room experience. Megan Henry is the global marketing communications business partner for O-I Glass. She told Beverage Master Magazine that they are transforming the to-go, single-serve and ready-to-drink markets by offering a new glass packaging alternative called the Drinktainer™ for these markets.

  “In an increasingly common world of to-go packaging, we feel that it’s time for craft beverage producers to elevate that part of their business and the consumer experience,” said Henry. “Growlers and crowlers are great, but they have limitations. As soon as you open them, you’re under a time constraint as to how long that product will be good. Using our wide-mouthed Drinktainer™, you’re promoting a sustainable packaging option with the recyclable glass and RipCap® closure, and you’re allowing the consumer to enjoy your products as if they were in your brewpub, taproom or tasting room.”

  Henry said that capacity and shortage concerns still affect many industry players, but those worries are not an issue with Drinktainer™, which is currently available in inventory.

  “We know that many beer aficionados prefer to consume their beer out of a glass, straight from the tap,” said Henry. “Offering to-go, single-serve options in a recyclable glass container is just a naturally better way to enjoy beer and craft beverages in general. Glass packaging provides great flavor retention in any environment and allows producers to feel more comfortable offering their consumers different types and combinations of products without the fear that alternative packaging, like plastics or pouches, will taint their beer, cocktails or wine. In addition, with the wide mouth (42mm), consumers get the deeper flavor and more robust aroma experience as if they would be drinking from a glass on premises.”

  Sustainability is a significant issue of consideration in every phase of craft beverage production, and the Drinktainer™ is a fully sustainable product, available in clear that is customarily used for beer and in a flint tone that highlights the color combinations of cocktails and other beverages. It’s sealed using a RipCap®, an easily applied and highly secure closure that O-I Glass believes brings a nostalgic feel to the products. Drinktainer™ has been successfully used to offer pick-six trial packs and beer flights, and it requires no other glasses or barware to enjoy as the beverage maker intended.

Find more information on the Drinktainer™ at www.o-i.com

New Brewery, Winery or Distillery Start Up

Cyndi Leave a comment
a cozy winery

By: Kris Bohm: Distillery Now Consulting, LLC  

Starting up a new beverage alcohol business is hard. Whether making beer, wine, or spirits, the challenges are daunting and upfront costs are huge. No one takes the leap to start a new business knowing it will fail, but many of them will. Based on industry data, up to 40% of new beverage alcohol businesses fail. To create a successful business, there is a common question that arises during the planning phase of launching a new beverage alcohol business.

What is the difference between a successful business and one that fails?

  This massively important question should be answered early on for a new business. In doing so, key strategies will be defined for the business from the beginning as it ventures forward. In the following paragraphs, you will find not only the answer to this question, but also a further analysis of successful business practices.

Defining Success: Let’s take a moment to define and measure success in a beverage alcohol business. This definition applies whether in a brewery, winery, or a distillery. These measurements of success will allow us to look closer at the internal workings of the business. As you look closer you will find common traits among nearly every business that is successful. For the sake of this article we will narrowly define success using the specific individual metrics of profitability, sustainability and velocity.

Profitability: The first key metric and measurement of success is profitability. A business must either be profitable, or at a minimum near self-sustaining, with revenue covering the cost of operating the business. Achieving profitability is one of the biggest metrics that defines success. Reaching profitability is essential, as every successful business must be self-sustaining after a certain amount of time. If a business is not profitable for too long of time, it is almost certain to fail.

Sustainability: A successful business must be sustainable in the capacity to produce the products it intends to sell. To clarify, we do not mean sustainability from an environmental impact or energy usage standpoint. Sustainability in this model means the ability to sustain and meet demand for products through growth. For a business model to be sustainable the equipment must have the capacity to grow and meet new demand as the company grows. The reason this metric is so essential is that most businesses must grow to reach profitability. If your business cannot sustain growth it most likely can not grow to become profitable.

Velocity: A business needs to have regular sales to provide consistent revenue for the business. Velocity is a measurement of how quickly your business is turning raw materials into finished goods and selling those goods. High velocity of product means there will be more consistent cash flow for the business. As product velocity increases it is followed by increases in revenue and often economies of scale. Both of which help a business become successful.

Tripod Business Model: Most businesses achieve some of these measures of success, but not too many will achieve them all. Among those who do succeed in meeting all three, there is a common thread that these successful businesses share. They will usually have three separate divisions that perform distinct business activities. These three divisions are production, sales, and marketing. This concept we will refer to as the tripod business model. If the top of a tripod is a successful beverage alcohol business as measured by our success metrics, then there almost always exists these three divisions in the business that make up equally important legs that hold up the business. If you remove any of the three legs, it only leaves the business on two unstable legs, and in time the business will fall and is likely to fail. It is easy to take this observation and call it as incorrect, but if one was to look closely at established successful beverage alcohol businesses they would find truth in this observation.

  When a sizable amount of time and resources are heavily invested into sales and marketing, the business has a strong probability that it will flourish. Often the business will flourish so strongly that production will often feel constrained in the resources it needs to meet the demand of the business. This is the correct way to invest time, financial resources and manpower to grow. If too many resources are dedicated to production in most instances production will have far too much capacity and there will not be enough demand for product to keep production running near its capacity.

  Now that we have defined some measures of success and the business practices that support them, let’s look closer at the three practices that hold up a successful beverage alcohol business, through the lens of a distillery.

SALES: Sales is essential and paramount to the success of nearly any business that has a product they sell. It can be the easier path for a new distillery to focus on their production with a plan to only sell spirits through a tasting room or cocktail lounge that is part of the distillery. A business plan like this can work, but it has a low ceiling that will often restrict a distillery from growing to a successful level. Real sales of considerable volume come from a distillery selling products in the same market as its competitors. This means working to sell spirits in liquor stores, bars, restaurants and other venues. In this market there is immense competition. The only way to compete in the larger spirits market is by investing into sales. This means having people working for your business who are full time employees whose job is to pull your spirits through the market and drive sales.

