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11/28/2004

Montana brewers use branding, packaging to stand out from pack

By Robert Struckman
The Missoulian

MISSOULA, Mont. — The sweet, moist odor of brewing beer — yeast and hops — was rich in the air at the Kettlehouse Brewing Co. here.

The barroom was empty. A few employees bustled about on errands. Tim O’Leary, who co-owns the brewery with his wife, Suzy Rizza, shuffled papers on his desk below photos on the wall of family and friends and a shelf with tattered copies of microbrew industry magazines.

“Beer is a product that people associate with buffoonery,” O’Leary said with a grin. He was talking about one of his brews in particular, Olde Bongwater Hemp Porter, but his comments apply to a basic marketing strategy of microbrewers across the country.

For small businesses trying to make a go of it in a competitive market, a good name is just as good as advertising without costing tons of money.

In Montana it is a strategy — often combined with the mystique of the state — that has made the state an unlikely player in the craft brew market in the western United States.

Consider for example Big Sky Brewing Co.’s Moose Drool Brown Ale, sold in 10 states from Wisconsin to Washington and Alaska. Even small brew pubs such as Kettlehouse buck the international trend of uniform mass production.

For scores of years before 1987, when Bayern Brewing Co. began to sell locally made beer in pint glasses in Missoula, no beer consumed in this heavy-drinking state was made locally. By the late 1990s, however, most Montana towns large enough for a Class A high school supported at least one local brewhouse, and a number of them now ship their products out of state.

A number of factors have brought about this change, not least of which is the mettle and ingenuity of the brewers. The beer made in the state is, by outside accounts, great. For years, glasses filled from the state’s breweries have earned more than their share of awards in national beer contests.

But brewers and experts agree that in this craft brew era — when wonderful beer stocks the shelves of every beer retailer — brand recognition and marketing make or break a brew’s chances to be seen, bought and bought again.

Unlike the broad stroke appeals of the major breweries who market with sexual innuendo and fads, microbrewers must appeal to the quirky whims of beer drinkers who choose craft over quantity, said Stan Hieronymous, a columnist for www.Realbeer.com and author of several books on the craft beer industry.

The question is: How does one stand out from the pack?

“That’s simple, as far as it goes. Branding and packaging,” said Neil Leathers, a co-owner of Big Sky Brewing Co.

That is often easier said than done.

“You’ve got to walk a narrow line. People need to feel like they’re in a club, but the club can’t be too exclusive,” said Marie Anderson, who owns Bayern Brewing Co. with her husband, Juergen Knoeller.

It’s an equation that favors Montana. And like the brews they represent, Montana beer names have earned national attention from beer drinkers and experts alike.

Moose Drool was the top vote getter in a 2002 national survey of top 10 beer names in the country. Erin Go Braless, of Kettlehouse Brewing Co., earned special mention and the pub’s Bongwater has often been cited as an excellent and provocative name, Heironymous said.

Of course names aren’t the only factor in the success of a brewery or a drink. Cost is an issue, too. The low price point set by the macro breweries has led many microbreweries to ditch their micro roots and compete on a larger scale, said Pat Hegerman of Real Beer Media Inc. in San Francisco. Hegerman started the online magazine Realbeer.com in 1994, a venture that has since spun off a beverage branding company.

Once a beverage is bottled, it competes with the cheaper prices of the macro breweries, Hegerman said. Because they produce in such massive volumes, the macros can afford to earn only a tiny profit per sale. So, to keep their own prices low, many microbreweries in the 1990s expanded quickly.

“A lot of them ended up chasing their tails, trying to get too big too fast,” Hegerman said.

About five years ago the craft brew industry suffered a collapse. Since then some of the larger craft brewers have consolidated, but on the smaller end of the spectrum, many brew pubs and microbreweries remain, Hegerman said.

Some, such as Kettlehouse, plan to stay small and local, selling to people who “want to be able to drink a pint with the owner,” O’Leary said.

His beer names reflect his ethos, as well as the personality of his patrons. Bongwater gets a lot of attention, but his other brews are named after local history and landmarks — Lake Missoula and Myrtle Street, for example.

Others brewers, including Big Sky and Bayern, hope to continue to grow in a controlled manner. Leathers said Big Sky, which will produce about 26,000 barrels this year, will add about one state per year for the next decade or so.

Anderson said Bayern, which will produce about 7,800 barrels this year, will never produce more than about 10,000 barrels of beer. She said the company will expand by branching out into other beverages.

It was hard enough for Knoeller to stomach the way beer is sold in America. The German native named his beers by the type and struggled with the idea of giving into marketing’s demands. The brewery has been selling Trout Slayer successfully for several years. Another brew, named Flathead Lake Monster, didn’t sell so well.

“I don’t think people got it,” Anderson said.

Anderson didn’t mind using the beer’s name to sell the product, she said.

“Trout Slayer has that connection to the idea of fishing and reaction. It’s hip to be a fly fisherman and fish in Montana,” she said.

Hegerman agreed. Marketing with the great outdoors is not really anything new — think of Coors ads about tapping the Rockies and Hamms’ “Land of Sky Blue Waters — but authenticity is big with craft beer consumers, he said.

That’s why O’Leary loves the business he’s in.

“A bunch of guys sitting around will come up with a better name than a roomful of experts. How great is that?” O’Leary said.