In the midst of the recent recession, more than 4,500 craft beer makers disrupted a centuries-old industry. Craft beer sales soared between 2007 and 2012 and now make up 14.3 percent of the $100 billion beer market.
Some of that may be due to the fact that some people took the concept of “having a cold one” during hard times to a new level. When Chip Town and his daughter Jacqui both lost their jobs, for instance, they used the unplanned time off to pursue a shared love of home brewing, eventually opening Rinn Duin Brewing in New Jersey.
But beyond the growth of craft brewing as a hobby and an entrepreneurial endeavor, the industry has two fundamental characteristics that have propelled a 17.2 percent increase in sales at the same time overall beer sales have declined by 1.9 percent – that is, innovation and collaboration.
Brewers today are pushing every extreme. Nano-breweries only serve a handful of people or restaurants, for example. Samuel Adams’ Utopias has pushed the limit on alcohol content at 27 percent and retails for $125.
Unique brewing techniques, surprising ingredients and innovative products have unlocked an approach to beer that rivals the wine industry for classification. And as experiments succeed, brewers don’t hoard their secrets. Many smaller breweries build on loans and advice from larger peers. In fact, during a recent specialty hops shortage, Samuel Adams even sold its supply to smaller competitors at cost.
So how can you implement this level of innovation and collaboration as strategies for growth in your business? Here are a few suggestions:
• Don’t follow the big guys: Giants like Anheuser-Busch InBev and MillerCoors are boxed into cost structures and product styles. Forced to worry about mass appeal, their innovation is primarily limited to packaging and distribution models while craft breweries are free to challenge the fundamental nature of beer.
Instead of focusing on the big corporations in your industry, use your size to your advantage and enjoy the freedoms that come with being small.
• Highlight the “friendly” in friendly competition: Small business owners can get bogged down in the details of their own enterprises, but it’s much more effective to develop a community that can offer advice, mentorship and the occasional adult beverage for commiseration or victory celebrations. Dismiss the misconception that others’ gain is your loss. With a healthy spirit of collaboration, multiple businesses can grow together in the same industry.
• Don’t stop pushing your limits: Craft brewers are experimenting with ingredients, fermentation processes and even serving methods. Explore the edge of what is known about your existing product. Seek out opportunities to explore unique applications and different approaches to your business. Keep asking, “What’s next?”
Those who are hungry for what comes next tend to develop a contagious momentum.
• Advocate for your industry: Craft beer expansion is driven by brewers’ advocacy for their products and the market overall. They’re excited about their creations, and they let it show. This leads to higher visibility, which creates even more room to experiment. Speak out for your industry and for your place in the market.
• Do what you love: When Chip and Jacqui lost their jobs, they felt free to pursue their passion. But you can create your own opportunity. If you love your business, the highs are higher and the lows are more manageable.
Of course, you will make mistakes, but be kind to yourself. Malcolm Gladwell famously said it takes 10,000 hours to become an expert. You have to invest that level of time to learn what works, but small-scale experiments are great opportunities to learn.
• Look ahead: Successful craft brewers pay close attention to how tastes are evolving. What worked last year might not get the same mileage next year. Consequently, the skills you have today are not the ones you’ll need tomorrow, so focus on growing capabilities to support your innovations.
Every industry has its own history and obstacles to overcome, but when you’re creative and collaborate with other businesses in your industry, you and your peers have a better opportunity to thrive. Collaboration and innovation are smart business strategies, and they can also make running a company way more fun – even if your product doesn’t call for taste tests.
Drew C. Marshall is the founder and principal of Primed Associates, an innovation consultancy based in New Jersey.