MARKETING: Marketing is the driving force that directly links to the success of sales. Marketing can come in a multitude of forms, some obvious and some not so obvious. Public facing platforms, such as social media, websites, billboards, magazines, newspapers, and influencers are all forms of marketing in action. The more a consumer or target consumer encounters a brand, the higher the chance that the consumer will buy your brand. Without an active marketing plan in place, consumers will quickly lose sight of your brand. A strong marketing plan and the person or people to continually implement, monitor, and drive a marketing plan is paramount to achieving success. Marketing is the key difference that will take a brand to the next level and keep pulling it up from there. Although it can be easy to not put an emphasis on channeling resources to marketing, it would be a mistake to do so. Many businesses have launched with little to no resources committed to marketing. Often these launches feel successful, but by our measurements are in fact not truly successful. Oftentimes the business will get going and be selling some amounts of product but in most instances a lack of marketing will cause a business to plateau quickly.

PRODUCTION: This practice of manufacturing is easy to give too much focus in the business of distilling. Whether you are distilling whiskey from scratch or bottling sourced spirits, the production part of this business is extremely important. While production is absolutely paramount to the business, this does not mean that the bulk of resources the business has should be invested into the production of spirits, nor the labor or equipment to produce the spirits. If the bulk of resources go towards production thus starving sales and marketing, there will invariably be a lack of sales to cover the costs of production. Now the manufacturing of distilled spirits is in no way inexpensive. Considerable resources have to go to production for it to function. We are trying to urge you to consider all resources the business has and properly allocate them to all three practices.

The battle between the practices: If you ask most folks who work in this industry, whether they work in sales, marketing, or production, they will all likely tell you that their business function is the most important to the success of the business. To be fair, all these folks can probably make a reasonably sound argument to support that statement. It is normal that there is some friction between all three practices because they all have unique functions and priorities that often do not align with one another. For a business to be successful, production, sales, and marketing must work together to achieve the goals of the business. When common goals are shared it is much easier for each part of the business to work in harmony.

Is it Time to Order More Brick-and-Mortar Locations for Your Bar or Restaurant?

Cyndi Leave a comment
dark bartending area

By: Raj Tulshan, Founder of Loan Mantra

Is commercial real estate making a comeback in the hospitality industry? After several extremely disruptive years of a global pandemic – and the resulting lockdowns, inflation, supply chain disruptions, and staffing shortages – is the future finally brighter for hospitality and real estate? Is it time to invest in more bars and restaurants – and if so, where exactly should you invest and when do you know if it is the right time?

Investing in real estate is a major, long-term commitment requiring careful consideration. Business owners must do their homework before signing a real estate contract, thinking about a host of factors, including the building’s location, the economy, zoning laws, the projected value of the property, and its expected appreciation over the coming years.

  Location is a huge factor. Is the property you’re considering in a good spot that will attract customers? Is the property attractive, in a safe, high-traffic location? Is the community vibrant and growing, with a history of economic stability? Is there easy access with ample parking, or is there a subway or bus stop nearby? What’s the neighborhood like? Is there considerable competition in your space, with tons of other bars and restaurants nearby? Is the neighborhood hungry (pardon the pun) for your type of establishment? Are the demographics right for your type of business? For instance, a heavy metal-themed bar might not flourish in a neighborhood with an older demographic.

  Despite major difficulties in 2020 and 2021, the hospitality and commercial real estate industries are finally in growth phases again, and this growth is likely to continue in 2022. Some things to consider include:

  People are going out again. Demand for in-person goods and services is rising again, as people want to eat at restaurants and go out for some beers. This pent-up demand is good for commercial real estate – and the bars, restaurants, and other businesses that occupy these buildings.

  Hospitality is rebounding. Now that the worst of the pandemic is (hopefully) behind us, business and leisure travel will start increasing again, and people will be dining out more frequently. The growing travel demand means hotels, restaurants, and bars may take on renovation and expansion projects that stalled during COVID. And, increasingly, hospitality business owners will invest in real estate to house their bars and restaurants.

  Secondary markets are growing. The evolution of remote and hybrid work means many employers and employees are moving out of high-rent cities into smaller markets that are more cost-effective. Recently, people have been leaving big, expensive cities like New York in droves, in favor of smaller, more affordable markets like Nashville and Tampa. If you’re thinking of opening a bar – or expanding your brand to new markets – consider these geographies.

  Operators are opting for building ownership. Some restaurant and bar brands are opting to own real estate rather than leasing. When leasing, the building owner is making money, regardless of whether your business is profitable. However, when you own the property, you’ll be building equity regardless of how your business is performing. Many restaurateurs and bar owners are choosing to buy instead of lease because it makes more financial sense over the long term. If you’re the property owner, you won’t have to worry about surprise rent increases. You also won’t need to abide by your landlord’s rules, giving you more freedom with your business and your property.

  Add new revenue streams to boost profitability. With labor shortages impacting the operating hours (and bottom lines) of hospitality businesses, restaurants and bars have realized the importance of having multiple revenue streams to increase profitability, especially if they’re working to cover the cost of their mortgage. Some brands are selling their own beers online or selling branded merchandise at their brick-and-mortar location and online. While people are finally coming back to dine and drink in-person, it’s wise to have additional revenue streams to keep a steady stream of revenue flowing – and so you can cover your mortgage and property taxes if you’re the building owner.

  If you’re financially able to swing it, buying property for your bar or restaurant can be a wise move. As experts predict that the worst of the pandemic is behind us, it looks like the hospitality and commercial real estate industries are poised for a rebound. If you’re thinking about a real estate investment for your hospitality business, be thoughtful and consider the decision carefully before signing the contract.

About the Author:

  Neeraj (Raj) Tulshan is the Founder and Managing Member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative, and transparent platform. Clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human—even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company designed to serve small and medium businesses with offices in New Jersey, Charleston, SC and New York. At Loan Mantra your success is our success. This means that our attention, purpose, and intention are all focused on you, our client. We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully, and service your account actively through one of three locations in the US. We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or Manicure, let us help you today. Connect with us at…www.loanmantra.com or 855.700.BLUE (2583)

Optimizing Same Day At Home Beverage Delivery  

Cyndi Leave a comment

By: Anar Mammadov

It’s not easy to make a beverage brand succeed. The marketing must be just right, including packaging, positioning, and placement of ads. Securing distribution is another step; hitting your sales numbers starts with getting your product in stores. Even when those two are achieved, brands still need to find a customer base that will adopt them, sharing their enthusiasm and spreading the word about their products.

