David Lipman interviews the best craft beer bottleshops in Australia to find out the basics on what craft beer brands need to do, to drive sales in bottleshops that specialize in craft beer. For brands targetting bottleshops in general please take not, craft beer only represents around 4% of total beer volume, whereas craft beer represents more than 60% of total alcohol sales in these shops, making this Top 10 craft beer specific, and hopefully helps sell craft beer brands into non-craft beer specialist bottleshops.
Interviewed managers and bottleshops – Mark Mead, Warners at the Bay, Warners Bay (NSW), Adam Bellamy, Platinum Liquor Concord and Bellevue Hill (NSW), Geoff Huens, Beer Cartel / Porter’s Artarmon (NSW), Chris Menichelli, Slowbeer, Richmond (Vic), Josh Daley, Mane Liquor, Belmont (WA), Anthony Young, Plonk Beer & Cider Store, Fyshwick Markets (ACT).
1. Brand / Retailer Relationship
The most important point for craft brewers to not only increase sales, but the velocity of those sales in bottleshops, is to do the good old fashioned things well, of having good sales staff, that love their job, love the brand and love craft beer, and having a good consistent product with an exciting and believable brand story, packaging, philosophy at competitive prices.
Yes, bottleshops want the complete story! Mark Mead sums it up, that brands need to prove to bottleshops, they are in the craft beer wholesale business for all the right reasons, being “100% behind the brand, quality, consistency and at the right price”. That way the bottleshop staff become your extended sales team, via recommendations and events, as they get infected by the brands enthusiasm and consistent quality.
Adam Bellamy says “yes I have my favourites, any brewer or rep I get along with personally, you really want them to succeed”. Josh Daley also says of brands he likes “we love to recommend them, we want to support them”. Mark Mead says its “hard to pick favourites and grow a brand when he has such a huge range, so many brands per style”.
Geoff Huens says “hire staff that know a bit about beer – not only will it gain better traction with retailers but they can also actually talk about your beer and brand at events/festivals”. Josh Daley says “if staff meet the reps, it helps a lot. We get deliveries every fortnight, which is usually a rep to keep freight down. We go out on the weekend with a lot of the reps, which helps”. Anthony Young gives his expectations of regular sales calls by sales reps “we don’t need more than once a month, either face to face or by email with phone follow up”.
Adam Bellamy says one way to damage the relationship is for brand reps to convey more attention to the on-premise rather than bottleshops, stating “brands need to show bottleshops similar respect and attention as they do for pubs and the on-premise. Bellamy continues “even breweries I like dealing with, I don’t get a deal, but the sales rep says he has to do deals with pubs to get their beers on tap – so it’s like the bottleshops are subsidising pubs”. Bellamy is not saying he wants a deal, or free merchandise, advertising dollars, rebates, fridges and so on, he just wants to have a good working relationship with the brewery, such that he receives the beer when he asks for it, the quantity he ordered, in good condition, and it’s a brand he likes and wants to support. It’s clear why the brands gives so much attention to the on-premise because excise is 40% less in 50L kegs, the packaging is more cost effective, and overall its more profitable than bottled beer.
Bellamy says a “brewery in the business of cut and thrust who is all about sales”, then Adam will cut them if not selling. Whereas “if a brand is not so pushy, and want to grow together” then they get more understanding from Adam, and if not selling so well, “that’s not a sole reason to cut them from the shelf”. Bellamy continues “I don’t like to do business like the on-premise and take what you get, I keep full control of what I sell, if I like them and I like their beers I’ll put it on”.
Geoff Huens says “have an awesome (real) story behind the brand and each beer. e.g. Death Between The Tanks is a result of Kylie (The Little Brewing Co., NSW) telling Warwick (Kylie’s Head Brewer husband) she will likely end up finding him dead between the tanks if he continues to work so hard! That’s an awesome story to tell customers plus an awesome name”. Huens summarises, “do things differently and a bit quirky – don’t be same old same old”.
If you are a retailer, Australia Trade Tasting would love to invite you at the Melbourne and Sydney Tastings to check out new and exciting craft beers, craft spirits and boutique wines that are looking to grow distribution.
2. Quality / Consistent Product
Geoff Huens says “strive for quality and consistency of product. We want to be able to stand behind our recommendations and feel confident customers will have a good experience. If not then it reflects poorly on the brewery and us, and will likely drive customers back to tried and tested brands they know. This happened in the states about seven years ago. We have culled beers from our range due to lack of consistency / quality”. Huens wonders if the current brewing qualifications allocate enough time in experience brewing on a commercial scale, so brewers are not entering the industry without years of experience brewing on a commercial scale. Huens suggests brands to “enter your beers into competitions to try and win awards. Then if you win tell people about it! If you don’t win ask the judges what the problems were and try again”.
