beer branding – brewdog
“probably the most exciting business in the UK”
When asking people about interesting UK businesses there was one business that was frequently suggested – Brewdog; a craft beer company. It was generally put forward that Brewdog was the most interesting business in Britain.
Brewdog is recognised as the fastest growing business in two industry sectors food & drink and hospitality.
A quick search revealed that since it was founded in 2007, Brewdog has grown astronomically to 4 breweries and 100 pubs worldwide. Interestingly, the head office is in rural town in Scotland. After reading the Brewdog newsletters I began to get a feel for the organisation, their philosophy, and their products – and the more I read the more interesting it sounded.
At first I found the PUNK positioning strategy a little unusual and confusing, however, as the idea unfolded the more I became more comfortable with it and to appreciate the opportunities is provided a new craft brewery
I visited a few Brewdog bars in Glasgow [research can be tough]. There are over 40 bars located in Britain and in major cities around the world. So with the experience of a few Brewdog bars and a feel for their beers I organised a site visit and tour of the brewery. The brewery itself is located in the small town of Ellon not for from Aberdeen, about 3 hours drive north –east of Glasgow. Ellon is a delightful town, a nice stone bridge, has a nice community feel, a great bookshop, and has a number of antique shops [one had a good range of vintage cameras – and I could not resist buying one].
Knowing we would have a beer tasting at the end of our tour we stayed overnight at the VVVV. This was a great hotel, whitewashed and a slate roof, with friendly staff, absolutely first class food and comfortable rooms – great value for money. They and many locals were very proud of Brewdog and the tourist and employment it had created.
As I entered the brewery I overheard a visitor proudly produce and show his ‘equity for punks card’ – obviously he was proud of his status as a crowdfunding member. My brewery tour host was Sydney and I have to say she was certainly a great ambassador for the organisation, their business philosophy, their business systems, and their products.
As I toured the facilities it was obvious that the rate of expansion has been phenomenal.
I must come clean, I appreciate good stainless steel pipework, neat stainless welding around the flanges, and quality lagging – I take pleasure in quality lobster-back bends – it pleases my eye when the rivets line up and are equally spaced – I appreciate the beauty and purpose – I like pipework like some people like modern art. I was truly impressed by the brewery, but, what really overwhelmed me was the learning that had taken place – the learning needed to make informed decisions and to ensure that the skills were in place to keep the brewery running effectively and efficiently during this process of expansion. If anyone from Brewdog ever reads this take a bow.
They have named their business philosophy – ‘PUNK’. So lets just look at Brewdog and their philosophy. Holistically, I believe that they work on the premise that if the rest of the market has gone right then they should go left. In many ways Brewdog is a lesson in true marketing – they would probably disagree with this description as it would irritate their inner PUNK, perhaps, because they may consider marketing as advertising and selling, which are, in their language UNPUNK. Nevertheless, Brewdog is true marketing, moreover, I would classify it as an example of blue ocean thinking –I first thought about this as Sydney took us through the Brewdog timeline outlining the achievements since 2007. At the time I found the idea that it was blue ocean thinking a little humorous, given that one of the founders was previously the captain of a fishing trawler in the North Sea.
If, as Brewdog suggest, the market is dominated by mass-produced similar tasting beers then going in the opposite direction and creating interesting craft beers makes blue ocean sense – why compete in an overcrowded marketplace when you can create a new marketplace. If the market is dominated by mass-produced similar tasting beers fighting for market share then the market is already established and waiting – beer drinkers who desire a quality beer with epistemic qualities – less chemicals and more flavour. If the market is dominated by mass-produced advertising and sponsorship selling a similar message then standing away from the crowd and using alternative media makes sense.
PUNK makes sense because the product is beer and not healthcare.
