How These Brews Grew: Tips from Austin Brew Masters

By September 22, 2012Advice, AMA, austin ama, Events

By Melanie Brenneman

Sometimes you just have to suck it up in the name of professional development and on Tuesday, Sept. 18, I did – with beer.

Austin AMA hosted a panel of local craft brewers to discuss how to survive (and thrive) as an Austin entrepreneur.  The panel included:

 

Needless to say, the beer – and the advice – was excellent.  Here are some highlights.

Know your market and who you’re selling to.

As a town with a large, nationally recognized college that also prides itself on local sourcing, Austin is an ideal location for craft brewers.  Independence Brewing, founded eight years ago, created early success by selectively targeting bars and stores. As Amy described it, “You find the right bar. You find the right person. You get them to try the beer and hear your story. And if they say no, try again.” For retail, the brewery turned to stores known for local sourcing such as Whole Foods, Central Market and Wheatsville Food Co-op.  Although it was no slam dunk, the local edge helped them eventually break into these outlets.

Hops & Grain Brewing benefited from targeting as well, but grew from an initial focus on runners and cyclists – a network that was well developed due to Josh’s ownership of a running store.  The company initially self-distributed for its first three months, but signed with a local distributor who specialized in coffee but wanted to extend into beer.  The brewery also capitalized on its message of sustainability by offering Brew Biscuits – non-alcoholic dog treats cooked from ingredients used during the brewing process.

Michael cautioned that the craft brewing world is small, so be careful who you turn down and how you turn them down. You don’t want to burn any bridges. 

Diversify your funding and your team.

Is there a fool-proof way to get funding? Nope.  Amy began by attending a lot of discussions and events for small businesses, but the work netted them no funding. Finally, a lawyer advised them to create a corporation and sell shares. Sure the money she saved to start the brewery ended up tendered as attorney’s fees, but it created an important framework for future operations. With this in place, along with networking and (initially) a three-page web site, the brewery started to collect investments. One bright spot:  A lot of no’s meant a lot of pitching practice.

Hops & Grain, which begin a little over a year ago, benefited greatly from social media. In fact, according to Josh, 85% of their investments came through social media connections. Investments begot more investments and now the brewery has 47 investors.  The brewery also flourished due to the diverse talents of its investors. With talents focused on a variety of disciplines including sales and marketing, it freed Josh up to handle operations.

Austin Beerworks started with four co-founders so it had most of its funding between them. Michael noted, though, that investors are your best sales force so be sure to use them.

 

 

 

 

 

 

Embrace healthy competition.

There’s no room for bad mouthing in the local brewing scene, as such dirty marketing ploys that contaminate the efforts of all brewers.

“The industry is very lateral,” said Josh. “You have to maintain cooperation with local brewers.” 

Indeed, with craft beer totaling .07% of beer consumed in Texas, it takes a united front to educate the market and encourage drinkers to try new beers. 

As Michael pointed out, “If someone has a craft beer they don’t like, it can turn them off of all craft beers. I’d rather knock off taps for big craft brewers than a local brewer.” 

Quality first. Quantity second.

Craft beer drinkers are promiscuous, according to Josh.  You have to produce a quality product for your target market. Hops & Grain ran into a challenge when their distributor once sold more beer than they could produce. It forced a lot of uncomfortable conversations, but in the end you can’t compromise the quality of the product to meet quotas.

Is the can mightier than the bottle? Both Hops & Grain and Austin Beerworks use cans for their brews, due to the fact that cans protect beer from light degradation (skunk beer, anyone?), they’re lighter and you can take cans more places. But while this option was at a feasible cost level for these two, newer breweries, it wasn’t a cost-effective option for Independence Brewery who began with bottling their brews around eight years ago. Now, Amy said, it would be difficult to move from bottles to cans without a lot of consideration and strategic planning.

Put in the grunt work.

Anyone who has built their own company knows it requires a lot of work and it’s no different with a brewery.  Service is key when targeting retail. Every week for five years, Amy was stocking her beer on HEB shelves. It was their responsibility to do that – not the store’s.  

All three brew experts concede that Texas is a promising market for craft brewery growth.  Austin alone is a great market. As Josh put it, “Beer can’t survive without activities to accompany beer drinking.”  Judging from Austin’s continual volley of sports, festivals and live music – and the occasional AMA presentation – I think the optimism is well merited.

 

 

 

 

 

Special thanks to Abel’s on the Lake for hosting our shindig.

Melanie Brenneman is president-elect of Austin AMA and senior account manager for Edge Legal Marketing. You can contact her via Twitter, LinkedIn or email.

Join the discussion One Comment

  • Melanie Brenneman says:

    The Austin Business Journal published an article today stating that “Texas is among the top states for beer consumption” according to a 24/7 Wall St. analysis. Good to know there is a great market for our local brewers. You can read the entire article at http://bit.ly/RMIHg9.

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