Mark Mead says “first and foremost have a good, consistent beer”. “What makes a good beer?”, says Mead, and discusses consumers or writers bagging beers, on rating sites, when it’s subjective, and they don’t have qualified palettes. Mead says “Stone & Wood is far from outstanding, but it can’t keep up with demand”.
Adam Bellamy says “plenty of breweries make sub-standard beer, promotions like buy 10 get 2, all helps, but it’s when they don’t have good products, it’s not a good look. It’s all about beer being good, consistently good”.
3. Price & Promotion
Brands when starting up will work out what size brewery to purchase, or how many litres to contract brew and sell each year to be profitable. However being profitable on paper doesn’t make the beers price competitive and sell. Bottleshops want brands to do their research on targetting segments in the market, and positioning their beers in categories that they will be price competitive. Most bottleshops see craft beer, from small to medium craft breweries, not being price competitive, with unrealistic wholesale prices.
When deciding on a beer style, do your research on what retail price other brands are sold at for the same style and similar ABV, for local and imported beers. Bellamy says “position your brand with competition in mind”. When he looks at the depth of beers of the same style on his store shelves, “why sell an Aussie craft beer 6-pack for the same price as an awesome USA imported craft beer 6-pack”? It cannibalises both. Then the beer sits on the shelf longer, getting closer to its best before date, and Huens says “we don’t stock any beers that are within three months of their best before date”. The softening of the Australian dollar to the US dollar will help local Aussie craft beers be more price competitive.
Mark Mead says they “haven’t done specials for five years, focusing on all day everyday low prices”, although Warners has been in the market for 10 years now. Mead says of how to drive craft beer sales there’s “no magic wand short of cutting prices”. Mead shares their GP margins to help brands work out what their wholesale prices need to be, 40% single 330mL and 32-34% up to 1.5L bottle, 28-30% 4 / 6-packs, 15% cartons. Chris Menichelli says retail price points need to be $20-$25 per 6-pack for easy drinking craft beer, $20-$25 per 4-pack for big ABV or big flavour intensity craft beers, and $8-$10 a single 330mL bottle for seasonal and limited release big flavour craft beers. Menichelli doesn’t do a lot of bulk, no case sales really, just 4/6-packs and singles, and doesn’t run many promotions, it’s not relevant in his store. Josh Daley says they aim to sell craft less than $20 a 6-packs and $15 for 4-packs as at those prices they “fly off the shelf”. Daley says at Mane Liquor “customers buy one or two 6-packs then fill the box with singles ranging from $5-$15 a bottle”. Geoff Huens requests from brands “volume pricing that then works into a promotional offer, e.g. 2 for $12 on pint bottles or similar”. Anthony Young says “periodic promotional buy deals i.e. buy 10 get 1 n/c. This increases the chance for a floor stack and additional shelf allocation”. Mark Mead says “bonus deals like 10 plus 1 are not the ‘be all and end all’, once you factor freight and the free case into the per carton price”. Geoff Huens encourages “intro discounts for retailers to get the beers on shelf and offers a lower initial price point to drive initial trial”.
My recommendation to craft brewers already brewing their own beer is, for beer you want to sell wholesale in bottle, to brew one or two of your best sellers with contract brewers, so as to dramatically reduce your cost per carton in brewing (my research says brewing the beer on your own is about $40-$50 per carton, ex-works, ex-excise, when contract brewing can be 50% less), reduces your wholesale price (leaving some profit for the brand for promotion or for cash flow), and ultimately leads to more sales. I am recommending this, without any association with a contract brewer, nor am I working with/for a contract brewer, it just makes sense to me. This way the craft brewer can still brew their other SKUs and limited releases on their own equipment, create some PR and excitement from selling them at your cellar door, or draught in the on-premise, and then once volumes get large enough, upgrade to larger brewing length equipment and tanks. As soon as you put beer in the bottle, it’s a whole new business model, it’s all about brewing big volumes to cost less down the line to the consumer.
Craft beer drinkers are repertoire drinkers and buy when they are browsing the aisles, and if they don’t see anything of interest they will stick with what they already know. If a brands label doesn’t make sense, excludes the important information, or isn’t using all sides of the cluster pack effectively, these all have an impact on sales. Even having the SKUs available in different size bottles or cans helps retailers sell craft beer. Bottleshops collectively want brands to take their time in getting the packaging right, so amongst its competitive set, it’s exciting and is consistent with the brand positioning.
