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Perusing my personal Facebook page I noticed a friend had shared the latest blog posting of ThePourFool. The author offers a scathing criticism of the recent purchase of 10 Barrel Brewing by AB/Inbev. The post is a rehash of arguments made when Goose Island and Blue Point were purchased by AB/Inbev. Full disclosure – some of these opinions are similar to those voiced when Terrapin entered into a minority agreement with MillerCoors in 2012. And this same commentary will be offered again and again over the next couple of years as more craft breweries are purchased.

These ongoing acquisitions by the large corporate brewers are a very public symbol of the rapidly changing beer industry. And this change in the industry appears to be leading to a split amongst people who support craft beer. When reviewing the comments from the acquisitions mentioned above, we see two camps emerging. One is a camp of indignation and comes with the promise to never purchase that particular brand again. According to members of this circle there are 3,000 other craft brands to try so why waste time on a sell out. Juxtaposed with this is the second camp. These people are delaying judgement and taking a “wait and see” attitude. Their stated intention is to continue to buy the beer “so long as it does not change”.

The first crowd, the ones who promise to never support the offending brand again, are the people who support craft beer because it is local beer. But what exactly is “local” beer? Obviously New Belgium is not local in Minnesota, Terrapin is not local in Pennsylvania, Cigar City is not local in Oregon. Three thousand other examples exist of craft brewers not being local. So “local” must have greater meaning than being brewed down the street.

Maybe it means being crafted by hand in small batches and not with large-scale industrial processes? But how to define that? The number of “local” breweries that are well above microbrew status and are now using automated equipment is surprisingly large and growing daily. Sierra Nevada’s new brewery in Asheville most certainly has today’s most state of the art equipment and therefore it is likely technologically superior to anything AB/Inbev or MillerCoors has in their older plants.

If “local” does not mean being made down the street or being crafted by hand in small batches, then what does “local” truly mean? I believe a “local” beer is one that not only has a story of origin but is made by a company with a passion for beer and the brewing process. And most importantly it means having a reason to exist. A “why”.  See Simon Sinek’s “Start With Why.

So if this first group supports a brewery because of its “why”, then what about the second group? These are the people who adopt the wait and see attitude; the ones who support craft beer because it is better beer. Do they not care about the “why”? Is the taste of the beer all that really matters?

I vehemently disagree with that notion. I believe the wait and see attitude in no way implies not caring about who brews the beer. To suggest this second group does not care about a brewery’s “why” would be disingenuous and unfair. What their wait and see attitude is expressing is actually a willingness to see if the behemoth corporate ownership will change a brand’s “why”. Can a brands reason and its “why” carry over to a larger organization? Or at the very least be protected within that larger company? Group one is saying “NO!” while group two believes only time will tell.

Better beer and Local beer. Are they still the same thing? Can a small company’s “why” continue to exist in a larger corporation? What are your thoughts?

Thought I would share a bit of beer insider press. It carries some industry jargon and viewpoint but I hope you will find it interesting. This article appeared in today’s Craft Business Daily. To Jenn Litz, thanks for the coverage; it’s much appreciated. Hope you do not mind my sharing. ;-)

 

August 11, 2014

Deeper Home Roots Changing Terrapin’s Chain Business, Route to Market

Dear Client:

Growth of course has spurred changes for Georgia’s Terrapin, one of the premier hop-centric craft producers of the Southeast. They’re up 46% YTD, sales and marketing chief Dustin Watts recently shared. Much of that growth is coming from the seeming unending wellspring of their backyard: Atlanta, where they’re with United Distributors, is up 57%.

“In order for us to be great long-term, we gotta win the backyard,” said Dustin. “That starts in Athens,” their home-home market, where they are up 42% with Northeast Sales Distributing. That’s not on a small base: that market is at about 18% of their planned 47,000 barrel output for 2014.

It’s also making them reconsider their to-market plans in unopened territories. After some great openings with Premium in DC last November and New Orleans/Baton Rouge with Crescent Crown in January, they had plans to open Kentucky and Ohio, which they’re “still heavily pursuing.”

“By no means are we pumping the breaks” for the new markets, said Dustin. But they may readjust how they plant the seeds there. That could involve more phased, 4-6 month launches, instead of hitting entire states at once. “We don’t want to come into a market and just kinda blow it up real quick, with beer everywhere; we want a slow approach, draft approach first … in 2,3,5,10 years, there will be the opportunity to grow the root deeper.”

KROGER FIRSTS. Indeed, as breweries hit those high growth numbers in their backyards, they must not only prioritize markets but also channels. As Terrapin has grown the depth of their backyard roots, they’ve hit a first with their local chain business: With Recreation Ale, they’ve had the No. 1 craft can package in the Kroger Atlanta RNA for the last 26-, 13- and 4-week periods.

“Our company has never had a win like that. That’s a big deal, said Dustin. “And it’s a growing segment.”

But it’s a win they’ve been preparing for, having moved one of their regional sales managers into a chain director role at the year’s outset. They’ve since seen great growth in chain grocery and upper-end c-stores. That “definitely takes time, and building relationships,” said Dustin. But it also takes “understanding that arena, ’cause it’s definitely different. But we’ve seen a lot of great success. The Kroger company has definitely embraced a lot of what we’ve been doing, especially in the state of Georgia.”

Good news for Terrapin — but also a sign of the times, where chain stores will become increasingly competitive for the craft segment. We can’t tell you how many brewers — some even smaller than regional size — have told us they’re doubling down on chain this year.

I had the recent privilege of speaking on a panel titled “Inspiring Local Careers: Sustainable Athens”. This was hosted by the University of Georgia Office of Sustainability.