  In 2022, beverage brands that want to be successful can add another task to their to-do list: providing same-day delivery. Consumers, responding in large part to the stay-in-place culture that was inspired by the COVID-19 pandemic, have come to expect that most any item can be delivered to their door in a matter of hours, if not minutes. This is true of everything from bandages to burgers to big screen TVs. And it definitely includes beverages. When a customer realizes that they don’t have the beer they want for the cookout or decides a nice bottle of wine would go well with tonight’s dinner, they are looking more and more to same-day delivery options.

The Current State of Same-day Delivery

  For beverage brands that want to meet the same-day delivery expectation, there are a handful of delivery services that can help them. Looking at the reviews for those companies, however, reveals they leave quite a bit to be desired for the brand that is concerned about providing service that consistently inspires glowing reviews.

  Forbes recently ran an article rating alcohol delivery services. At the top of its list was Drizly, which is an online platform that allows users to get alcohol delivered from local retailers. Drizly promises delivery in less than 60 minutes and the “biggest selection for on-demand alcohol in the history of ever.”

  Forbes rated Drizly as the “Best Alcohol Delivery Service Overall,” but reviews show it to be hit or miss. According to the consumer review website Trustpilot, Drizly needs to do some work to become a five-star service. While 39 percent of the reviews described Drizly as “excellent,” 46 percent labeled it “bad.” The most frequent complaints from users focused on delivery times and fees that could be improved.

  Minibar is an online alcohol delivery platform that Forbes rated as “Best Quick Alcohol Delivery Service.” According to user reviews submitted to the online review site Influenster, Minibar provides better than four-star service, but still struggles in some areas, such as providing reliable ETA info.

If you are ordering alcohol with a takeout food order, Forbes says DoorDash is your best option. But users are not kind to DoorDash in their ratings on Trustpilot or Reviews.io.

The Issues That Make Same-day Delivery Challenging

  What is keeping these companies from achieving consistently reliable delivery service?  Anar Mammadov, CEO of Senpex, has some ideas. Senpex is a logistics company that provides safe and reliable on-demand pickup and delivery services for a wide range of companies, including beverage companies. Central to the service that Senpex provides is an AI-powered engine that ensures all of the delivery factors are considered and routes are optimized.

  “There are a lot of factors that need to be considered if you are going to provide delivery in a timely, professional way,” explains Anar. “These include the volume of product, which dictates the size of the delivery vehicle needed, as well as traffic and other road conditions. When you have multiple drivers making multiple deliveries, it gets exponentially more difficult to plan. At Senpex, we rely on our route optimization algorithm to make sure that deliveries are possible and profitable.”

  Sen has some experience in making deliveries. Having worked with more than 3,000 corporate clients, Senpex has more than 500,000 successful deliveries and a 98 percent customer satisfaction rate. And thanks to the help of AI, it is able to achieve that for as little as $7 per delivery stop.

  Anar also highlights the need for reliable in-house logistics that simplify the delivery process by bringing inventory, ordering, and fulfillment together. In addition to partnering with companies to provide a delivery team, Senpex also offers its logistics platform as a SaaS solution for companies that want to increase the efficiency of their own delivery teams.

  “Having your own delivery fleet is not enough to meet same-day delivery expectations,” Anar explains. “You need sophisticated logistics that convert delivery details into optimized delivery routes. The platform needs to keep drivers updated in real-time to make sure that deliveries are not delayed. Being able to stay on top of ETAs allows you streamline deliveries and keep customers informed.”

  In its own operations, Senpex has found it essential to have an AI-empowered dispatch management tool that also provides drivers with an app to track and verify the delivery process.

  “Customers have a lot of expectations when it comes to same-day delivery, regardless of what the product is,” Anar explains. “They want safe and transparent delivery, competitive pricing, and instant real-time status updates. And they want it all to be managed by a professional delivery team. Businesses that can’t meet these expectations are risking their reputations.”

Navigating the Risks Associated with Same-day Delivery

  So what does all of this mean for beverage companies who are contemplating providing same-day delivery. The bottom line is that it is risky. There is a huge potential for craft beverage makers to grow their following through alcohol delivery, as the financial services platform Square recently reported. However, a bad delivery process can come across as a bad brand.

  Is there a solution? The answer may be found in a delivery system that provides a brand with more control than what is typically available through a generalized delivery service like DoorDash. Professional delivery services like Senpex exist to take your delivery to the next level.

  In addition to providing you with the tools that you need to do delivery well, a professional delivery service can also help you to scale that aspect of your business. They give you access to a large fleet while only requiring you to pay for the deliveries that you need. As the demand for delivery grows, you have additional drivers at the ready.

  As you explore the possibilities that are available, here are a few things you will want to consider.

Work with Drivers Who Know Your Business

  Delivering alcohol is not like delivering anything else. Several states have laws that regulate it. Before committing to working with a delivery service, make sure that they can provide drivers that comply with all applicable laws. In other words, choose a professional service that vets its drivers. Let them do the HR work for you.

  Also, make sure that the delivery service has the type of vehicles that are needed to facilitate your deliveries. Not only should they have refrigerated vehicles when that is necessary, but they should also have the right size vehicle. Vehicles that are too small will not be able to handle the load. But vehicles that are too big will often cost you more than you need to be paying. Ensuring that the right vehicle is available is one of the functions of route optimization.

Work with Companies Who Understand Delivery Logistics

  Whether you are partnering with a delivery company to utilize their drivers or simply taking advantage of their delivery logistics platform to optimize the efforts of your own delivery team, there are some things you should look for. For example, look for a platform that integrates with your existing ERP system. If you truly want to take advantage of delivery automation, it is better to avoid working with multiple systems.

  Dispatch management functionality should include tools that allow for real-time fleet tracking. This includes automatic status updates, electronic proof of delivery, and secure driver chat through simple and intuitive apps that are native to both iOS and Android.

  One often overlooked element of logistics optimization is deliveries that are managed by regular drivers on regular routes. Regular drivers know what to expect from both the route and the delivery destination, making them more capable of delivering the type of experience that will lead to repeat business. A company with a lot of driver turnover will not be the best option for businesses that want to provide a consistent customer experience.

  Finally, tools that empower route optimization are critical to success. Last mile delivery is one of the biggest challenges facing businesses today. It takes the most time, it costs the most money, and it serves as the key point of contact between the customer and the brand. It should be a top priority for any delivery service with which you choose to work.

  Overall, same-day delivery provides another revenue stream that beverage businesses should seriously consider tapping. The market clearly exists, even if the price that consumers are willing to pay has yet to be firmly established. Now is the time to explore the options that are available to create a system that can be profitable and provide a positive customer experience.

