3 Lessons for an Industry Transformation
Co-Author Joseph Callender
The collective force of startup ventures, rooted in curiosity, causes industry transformation.
In 2012, the beer industry was in the midst of a resurgence of craft brewers coming onto the scene.
As a life-long beer lover and a dedicated customer of craft brewing and the beer industry, I spent many nights at The Brickskeller in Washington, D.C., in the late 80s and early 90s, working my way through their global beer menu.
The atmosphere was electric with new craft breweries popping up by the hundreds, and in time, by the thousands across the US.
I was so enthralled that I left a steady, well-paying career, secured my certification as a Cicerone Beer Server, and began my own effort to turn consumers onto craft beer. I secured a server role in a startup craft beer bar and started a blog called Craft Beer Coach, focusing on an interview series of craft brewers. I ended up conducting over 20 interviews of craft brewing stalwarts and industry newcomers.
In this industry transformation, three key lessons have emerged.
KEY LESSONS
1- Curiosity Matters
Curiosity is an original human trait. For decades, very little curiosity existed within the US beer industry in the years prior to the craft brewing transformation. The big beer brands spent most of their effort and money on marketing and gimmicky repackaging. As the beer industry stagnated, the only thing for the big brands to do was to merge with each other. By 2008, there were just two major beer industry conglomerates in the United States.
Craft brewers had to tap into a new level of curiosity that would lead them to experiment with the things that would set them apart from the conventional wisdom of the beer industry. It was this level of curiosity that led to multiple new beer styles and the resurrection of several ancient and historic styles. They ended up creating a flourishing market of premium beverages.
If craft brewers had tried to go head-to-head with the large, established conglomerates, they would’ve been eaten alive. They simply would not have been able to compete on volume and price.
Takeaway: The curiosity to experiment will set someone apart from the conventional wisdom and practice of any traditional, mainstream business model.
2- Relationships Matter
It was always a peculiarity that the big beer brands could buy up local distributors and end up controlling which products made their way into shops and restaurants. Many distributors were known as an “AB-Inbev House” or a “Miller-Coors House.” In certain states, once a craft brewer signed on with a distributor, they could not leave the contract regardless of how poorly the distributor handled the craft brand.
The craft brewers garnered so much love from consumers that the big beer distributors were forced to capitulate and begin distributing the small startup craft brands into local markets across the country.
New craft-only distributors were launched to help craft brewers with this particular problem.
Eventually, the craft brewing wave led to a loosening of antiquated Prohibition-era laws and new craft breweries were allowed to self-distribute.
Takeaway: The market is shifting significantly in the direction of consumers going to the source to try products and meet the people that make and sell those products. Consumers want to build a direct relationship and meet other dedicated fans of the brands.
3- Community Matters
Carlsberg Group, a good macro-brand in its own right and my personal favorite, commandeered most of the distribution, product, and taps in Copenhagen.
The Bjergso brothers Jeppe and Mikkel grew tired of it. They started a beer-drinking club where attendees were challenged to bring lesser known beers from breweries throughout Scandinavia and Europe or beyond to be shared.
Out of the success of this experience, Jeppe eventually opened a beer bottle shop in Copenhagen called “Olbuttiken” that became one of the top shops internationally. Beer drinkers started travelling internationally to visit the shop.
The shop became a sort of craft brewing folklore and on the American beer scene we heard of “this bottle shop in Copenhagen.”
At the same time, Mikkel started working on a new beer brand that became known as Mikkeller. An interesting fact about Mikkel is that he was a high school science teacher who successfully encouraged his class to petition to use the school kitchen to start brewing beer as a science lesson. Two students from this class went on to be mentored professionally by Mikkel and start their own beer brand.
The other brother, Jeppe, eventually moved to Brooklyn to launch Evil Twin Brewing. I met him for the first time in the spring of 2012, when he came to talk about his venture at a friend’s newly opened bottle shop in Greenpoint, Brooklyn. Here’s a young man from Copenhagen, with a love for beer, moving to Brooklyn to join the American craft beer revolution. The explosive growth of the American craft brewing scene was palpable.
The Bjergso brothers sparked a craft brewing revolution in Denmark and across the globe by building a community of insatiable, like-minded, beer drinkers.
Jeppe’s Evil Twin Brewing and Mikkel’s Mikkeller eventually grew into two of the most creative and sought-after brands internationally.
Mikkel hosted the inaugural Copenhagen Beer Celebration in 2013. I attended, and what I witnessed at that festival has created a collection of memories that I will never forget. To sum it up, there I was in a Mikkeller Bar booth one night, imbibing with new friends from Argentina, Brazil, the UK, and Scandinavia.
Takeaway: When the world is saturated with similar products and services, a community will bring new ideas to life and members will become a brand’s loyal fans and advocates, if the leadership lets them.
Final Thoughts
The brewery industry has experienced a transformation due to remaining curious and experimenting with a new model.
The beer industry is nothing like what it was ten years ago. Back then, beer drinkers mainly stopped by the local liquor store to pick up a six-pack or case of their reliable macro beer and take it home. There was no community around brands.
Today, an entire beer tourism industry exists across the country. People travel locally, regionally, and nationally to visit the source and meet fellow community patrons.
All of our formal education teaches us to replicate and implement existing, “proven” models. It is time to learn how to create new models and become the next generation of model builders.
In our next blog post "Disruption is the New Normal for Education", we explore how similar disruptions are causing the world of education to experience a profound shift.
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