Geoff Huens says “think long and hard about bottle labels and branding so that it stands out on the shelf amongst a sea of beers. Huens likes Doctors Orders and Rogue Ales as two examples of good packaging, “hire a designer that has industry experience of what labels will look like when placed on a bottle. Mentioning of awards on packaging, bottles or POS, having beer bottles clearly labelled with the style – so many beer bottles have ordinary labels that customers struggle to decipher what it is. Recent research we did this month showed that customers initially look for beers by Brewery or Style – put your plotted brewery history on the back label!
Chris Menichelli says “branding is important now more than ever due to how crowded the market is. Moon Dog is quirky, and Red Hill is classic, as two examples of packaging that works well”. Anthony Young says “Packaging that results in the product displaying really well on shelf, be it single unit, 4 or 6-pack on all four sides as you don’t know which way the retailer will face the product”. Young requests “4 or 6-packs that don’t collapse, particularly once they come out of refrigeration”. Geoff Huens also says “4-pack / 6-pack holders that just have what the brand and beer style is on the side are useless in fridges. You’ll sell a lot more beer if they can go in the fridge”. Huens also adds “have barcodes on the beers”.
A lot of brewers overlook it’s not ideal packaging bottles loose in a box of 24, Chris Menichelli says “as it basically discourages the consumer buying a 4-pack or 6-pack, people are guided by what they see, if it’s a single bottle, or 6-pack that’s how they buy it, from an impulse perspective”.
Adam Bellamy says “long necks sell really well for us”, selling 500mL and 640mL bottles in 3 x bottle quantities, showing merit for brands to offer bottleshops SKUs in stubby and long neck sizes. Huens says “release seasonal / one off beers in different format bottles to make them a bit more special and releasing beers in 30L kegs to allow for offering the product on growlers / squealers”.
Mark Mead says of brands deciding on can vs bottle, “I would love to see everything in can, much better for the beer”, and for those thinking it’s not a good look drinking out of a can, “all good beer should be poured into a proper glass” says Mead.
5. Social Media and Marketing
Social Media is a very popular marketing medium for craft beer brands that bottleshops say really works to drive brand awareness and craft beer sales in-store.
Mark Mead says they rely on brands to promote their beer(s), and “social media is very important, as most of their craft beer nerds are getting a lot of info online”. Josh Daley says “social media around events is massive, the brewery pumps it up, the staff pump it up, social media is the number one thing to get the brand out there”. Daley mentions a recent promotion from Colonial Brewing with their new cans, saying they were smashing Instagram and Facebook about the canning”, they really felt it in-store. Daley says though it helped a lot that Colonial had a Cellar Door, saying “you don’t hear much about brands without a cellar door. But the cellar door needs the fit out, spend the money”. Daley also sites Eagle Bay Brewing’s cellar door as a place people get introduced to their beers and then ask for their beers at Mane Liquor.
Anthony Young says of a brands web page, “have a link that states where your beers can be found (on and off-premise) and where possible have the web page links for those outlets”. Geoff Huens also says it’s important to promote stockists “listing us as a stockist on their website – and keep it updated”.
Geoff Huens says “be active in social media / general media about what you are doing and what is coming up, such as mention stockists when releasing new beers. The more general awareness there is of the brand the more likely consumers will be to ask for the beer by name”.
Anthony Young says “promote where the beer can be found when marketing on social media and have links back to your web page that allows the customers to see where they can access your product.
Print Catalogue advertising wasn’t mentioned by many bottleshops, probably due to the high resource, cash and time intensive process, or not being able to source funds from brands, however they do work and are effective for brands to drive sales. Anthony Young says “assistance in providing funds for retailers catalogues (is important)”. Look at Dan Murphy’s who do a lot of catalogue advertising, and require brands to contribute a significant amount of money, given the large print and production costs. For some brands this is not worthwhile, even though a healthy order may come with the request. Perhaps this is more an option for brands that get to a certain sales volume, so the cost is spread over more cartons. Print advertising in general is great for brand awareness and bottleshops, such as Mark Mead, have read magazines such as Beer & Brewer magazine to see new brands or releases to place an order.
