Fueled by passion: what microbreweries teach us

Micro businesses can be extremely vulnerable to market fluctuations and competition within their market segment. They simply have to succeed in their limited market, and all the pieces, from production to sales, are critical to their success. However, when the entire business is absorbed in the conversion of a common, specific, worthwhile goal, things are likely to work out.

Over time, we can expect the majors to successfully counter by making ever more flavorful beers and use their distribution muscle to push them. In food, we see the same phenomenon: the gulf between a specialty cheese from a local cheese factory, for instance, and a gourmet line made by one of the majors, is narrowing.  When two products from very different business models may be indistinguishable in quality and variety, how is a consumer to choose?  Price is an obvious answer. Unless shipping costs become extremely prohibitive, the economy of scale of the large manufacturers puts them at an immediate advantage; as gas prices continue to increase, this advantage wanes.

Niche food companies have a distinct advantage of their own.  By virtue of their size, localized history, and ground level culture, they have a better chance to stimulate and foster a genuine love of what they do, both among employees and customers. This can translate to healthier customer responsiveness, and a response of stronger customer loyalty. The loyalty comes from authentic relationship, rather than pure branding or advertising image. In addition, they naturally fulfill the growing demand for locally owned an operated, an naturally products. Tough to beat.

Niche food companies, in other words, are more apt to succeed through marketing enthusiasm. Marketing enthusiasm, a term probably coined by British marketing consultant and blogger John Grant, stands in contradistinction to marketing aspiration (image). “It is about being involved in things you have a passion for versus passively buying something which might make you look good. “

On a sunny Friday afternoon, I’m standing by the loading dock with Rick Dellow, gulping down a glass of oatmeal stout, as the light and reassuring waft of stale beer filled his 3,000 square foot facility. Just a few feet away,
Spencer Parton is experimenting with a 20 gallon batch of alcoholic ginger ale for a local restaurant, The Hamilton Street Grill. I’m struck by how the staff, and Rick himself, are obviously happy to be here; I wonder out loud how Rick selected his team members. Rick Dellow: “You have to want to be involved in this; you have to love your job and you have to love beer.” Love takes sacrifice:  “We can’t pay people what they deserve. Compared to larger breweries, we are selling in micro quantities. But what we offer our employees is a chance to be themselves, express their creativity and get a chance to experiment within their organization…We [also] offer them a chance to fail.”

So, does a micro business culture scale? It can. This year R & B is nearly doubling its floor space to 5,000 square feet. They are now up to 3,100 hectoliters of beer annually, though they could quadruple their capacity and still stay within the bounds of a textbook definition of a microbrewery. Small potatoes? Yes and no. R & B Brewing is a company that is prospering in this economy, and the people who work there are obviously in high spirits.

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(0) Comments • Permalink • 06 12 2008

• John Dumbrille, MonkeyMedia.net
• http://www.bizjournals.com/stlouis/stories/2008/04/21/daily42.html
• http://en.wikipedia.org/wiki/Microbrewery
• http://www.beertown.org/education/stats.html
• http://www.brandtarot.com/blog/

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