It's Pronounced Chookshaw

The semi-professional blog of Albert Ciuksza Jr.

Category: Strategy

Macro Beer Champions the Silent Majority

Proudly a Macro Beer

Don’t Fuss Over This

Budweiser threw the first big punch with what The Atlantic called “The Super Bowl’s Riskiest Ad.” You probably saw it, but here’s the copy (and the video):

Proudly a macro beer. It’s not brewed to be fussed over. It’s brewed for a crisp, smooth finish. This is the only beer Beechwood aged since 1876. There’s only one Budweiser. It’s brewed for drinking. Not dissecting. The people who drink our beer are people who like drinking beer. To drink beer brewed the hard way. Let them sip their pumpkin peach ale. We’ll be brewing us some golden suds. This is the famous Budweiser beer. This bud’s for you.

Reaction was swift. Craft beer drinkers blew up in anger and snark on Twitter. Media cherry-picked tweets to maintain the narrative. Jim Vorel wrote thoughtful analysis about AB’s hypocrisy. Carla Jean Lauter (The Beer Babe) wrote an excellent point-by-point analysis of the spot. Dick Cantwell, co-founder of Elysian (recently acquired by AB InBev), was annoyed. It was spoofed almost immediately in a counter-ad. And even Bud’s marketing VP, Brian Perkins, said that he “meant no offense”.

From a Promotion-P marketing perspective, I think the ad was hugely effective. Instead of taking heed of MillerCoors CEO Tom Long‘s  2012 call-to-action for the industry to build “Brand Beer”, Budweiser took a shot at the very thing that is keeping brand beer in the running against wine and spirits, i.e. the taste- and brand-conscious attitude that, at times, puts off the silent majority of beer drinkers who like macro beers. The result was a celebration of a populist appeal that got exactly the reaction from craft beer lovers that the ad was mocking. Strategically, that’s one hell of a rope-a-dope.

The only shock is that it has taken this long for macros publicly challenge craft beer. Budweiser’s declining market share is well-documented, and Perkins has been on record saying that they want to go after 21-27 year old consumers with a new strategy. That demographic is rejecting macro beers at a rate much higher than other generations of consumers, and Bud is going for the long game that comes with early exposure. It’s giving up on the consumers who have driven craft beer demand in the hopes that younger drinkers will become brand loyal.

Maybe this ad will get craft breweries to realize what the macros have known all along — that building brand relationships with a wide range of consumers creates a hell of a lot of goodwill that can be leveraged into messages just like this one. Even if the Brewers Association hits its stated goal of craft beer making up 20% of market share by 2020, that means that the macros are still controlling 80% of the market. Combine this with macros’ craft beer brand acquisitions and you have a recipe for dominance in the channels craft breweries need to survive and grow. Unless craft breweries want to be left fighting over local bar tap handles and growler sales, they must figure out a way to pitch a bigger tent and welcome the folks who just want to enjoy a beer with their friends. If not, there’s a serious risk of losing the culture and variety that has driven nearly a decade of double-digit craft growth, effectively teeing up the macros to swoop in and win the war.

UPDATE: 1:47PM on 2/3/2014

Really solid analysis from Beervana that hits similar notes. With a read here.

My ‘Buying Local’ Mistake

For those who might not know, I host a radio show for my real job called Pittsburgh Impact Radio (click here for the iTunes podcast). In my most recent show, I interviewed Buy Pittsburgh First, an organization that promotes the idea that companies can, and should, buy from local suppliers. From an economic development standpoint, this is a huge opportunity — between 40%-60% additional economic impact is made when a purchaser buys from a local supplier vs. a national/non-local one. That translates to jobs, more consumption of local products and services, multiplier effects and other good stuff.

As an entrepreneur currently selling into the local and national market, I too have skin in the buy local game. It is easier for me to market and sell product to companies nearby (I can demonstrate how our product looks and works). It’s cheaper for me to fulfill my orders to local companies. And, in the (rare) case where something isn’t quite right, I can fix it personally. Our company is another case study in why buying local makes sense — the service is often far beyond any national vendor and we’re willing to go above-and-beyond in ways that are impossible for our other customers across the country.

