Covid Reveals the Importance of Fan Service
Gigantic’s new Robot Room, opened during Covid.
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It was my pleasure to deliver the keynote address for the Finger Lakes Beverage Conference last week. No surprise, that meant confronting the pandemic and, critically, its lessons. At the outset of the crisis, it wasn’t clear there would be any. Covid was an unexpected, capricious event, and business models rather than long-term strategies would define failure or success. That’s not what happened, though. Instead, breweries managed to survive far more ably than anyone expected.
I wanted to understand why, so I looked back at all the different new approaches breweries experimented with. Once they were all lined up, a clear through-line emerged, and it echoed what breweries themselves were saying: they retrenched and appealed directly to their most loyal, core customers to see them through. It’s a contrast to the allure of finding new drinkers, especially when that weakens a connection to stalwart fans. Core lineups atrophy as breweries go on the hunt for that tantalizing customer just beyond reach. Focusing on core customers has been a powerful lesson, one smart breweries will heed even as we emerge out of the pandemic and sales return to a more normal pattern.
The Covid Strategies
A year ago, the Brewers Association surveyed member breweries and found that 60% expected to be out of business in three months if “social distance measures stay where they are now.” Only 6.4% thought they could survive the year that followed. Clearly the federal aid helped, but breweries didn’t sit around waiting for it to arrive—they acted. (This contrasted what I saw among Portland restaurants, a large number of which just stayed closed for weeks or in many cases months.) I’m sure I didn’t catch every effort, but here are several strategies I observed. Breweries:
Revamped websites to accept online orders for pick-up;
Started home delivery;
Launched new packaging/labels for store sales, and
In particular, bought new canning lines;
Created alternate buying opportunities like Old Town’s drive-through “Brewers Market”;
Leaned into clubs and beefed up social media and email communication;
Started new projects like barrel-aging; and
Opened new taprooms.
Each of these strategies created more direct connections to customers. Nothing prevented breweries from selling online or delivering to homes before Covid, but breweries didn’t see any particular benefit in it. Now that they’ve begun these programs, they see several previously hidden advantages: strengthening that direct connection to customers and extending high-margin sales beyond the brewery’s walls. I was even more surprised to see breweries open satellite taprooms during Covid (as did three of my five regular Coronavirus Diary breweries). It was so counterintuitive—yet in retrospect, so obvious. The pandemic will end, but it only underscored the importance of direct-to-customer sales. Even Breakside’s barrel program (see more here) was a way of strengthening connections: brewer Ben Edmunds emphasized that most of that beer will be sold in the brewery’s pubs and taprooms.
Actual Versus Potential Fans
Every brewery needs to feed its base with new fans, even if they don’t plan to grow. Yet breweries also have a finite amount of bandwidth, and Covid revealed the dangers of devoting too much of it to people who don’t actually buy a brewery’s beer. Especially among larger breweries this has led to sprawling product lines of beer—or other rando stuff—about which the core customers couldn’t care less. Even smaller breweries often lose focus by spinning out scores and sometimes hundreds of new beers each year to attract capricious drinkers.
The craft beer era has been marked by different approaches to selling beer. In the 1980s, breweries created pubs so customers could find their products. In the 1990s, breweries expanded to package to push their beer out across ever-growing footprints. The aughts were a retrenchment following the late 90’s plateau (in which many breweries failed), and the 2010s were a period of massive brewery growth and expansion—a land grab for what seemed to be a mushrooming new population flocking to craft beer.
Things were already changing before Covid, but the pandemic offered a clarifying moment. To borrow a paradigm from the movie industry, breweries discovered “fan service.” It’s a concept that describes the way a franchise winks and nods to those superfans who read the novels or buy the comic books, who inhabit online fora, who go to ComicCon in full Iron Man gear. In bringing customers to their websites to buy beer, by delivering to homes, by giving them opportunities to engage more deeply, breweries discovered the power of fan service.
Great Notion introduced one of the more interesting developments of the Covid era, the immersive app. It created a literal world into which fans could disappear. No one needs the app to buy the beer or visit the brewery, but it gives Great Notion’s most devoted fans an opportunity to go deeper. It’s a very clever kind way of harnessing the love of superfans who can’t get enough—and is an acute example of the power of leaning into a brewery’s customer base.
Beer is a strange and wonderful product to which customers feel an unusual emotional connection—and have for millennia. In the rush to find new customers, breweries put out a lot of weird stuff that was the opposite of fan service. It confused actual fans and weakened that connection. I suspect all of the Covid techniques, and ones breweries haven’t yet developed, will mark the way breweries approach customers going forward. As more and more breweries open every day, the core audience becomes essential. They kept breweries afloat during the pandemic, and they will keep them healthy long after it ends.