The Impact of COVID on Beer Tourism

Cyndi Leave a comment
tourists having a beer taste test

By: Becky Garrison

As expected, brewery tours were among those hospitality offerings impacted by the ongoing global pandemic. While some experimented with online offerings, others simply closed shop or halted operations intermittently.

  For example, prior to COVID, Abil Bradshaw regularly gave tours of the Seattle-based Pike Brewing Company. Also, the brewery engaged Savor Seattle, a local tour provider, who gave tours daily. However, during COVID, Bradshaw moved to Spokane. Also, Savor Seattle ceased operations. While Pike remains understaffed and not in a position to offer tours, founder Charles Finkel can meet for a special tour at the brewery if given adequate notice. 

  Following are examples from a range of brewery tour operators regarding how they pivoted their operations during the past few years, as well as any plans they have for the future.

City Brew Tours, Portland, OR 

  At the end of 2019, City Brew Tours, a tour operator with operations in over 16 cities, had just taken over the operation of Brewvana Portland Brewery Tours. In this capacity, they operated the Original Portland Brew Tour and the Pacific Northwest is Best Tour, as well as private tours. Their Original Tour ran five hours long, visited four of their brewery affiliates and included a meal and beer pairing. The Pacific Northwest is Best tour is a shorter tour at  3 1/2 hours, with three stops and a craft beer pretzel snack.

  Like many other businesses in the hospitality industry, they stopped running their tours in March 2020 with no idea how long they would have to suspend operations. Also, they were unable to provide adequate employment for their beer guides and full-time staff. Chad Brodsky, the founder & CEO of CBT Group, LLC, reflects on this period of time. “There was no workaround and no safe solution to resume in-person tours during the worst of COVID-19. It took 15 months before we could slowly reopen brew tours in Portland, and even then, we had to take every precaution possible, including the limited number of guests, mask mandates, proof of vaccination and strict sanitation protocols.

  During the shuttering of their brew tours, they pivoted to virtual experiences under the brand Unboxed Experiences. Also, they repurposed Brewvana to be a beer lifestyle brand that offered a beer of the month club that explored a new beer city every month along with beer-making kits. This enabled them to bring their full-time staff back. Also, they were able to utilize some of their beer guides in leading online events, such as beer-making at home, beer and cheese pairings and ice cream float experiences.

  Since resuming operations in the summer of 2021, they’ve been able to reintroduce the two tours they were running before COVID-19. However, at times they had to temporarily suspend one or both of their Portland public tours due to the lingering issues brought about by the rise of COVID variants.

  According to Brodsky, staffing and finding reliable tour vans remain the biggest lingering challenges of COVID-19. He noted, “Our hiring process includes multiple steps and trial runs to ensure that new guides can safely lead a tour and are comfortable with the responsibility. The process takes time, and when potential hires decided it wasn’t for them, it would set us back and affect our ability to operate regular tour schedules. Plus, with a country-wide vehicle shortage, it took a long time to secure another passenger van to run more tours.”

Seattle Brewery Walking Tours, Seattle, WA

  Pre-COVID, Tim Lorang offered walking tours of breweries mostly in Seattle’s Ballard or Georgetown neighborhoods. These tours consisted of visiting three breweries for a guided beer tasting of four beers at each brewery. During this tour, he would talk about the beers and beer styles, along with the history of beers and focus on why Seattle was at the forefront of the craft brewing renaissance.

  Once COVID hit, he experienced a 69 percent reduction in his tours in 2020. Lorang experimented with designing webinars and making guides for beer tastings. However, he found this venture became problematic because he could not deliver beer samples to consumers, as he lacked the needed licenses required to send beer through the mail. Also, most breweries had a much more limited supply of beer on stock, and it proved tricky for him to come to a given brewery so he could film his segments. 

  In 2021, his numbers went up 340 percent from the previous year once breweries opened to the public. While Seattle was still not open to tourism, Lorang found that locals within the greater Seattle area booked his tours as they were desperate to go outside and socialize.

  As a number of breweries closed or changed hands, Lorang found he needed to reestablish a number of connections with breweries, hotel concierges, and other businesses that catered to the tourist trade, as many individuals were no longer working in the hospitality industry. Initially, he was limited to hosting tours outside with breweries, only allowing five people per table. Along those lines, the influx of customers wishing to explore the breweries, especially during the weekends, made it difficult at times to find space to host his tour group. During this time, proof of vaccination was a requirement to go on a tour.

  In reflecting on why he remains in business when so many other tour operators have closed shop, Lorang notes that one of the key reasons he survived is that he is a solo entrepreneur. “I don’t have a lot of overhead. I don’t have a van. I don’t have a lot of employees. I’m semi-retired. This is just a passion for me.”

Pedal Bike Tours, Portland, OR

  Since 2008, Pedal Bike Tours has combined two of Portland’s favorite activities by offering pub crawls on a bike. A typical three-hour bike tour would travel five miles and feature a tour of three breweries with a taster tray of six beers offered at each brewery. During the tour, the guide would talk about the history of the microbrewery movement in Portland.

  During COVID, they had no business in 2020, though they could resume business as usual in 2020 with only one of the breweries they frequented remaining closed. They gathered outside where there were no COVID requirements other than the occasional need to mask to go inside the brewery. Also, during this time period, they ceased doing scenic van tours in the Columbia Gorge area after losing their van. 

  At present, they are back to full operations. They do not plan on resuming van tours, choosing instead to focus on their cycling tours. Moving forward, they just added electric bikes, though the tours will not expand the distance they cover. At present, their biggest challenge remains the price of tours, as they had to raise their prices due to the cost of beer.

BeerQuest Walking Tours, Portland, OR

  Pre COVID, they offered a brewery tour and haunted pub tour and would average five to seven public tours a week. In addition, they offered private corporate tours. Once COVID hit, their sales were down by 80 percent. They had to shut down their brewery tour altogether after two of their partners went out of business. Also, those partners who remained open reduced their hours and days of operations. 

  Since COVID hit, their private tour business with corporate clients remains non-existent. Also, they struggle to find employees and remain low-staffed. At present, they offer three or four public tours per week. In particular, they could offer a lower-priced shorter version of their haunted pub tour, which appears to work better for their customers. 

