Comments on: The power of marketing http://hop-talk.com/2007/07/10/the-power-of-marketing/ Beer. Life. Blog. Wed, 01 Feb 2012 13:37:05 -0500 hourly 1 http://wordpress.org/?v=3.3.1 By: The Beer Nut http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3300 The Beer Nut Fri, 13 Jul 2007 09:02:17 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3300 Likewise InBev: €5.5bn cost of sales, but only €2.1bn spent on marketing. I have to say I'm surprised, since both companies produce an industrial product that's almost entirely water. Compare to Coca-Cola, who had an $8.1bn cost of sales in 2006 and a whopping $9.4bn "Selling, general and administrative expenses": I'd have thought the transnational breweries would have had a ratio along these lines. I take your point, Jack, about the line between craft and micro. There are no non-micro craft breweries in this country. But I don't think a focus on taste is the unique hallmark of a craft brewer: it's very important to the big guys as well, just in a rather different way. Likewise InBev: €5.5bn cost of sales, but only €2.1bn spent on marketing. I have to say I’m surprised, since both companies produce an industrial product that’s almost entirely water. Compare to Coca-Cola, who had an $8.1bn cost of sales in 2006 and a whopping $9.4bn “Selling, general and administrative expenses”: I’d have thought the transnational breweries would have had a ratio along these lines.

I take your point, Jack, about the line between craft and micro. There are no non-micro craft breweries in this country. But I don’t think a focus on taste is the unique hallmark of a craft brewer: it’s very important to the big guys as well, just in a rather different way.

]]> By: Jack http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3292 Jack Thu, 12 Jul 2007 16:02:18 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3292 I went and checked A-B's annual report and here is how they show their consolidated cash flow for the cost of sales and marketing -- cost of sales is approx $10B and marketing, distribution, and admin is only $2B. Not exactly a perfect measure but I think it does support that the beer costs more than the marketing even for the largest of the large. Also...I'd bet there are a number of craft brewers that do employ people who are solely focused on quality control. After all, one bad batch out the door is hard to recover from. Granted the really small guys can't afford a dedicated person, but some of the mid size guys like Sierra Nevada can. Of course that opens up a debate as to whether they are craft or not. Definitely not "micro" but I think they do focus on the taste of the beer and not the cost to produce like AB-M-C. I went and checked A-B’s annual report and here is how they show their consolidated cash flow for the cost of sales and marketing — cost of sales is approx $10B and marketing, distribution, and admin is only $2B. Not exactly a perfect measure but I think it does support that the beer costs more than the marketing even for the largest of the large.

Also…I’d bet there are a number of craft brewers that do employ people who are solely focused on quality control. After all, one bad batch out the door is hard to recover from. Granted the really small guys can’t afford a dedicated person, but some of the mid size guys like Sierra Nevada can. Of course that opens up a debate as to whether they are craft or not. Definitely not “micro” but I think they do focus on the taste of the beer and not the cost to produce like AB-M-C.

]]> By: Stonch http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3288 Stonch Thu, 12 Jul 2007 13:26:17 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3288 But does any brewer spend more on advertising and marketing than they do making beer? I sincerely doubt it. But does any brewer spend more on advertising and marketing than they do making beer? I sincerely doubt it.

]]> By: Monday Night Brewery : Atlanta, GA » Good marketing does not equal bad beer http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3276 Monday Night Brewery : Atlanta, GA » Good marketing does not equal bad beer Wed, 11 Jul 2007 16:32:58 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3276 [...] over at Hop Talk has just written an excellent post on the power of marketing in beer. The brunt of the argument is this, from writer Bill Virgin: Put samples of half a dozen or so [...] [...] over at Hop Talk has just written an excellent post on the power of marketing in beer. The brunt of the argument is this, from writer Bill Virgin: Put samples of half a dozen or so [...]

]]> By: The Beer Nut http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3275 The Beer Nut Wed, 11 Jul 2007 16:19:16 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3275 Excessive quality control is one of the problems with mass-produced beer: they define "quality" as consistent and unchallenging. A brewer with no-one specifically employed to do quality control is a craft brewer, IMHO. Excessive quality control is one of the problems with mass-produced beer: they define “quality” as consistent and unchallenging. A brewer with no-one specifically employed to do quality control is a craft brewer, IMHO.

]]> By: Jonathan http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3274 Jonathan Wed, 11 Jul 2007 16:18:44 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3274 "(such as the Northwest’s Rainier and Olympia, neither of which are brewed in the state today)" I would just like to point out to Mr. Virgin that the "Northwest" is not a "state." “(such as the Northwest’s Rainier and Olympia, neither of which are brewed in the state today)”

I would just like to point out to Mr. Virgin that the “Northwest” is not a “state.”

]]> By: Stan Hieronymus http://hop-talk.com/2007/07/10/the-power-of-marketing/comment-page-1/#comment-3271 Stan Hieronymus Tue, 10 Jul 2007 17:26:22 +0000 http://hop-talk.com/2007/07/10/the-power-of-marketing/#comment-3271 Al - Great post, lot to think about all the way through (tough to be brief). a - If your beer tastes almost exactly like beer from the other breweries then you are left with marketing. b - I really lover the PS. A fine definition of craft. Probably needs to be a percentage though. I don't think the megas actually spend more on marketing than beer. But it reminds me of being at New Belgium Brewing in 2000, shortly after they released the first batch of La Foile. Peter Bouckaert was talking about how wonderful it was to have a lab with seven workers in it, considering he knew Belgian breweries that had none. So then Greg Owsley, the head marketing guy, did a quick count and figured out there were more people in the lab than marketing. That doesn't count sales reps, obviously, but dang impressive. In all fairness, the big brewers have labs that spectacular. So maybe the rule is if you are spending more money on quality control than advertising then you are a craft brewer. Al – Great post, lot to think about all the way through (tough to be brief).

a – If your beer tastes almost exactly like beer from the other breweries then you are left with marketing.

b – I really lover the PS. A fine definition of craft. Probably needs to be a percentage though. I don’t think the megas actually spend more on marketing than beer.

But it reminds me of being at New Belgium Brewing in 2000, shortly after they released the first batch of La Foile. Peter Bouckaert was talking about how wonderful it was to have a lab with seven workers in it, considering he knew Belgian breweries that had none.

So then Greg Owsley, the head marketing guy, did a quick count and figured out there were more people in the lab than marketing. That doesn’t count sales reps, obviously, but dang impressive.

In all fairness, the big brewers have labs that spectacular.

So maybe the rule is if you are spending more money on quality control than advertising then you are a craft brewer.

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