Why Brands Matter
Let’s try a thought experiment. I’ll offer the name of a brewery and you notice the first few things that spring to mind. Ready? Sierra Nevada. Unless you’re really not into beer—and then, why are you reading this?—something should have popped into your head. OK, here’s another: Dogfish Head. Or here, try this juicy one: Lagunitas.
We have strangely complex relationships with breweries. The mention of a name produces a tangle of impressions, memories, opinions, prejudices and emotions. Unlike many product companies—soap makers, snack food companies, pharmaceutical firms—breweries inspire feelings. You’ve had a lot more meaningful experiences with a beer in your hand than, say, doing laundry. (On the first date with my now-wife, I drank Guinnesses on a sub-zero night in Chicago.) It’s the reason that, while you may well like Torpedo, 60 Minute IPA, and Lagunitas IPA equally, you almost certainly feel differently about each of the companies that make them.
This connection is born from what the business world calls “branding.” In a very real sense, a brand is a company’s personality. Things like the logo, label art, fonts and color scheme are a way of signaling that personality the way clothes do. Think about how some companies use gothic fonts to associate themselves with German beer. Or how others use folksy, old-timey imagery to highlight the notion of “craft.” We put on clothes as a way of signaling what kind of people we are, and labels do the same for beer.
Brands go deeper than just packaging, though. The products themselves are a part of the brand. Apple got into the telephone market very late, but it introduced a product that was perfectly in keeping with the brand: It was futuristic but easy to use, elegant, powerful and luxurious. Très Apple. Strong brands may also communicate company values. For example, in its products, packaging and public presentation, Hill Farmstead manages to communicate old-world artisan values, rusticity and quality. Even things as subtle as pricing send a message about identity to consumers. Price a product above the median and you are signaling quality and exclusivity; below the median means you’re selling a populist, everyman product. All these things create that personality, that brand.
Let’s take some recent news out of California as an example of how this plays out in the real world—and in turn, how we can expect it to play a major role in the way beer evolves in the coming decade. To recap: When word came out that Lagunitas was suing Sierra Nevada over the font on a new beer, the reaction was intense. For over 20 years, Lagunitas had carefully managed to create the ultimate California brand—mellow, counter-cultural, anti-corporate and irreverent. People loved the brewery because it didn’t seem to bother with the whole business thing. The reason the lawsuit was so offensive was precisely because Lagunitas had such a strong brand identity. It seemed discordant to see such a chill company pull out the lawyers and play business hardball.
As a way of demonstrating this phenomenon at work, let’s go back to the examples from the top of the post. Recently, I surveyed people on social media with that same thought experiment. I offered the names of six breweries and asked people to give me one-word reactions. The results will seem both obvious to you, but also illustrate why this concept is so important. The brands I asked about were, in alphabetical order: Budweiser, Dogfish Head, Goose Island, Lagunitas, Rogue and Sierra Nevada. I’ll post representative responses to each brewery below and see if you can match them up. (I try to use both positive and negative, but the brands don’t always have them in equal measure.)
1. classic, venerated, old guard, iconic, pioneer, staple, meh
2. big-bottled, creative, bitter, chocolate, overpriced, outdated
3. quirky, eclectic, funky, idiosyncratic, raisin, showy, gimmicky
4. American, consistent, rice, appley, technical, corporate, watery
5. barrel-aged, stout-making, bourbon, crafty, success, sell-out
6. Californian, free-spirited, dank, secretive, arrogant, stoopid
Pretty easy, right? (1-Sierra Nevada, 2-Rogue, 3-Dogfish Head, 4-Budweiser, 5-Goose Island, 6-Lagunitas.) These responses are in no way scientific, and it’s easy to over-interpret a few dozen responses on Twitter and Facebook—but branding is in many ways not scientific. The Lagunitas adjectives are especially interesting. Until recently, when negative news started trickling out about Lagunitas, it would have easily been a model for successful branding. But now about 40 percent of the responses pointed to these missteps. Conversely, Sierra Nevada—despite having a flagship that’s 36 years old—only had one negative response (that “meh”). It may be one of the reasons the reaction against Lagunitas was so strong.
Dogfish Head, with a motto that tracks almost like a part of the brewery’s name (off-centered ales for off-centered people), was called some variation of “off-centered” by over half the respondents—enough to make any marketer ask for a raise. People didn’t like Budweiser, unsurprisingly (my social media connections aren’t Bud folk), but they still pointed out some key things about the brewery’s brand. Part of Goose Island’s brand comes from being a division of Anheuser-Busch InBev, but the brewery has rebounded nicely and is also known for its barrel-aging program and Bourbon County stout line. Of all the breweries, Rogue is in the biggest trouble—the large majority of responses were negative, and about 20 percent were some variation on “overpriced.” Even in a little exercise like this, you can see brands emerge, and whether they’re positive, negative, or neutral.
Branding is not a concept everyone likes; people prefer to think they’re not being played by a faceless company interested only in their wallet. And there is a obviously a crass element to branding. It can become so dominant that a product hardly matters. People are buying a brand as a matter of personal identity. When this happens, companies are no longer competing with each other over making a better mousetrap; they’re trying to make better ads.
Yet there are over 3,000 reasons the concept is important. The marketplace is so saturated with beer that personality—brand—plays a larger and larger role. We make purchases based partly on quality, but more often on feelings. In a world with nearly unlimited choice, how else would we make decisions? If two IPAs are good, we’ll choose the one from the brewery we like more. That passion is what fueled the beer renaissance in the U.S. in the first place, and it’s what has made it big business. As a welter of new products threaten to overwhelm consumers in choice, they will rely ever more on their loyalties and passions in choosing which beers to buy.