Santa Rosa Beer Passport, Santa Rosa, CA

  In 2016, Visit Santa Rosa created the Santa Rosa Beer Passport as a way to explore and celebrate the world-class craft beer scene in Santa Rosa. While Sonoma County is best known for producing world-class wine, a band of brewery brothers and sisters began pioneering the production of artfully crafted local beers. As a result, this city evolved into a mecca for microbrew maniacs.

  Based on the massive popularity of Russian River Brewing Company’s annual two-week February release of Pliny the Younger, Visit Santa Rosa launched FeBREWary. This venture was a way to promote Santa Rosa’s brewing heritage, showcase artisan producers in the craft beer industry, educate the greater public and unite those who make local beer with those who love it during an otherwise slow time for tourism in Santa Rosa.

  Participation in the self-directed Beer Passport program is simple. At their leisure, craft brew lovers can take their passports to each of the participating 14 breweries and receive a stamp. After collecting at least 11 brewery stamps during the entire month of FeBREWary, participants receive a custom-designed, commemorative oversized Santa Rosa Beer Passport bottle opener medal and lanyard.

  This model proved to be a low-cost way to introduce visitors to the local brewery scene and a tool to inform potential consumers of the changing developments.

10 Ways to Maximize Beverage Sales Through Every Spring & Summer Holiday

Cyndi Leave a comment
people drinking and celebrating

By: Raj Tulshan, Founder of Loan Mantra

The arrival of spring means sunshine, warmer temperatures, gatherings and lots of drinking. This often involves celebrating with a cold pint of beer, glass of wine or festive cocktail. Special days are a great time to attract crowds planning to connect with family and friends at area restaurants and pubs and to increase beverage sales.

  More than 335,000 gallons of tequila are consumed in the U.S. during Cinco de Mayo fiestas. An estimated 92 million Americans take their moms out for a meal for Mother’s Day, making it the most popular day for restaurant dining. People don their big hats and spring finery, while sipping Mint Juleps at Kentucky Derby-themed parties. Then it’s time to toast to dads on Father’s Day, celebrate graduations, for bachelor and bachelorette parties and bridal showers. So, how can you maximize beverage sales all throughout these warm weather celebrations? Here are 10 tips:

1.   Spring into Theme – Jump into action with some tropical themed drinks. Serve a refreshing Cherry Blossom, Tequila Honeysuckle, or a Lemon Drop for festive seasonal celebrations and, of course, don’t forget a Mint Julep for Kentucky Derby parties. Source fresh ingredients whenever possible and use fun garnishes, like edible flowers. For a Spring Fling, use sorbet as a drink ingredient, with fancy glasses and pastel cocktail napkins. Get patriotic with red, white, and blue themed drinks for Flag Day, and consider garnishing the drinks (or the tables) with cute little sparklers. Throw a tropical party and encourage employees and guests to wear Hawaiian shirts and leis, with mai tai or pina colada specials. Have a taco and tequila party for Cinco de Mayo and decorate with bright colors and a cactus or two. What about hosting an ice cream party with boozy milkshakes on a hot summer night social? The possibilities are endless, so be creative!

2.   Partner with the right vendors – Many beer, wine and liquor vendors will provide plenty of marketing materials to help restaurants and bars drive beverage sales. They’ll often give you free table tents, branded coasters, and other materials to promote their brands. Some vendors will go a step further and provide give-away items, like branded pint glasses, t-shirts, or baseball caps for customers that order their products. This is an easy way for you to boost excitement and sales – and a fun incentive for your guests to enjoy.

3.   Get your financing in order – Restaurants and bars have, understandably, had a tough two years, due to the COVID-19 pandemic. And now the COVID fallout includes a trifecta of major challenges, including soaring prices on food and beverage supplies, ongoing supply chain disruptions and continued staffing shortages. Be sure that your financing is stable enough to sustain your operations, especially amid this turbulent period and as you recover from the pandemic hardships. If you need a business loan, talk to an expert that can advise you about which path to take. There are many viable options available to help your business through the short-term or for your longer-term needs.

4.   Get the funding for your marketing needs – You might have the most amazing place that serves the best food and drinks in the area, but if people don’t know about you, you won’t maximize sales, profits and other key metrics. Elevate your marketing efforts to generate awareness and excitement and drive traffic and sales. Be sure to have a professional, easy-to-navigate website with updated menus, drink lists, and specials. Become more active on social media and buy online ads that target your priority populations. Host special events and tastings. Send out emails about upcoming events and other incentives. If your budget is strained, consider a loan to boost your marketing efforts and attract more attention.

5.   Host VIP tastings. Boost customer loyalty with VIP tastings – Valued customers will feel special to be part of an “elite” event, so make these tastings feel exclusive and important. Send out VIP invitations. If your budget allows, you can go all-out with a red carpet and champagne. Or create a different vibe with beer flights, a wine tasting or a sampling of different types of whiskey. Ask your vendors to provide experts to discuss their products and educate your guests about the types of beer, wine, or liquor they offer. Your vendors might provide VIP gift bags or other SWAG, as well.

6.   Create a comfortable atmosphere – Be certain that your guests feel comfortable at your establishment, whether that means continuing to social distance during higher COVID transmission periods or keeping plastic partitions up for a while longer. Guests want to see “proof” that your restaurant or bar is still following strict cleaning and sanitation protocols, so place hand sanitizer dispensers around the facility and continue to sanitize tables, bars and other high-touch locations frequently. Have comfortable seating that will make people want to linger and have another drink. Use appealing soft (not harsh!) lighting and play fun music. Also, consider what would appeal to your target demographics. Men will want the big game on your TVs. A bachelorette party will want a fun waitstaff that will dare them to do shots. And guests appreciate some creative decorating for the holidays, whether that’s flowers and champagne flutes for Mother’s Day, or big hats and roses for Derby Day (also called The Run for the Roses).

7.   Provide outdoor seating – One of the silver linings of the pre-vaccination landscape was that many restaurants and bars added outdoor seating, which customers loved. Now that spring is finally upon us, people will welcome the opportunity to eat, drink and celebrate outdoors. Set up tables and chairs outside. Consider adding fire pits or offering blankets on chilly evenings. Offer boozy popsicles or milkshakes to boost beverage sales when the weather gets warmer. String up pretty lights. Plant colorful flowers. Make your outdoor area feel lovely and inviting.

