As the craft beer industry becomes saturated, and consumer preferences change, many breweries are expanding into new product lines. Expanding product offerings can help craft breweries to reach new customers in new markets, but is it the right choice for your brewery?
Product diversification for craft breweries could talk a few forms. You could expand your beer line, or branch out into other craft beverages like non-alcoholic beer, hard seltzer, or cider. There are a few things to consider when deciding what type of diversification you want to pursue.
Earlier this year we researched 298 breweries to find out the what set breweries that make it apart from breweries that don't. In this study we looked at both breweries that have recently closed, and breweries that are still operational, hoping to find differences between these breweries.
71% of the breweries we researched that had recently closed were offering more than ten varieties of beer, indicating to us that while beer drinkers love variety, brewing too many different beers might not be great from a business perspective. In contrast, 67% of the breweries we researched that had recently opened, were offering products outside of beer. This indicates a trend in a different type of diversification in the beverage industry.
If you have a desire to try something new at your brewery you may be better off branching into new product categories, rather than expanding your beer offerings.
Paving the way for access to new markets comes with its own set of challenges. If you are considering making the move into other products there are a few things to consider.
Diversifying into new products is no easy feat, so where should you start? It may be worthwhile considering creative options to dip your toes into new categories with a lower level of commitment. Partnering up with other local business could be a good place to start. Perhaps you want to start by buying non-beer products from a local producer to offer customers a wider range of products. Monitor the results, find out if total sales volumes increase, and gain an understanding for how quickly inventory for different products moves.
When you're ready, look in to ways to produce one product such as seltzer. Work with the new beverage using it as a bit of a case study. Look into contract brewing options to minimize any complications that come from experimenting with a wider variety of products. If you find your new product performing well, it could be time to start thinking through production schedules and equipment use to determine whether or not it would be feasible to produce the product in house.
The craft beer market is becoming saturated, and many breweries are looking at diversifying their product offerings. As a brewery management software, Brew Ninja can make managing a diverse product line much easier for breweries. With Brew Ninja you can streamline inventory management, simplify your production schedule and forecast sales to ensure your new ventures are paying off. Interested in learning more? Book a demo with a member of our team!