Too often the marketing ‘textbook’ approach to marketing is about identifying and filling a gap in the market. Let’s be honest identifying and filling a gap is red ocean thinking. It is akin to a Captain of a fishing trawler lining up and trawling his nets behind a fleet of bigger trawlers. Blue ocean thinking is about identifying a category that an organisation can own, sure this requires some mental recalibration by beer drinkers, however, keep in mind that for thousand of years society has been driven by consumers and their quest for best satisfying products – best satisfying products will always win.
I mentioned that Brewdog has grown in two industry sectors; they have not only crafted interesting beers and they have also crated interesting places to experience the beer – so they are applying blue ocean thinking on two fronts with one objective – that is impressive.
I guess if every other business is POP then PUNK makes sense. PUNK identifies that they are independent from the established breweries; that they challenge the status quo ad the accepted corporate paradigms; that they are anti-authoritarian and non-conformist; prepared to shock to get their point of view across. That PUNK is about communicating their philosophy and attracting like-minded people and crafting a Brewdog PUNK culture.. To me, Brewdog, and PUNK are a good fit; it is about staying true to the philosophy and then prioritising what needs to be done and then acquiring and applying the necessary skills to maximize the opportunities that established breweries have ignored.
Sydney, our host, was full of praise for the founders and stated that being PUNK does not imply that the management are foolhardy or ignore the immutable laws of brewing, bottling, accounting, business and she emphasized managing people.
When the singer Bing Crosby [ask your grandparents] was at his peak in the early sixties; businesses sang about the 4Ps of marketing – ‘product, price, place, and promotion’. Having four variables or ‘levers’ implied that shortfalls in the product could be overcome by manipulating the other variables. Times change – and Brewdog are part of this change.
The Brewdog model is built primarily on the quality of their core product – their beer. It should be emphasised that their ‘total product’ is far more than the beer that flows from their brewing process, however, the quality of their core product is the foundation of their business. Brewdog started with passion and purpose; crafting beer that the founders were really proud of, not a product at a price agreed to by a focus group. In the early days the founders had faith that if the core product was really good then people will enjoy it, tell others and demand will follow. They knew that to produce a premium product then they required a premium price; they knew their core product was of value, they just had to be steadfast; they knew value, quality, satisfaction, were related and if they were consistent then customer trust and loyal behaviour would follow. This meant that price is a consequence of their philosophy and not a variable that can be managed to increase demand or provide a lazy retailer with a higher margin. No Captain of a fishing trawler is going to risk a raging storm and then sell his catch for less that its value. Brewdog realized that place is not about a crowded supermarket shelve or a liquor outlet where the product is stacked high and sold cheap, but place is about creating interesting places for customers to enjoy the experience and their hospitality.
That promotion is, not a communication task, but everything that the Brewdog staff and customers do and say, that beer promotion is not restricted to tasteless television advertisement where the male prefers a mass-produced and bland beer to a beautiful woman. To me being PUNK is about being empowered to live your life the way you wish to. For Brewdog PUNK is about being true to your convictions and then when you have something worthwhile to say then say it and say it with conviction.. Let’s be clear; people bought Brewdog products, they like what they drank and where they drank it, in time consumers developed an attitude to Brewdog and what Brewdog stood for – this is what marketers call a brand. The Brewdog brand evolved from the total product and . Brewdog’s role was to focus on the what and the where; to produce a total product that was distinct, discernable, and distinguishable from established breweries. Being PUNK meant that they were not committed to the maintenance of the status quo and the established distribution channels, therefore, the Brewdog brand could be communicated through events that challenged conventional thinking and perhaps even shocked some people. The objective is not to shock, but to create awareness and interest to stand out and appeal to their target market – even if that meant upsetting people who are outside their target market. Some of their communication tactics may be unconventional but offensive not when you compare it to some established brands where the core message reduces the status of women. A PUNK communication strategy means that their message will cut-through the noise of the big breweries and their big advertising budgets. Being PUNK not only allows their message to standout from the crowd it provides them an opportunity to leverage every promotional event and then amplify the reach with social media.
