With everything from how we socialize to how we work changing rapidly, how will craft breweries fare in the post-pandemic world?
The last couple of years have been rough for independent breweries between outbreaks, shutdowns, and staffing issues. So here’s what you’re up against. The brewing industry is well-known for being a challenging and competitive place. Here are some of the most common challenges of running a brewery, and how you can keep costs under control.
Owning a brewery has never been easy, and it could get even more challenging in the short run as we recover from a pandemic that hit the service industry hard. Not all of the changes are bad, though. While it’s hard to predict the future, it’s easy to see that consumers are leaning into small businesses and new experiences – and big corporations are not getting all the love. Here are some of the biggest challenges to running a brewery in the rapidly changing industry.
What Are the Biggest Challenges of Running a Brewery? 7 Hurdles to Consider
1. Supply Chain Issues
The supply chain may soon be the number one topic of conversation for every manufacturing and retail business globally. Ships are backing up in the harbor for many reasons; worker shortage at the docks, truck driver shortage, new regulations affecting the California trucking industry, and sheer volume increase, with bigger ships carrying more cargo.
One of the most common brewing industry challenges is maintaining product quality and consistency, which depend on the quality of your equipment and ingredients. How will the supply chain affect your business? Possible issues:
- Delayed material and equipment delivery
- Higher brewery costs
- Unavailable materials
- Product distribution delays
Any one of these issues is difficult to overcome and can affect the quality of your product and significantly impact your profits. For many breweries, the solution is scaling back, at least in the short term. Limited product offerings, local sourcing, direct consumer sales, and limited distribution are good options to maintain profitability until the supply chain is moving at full speed again.
2. Finding Skilled Labor and Brewmasters
Employment is a tight market this year, and finding workers is a challenge for every business. However, for brewery owners, skilled workers are a must. Hiring and retaining the right people while keeping brewery costs low and production high could be a significant problem in the coming year and beyond. Even the way we want to work has changed. Employees are demanding more, and competition for top talent is high.
You may have to think outside the box when it comes to this challenge of running a brewery. Consider what your employees want and try to deliver. Is there a way to meet production expectations with shorter shifts, flex time, or additional days off? Can you streamline or automate production to do more with a smaller staff? Can you afford to pay higher wages or offer other benefits?
3. Finding Funding to Scale Up
Taking your business to the next level is difficult in the best of times and even more challenging today. Whether you’re looking to expand by opening a taproom or exploring retail store sales, it’s a giant leap in these uncertain times. You’ll need funding, and investors may be wary. On the other hand, low interest rates make it a great time to invest in real estate, so if you’re looking for a new brewing facility, it’s the right time to make a move.
Crowdfunding offers an attractive alternative to traditional funding sources. Kickstarter launched 528,975 projects as of July 2021, with $5.49 billion pledged. The success rate of these projects amounted to 38.92%. Why so high? Because as you collect money, you build an audience. People willing to invest in your company will be excited to try your product and tell their friends they had a hand in making it happen. Success often depends on building audience and buzz.
4. Creating Buzz for Your New Brewery
Ten years ago, owning a brewery had little to do with being a social media sensation, but today your success may depend on it. Here are a few tips for building a following for your brewery and increasing your chances of making it big:
- Grow an online following: The key to growing an online audience is engagement and consistency. Think show and tell. Show potential customers why they should be interested with great photos of people enjoying your products, the brewing process, the brewery itself, and your people. Tell visitors everything, event details, how to find you and your products, hours of operation, contact information, and anything else they might be looking for.
- Tell your story: Find an interesting angle about how you got started and turn it into a compelling backstory that customers can relate to. Don’t worry; something is interesting in every story, although it’s not always easy to tease out.
- Showcase your company culture: Consumers want to deal with ethical, authentic companies. So invest in green energy, sustainable sourcing, ethical practices, and let your customers know what you’re about. Fair warning, though; don’t try to fake it.
- Go where your customers are: Local events are prime opportunities for introducing your products to a new audience. For example, join food festivals, have an outdoor beer garden at art shows, sponsor charity events, or host after-parties for a nearby convention center or event venue.
- Get featured on the news: Local news reporters are always looking for interesting stories, so let them in on everything happening.
Social media is a lot of work, but it does address some of the stickier brewing industry challenges. A faithful and enthusiastic following impresses investors as well as potential customers.
5. Keep Brewery Branding Gender Neutral
In the past, sexist images were common, but gender issues can be a minefield. To avoid alienating potential customers, tread carefully. Disrespect, misogyny, and bigotry are not labels you want your brand to earn on social media.
6. Direct Marketing
In the past, one major challenge of running a brewery was the lack of distribution options. Brewery owners had to either earn a spot on retail shelves, in bars and restaurants or open their own taproom. Now you have additional options. You can ship online orders directly to customers and sign up for a local delivery service that handles alcohol, like Drizly or Instacart. Before jumping on that bandwagon, be sure to check the laws in your state about delivery, packaging, and other regulatory brewing industry challenges.
7. Finding Originality in an Every-Growing Industry
The brewing industry is increasingly competitive, and developing original products is one of the significant challenges of running a brewery. Breweries are already on the market with every imaginable flavor and type of beer, wine, and liquor, from Wizard Works’ wild strawberry and rhubarb Magic Jam to a rising trend of non-alcoholic beers.
It’s not easy to stand out and attract the fans you need to scale, but you don’t have to start from scratch. Instead, consider trying new recipes for existing combos or adding a hint of complementary flavor for another layer of complexity. Draw flavor profile inspiration from anywhere – teas, coffees, baked goods, ice cream, or regional foods, for example. Many of the exciting beverages on the market sound like they should be good, but they aren’t. Perhaps you could improve on flavors that sound intriguing in theory but taste bad in practice.
The challenges of running a brewery may seem daunting, but there is opportunity in this environment as well. People are dying to get back to normal life and back to socializing. So it’s a great time to refine your flavors, expand your social network, and explore new distribution methods.
