Depletion growth estimate of 6% to 8%, reflecting the continued strength of the Kona, Redhook and Omission brands offset by softness in the Widmer Brothers brand. Previous guidance was 8% to 10%.This just mystifies me. Kona is a solid label, and their seasonals are exceptional--but their regular offerings like Longboard Lager are pretty pedestrian beers. Redhook has a similarly pedestrian line of beers augmented by specialty beers that sometimes (but not always) wow. Widmer, on the other hand, is one of the most innovative brands in craft brewing, and I could survive on nothing but their 23-beer line-up this year if I had to. They throw a lot of experiments on the wall, and some don't stick. It would not stun me to learn that Kill Devil didn't fly off the shelves. But the rotating IPAs, the fruit gose, the really lovely oatmeal porter--and on and on--these were fun, wonderful beers. So why the market softness?
I sometimes like to fancy myself an astute observer of the beer market. Sometimes I think I understand which beers will sell and why. But then I read a report like this and am reminded how hard the beer biz is, especially when you're dealing with the mass-craft market. (CBA has already brewed 550,000 barrels of beer this year.) If you're a 5,000-barrel brewery, I think the success calculus is a lot simpler: make excellent, distinctive beer. When you're a 500,000-barrel brewery? No clue.
Sages of the beer biz, please comment if you can help 'splain this for the rest of us.
It feels like there has been a lot of dilution in the brand. Rather than trying to focus on core flagship products like Hefeweizen, they're now trying to be everything to everyone.
ReplyDeleteWe've got seasonals and reserve series and rotating IPAs and new beers popping up faster than we can try them. A lot of the beers are great but a lot of the beers are pretty weak as well.
They're so focused on marketing and branding that they are losing sight of beer. They need to follow the Deschutes model that does both well. Bottom line is that Deschutes makes GREAT beer. Widmer makes okay beer.
Isn't a dirty little secret about larger craft breweries their dependence on just one beer for a huge chunk of their sales? How much Kill Devil did Widmer make versus how much Hefeweizen, and what portion of their profits come from just that beer?
ReplyDeleteFor that matter you could name all the larger craft brewers by their single most popular beer (fat tire, Mirror Pond, &c)-which tend not to be the most appealing to beer geeks- but clearly lots of people like 'em.
I'm not sure that craft breweries should actually be public. Investor's have demands that are financially oriented. Make stuff the people like, and make increasing amount of revenues and profits over time. This means that one is stuck pandering to the masses and that road leads to direct competition with SABMillerMolson Coors and Anheuser-Busch InBev. Thay appear to be stuck in "no man's land."
ReplyDeleteOf course, the Anheuser-Busch InBev investment and influence won't help. Eventually, they'll be purchased (completely) by Anheuser-Busch InBev at a serious discount. Carlos Brito will have the Widmer/Redhook/Kona product made in Missouri or Pennsylvania and the brands will be completely assimilated.
Craft beer needs to please the brewer first, the customers will follow.
Unlike Brian said up above, I feel that Widmer DOES make some great beer. Not all of them, mind you, but a few are great.
ReplyDeleteMaybe they need to focus on making ONE truly epic beer, like The Abyss is for Deschutes. Not that everyone is going to buy or like that one truly epic beer, but it certainly would get some attention pointed in their direction.
It's just like why does Audi make the R8? Not to sell R8's, but to sell A4's and A6's. Just like why Chevy makes the Corvette or Ford makes the GT, to sell more of their lower end cars. Widmer should take notice and focus on making one truly outstanding, epic beer. I still like trying many of their experimental and limited release beers, but perhaps they should be a little more focused.
But hey, maybe that's just me wanting another epic beer on the market to fill my belly with...
I'm with insightful Siddoway.
ReplyDeleteBob's Your Uncle.
I disagree with Siddoway, if nothing else for the Audi analogy: its the sales of tens of thousands of A4s and A6s that Audi is able to make a Car like the R8, which they make FAR fewer of. I won't argue the R8 doesn't capture mindshare and respect for the brand, but for small enthusiast subset only. What sells Audi's is the quality and consistency of their 'everyday' products.
ReplyDeleteSimilarly with beer, Abyss does not help Mirror Pond sell. Beer nerds known all about both beers and buy both for difference reasons. Mirror Pond is in front of a huge number of beers drinkers who've never heard of Abyss, nor would like it yet who have bought cases and cases of Mirror Pond, Black Butte, etc
Looks to me that Widmer's problem is inconsistency and dilution of the Brand with SO many experiments and not sticking with ones that work. I like their sense of adventure, but a nano-micro who experiments that much (with the same inconsistency) would quickly be out of business, not just 'soft' for a quarter.
And cheers to whoever said craft brewery's should not be publicly owned!