Getting Ready to Speak about Sustainable Careers

Getting Ready to Speak about Sustainable Careers

It was great to see so many students interested in finding a career in the Sustainability field. Lots of great people on the panel as evidenced by the sign above.

During our section we talked about many of the ways the craft beer industry as a whole is paying more attention to sustainability issues. We discussed some things Terrapin is doing currently and projects that we hope to do as Terrapin grows larger. The presentation I gave was split into 4 parts. Terrapin as a toddler, teenager, young adult and responsible grownup.

 

 

 TERRAPIN AS A TODDLER

toddler

Terrapin as a toddler.

Terrapin begins! Classic City Brewfest in Athens, GA April 2002.

Terrapin begins! Classic City Brewfest in Athens, GA April 2002.

Terrapin as a toddler. Our focus was on staying in business from week to week. We contract brewed so we were able to do little on the Sustainability front.

 

 

 

 

 TERRAPIN AS AN EARLY TEENAGER

early teen

Terrapin as an early teenager. (Look, our body is changing!)

teen2

2008 Employee Picture. Most of the people here are interns. And no, we did not use child labor.

toddler3

First tanks coming to Athens in 2007.

Terrapin as an early teenager. We were still focused on surviving long term but at least we knew we would be around for the next year or two. We finally started brewing in our facility in Athens, GA. Concrete slabs from brewery construction were retrofitted into a stage rather than hauling it off to the landfill. Old shipping office in warehouse was turned into a bar in our new tour area. Spent grains went to local farmers, cardboard/glass/plastic were recycled. Money was continually raised for local charities and causes.

 

 

 

 TERRAPIN AS A YOUNG ADULT

young adult

Terrapin as a young adult.

young adult2

2013 Terrapin Team Picture.

youngadult3

Bigger tanks in place. The building is filling up.

Terrapin as a young adult. This is us now. Wide-eyed with wonder at the possibilities. Defined mission statement and values. Focus on Contributing to the Community, Being Friendly to the Environment, and Providing a Great Work Environment. Instituted 401k matching and profit sharing for employees. Many more events and fundraisers for charitable causes; $28k in Athens in 2013, even more when considering other communities. Reduced water usage on bottling line by 65%. Cut energy usage and raw ingredient consumption by 15+% through set up of new brewhouse. Goal of becoming 100k bbl brewery AND Great Place to Work by 2018.

 

 

 

 

 

 TERRAPIN AS A RESPONSIBLE GROWNUP

responsible grownup

Terrapin as a responsible grownup. We are starting to think about our long term future. And Sustainability is a big part of that.

Terrapin as a Responsible GrownUp. Not completely there yet but we see it coming. Looking into improving wastewater and solid waste treatment. Conversations about solar and CO2 recapture are starting to happen. Getting ready to have chats with local government about preserving water resources.

 

 

 

 

 

sierra nevada

Sierra Nevada in Chico, CA.

So who is our role model for when we grow up? Recognize this place? (Hint: Chico.)

According to Collin McDonnell from Hen House Brewing, owning a brewery is 90% cleaning and 10% paperwork. He also says, and I quote, “HOLY HELL STARTING A BREWERY IS SO EXPENSIVE”.

beermoney

Click here and let Collin tell it like it is. I can vouch that everything he is saying is true.

To those of you who are dreaming of opening your own brewery and still want to do so after reading Collin’s comments: It’s definitely tough but if you know (and I mean really know) why you want to do it, you can do it. Best of luck.

Cheers, John

So you want to open a brewery? That’s awesome! Craft beer is growing every day. There are now over 2,700 breweries in the US and another 1,700 in planning. And yes, there is room for you too.

What is your first step? Ask questions of and learn from the professionals. Whenever you see an opportunity to get a gang of pro brewers in one room talking freely about our craft, it’s a DO NOT MISS opporutnity. So if you are a homebrewer looking to up your game, or if you have dreams of going pro, the Southeastern Craft Brewer’s Symposium is for you.

This one day conference is being held at the Mariott in downtown Decatur on Saturday April 19th, from 9am to 5pm. There will be seminars on brewing and the business of beer from leaders in the craft brewing industry in Georgia. Below is a current list of seminars. The massive amount of information being passed on at this conference will be huge in your efforts to join the ranks of professional brewers. Don’t miss this awesome opportunity to learn from some of the best!

SIGN UP NOW!

While I was out of the office all of last week with Spike, Dustin and Steve launching Terrapin in New Orleans and Baton Rouge (yeah that was a tough trip), Erin Appel wrote up a press release recapping 2013 and previewing 2014. Since I had actually already listed that as my next topic, this just became  a really easy blog post to complete.

So with no further adieu, here is what Terrapin did recently and where we are going next.

Cheers,

John

WHY. WHY? WHY!

Those of you in the corporate world or who run your own business are very familiar with this time of year. It’s about budgets and projections and performance to plan.  It’s about numbers and financials and meeting bank covenants. Those items might be interesting to financial gurus and CFOs, but what about our customers? What about the beer geeks? They don’t care if we hit plan or make our budget; they care that our beer is above reproach and that our brand remains authentic.

The Golden Circle - Simon Sinek

The Golden Circle – Simon Sinek

It is extremely easy this time of year to get caught up in the number crunching and analysis. But we need to remember this is not “why” we are in business.  It is merely “how” we continue in business. Our “why” is much stronger than that.  To understand what I am referring to you need to see Simon Sinek’s TED talk on “Start With Why”, I highly recommend it. “People don’t buy what you do, they buy why you do it.” (Lisa Jordan passed this tidbit on to me a couple of years ago. Big shout out to her for that.)

Simon’s video is a great reminder to keep centered on what’s important. Which is “WHY”.  I can easily tell you why Terrapin Beer Company is here. It’s our Mission Statement. Continue Reading »

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