Most segments of the beer industry, domestics, crafts, imports and all others are in the mist of 2016 sales planning and forecasting. During the years working and managing Modelo brands with Gambrinus our sales forecasts were aggressive. At least, that is what we all thought however as each year unfolded sales trends exceeded forecasted growth. Every year numbers went up, marketing budgets increased along with our sales promotion calendars. In August we recapped our budgets and returned any dollars we knew we would not spend as it was almost like putting gas on a fire.
The dramatic growth in crafts seemed to have created an environment where we see unrealistic forecasts coming from these craft breweries who are into me too brands. In recent conversations with some craft breweries, forecasts out of headquarters were ridiculous. One brewery in particular, with great growth, senior management gave initial goals of +300% to the field sales team. Needless to say these projections created a negative environment with employees. After weeks of meetings, sales regions reluctantly submitted numbers of +55%.
In further discussions with senior management, who do not have the experience of managing a successful brewery, they finally realized that submitting numbers of this nature to their distributors would be harmful to their relationships. Now, instead of a top down forced number, field staff is submitting more realistic numbers which tie into trends and budgets that distributors will work against.
In both Texas and Florida, the second and third largest volume states, the number of craft breweries have exceeded 100 with more coming. A number of these make good, well brewed beer however more and more are brewing beer that is not up to the quality it should be. Wholesalers are concerned and should be about the damage these beers do to the craft segment.
These breweries are producing “me too” beers which now has been written about. Beers and flavors similar to all others in the market. Nothing outstanding, nothing new, and beers with no story, no face, no marketing, no plan, and ultimately, no future. Why would any wholesaler take these beers on? Even if these beers are self-distributed they will not help the craft segment, only damage it.
There will be no future for these breweries. We can only guess why the owners of these breweries decided to get into this business and brew these beers. Most will fail and soon but in the meantime it will be tough on wholesalers, retailers and the industry in general.
Those successful craft breweries, still experiencing great growth, must learn to manage with realistic expectations and long term planning. Those fly by night crafts will eventually disappear but not without some negative impact to the industry. Remember, give a man a beer, waste an hour. Teach a man to brew, waste a lifetime!
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