When Your Legacy Brand Tanks

One of my industry friends just sent me a spreadsheet comparing OLCC taxable barrels reports for May 2017 and May 2016. I don't have a lot of confidence in these numbers. Why? Because the amount of missing information from month to month is often difficult to figure.

Here's an example, before I move on. Due to some kind of accounting or data collection issue, numbers for the Craft Brew Alliance (Widmer, Kona, Redhook, etc) have almost completely vanished from the monthly reports. That's a giant hole. Thus, my lack of confidence.

Anyway, the comparative numbers in this spreadsheet are shocking. We know craft growth is slowing. That's been a beer news item for the last year or so. What the numbers essentially show is that many older breweries are losing big while a few newcomers show solid growth.

I'll forgo the specifics in favor of generalizations. Deschutes and Full Sail were both down, Deschutes significantly. Locally, Portland Brewing and Bridgeport continue to drift into obscurity. Breweries showing notable growth include Breakside, Silver Moon, Crux, Block 15 and pFriem. No surprise.

More to the point of this piece, several of Portland's smaller legacy brands show scary declines. Lompoc Fifth Quadrant was down 14 percent. Alameda Brewing was down 18 percent. Lucky Labrador was down nearly 12 percent. Not good.

What's happening to the larger breweries we understand. As new, local breweries open in previously underserved areas, they siphon share from national and regional breweries. There's not much the big guys can do about that dynamic. Consumers seem to like local beer. Hard to blame them.

Established local brands are also losing share to upstarts, remote and local, that offer shiny new beer options and approaches. Essentially, many older local breweries are having a hard time competing for market share in markets they once dominated.

The reasons aren't as simple as you might think. It's easy to assign blame. I hear some failing local breweries blame their distributors. With so many craft brands entering the market, established breweries feel like they've been abandoned in favor of what's new and shiny.

Distributors are convenient whipping boys. It's true that they've taken on lots of new craft brands. Craft is where the action is. But they've also invested in the people and infrastructure needed to float everyone's boat. They really don't want anyone to fail. Blaming them is a slippery slope.

In fact, many established brands simply haven't worked to stay relevant. They were slow to adopt creative brewing approaches and higher quality standards. They refused to refresh tired, woefully outdated brand identities. And they failed to support brand health via focused social media campaigns and boots on the ground.

When you look at the most successful brands in this market, you see much of what the declining local breweries lack. You see beer that is typically solid across a wide spectrum. You see thoughtful branding and coordinated social media efforts. And, yeah, many of them have reps who work to keep brands fresh in the minds of consumers.

The reality is, the ground has shifted. There was a time when a brewery or brewpub could get by with decent beer. They didn't have to put much effort into chasing eclectic beer styles or enhanced quality because there wasn't much competition and beer palates weren't very sophisticated. Simpler times.

Those days are gone. Modern beer consumers demand more. Owners of older local breweries that are losing market share might do well to look in the mirror and evaluate what they're doing to stay relevant in a market that's getting more competitive by the day. It ain't easy.