8.   Offer special incentives – Promote special deals around the spring holidays, like “Moms drink for free on Mother’s Day” or “Dads get a free beer for Father’s Day.” Promote specials on tacos and margaritas for Cinco de Mayo. Offer Mint Juleps and tiny sandwiches for a Kentucky Derby watch party. Offer discounts on your special spring drink menu. Consider discounts on beer buckets for the spring or 2-for-1 drink specials on a typically slow weekday.

9.   Train your staff about the drink specials – Make sure your staff are educated about your drink specials and encourage them to upsell to your guests. This is especially important when you add new seasonal cocktails to your menu or if you’re having special holiday-themed drinks. Be sure your employees know what each drink tastes like, how it’s made, and what it pairs well with. Your staff are your best ambassadors. The way they describe your menu and drink specials will matter. In fact, it will have a direct impact on your sales.

10. Be active on social – Social media can be a very effective way to incentivize your events, spotlight drink specials, and highlight fun plans and celebrations for the season. Post about what you’ll do to treat soon to be brides well for bachelorette parties (Champagne toasts! Bloody Mary specials!), so they’ll come to your establishment instead of your competitors.’ Feature different staff members raving about their favorite spring drink or talking about the upcoming events or parties that you’re hosting. Share photos of beautiful spring drinks garnished creatively. Showcase that your place is the place to be this summer, for any seasonal celebration.

  Spring is in the air and there are so many opportunities to celebrate. There are also so many opportunities to promote your establishment, drive traffic and boost your beverage sales. Try these 10 tips to increase traffic to your establishment, customer loyalty and profits.

  Neeraj (Raj) Tulshan is the Founder and Managing Member of Loan Mantra, a financial advisory firm with best-in-class and proprietary FinTech, BLUE (Borrower Lender Underwriting Environment). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative and transparent platform. Clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human—even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company that helps level the playing field for small and medium businesses to gain financing by providing a one-stop portal, paperless application process and personal service. With offices in New Jersey, Charleston, SC and New York, our only success is through your success. This means that our attention, purpose and intention are all focused on you, our client. We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully and service your account actively through one of three locations in. We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or Manicure, let us help you today. Connect with us at www.loanmantra.com, 1.855. 700.BLUE (2583)

Boosting Brewery & Distillery Business with Entertainment and Lodging  

Cyndi Leave a comment
2 guitarists jumping

By: Alyssa L. Ochs

With thousands of craft breweries and distilleries in operation today, it’s no longer enough to simply produce amazing beers and spirits. Brewers and distillers are quickly learning that to thrive and stand out among the competition, they need to build a unique brand and expand their reach to a broader customer base.

  Some of the best ways to achieve this are to offer entertainment and recreation opportunities for everyone to enjoy and onsite lodging that makes an evening out safer and more convenient. With the right event-planning strategy, you can keep consumers coming back to your business even after they’ve sampled everything on the drink menu multiple times.

Types of Entertainment and Recreation

  In recent years, both breweries and distilleries have gotten very creative with the types of entertainment they offer. You’ll regularly find local establishments offering board game nights, yoga classes, musical concerts and karaoke nights. Trivia, open mic comedy nights, painting and crafting events and book club meetings are also held at breweries and distilleries.

  Low-key options, such as yard games and photo booths, are easy options to add, as well as professional networking events, poker tournaments and sport-themed events for big games. Breweries and distilleries can become more involved in their communities by partnering with other businesses to promote local products, nonprofits to support important causes and artists to display pieces of original artwork on the walls. Meanwhile, it’s fun to host holiday-themed festivals, offer educational brewing or distilling lessons and highlight new beverage releases in a way that entices people to walk through the door.

  Dana Koller, the president of Kaktus Brewing in Bernalillo, New Mexico, told Beverage Master Magazine that his brewery’s most successful events have been celebrating Oktoberfest, St. Patrick’s Day and other cultural events. Kaktus always has a full lineup of exciting events on the brewery calendar and offers small-batch brews, organic bites, and a refreshingly chill atmosphere.

  “I think what makes them successful is that we are genuine about the celebration and not just there to make a quick buck,” Koller said. “Although we may not be the most authentic option, we make sure that we have a blast doing what we do and show our appreciation for those wanting to celebrate.”

  On the distillery side of things, Sledge Distillery in Tolar, Texas, has been adding lots of events to its calendar lately, including tastings, tours, food, retail offerings and live music. Sledge Distillery specializes in hand-crafted spirits based on a World War II family moonshine recipe.

  “Private shopping nights for new releases have been very successful,” said Susan Sledge. “Also, we have found that the addition of live music adds to the atmosphere. Our clients are looking to re-engage with us and bring their friends along. We consider their repeat business a huge honor.”

Onsite Lodging Options

  Another unique idea for breweries and distilleries to consider is adding lodging near the taproom to welcome overnight guests. Some craft beverage producers have locations in historic buildings that can be renovated to include accommodation in an adjacent space.

  Alternatively, producers can purchase or build a separate building that provides lodging on the same property. Not only is this a good way to keep customers safe from drinking and driving, but it’s an opportunity to make your business a true weekend destination rather than just a quick stop along the way.

  One brewery that has added lodging to its offerings is Riff Raff Brewing Company in Pagosa Springs, Colorado. Founded in 2013, Riff Raff operates in a historic, Victorian-era house in the downtown area and offers flagship beers, seasonal taps and eclectic twists on favorite foods. Visitors can currently rent apartment units above the downtown brewpub through Airbnb.

  “The building that houses Riff Raff Brewing Company is registered on the Colorado State Historic Preservation roll and has been used and repurposed multiple times since it was built in 1898,” said Jason Cox, founder and CEO.

  “When we purchased the building and opened the brewery in 2013, the upstairs housed apartments with long-term rentals,” Cox said. “We underwent a major remodel in 2015 and converted to short-term rentals because of the fact that there was a brewery downstairs. We thought it would be a type of beer-and-breakfast kind of offering!”

What Consumers Want Right Now

  There is a high demand for entertainment options at breweries and distilleries because people are looking for fun ways to get out and experience their communities in different and social ways. Breweries and distilleries have emerged as ideal destinations for date nights, family-friendly fun and free things to do that don’t require a big commitment. Many businesses are finding success with inclusive events that are pet-friendly and welcome children. You can give consumers what they want by keeping participation costs low or free, offering something different from what they can find anywhere else in town, providing fun photo opportunities and maybe even selling specialized merchandise to mark the occasion.