So, my ‘buying local’ mistake. Somewhere in the radio interview, and I believe it might have been said multiple times, I mentioned that there is an obligation to buy from local vendors. Given the regional impact, and what it can do to accelerate growth, it sounds like something that is reasonable to say. Further, I have also worked in economic development for seven years, so I’m comfortable talking about connections between buying from companies and how that can impact an economy. But, after more reflection, I realized that I was dead wrong. There is no obligation. And there’s nothing wrong with that.

In any business transaction, the decision comes down to what option brings the most value. Some of these are objective measures (price, turnaround time), and some of these are completely subjective (brand, reputation). A commitment to buying local is decidedly a subjective perception of value. Regardless of how much value we might individually place on buying local, that doesn’t mean that we do it at each opportunity, or that it’s right to always buy local. Sometimes, the local option just doesn’t deliver the value we need, regardless of proximity.

I won’t say that it doesn’t hurt when a local company won’t take a meeting or consider our product. I’ll admit to getting irritated when a company decides against giving us a chance to prove our concept. But, the reality is that it’s not their fault for not buying. It’s our fault for not delivering enough value (or, worse, targeting the wrong market).

This doesn’t mean that I will not continue to be an advocate for buying local — I think it’s a great opportunity to have a disproportionate impact on the local economy (and get exceptional customer service at the same time). However, I have made a decision to stop making it personal, start delivering more value, and eliminating the words “should” and “obligated” from my vocabulary.

Boo Not Voting! Hooray Beer!

Voting They<br /> Can Believe In

Voting They Can Believe In

Research suggests that we vote not for an explicit effect on an election (most data suggests that larger-scale elections are minimally affected by an individual vote) but rather for an intrinsic reason (duty, a sense of having a “voice”, etc.).  Even in the wake of the last presidential election, where youth turnout was cited as one of the major reasons Barack Obama was elected, turnout amongst 18-to-24-year-olds didn’t exceed 18%, truly abysmal numbers.

Apparently, the U.S. isn’t alone. The Czech Republic seems to have a challenge with getting young people to vote (not true for the overall population, which is competitive with the U.S. in voter turnout in their last presidential election, hovering around 65%). Like their youthful counterparts in the U.S., young Czechs feel that the process isn’t worth their time. So, how to get the youth of the Czech Republic?

In a WSJ Article today, The Stanislav Bernard brewer (its owner is a former candidate) is offering free beer to young people who vote in the country’s upcoming election. Citing the “near-steady stream of domestic political infighting, corruption scandals and mudslinging” as reasons why the country’s youth don’t regularly vote, Mr. Bernard believes that their participation is critical to democracy. So, his offer is simple: classes at college preparatories that get at least 85% of students to sign a declaration to vote win a free keg, and the first 1,000 students to sign the declaration win a free case of beer.

A former (and potentially future) candidate hit for the cycle with this stunt — he’s getting massive world-wide publicity for his beer, he’s supporting a noble cause and he’s raising his profile amongst a potential future voting bloc. In a country that consumes a massive amount of beer (about 320 pints annually), this seems to be a surefire way to sell beer AND democracy. Who can’t drink to that?

Sephora is One Scary Place

Scarier than the boogeyman

Scarier than the boogeyman

I love the National Geographic Channel and its focus on wildlife. For some reason, I’m particularly drawn to how different species choose mates and the lengths to which they will go, from the plumes of feathers on a peacock to the amount of light a firefly will use to attract the opposite sex. I’m even more fascinated by the sheer number of similarities between us humans and the animal kingdom.

On a recent trip to Ross Park Mall, a female friend dragged me into Sephora for a time she described as “quickly”, which made me realize that the she might not know the definition of the term. While initially nerve-wracking, I decided to make this my own personal National Geographic special, using the experience to analyze how products were packaged and displayed, how lower-end products compared to premium products and what design theories were used to appeal to women. While I started in an area with a bunch of boxes and bottles, I ended up in a section with various items that resembled miniature lawn equipment, much of which made me realize that I am much less likely to injure myself using a table saw than an eyelash curler (Really? An Eyelash Curler? That’s necessary why?).