Mark Mead points out how subjective beer is, and with all the online ratings sites, blogs and Apps, it’s important for Brands to watch what people are saying about their beers. Consumers may be looking for guidance from online material and not everyone writing the material has an educated pallet. At the same time, brands should make sure all of your SKUs are listed on the rating web sites and Beer Social and Rating Apps, such as Untappd (with over 950,000 users), Rate Beer, Beer Advocate, Beer Guide, and so on. Distributors use these ratings to sell craft beer to retailers, retailers use the ratings as a selling tool to consumers and consumers use these sites to see what their mates are drinking, or what beer is the most highly rated in making buying decisions.
6. 6. In-store Tastings & Events
Most bottleshops encourage brands to conduct in-store tastings, where the brand provides a knowledgeable staff member and stock for the tasting, or credits whatever stock is used for the tasting. Tastings embrace the try before you buy nature of being introduced to something new.
Mark Mead says “tastings are the best way to drive sales for craft beer, however there is no point using agencies, it doesn’t work. People want to meet the people behind the brand. If craft beer brands demand a premium price, they need their own staff”, this leads to more sales. Mead continues a “small percentage don’t care who is doing the tasting, they get a free taste, buy a 6-pack”. Mead says of Warners “it’s frustrating seeing brand staff doing tastings in metro areas, but it’s very rare to get reps to our regional store”.
Adam Bellamy says he’s not a fan, “it’s a short term gain in sales, but long term pain”, they “sell a lot on a tasting night, then order more and it sits there. Tastings can awaken some people and help sell in the short term, or disguise a not good seller in medium term”. Bellamy concludes he’s “yet to see brands do tastings consistently” and for a store of their size, “staff recommendations are better than in-store tastings”. Josh Daley says they don’t do “a huge amount of tastings, one every 2-3 weeks, get a rep and free tastings, Friday arvo, that helps, you always get sales”.
Bottleshops say events are a great way for the brands to promote their stockists, on and off-premise, particularly the bottleshops closest to the event, be that a dinner, or beer festival. Geoff Huens says events are important to brands as they “drive awareness and trial of your brand – either through in-store tastings or festivals or giveaways. It takes a minimum of 12 months of continuous pushing and trialing of your brand for traction to be gained”. Josh Daley says “we get a fair few sales after breweries hold events, when we are one of the closest shops to the event. We’re lucky we have a good relationship with the brands. It’s good to see brands at festivals, not just beer related, to introduce craft beer to the masses”. Adam Bellamy says he “hears brewers or importers at festivals, proclaiming their independence, but their beers are not available in independent bottleshops” – so they should be promoting stockists at events, particularly the independents.
Daley provides some great examples that have helped drive sales from events at Mane Liquor, saying in-store tastings, events and social media are an all-in-one must have for brands. “Brands gave a $300 budget on food, for a free Chili Dog with every 4-pack promotion with an in-store tasting as well”. The brand also provided the tasting stock and Mane Liquor paid for the staff. Of the events success Daley proclaims “then still two weeks later we were getting repeat orders for the same SKU [in the promotion], then they would buy more SKUs in the brand”, showing loyalty to the brand, all thanks to the initial event.
Daley says putting on events around new releases of products works well for them, such as “free toasties with every beer”, which resulted in sales of 40 cartons in one night. Daley says another event idea that works for new releases, is they use their carpark, getting Food Trucks in, and run a deal of “buy a 6-pack and get whatever food truck item free”. These events are usually Friday afternoons as the best time. If on a Saturday, Daley makes the event bigger, “as customers have more time to come down, hosting 2-3 food trucks, 2-3 breweries, being a mini car park beer festival”.
7. Staff Recommendations
Bottleshops all concurred that if they receive samples from brands, it helps staff understand the beer and it directly leads to more sales. However it seemed more important for new brands to send samples of their launch beers. Once a brand gains loyalty and momentum, the bottleshops don’t need to taste the beer to like it and sell it, the staff and consumers are already sold on the brand.
Geoff Huens says of his staff “they are more likely to recommend it if they have tried it and liked it”. Josh Daley says “if staff haven’t tried a beer, it doesn’t sell anywhere near as well to those they have”. While Chris Menichelli says while “this is the biggest for us”, it’s not essential to send samples all the time, “I look up rate beer and beer advocate for imports, when ordering stock”. Menichelli says “new brewery samples are important”, whereas for existing brands with new beers, “the brewer comes in and explains the range”.