Services, experiences, people, places are important product components, however, they are often neglected. As a marketing academic I often emphasise the importance of internal marketing. Within the e-book I state that “To achieve quality relationships with external customers, marketing practitioners must recognise that the first step is to develop a relational approach with their own staff and channel partners”. Within an organisation there are two types of staff front-stage staff and back-stage staff. Front stage staff could be described as ‘boundary spanners’ as they span the boundary between the organisation and the customer. They represent the organisation to the customer and the customer to the organisation. Often, in a selling organisation these are a neglected resource. Back-stage staff often don’t come into contact directly with a customer, but, they do in their personal lives. Their working time is spent providing the behind the scenes services that make everything happen and they are the providers and recipients of services by others. Therefore, a number of marketing scholars suggest that staff should be considered internal customers. The view that other staff members are also customers that there is an internal service culture was clear from all the staff I encountered in the bars and in the brewery. It is part of the PUNK philosophy to firstly employ like-minded people and then to invest in the culture, put processes in place to reward good internal service, and then develop an attitude that a great working environment is everyone’s responsibility. It is a bit like – if you don’t like PUNK then don’t come and play with us.
In my marketing classes I often introduce the salespipeline concept; the premise is that you take a customer from a suspect, to a prospect, to a customer, to a repeat customer, to an advocate and an evangelist – this is accepted part of customer relationship management. Now Brewdog do this and they do it exceptionally well, however, what I observed and learned was that the salespipeline concept is focused on external customers, I had overlooked that the salespipeline neglected internal customers. Before I visited Brewdog I was not cognizant that the salespipeline did not truly reflect my view that customers could be internal and external and that external quality relationships began with internal quality relationships. As Brewdog staff become more involved they evolve into internal ambassadors and as customers become more involved they evolve into external ambassadors. However, the lines between staff – customer – organisation at Brewdog are also unconventional. Many staff drink Brewdog beer – therefore they are customers, many staff own equity – therefore they are shareholders, customers often own equity – therefore they are shareholders. Perhaps, Brewdog is an exception, however, this exception highlights that an ‘ambassadorpipeline’ may be a more accurate descriptor than salespipeline.
When an organisation challenges the existing paradigms of an industry, when they adopt blue ocean thinking, then it requires the organisation to change the attitudes of the customers – it requires customers during the product selection stage of the buyer decision process to rethink their considered set of product to consider a new product as an alternative, fortunately, consumers are always searching for best satisfying products, however, just getting the product on the considered set requires a consumer education process. This requires organisational involvement with the marketplace and a receptive marketplace.
Brewdog highlights the importance of carefully crafting the product components of goods, services, ideas, experiences, people, and place. Of ensuring that the total product is carefully crafted to be congruent with their PUNK philosophy. It is expected that Brewdog behave in an unconventional manner; for example, Brewdog employ urban artist to communicate their philosophy and craft their culture. The unexpected is expected and the marketplace is waiting for the next surprise. Tactics that would be absurd in a conventional business are often logical in an unconventional business; for example when Brewdog need to access capital to maintain their growth they do it through crowd-funding. The founders know that although money is readily available through the conventional banking system, there is a cost, this would require them to pay interest to the bank, their PUNK thinking suggests that it would be far better to pay interest to their ambassodors – to keep it in the family. Let’s not think that crowd-funding is new or that Brewdog invented it; The Dutch-East India company was a crowd-funding venture, what is refreshing is that Brewdog ignored the conventions that dictates that banks are the only source of finance – that banks can dictate who should succeed and who should fail. What we are seeing is that whilst they enhance the involvement of customers and staff; they reduce the involvement of NONPUNKS particularly when there is a cost to Brewdog – and sometimes costs are more than financial costs. What is more impressive is that their crowd-funding model was communicated as ‘Equity for Punks’ and had real returns and value for investors. Interestingly, and in keeping with their philosophy, they hired a 1940s tank and parked it out the front of the Bank of England and the London Stock Market; as expected this created a great deal of outrage or delight depending on your perspective – check the number of images on GOOGLE.
