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BEER-30 (La Crosse, WI)
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Are you ready for a good story? Of course you are, everybody likes a good story. This one you may like or it may make you mad, but at least you got a good story. The recessions of the 1980s and 1990s, coupled with excess brewing capacity, brought us such independently produced low-priced beer -- usually contract brewed -- such as St. Ides and Crazy Horse Malt Liquor, for better or worse. Well, the tough economy and pockets of excess brewing capacity have started to bring us more independent producers of low priced beer.
One such indy contract brewer is Melanie Brewery Co., a beer marketer making beer out of the City Brewery in LaCrosse, Wisconsin (the old G. Heileman Brewery). Melanie is owend by Jeff Ciesco, Nick Sever, Mike Bella, and Jamie Schultz, and they have an interesting story and have executed a successful strategic and sales plan that is striking in its simplicity. Their main product is 30 packs of Beer-30 Light and Beer-30 Ice, budget brands priced at the very low end, at about $13.99-$14.99 a case at retail. I first ran across Beer-30 on YouTube about a year ago, where a guy videod himself taking a serene and reflective walk on his lunch break in the woods behind his office -- as he guzzled a can of Beer-30. I had never heard of Beer-30 and was intrigued, and soon learned it was contract brewed at City. What I didn't know was the story of how the brand came about, until now.
Melanie was doing a good business selling Evil Eye High Gravity Lager when one of its distributors in Colorado asked them to come up with a private label 30 pack budget beer. You may wonder why on earth a distributor would want something like that. The truth is they were getting clobbered by competition in the college towns and military bases. "We knew that it had to have a catchy name, great taste, and a price driven to reach out to the target consumer," says partner Jeff Ciesco. They came up with the name "Beer-30" (referring to the common punchline when somebody asks when is it time to have that first beer, as well as referring to the number of cans in each case), and within two months they were selling 12,000 cases a month in one market. But once the distributor's big suppliers got wind, they were compelled to "reign it in."
So Melanie decided to take their learnings and roll out regionally east of Denver, but only targeting college towns. Soon they acquired distribution in Norman, OK, Lincoln NE, Phoenix, AZ, Salina, KS, Minneapolis, MN, Iowa City, IA, Columbia, MO, Champaign, IL, Lansing, MI Nashville/Memphis, TN, Lexington, KY, Richmond, VA, and College Station, PA. Do you see the pattern? All college towns. So far in 2010 Beer-30 is moving into Louisiana, Alabama, West Virginia, Mississippi, California, Maryland, North Carolina, and Florida. Jeff says he expects his business to be up 300 to 400% in the first quarter alone. They are also planning on rolling out 24oz cans in March.
"This isn't rocket science," says Jeff. "We keep it simple: visibility, affordability, and drinkability." Beer-30 keeps its pricing "at the rock botom," says Jeff, and they offer no post-offs, sales incentives, or promo dollars. Just one EDLP. There is no advertising, no billboards, really no marketing at all. Beer-30 tells distributors to price-in all the additional tangibles (printing and signs) to hit a competitive price point and still make a profit. "We tell new distributors right up-front that we will be the most distributor-friendly supplier that you will ever have." And how do they choose distributors? They keep that simple too: Jeff says they usually find one distributor in a state that they'd like to work with, and then that distributor arranges the rest of the distribution in the state.
Interesting business model. While we're not a big fan of budget 30 packs, they've clearly found an unmet niche in the market. End of story.
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