In the late 1980s, I joined Coast Distributors as the General Manager. Coast had been in existence for over 100 years, and still ownership was focused on the company’s long term plans. Immediately after joining the company, I led a committee to identify and design Coast’s long-term strategic growth plan.
This strategy was centered on two key platforms: one, target key distributors in which to acquire; and, two, create organic growth from the existing portfolio, which was focused on Coors, a recent addition to the Oregon market. During this time, crafts were only one percent of the Oregon business, and were just beginning to gain real traction in the market. We had made a concerted effort to build a craft portfolio and were successful in so doing. Building the plan took well over a year of research and work.
Coast was a family owned company, as were most distributors at that time. Shortly after the strategy was approved by the board, the next generation decided to sell the business and Coast became Mt. Hood Distributors. Over the ensuing years, the new ownership continued with the same strategy. Now Columbia, the distributorship has become one of the industry’s largest in the industry operating in Oregon, Washington and California.
Last week was the Craft Brewers Conference in Philadelphia, attended by over 13,000 people. Along with the almost 900 exhibitors, were multiple seminars on every topic that dealt with the beer industry. Unlike other conventions, this one was upbeat. A topic I will discuss in a future post.
One seminar was focused on craft beer strategies. The seminar was not only full, but there was standing room only outside the meeting hall and some attendees were even positioned down the hall center due to the overwhelming volume of interest. The question is why now: Why are people who have already started a brewery just now deciding it is time to develop a company strategy?
College programs are springing up with multiple offerings of strategy classes to craft beer students. The University of Portland offers a program exclusively on craft strategies. Some find it intriguing that strategic thinking is now somewhat of an afterthought.
Many crafts have been successful due to the growth of the segment, however all will, at one point or another, hit their respective wall. Then said brewery will have to determine exactly what they want to be. And this is when the strategic thinking comes into place. Do I sell? Do I reinvest and grow? Or do I just remain the same?
Given the amount of money that has been paid to various craft breweries for all, or part of their business life, the money is certainly the engine which is driving the interest in the late focus on a strategic direction. Who can blame them?
Perhaps the key is not just the future, but the past. Of course, there is always the emotional part of the decision making. One must remove the emotion and look at this from a business perceptive. Certainly easier said than done. Like all those beer distributors who have had to deal with selling out. It is a very hard decision.
Regardless, it is just what the craft segment needs if it is to achieve the goal of growing larger. No matter the beauty of the strategy, one should occasionally look at the results….