The entire experience went from fascinating to traumatizing when I came upon a box with this grooming machine that included three different attachments. I looked at the first one, which looked much like the trimmer you’d find on the back of an electric razor — that’s not so bad. Next down was a tool that looked just like an electric razor with little holes to cut hair — that was just a mini Norelco razor. Finally, I got to this dangerous shark-toothed looking thing. I looked at it, tilted my head like a beagle hearing a harmonica for the first time, and tried to figure out what the hell an “epilator” was. Then it hit me. Completely by reaction, I hunched over a little bit and protected certain areas of my anatomy, subconsciously afraid that the damn thing would jump out of and attack my nether regions. I also made a very loud oomph/ouch sound, causing my friend and two sales associated to run over to make sure I was ok. They found me standing there, completely blown away that anyone would use such a disturbing device. While they were laughing, I was still in shock. I believe I’m now one of the first diagnosed cases of epilatorphobia.

The lesson learned, beyond the fact that I will never feel entirely safe being in the same room as that devil machine, is that men and women really do have completely different shopping experiences and expectations. There was a shocking amount of white used in graphic design, as well as pastels (compared to the blues/browns/darker neutrals found in men’s products). I also saw a loose correlation between product shape and price — the more unique and feminine the shape of the bottle, the higher premium on the product. Another observation involved typography — while men’s products usually feature bold/black fonts, most of the products in Sephora used type that was thin or ultra-thin. Finally, I realized the motivation women have to achieve beauty is beyond what I had ever expected before (I’m an only child with a decidedly non-girly mom who has usually dated women who could get ready in 20 minutes or less). The point? For this category of woman, appeal to the need to be beautiful, make the packaging as much of an experience as possible, market the product in a way that it feels luxurious and price it such that the product feels rare (now with “hydrokryptocyanide!”) rather than eerily similar to what is in a Suave bottle in Giant Eagle. While it is a very crowded market, there seems to be a niche for a multitude of similar products — invoke those feelings of beauty and exclusivity, and you’ll carve out a niche.

Budweiser = Innovation? You’re Kidding, Right?

bud

Does this look like innovation to you?

The Business Insider published an article on February 11th entitled “What Budweiser Can Teach You About Innovation“. This was based on blog post from the Harvard Business Review entitled “Four Innovation Lessons from Anheuser-Busch“. Based upon a talk given by the global director of innovation at Anheuser-Busch Inbev, the two wrote about lessons that A-B can teach us about innovation. While the four bullet points were perfectly fine  (explain strategic objectives in simple terms, have defined types of innovation strategies, have a clear but robust innovation process and draw insight from non-obvious places), the suggestion that A-B is innovative in its product development is absolute bullshit.

A movie that was recently released called Beer Wars that exposed the battles fought in the beer industry (written, produced and directed by Anat Baron, former head of Mike’s Hard Lemonade), showing that A-B is both heavy-handed and rips off ideas from some of the true greats in beer (Dogfish Head, and Yuengling, for instance). In one scene, Sam, the owner of Dogfish Head, shows a bizarre and unsubstantiated cease and desist order from A-B for Dogfish’s use of “Punkin'” in the name of one of its brews. Since when did strong-arm litigation = innovation?

The following quote from the HBR article illustrates the ridiculousness of the contrast between the big brewers and those who are truly passionate about the craft:

Its strategic objectives are to increase SOB (share of beer) and SOT (share of throat). It can achieve these objectives by getting consumers to switch to its products, consume its products in new locations, or attract new consumers.

Wait, what? They have metrics like “share of throat”, a term that entertains my inner 12-year-old? They don’t simply look at ways to deliver better beer to the customer? No, they don’t. They make boring, bland beers and acquire brands that have strength in the market and a loyal following (see how they destroyed the Rolling Rock brand, a particular insult as a former resident of Latrobe, PA). That’s not innovation, that’s a recipe for market domination that is focused on shareholder value. As a business, it’s a fantastic strategy, but it should not be confused with innovation.

I’m a homebrewer and enjoy a lot of different types of beer. I’m a fan of microbrews and strange and innovative beers. I frequent local microbreweries (East End Brewing Company is a great example of innovation in beer-making) and enjoy great beer-focused Pittsburgh establishments such as Sharp Edge, Bocktown Beer & Grill and Fat Head’s. I’ve had some pretty amazing, innovative beers from brewers who are willing to take risks. A-B isn’t remotely on this list. It’s insulting to beer drinkers to suggest that A-B is innovative. It’s not innovative — it bullies its suppliers, spends amazing amounts of money keeping a regulatory system in place that does not benefit the customer and actually reduces innovation, and pursues a strategy whereby it steals innovative ideas from the market and pushes out the competition.