I mentioned at the start of my discussion that Brewdog is true marketing, although I immediately found them interesting in and unconventional way, it was only with time and during Sydney’s presentation that I began to appreciate that their marketing philosophy was true to the marketing concept and that they were meeting the nine marketing objectives outlined in themarketingconcept e-book. In the e-book I have organised the nine key objectives of marketing practitioners into a 3X3 structure. Listed are three objective headings, financial, strategic, communication, each with three objectives.
The 3 financial objectives of marketing practitioners
To increase sales revenue: Although sales volume and sales revenue are related an increase in sales revenue can be achieved through a price premium and without an increase in sales volume.
To reduce costs as a percentage of sales: Cost may increase as sales revenue increases, but it is critical that they are reduced as a percentage of sales
To build the value of the business: That the business fundamentals demonstrate a strong, healthy balance sheet and an attractive long-term investment
The 3 strategic objectives of marketing practitioners
Product leadership: Products that are distinct, distinguishable, and discernible from alternative products and provide meaningful benefits at a cost which is comfortable for the organisation and the customers.
Customer intimacy: Understanding customers dreams, desires, and demands and building quality relationships, and creating customer ambassadors, creating involvement and status
Operational excellence: Producing a product and taking it to market more effectively and efficiently than competitors – never being complacent.
The 3 communications objectives of marketing practitioners
Attract the right people: This means attracting the best staff and the right customers
Retain the right people: This means retaining the best staff and the right customers
Enhance relationships with customers, staff, channel partners, and society: This means that all four parties must profit and that relationships are synergistic, symbiotic, sustainable, and strategic. That all parties are involved in crafting the brand narrative
When we finished our tour of Brewdog, we were given a sample of different beers by our hosts. They were even kind enough to provide an alternative drink for Anna [who is not a beer drinker] and inquired if we needed a taxi. At this point I was exhausted. Throughout the tour I had been working my way through the material in themarketingconcept [e-book] and realised that Jim was right this is one of the most interesting businesses in Britain and it was not by chance that they were so popular. I do have my concerns being PUNK means that their web-site, the packaging, the servicescape of their bars, the branding and even the breweryscape must be authentic to PUNK, failure to be authentic will create the perception in their customer’s mind that they are poseurs employing punk gimmicks as ‘customer pick-up lines’; that they are phony’s that are no more opportunists ‘selling’ their produce – they will be perceived as having sold out, or, as once interesting, but, now bland and mainstream – so I am hoping that they remain TRUEPUNK and are an inspiration for others to be brave and trust their judgment. That they listen resist the constant outpouring of annoying mind sapping social media dribble that is unfortunately becoming the norm. There is only one marketing concept, however, there are millions of potential marketing philosophies waiting to be discovered.
We left Ellon after a nice breakfast and a walk around town. During the walk Anna, found a China tea set. What happened was that she walked past an ice cream shop the previous evening [no matter what the Italians say Scotland makes the best ice cream] and saw what she thought was part of the window display, she commented on how beautiful it was and the owner of the shop provided the history. On pay-day each Friday a local lady would buy a piece of china and over time built up quite a collection. She is getting on in years and every once in a while brings a set down to the ice cream shop for her friend, the owner of the shop, to sell for her. The staff in the ice cream shop carefully wrapped the set in bubble pack whilst we had an ice-cream. We left the shop with Anna delighted with her purchase – this could only happen in a Scottish village.
Brewdog continue to expand in the UK and around the world. On a photographic tour of Rome I discovered a Brewdog Pub just around the corner from the Coloseum. Where I encounter a ‘PUNK’ bar manager who was looking forward to visiting the ‘mothership’ in Ellon. It was mid afternoon, pouring with rain and a Brewdog shareholder, his wife and a friend were escaping the weather.
Task
Task: After reading the article, themarketingconcept [e-book], and searching the internet provide an overview of how Brewdog has developed a marketing philosophy and have amplified word of mouth and customer engagement to create a unique product value proposition.