  “I think what people are looking for is true community, a place and time to connect without expectations,” said Koller. “The music and events are the excuse to get out and socialize for them.”

  “Our customers are looking for a way to relax and take a break from the pressures of life,” said Sledge. “Our distillery is located in the country and gives our guests a feeling of truly ‘getting away.’” 

  “I can’t speak directly to data or analytics, but I do know there are several experiences where lodging is packaged with craft breweries, and it creates a more complete experience,” said Cox. “Our friends own a brewery in northern New Mexico that allows camping on the premises, and they have lots of concerts, so it provides an opportunity to have an immersive guest experience. We aim to do the same type of thing with our lodging above Riff Raff Brewing Company.”

Considerations for Breweries and Distilleries

  Planning events may seem overwhelming to some brewery and distillery owners because it’s just one more thing added to the to-do list and budget. It often pays off in terms of business sustainability and professional satisfaction in the long run. Events, recreation, entertainment and lodging provide fun opportunities in relaxed environments to build your brand and get people engaged with what you’re doing. It’s an effective way to make personal connections with your customers and perhaps even raise money for charitable causes.

  There are many things to think about when planning a new event, type of entertainment or onsite lodging. Cost tops the list since some things will inherently cost more than others. If the event requires renting or buying extra furniture, party supplies, or sound equipment, you’ll need to budget ahead. Although it may be an initial goal to make extra money from an event, it might be worth it to break even for the sake of outreach and exposure. Breweries and distilleries with large spaces may be able to rent out entire sections of the building or property for private events and make extra income in that way.

  Regarding onsite Airbnb offerings, Riff Raff’s Cox sees significant benefits in breweries entering the lodging business.

  “We rent more than 325 nights a year in each of the two rentals, which include a three-bedroom, two-bath unit and a one-bedroom, one-bath unit,” Cox said. “We do see people who book because it’s above a brewery, and they definitely want that experience. Sometimes I conduct VIP tours and add other offerings for guests who stay upstairs.”

Event Planning Tips

  When considering hosting an event, make sure to see what else is already scheduled in the community so that there are no conflicts that would prevent someone from attending what you have planned. In general, it’s best to keep the event size manageable so that the lines for beverages don’t get too long or the spaces too crowded. Fun themes will catch people’s attention, while free and low-cost ticket prices will make your events more accessible to everyone.

  Recurring events, such as activities that happen on the same day each week, make scheduling events easier and allow more people to participate when it works for their schedule. It may also be worth inviting another local brewery or distillery to co-host your event.

  Koller from Kaktus Brewing said that one of the most important things to plan for when hosting events is “making the numbers work so that you are not understaffed since this is always a major challenge.”

  “From the moment a guest arrives on property, we want them to feel welcome,” said Sledge. “Signage has been strategically placed, so people know where to go and the options they have for entertainment, food and beverages. Our employees are intentional about greeting guests and orienting them to the facility and events.”

What’s Next for Craft Beverage Entertainment?

  Producers are just getting started with what they have in mind to entice craft beverage enthusiasts.

  “For Kaktus Brewing, we have been working on plans to expand parking to host larger events with games, a new stage, more shade structures and outdoor cooking,” said Koller. “This will allow us to do full weekend events instead of just evening events.”

  “We are programming smaller, more intimate events where people share a particular interest,” said Sledge. “For example, we are doing a three-event women’s workshop called ‘Feel Good Fridays’ where the group has drinks with a licensed therapist who facilitates a group session on various topics.”

  Meanwhile, Cox recommended that any brewery looking to add short-term lodging should check with the local planning or zoning department to understand rules regulating short-term rentals.

  “Depending on the type of zoning district, it may or may not be allowable for a brewery to offer lodging,” Cox said. “After that, I would put myself in the shoes of a guest to understand the entire experience. For example, some of the equipment that a brewhouse uses runs 24/7, and the noise could have an impact on the lodging, depending on the configuration. Beyond that, I would say to create a great experience for the guests and make it happen. Remember, it’s all about the craft beer and having fun with it.”

How Beer Wholesalers Can Use The Ansoff Matrix to Grow Sales

Cyndi Leave a comment

The Ansoff Matrix is a tool that can help you build a sales growth strategy and identify opportunities to increase revenue.

The matrix was originally developed as a device for businesses to think about revenue diversification.

Since then, it has been used as a quick and easy way to build a sales strategy while considering the risks of growth.

The matrix breaks down the drivers of sales growth into these categories:

  1. New markets (accounts)
  2. Existing markets (accounts)
  3. New products
  4. Existing products

The matrix then combines these four categories and assigns a relative amount of risk to each approach.

The Ansoff's Matrix

For example, building a sales strategy to focus on improving market penetration with existing customers and products is low risk.

Whereas, diversifying into new products in a new market comes with a higher risk.

How can you use the Ansoff Matrix to Grow Beer Sales?

Use it to ask strategic questions:

  • How can we sell more of our current products to our existing customer base?
    • Could we do better with e-commerce options? Can we improve our marketing (social media, traditional media, events, etc.)?
  • How could we enter new markets with current products (or add new accounts)?
    • Are there opportunities to acquire brand/territory rights or purchase another distribution business?
  • How could we develop existing products or services?
    • In other words, could we market the products differently, could we provide more sales training, could we hire a specialized sales person?
  • How could we move into new markets with new products (or services)?
    • For example, could you sell non-alcohol products to non-licensed accounts (a new market)?

The Ansoff Matrix is a simple and easy way to think about sales growth strategy and find new ways to increase revenue.

Use the matrix to brainstorm ideas and ask difficult (but profitable) questions.

Yours in Sales Growth,

Kary

P.S. Take advantage of the Spring Special and save 33% off the Beer Business Finance Subscription. Use Discount Code SPRINGCLEAN at checkout.

Your subscription includes access to the library of online courses, back issues of the Beer Wholesaler Financial Newsletter, webinars, podcasts, tools and resources to help you drive sales and profits in your beer business.

Growing Your Distillery to Meet Demand

Cyndi Leave a comment
wine distillery machine

By: Kris Bohm: Distillery Now, LLC

Years ago, it all started with the dream of your own whiskey. Through meticulous planning, hard work, blood, sweat and tears your dream of a craft distillery became a reality. Then the real work began, with long days and nights of distilling. Barrels were filled with whiskey and tucked away to age. The whiskey aged and what came out of the barrels was not only delicious but loved by all those who tasted it. The distillery you dreamed of and built up is no longer in its infancy. The spirits of your distillery have been embraced by the public and sales growth is strong. Now here comes the harsh reality. The whiskey your distillery has created and the brand that you built up does not have enough supply to meet demand. The problem gets worse as your equipment is nearly maxed out, since you started with a small budget and limited equipment. With no immediate way to keep up with the demand for your whiskey, you stand at a crossroad where critical questions arise and important decisions must be made.