Mark Mead says over Christmas “about 75-80% of craft beer sales are from staff recommendations, with so many being 6-packs. Whereas this is more like 50-60% throughout the year”. Mead says for commercial beer, and some craft beer brands, where customers are brand loyal, there are no staff recommendations needed. Mead says “I stock some beers I don’t like, but they sell, they have their place in our shop, let the customers decide”.
Anthony Young encourages brands to “take samples out to retailers in a cold esky and even take small glass tasting cups in with you. Have the staff sample the product with you so all the staff employed in the bottle shop are your best-selling tool to the customers”.
8. Brand Mix of Styles
Craft brewers love showing their creative flair with “propeller-head” type craft beers, full of flavour, IBU, high alcohol, and words such as barrel-aged, sour, farmhouse, double and imperial. However the bottleshops say these beers aren’t for everyone, and in fact don’t sell enough volume for either the bottleshop or for the brand to generate enough volume to be sustainable.
There are still 95% of consumers drinking commercial lagers and ales and wondering what is craft beer or not aware of this whole new world of beer. Bridging Beers or Session Beers are a great way for bottleshops to introduce these customers to the category, which helps increase brand sales. These Session Beers may be the ones that pay the bills for a brand, while having seasonals and limited releases, says Geoff Huens “helps people who like to try everything and come back to your brand every now and then. Otherwise they just see the same beers they may have tried two years ago and don’t ever think to come back. It helps keep your brand top of mind”.
Geoff Huens says “have an everyday beer in your range. It’s OK to make hop bombs but not all customers want that all of the time. Plus hop bombs don’t cater for newbies to the category”. Chris Menichelli agrees when you look at “Mountain Goat’s Summer Ale, it is a great session beer aimed at the mass market, it also allowed them to do more NPD”. “But don’t go all session, then you’re not interesting, all subtle, all same slightly / different”.
Geoff Huens says “customers are brewery loyal”, as does Josh Daley that consumers will drink a brands portfolio, “because they know their other products are good”. Huens continues “customers also buy styles, and Pale Ales and IPAs are the most asked for styles”. If a brand doesn’t have a Pale Ale or IPA, they are simply missing out on sales.
Brands investing in the time to source merchandise, get it designed and branded, find a supplier, or produce posters, gift packs or shelf talkers, it’s a costly process. Does it work for craft beer bottleshops? Does it drive sales?
Mark Mead says “we’ve been wearing Little Creatures t-shirts for five years, but I’m not sure it’s helping sales”. On the other hand, Mead says if brands can give interesting merchandise away to consumers, such as caps, stubby holders, bottle openers, t-shirts, posters “then it starts a conversation outside the shop, you’ve got to give them something to take away”. Then the brand is gaining exposure for example at a house party, “then everyone is talking about you”, affirms Mead. Both Geoff Huens and Josh Daley say posters help merchandise their stores.
Chris Menichelli says they “don’t do much merchandise, it’s not really relevant”. In regards to gift packs, Menichelli says “they don’t pre-pack gift packs, a customer will come in wanting a mixed 6-pack and we will help the customer choose, put in a nice box, wrapped. If we had merchandise free from local breweries we could bundle it”. Adam Bellamy says beer gift packs can work over Father’s Day and Christmas.
Anthony Young asks brands to “provide shelf talkers for your products that suit the retailer’s method of shelf tickets / promotional ticketing”.
Josh Daley doesn’t do a great deal of merchandise, “glassware helps, but people aren’t that fussed getting something for free, it doesn’t increase sales that much”. Adam Bellamy, says merchandise isn’t their style, he likes to focus on just selling beer, stating “merchandise may be seen as something to make beer easier to sell to compensate the beer not being able to sell itself”.
Mark Mead highlights Growlers can work in any store “at the right price, all walks of life love Growlers, but staff have got to be passionate about it, and understand the beer should be on tap for two weeks maximum, not three months. Saisons and Ginger Beers don’t work, anything with Pale Ale or IPA in it sells”. Mead asks customers what they like, but anytime he ventures out of Pale Ale or IPA, it doesn’t sell through. If the beer is not sold in two weeks, Mead says “we take it off, pour for staff and dump the rest”.
Chris Menichelli says “filling one litre cans, rather than growlers, is interesting” as he has learned of Modus Operandi in Mona Vale (NSW). Josh Daley says of these cans “they look awesome, but once you drink them you have to throw them out, whereas growlers you can re-use”. Josh Daley says of their Growler station, “we prefer beers that aren’t available in the bottle or can”. Daley welcomes a promotion deal with brands along the lines of “buy two kegs get one free for tasting and to factor savings into reducing the Growler price”.
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