Go Deeper

In economics, market saturation is a situation in which a product has become diffused (distributed) within a market; the actual level of saturation can depend on consumer purchasing power; as well as competition, prices, and technology. In earlier blogs, I’ve talked about brand differentiation, creating relevance in the marketplace and penetration. With over 5,000 craft breweries, saturation is inevitable and many breweries will be faced with this crossroad…do you go wider or deeper?

In an effort to create a little context, let’s take a quick look back at Iron Horse Brewery and how we got to producing 22,000 annual barrels. In 2004, IHB was founded by Jim Quilter and started to build its brands in the tasting room offering five brands on draft. Eventually seeing a growing demand for these brands, IHB developed distribution agreements with local wholesalers to see these same draft product across Washington state (wider).

The next step of the craft beer maturation process, was innovating to a package that could be sold in Off-Premise. In 2008, IHB started to package a select number of brands in 22oz bottles and opened up a new channel of volume opportunity (deeper). Over the next six years, Quilter’s Irish Death grew to be the #1 selling 22oz bottle in the state of WA per IRI, three times greater than its second place competitor. With the craft beer segment gaining strength, it was time for another package innovation and in 2014, IHB outsourced a mobile canner to package High Five Hefe in 6pk/12oz cans (deeper – you get the jist). You’re probably asking yourself why didn’t IHB put Quilter’s Irish Death in 6pk/12oz cans? Given the size and strength of QID (QID represented 68% of the total volume), IHB wasn’t prepared with it’s current infrastructure to take on such a project. More or less market testing with the 6pk can versus glass bottle with a lesser volume brand would limit risk and help us understand the landscape. At this point, IHB was selling 75% of its total volume in draft beer and the rest in 22oz bottle and 6pk/12oz (just High Five Hefe). It wasn’t until the summer of 2015 did IHB decide to invest in the next phase of expansion and create room for the inevitable package innovation, Quilter’s Irish Death 6pk/12oz cans.  

After many long hours of planning, frustration, happiness and defeat…and inevitably the banks writing a check, IHB launched QID 6pk/12oz cans in limited quantities, March of 2016. Yet this was another step of going deeper in our current market, arguably this was the first LARGE step of establishing our strategy for going deeper in our five state market (listening to consumer demand). Over the next nine months, we (Wholesalers/Market Managers) were able to achieve roughly 25% market penetration of the 6pk/12oz can and “kind of” keep up with the volume demand of the cans. Overall it was received with a tremendous amount of support and overwhelming excitement, enough to warrant the attention of potential package innovations in other channels of the business…which lands me on the actual point of my blog (sorry about the long-windedness).

Ask yourself this…what’s better than being able to buy a 6pk of Irish Death cans? Yes, correct…being able to buy a 24pk of them in a easy to carry suitcase. You heard me right…somewhere, someone thinks it’s a good idea to arm our consumers with a 24pk of these 12oz beer candies…and we couldn’t be happier. If you find yourself aimlessly wandering the aisles of a large box store that’s name rhymes with Rosco, (or any other retailer that wants to carry it – you’re welcome KG) during the months of March and April and have the sudden urge to share your bounty…we’ve got you covered. March 1st, be on the lookout for Quilter’s Irish Death 24pk cans…and like always, thank you for allowing us to go DEEPER in this crazy world we call Independent Craft Brewing.

 

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