EXPERT REVEALS HOW BEVERAGE ARTISANS CAN SCALE UP

With research revealing that the number of food and beverages launched with a craft positioning has increased by 15% in recent years[1], it is evident that the explosion of new categories is largely due to consumer hunger for the ‘new’ and the ever-evolving tastes. To survive in the sector, it has become apparent that brands need to expand and align their offerings with these changing habits.

Anton Szpitalak, CEO and Co-Founder of Tribe Breweries says, “Our market learnings show that consumers are no longer wanting the norm or the most convenient option. They want products tailored to their taste palate and lifestyle, as well as flavour blends that you simply can’t find on any major supermarket shelf.

“Many producers are beginning to realise that consumers are demanding products that don’t fit the standard mould, but they struggle with how to start the journey and often don’t have the capability to do so. From my experience, one of the key focus points of a brand owner needs to be the “how”. As the first point of call, brands or artisans should look at engaging in partners that can help with their needs in this department to help scale their ideas into a commercial reality. We recognised this exponentially growing need at Tribe, which is why we allow brewers everywhere to access our people, process and equipment through our Partner Brewing program.”

Although the craft beer industry continues to grow at rate of around 10% per year and has a forecast growth rate of 6.5% p.a. to FY21[2], artisan brands in particular have been unable to keep up with this demand, largely not taking advantage of the growth opportunity, this trend can afford them.

To help craft brands facilitate growth and scale up, Anton shares his top tips on how to achieve this:

Partner with breweries that have those production capabilities

While the craft trend is undoubtedly gaining traction and a small number of Australian craft brewers have been able to build scale to meet this demand, the vast majority are capacity constrained and can’t afford the necessary infrastructure. By partnering with breweries that have these capabilities and are flexible with formats, brands will be able to scale up production as needed. Partnering with a reliable brewery can provide successful brand owners with alternative growth options, and will ultimately lead to a stronger craft beer industry in Australia. It can also reduce the occurrence of errors that may arise during the manufacturing process. We are strong believers in helping smaller brewers, which is why we embarked on building Australia’s most ambitious $35 million brewing project, set to launch in September 2018.

Need to produce personalised and non-traditional offerings

Today’s diverging beverage market is a strong indication that brands need to produce more personalised and non-traditional offerings which speak to more than the general public. To succeed in this increasingly saturated market, brands need to look at offering innovative flavours, packaging options, collaborations and limited editions. For example, we have used our new capability set to put products into different packaging options – such as coffee in cans and kombucha in kegs – and we’ve found it works extremely well. Millennials are a strong driving force behind this need for this differentiation and personalisation.  Research by Nielsen revealed recently that millennials in particular have an ‘appetite for new and exciting products’ and almost one-in-two Millennials like to try new or different beers.[3]

Brand extensions

Brand extensions are an effective way to leverage an already positive brand reputation, with loyalty and trust being a core part of why this is a particularly useful method of scaling up. Within the craft industry, we have found that consumers are becoming more health conscious, and are becoming increasingly drawn to trendy ingredients. A recent report revealed that Kombucha drinks have grown 7 times in the last 2 years in the Australian market.4 By capitalising on trends and getting first to market with extensions that are unique yet within a similar market, this can facilitate long term growth.

Need to ensure you have high quality standards

Brands need to ensure that their products have the integrity to keep up with evolving distribution. Small brands often suffer when moving from short supply chains to long supply chains – however, a good partner can reduce some of these growing pains. Artisans value partners that focus on the integrity of their brand and have experience in quality assurance and key manufacturing certifications. Recognising this importance, at Tribe, we set out to create the most well evolved quality control and assurance program in the Australian craft beer industry.

Anton concludes, “As brewers, we have witnessed well-known large brands encounter problems when trying to scale at a rapid pace and ultimately fail in accommodating increasingly complex consumer demands. In a time of rapid growth, artisans looking for opportunities to share their creations should not be discouraged by the daunting task of production.

Partnerships with reliable breweries can assist in scaling up and keeping up with demand, and can do so without stretching existing resources.”

[1] Innova Market Insights (2016)

2 (Ibisworld 2016)

3 http://www.nielsen.com/au/en/insights/news/2017/boomers-and-millennials-think-different-drink-different.html

4 http://www.nielsen.com/au/en/insights/news/2018/low-sugar-hitting-the-sweet-spot-in-australia.html

Tribe Breweries is the leader in innovative high-quality craft brewing in Austral-Asia, and home to the largest number of craft beers in Australia. Tribe shares the craft journey through their brands, and by sharing their capabilities, scalability, reliability and innovation with other growing brands through contract brewing partnerships.