HBR, you’re better than this. You’re better than to swallow the propaganda of the largest brewing company in the world. Keep talking innovation, but find the right players. In beer parlance, A-B is all foam, no beer.

Blogging is Really Hard

News flash to those thinking about or currently writing a blog — it is really, really hard.

Don’t get me wrong, I think blogging is one of the most important ways that an individual or company can show how they’re different/better than their competitors. A company’s business philosophy and technical competence shows through in the words they write. Plus, there’s something to be said for being forced to challenge current perceptions and having to articulate a vision. It’s a great mental workout and shows current and potential customers a window into how strong a company really is.

However, the reasons to write a blog are also the ones that make it a challenge. First, we’re not all first-class writers (if you’ve flipped through mine, I’m sure you’d find plenty of mistakes). Second, it’s tough to find a voice that balances a professional tone and the openness that the social media world requires. Third, there is a time and mental resource challenge associated with a blog and can sometimes let weeks go by before we have the chance to sit down and write. Finally, if you don’t get the readership you want, it’s easy to get discouraged and allow a blog to become a graveyard.

Confession: I have a particularly difficult time writing my blog. Should I be funny at the risk of being offensive? Should I be brief but short on details? Should I come off as an expert or open-minded learner? Who should I be writing for? Should I write for only myself, or should I try to build an audience? Is there anything I’m going to say that might come back to haunt me or get me fired? And what the heck do I write about, anyway?

I’ve been working on figuring out the best way to solve these problems. As a proud BlackBerry owner, I’ve downloaded and used the WordPress app, which lets me get some thoughts down that I can either publish immediately or develop more fully when I get time. I’ve been attempting to schedule time to think about certain topics and decide what might make sense to write about. However, these are just process solutions; they don’t get to the bottom of my main issue, i.e. what is it that I should be saying and how do I say it?

I’ve recently engaged an editor and PR veteran to do some analysis on this blog. One of his areas of expertise is in co-authoring and ghostwriting, and he has mastered the art of identifying a “voice” and applying it to developing copy. I can’t wait to hear what he has to say, even if it’s going to be tough to hear.

Have you done an audit of your blog? Have you gotten feedback on whether or not you’re saying the right thing, being brief enough, or speaking to the right audience? Do you think you’d benefit from a professional blog audit? I’d love to hear from others who might be suffering from this challenge.

What Strategy Would You Use To Defeat Yourself?

What a question.

It appeared in this post from the informal, slang-filled, business site called Trizle (I recommend it — a great jolt of reading at 30 seconds a day). The question hit me between the eyes.

Does anyone ever ask this? I’ve not seen it very often. Sure, there are senior executive strategy sessions that generate a nice little printable SWOT analysis that gets thrown into a binder and put right next to last year’s strategy binder. But, do these sessions really get to the core of what’s going on and, if they do, do they lead to the actions necessary to make it all better? I’ve always hated the statement “knowing is half the battle”, because I believe that, while knowing might be half the battle, you’re still dead if you don’t fight the other half.

Bad economy or great economy, we’re in global knock-out-drag-out fight for resources. If you don’t compete, you don’t win (or even get to stay on the field). That means that you don’t get the sale, you don’t get the donor, you don’t get the legislation passed. People lose jobs, companies close, mortgage payments get missed and it’s game over. The company/non-profit organization/public recreation center/corner doughnut shop dies, right along with the income and jobs. Them 1, you 0.

Discussing the issue is tough — the death of our job, the death of our organization — those are big scary things we just don’t like to think about. Senior managers don’t like the question either, so they bury their heads in operational issues while completely neglecting strategy. When the time comes to lay people off, close a plant, make people work more hours for less pay, outside factors are almost inevitably cited as the culprit. You’ll never hear a manager say, “I was asleep at the wheel, running away from my real job (understanding and fixing the real problems), waiting for everything to blow over. My bad.”

Be a better leader. Ask this question of yourself, your department, and your organization. Write down the answers. Take action to fix the problems. To do otherwise is not only to ignore your responsibility, it is putting other people’s lives at risk.