September 2015 - MicroBrewr

MicroBrewr 083: Market branding for a cider company

September 29, 2015/0 Comments/in Podcast /by Nathan Pierce +

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Fran Toves’ son challenged her to enter cider into the homebrew competition. After her 3 entries made it to the top 10, she figured it time to take the product to market and started Common Cider Company in Drytown, California.

“There is no need to start a cider company with a million dollars.” [Tweet This]

Cider is not brewed the way beer is made, but similar fermentation tanks and bright tanks are used for making cider as making beer. After the initial attention at the homebrew competition, Common Cider Company started with a 400-gallon (13-BBL) test batch that got picked up by a distributor. They grew to 30,000-gallon (1,000-BBL) batches within a couple years.

Whereas a cidery or a cider house presses the fruit themselves to make juice, a cider company buys the juice pre-squeezed. A cider usually has a base of apple juice, but it can start with other fruits. A perry is made from pear juice.

“Cider as a base,” says Fran, “is a great platform to be able to introduce new flavors.”

Fran’s background in product development for the organic food industry is helping her with Common Cider Company. She emphasizes the importance of branding.

Fran says a small company can easily spend $50,000 to $100,000 on high-quality branding design for all promotional materials. With such a significant investment, it is very important to consider your message and what your company is about. If you want to take more time to learn about your customers and find your voice in the market place, just get simple logo at first. Then budget up to $100,000 for a re-branding.

That’s the route Fran planned for Common Cider Company. “I wanted to spend some time with our customers an just spend some time in the marketplace,” she says. “before investing in the brand.”

Sample Cider Packaging

They’re keeping a logo element from the original design scheme and hiring a branding firm to re-design their message. The results have been spectacular and you can expect to see more on store shelves soon!

Fran also has tips for the today’s listener question about budgeting and profit projections:

Decide where you are and where you want to be.
Put a budget for every core area including, branding, legal fees, sales staff, materials, and all other details.
Decide what you can spend on each category of your budget.
Use checklists so you don’t miss details.

“Your suppliers will give you pretty good information as far as what your cost of juice is and your yeast and any other adjuncts that you want to add to your product,” Fran suggests. “And that goes from your raw material to your packaging.”

As for projecting profits, Fran always advises starting with small batches. She suggests 500-gallon batches or 1,000-gallon batches at the most. Any larger, and you’ll have too much money tied up in product and it will take too long to sell.

After you sell a few batches to earn some money and build demand, then you start doing larger batches.

“It’s important to start small,” Fran advises. “Just like any business, you’ve gotta kind of walk before you can run.”

Listener question:

From Texas Rüegg: Where do you find real accurate numbers to estimate cost of operation? I keep building spreadsheets with hundreds of calculations, but at best they are just guesses. I want to be conservative with my numbers and be sure that even the worst case will actually make money. So where do you find real data?

Can’t-go-without tool:

Pump.

Book recommendation:

The Checklist Manifesto: How to Get Things Right by Atul Gawande.

Check out the entire list of recommended books, click here.

An upcoming beer style:

Dry ciders

Other resources:

Friends of Black Rock High Rock, dedicated to the health, diversity and productivity of the Black Rock and High Rock regions.
BrandLab; branding, identity, video, content, the big idea.
Hard Cider Is Having A Moment, Jonah Keri, FiveThirtyEight, January 9, 2015.

You can reach Fran Toves and Common Cider Company at:

Sponsors:

Audible

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MicroBrewr 082: Gluten free beer for a large market

September 22, 2015/4 Comments/in Podcast /by Nathan Pierce +

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Brian Kovalchuck has a background in finance and marketing and came to beer late in his career. After he helped with the turnaround of Pabst Blue Ribbon, Brian became CEO of the gluten free Bard’s Tale Beer Company in Minneapolis, Minnesota.

“I wish I had been in the beer business a long time. It’s a great business to be in.” [Tweet This]

In the U.S. there are approximately 2 million people with Celiac Disease, an autoimmune disorder that causes damage to the intestine from eating gluten. There are approximately another 6 times that number of people who are gluten-intolerant or voluntarily exclude gluten from their diet.

“Gluten is a protein found in most common grains,” explains Brian, “wheat, rye, barley, and sometimes oats gets thrown into that because of cross-contamination.”

The founders or Bard’s Tale Beer Company experimented for 2 years before they settled on a recipe and a method. Their secret is malted sorghum. Sorghum is a grain that does not have gluten. It is commonly used to make gluten-free beers, but it is not commonly malted like other grains used in brewing.

Bard’s is the only brewery that uses malted sorghum to brew gluten free beer. Brian won’t say whether Bard’s malts their own sorghum or has it made for them, but he did say it’s their own.

Bard’s uses a contract brewer to make “Bard’s Gold,” currently their only product.

Brian’s advice for finding a contract brewer is use a brewer that:

Has a good reputation
Makes high-quality products
Has a lab that can ensure consistency
Is happy to work with you
Has the capacity to grow with you

Other contract breweries—or breweries that got their start as a contract brewery—on MicroBrewr Podcast:

Alamo Beer Company

HenHouse Brewing

21st Amendment Brewery

Backshore Brewing Co.

Two Birds Brewing

Craft Artisan Ales

Noble Brewer

If you’re using a contract brewer to make gluten-free beer, you’ll need to take special care to ensure there is no cross-contamination from the other beers brewed at the facility. Bard’s beer is always the first batch brewed after the brewery is cleaned. They test at several points along the process to ensure there is no gluten in the beer.

“The gluten free market around your brewery is too small to support a brewery,” says Brian. “There’s just not enough gluten-intolerant people to support a stand-alone gluten free brewery in one location.”

So Bard’s model depends on very wide distribution. And working with distributors can be tricky.

“The way the laws are written,” says Brian, “once a distributor gets a beer brand, it’s very difficult to get that beer brand back from the distributor. So if you make a mistake, it’s really hard to fix that problem.”

Brian’s tips for picking a distributor:

Talk to contacts you already know.
Differentiate yourself from the others.
Work with the distributor to drive the business.
Find a distributor that is eager to work with you.
Coordinate marketing across all 3 tiers.