  How will you meet a demand for whiskey that greatly outstrips supply?

The good news is there are solutions that can allow your business to sustain the growth curve. We will take time to consider the problem in detail, by examining the routes others have taken to solve this exact problem. Some solutions presented here are simple and inexpensive, while other growth options are costly and complex. To help prepare you for the future, let’s break down production growth options with pros and cons of each option to help you find the optimal path to grow your business.

  Outsource Your Problem:  There are companies who produce spirits that are already aged, finished and ready to go in your bottles. Sourcing whiskey from another distillery is the most direct path to an abundance of ready to bottle spirits. Barrels of aged spirits can be obtained faster than producing them yourself and in large quantities. In some cases, distilleries will blend their whiskey with sourced whiskey to stretch their house made supply for the short term. Barrels of aged whiskey are often expensive per proof gallon, but this is certainly the quick route to continue to meet your growing demand.

  Is sourcing whiskey the right choice? If more whiskey is needed immediately, it is likely that sourcing is your only option.

Bringing in aged whiskey from another distillery is an immediate solution to fulfill the demand you worked so hard to create and certainly do not want to lose. Sourcing is the least expensive path forward worth considering. When it comes to cost, other than buying the whiskey, there is no requirement to spend money on equipment when you source whiskey.

  What is the downside to sourcing? Sourcing will require a change in label to disclose the use of sourced spirits.

Spirits from another distillery are unlikely to have identical flavor profile to spirits distilled by your distillery. This can be a challenge if your whiskey has a unique flavor profile.

Sourced spirits are not always received well by an increasingly aware consumer and furthermore may require changes to your marketing story to match the sourced spirits.

  Make More Whiskey: If there is room in your existing distillery to grow, producing more whiskey is often the most logical decision to meet growing demand. The addition of another still, or a stripping still, and more fermenters may be the best choice for you. An equipment addition can greatly increase your output. The decision to add equipment is often the first step a distillery will take to increase output. To grow in this way, a distillery must have additional capacity to add this equipment. Additional capacity is measured several different ways.

  First things first, do you have the space to grow? Additional space is needed to add the equipment, raw materials, and more barrels. A bigger still, more fermenters, and many more barrels of whiskey need to go somewhere and the space must be found first and foremost. The second constraint of additional capacity is heating and cooling. The boiler and chiller must have enough capacity to heat and cool the additional equipment, without overly stressing the equipment. If you have the additional capacity, let’s weigh  the pros and cons of going this route.

  Upside of Adding Production Capacity: The addition of new distilling equipment can greatly increase output of spirits produced daily. This allows you to continue producing your product from grain to glass, and maintains existing flavor profiles and processes to produce the exact spirits you are after. The addition of another still and fermenters is not nearly as expensive as an entirely new distillery build out, as long as the boiler and chiller have capacity for additional load.New equipment added to existing equipment can quickly increase output to work toward catching up with demand.

  Downside of Adding Production Capacity: The new still you add will be hungry and more spirits mean you need more raw materials. Increasing production will invariably increase operating expenses. This sharp increase in spending on raw materials, like grain and whiskey barrels, must be planned for in advance to ensure you have the capital to produce more spirits.Adding a new still will take months to procure, install, and get it up and running. This means it will be sometime before you are able to increase output. An extra still will certainly increase output, but may not be a big enough increase to meet demand in the coming years. This leads to a critical question one must carefully consider when planning to add capacity. Will this planned addition of equipment meet the expected demand in growth for the next 5 years?If the answer to this question is no then it is worth considering jumping into the big leagues of distilling whiskey with a continuous column still.

  Big Distillery Growth: For many distilleries that are making good spirits, they hit a ceiling rather quickly in their whiskey production that requires the consideration to build a new, larger facility to produce enough. If your distillery is on a growth track that many distilleries are currently seeing of +100% growth of sales year over year, the addition of another batch still may not meet your long term demand. Sales growth at this rate requires a massive jump in output of spirits that the addition of another still can not meet. You can look up to nearly any whiskey producer in America where their products are found nationwide and you will find they distill their spirits on a continuous column still. A continuous column still has a proof gallon output level that far exceeds the daily output of even the largest batch stills. There are many unique challenges that come with operating a continuous column still, but their capacity is massive in comparison to pot stills. If your distillery needs large production quantities to keep up with fast growing sales, a continuous column should be considered.

  The Mighty Continuous Still: The output of a single pass continuous still can easily produce seven hundred proof gallons of whiskey in 8 hours. Continuous column stills are extremely efficient and require less labor and energy cost per proof gallon produced. More proof gallons per pound of grain can be distilled on a continuous column still versus with a batch still as well. Distilleries running a continuous column often have excess capacity and can use that capacity to contract distill and create additional revenue streams. This means you have room to grow in your own production as needed.

  Downside of the Continuous: The manufacture, build out, and installation of a continuous column is a much more expensive project than the simple addition of a batch still. Producing large quantities of distilled spirits requires large amounts of raw materials and its downright expensive to operate. Distilling spirits on a continuous column requires an abundance of operating capital to purchase grain and barrels to keep the still running. When running a continuous column and producing dozens of barrels weekly, the need to store those barrels becomes a new challenge. A large barrel storage area or rickhouse is a must when planning to operate a continuous column.

  What is the Best Choice for You? First off, let’s take a moment and celebrate! You have built a successful distillery with growing demand. Hats off to you and your team as this is a massive accomplishment.

  Where to go from here is a daunting decision as the long term success of your business very well hinges on it. Careful planning and consideration is key here as you plan to make this critical decision. There are plenty of options and ways to go to create the opportunity for your distillery to grow. Long term strategic planning must be employed if the next stage of growth is going to work to support your business. If you are unsure which path is the right one for you, drop us a line and let’s talk about it.  Dream big and plan well for it.

  Kris Bohm runs Distillery Now Consulting and has helped oversee expansions for several distilleries. When he is not distilling Kris can be found racing cyclocross or defending his beer mile record.