The recent Brewers Association member survey had several recurring themes. One of the more prevalent topics was a request for information and support on expanding brewery’s product portfolios into other beverage types. I recently spoke with several breweries which have launched successful expansions into different types of “beyond-beer beverages.” Although these breweries followed different paths to success, the foundation they built to support a successful product launch addressed the same underlying questions and considerations. 

Adventurous Drinkers Create New Possibilities 

Beverage drinkers are becoming more adventurous, seeking out new products and consuming across a wide range of beverage types. This tendency creates a plethora of opportunities. Hop water, soft drinks, tea, and functional beverages are some examples of non-alcohol products, including non-alcohol beer, that a brewer can consider. If a brewer prefers to continue to work in beverage alcohol, cider, spirits, and RTDs are among the possibilities.  

Planning for Success 

The individual sections in this article are not intended to be a step-by-step guide. Nor are they a deep dive into solutions. Rather they are deliberations that when explored holistically will help you create new products with perceived consumer value that will allow you to compete. In other words, think your project through as if you were starting a new business with a new business plan. 

Investing in the Future 

If you have made a decision on exploring a particular beverage beyond beer, take a realistic look at the resources necessary to support the launch of a new product. Investigate market margins and unit pricing of the products you are considering. Research cost of goods, including labor, taxes, etc., to help determine different pricing models and potential profitability. Do you have the capital necessary to make investments in equipment, infrastructure, packaging, and marketing to successfully launch a new product? Just as critical, does your current staff have the necessary knowledge and experience to transition to the successful production of a high-quality beyond-beer product? Do you need to consider bringing in expertise for product formulation or quality assurance? Quality concerns, process considerations, safety issues, and regulatory requirements for beyond beer beverages can be very different from brewing beer.  

Satisfying Regulatory Obligations 

In transitioning into production of beyond-beer beverages, regulatory requirements and obligations can be significantly different. Producing any non-alcohol beverage, including non-alcohol beer, subjects the producer to a different set of Food and Drug Administration (FDA) regulations, specifically all aspects of CFR 21 117 subpart C. Hop water is subject to the same regulations as carbonated soft drinks. Functional beverages are subject to FDA labeling regulations for health claims. Moving into production of alternate alcoholic beverages requires different licensing and reporting. Distilling spirits has very different safety considerations and may even have strict local building and fire codes. State and local licensing and regulations for different beverage types may apply. 

Identify Your Target Demographic 

Having a clear vision of who is the target market for an expanded portfolio is critical to the product’s ultimate success. Are you looking to expand the types of beverages you can offer to your existing customer base, or are you planning to expand your existing customer base? Understanding who is the potential consumer of your new product line is an important strategic decision in both on and off-premise situations and will drive other important strategic decisions. 

Consider Branding Opportunities 

How you brand a new product may be one of the most critical decisions you will make when launching a new beyond-beer beverage. Will the addition of a new product that shares your beer/brewery brand dilute the intrinsic value of your existing brand? Will the creation of a new brand position the product in a way that creates excitement with the targeted consumer? Or will the strength of your existing brand complement a new and different type of product? For example, hop water or a non-alcohol beer may benefit from the cachet of an existing beer brand. But the same beer brand may not create value for a new line of herbal tea which may have a different target demographic.  Creating a new brand can sometimes lead to exciting opportunities.  

Packaging and Presentation Sell Products 

In choosing packaging for your new product, the same type of decisions made concerning branding will need to be considered. Will your current type of packaging work for the new product, or will the product require a different type of package? Using the same example as above, the aluminum can that you use for your beer may work well for a hop water, but may tarnish the image of an herbal tea. In many types of beverages, consumers associate quality with certain types of packaging. Product presentation in the on-premise can play the same role as packaging. A brewpub or taproom launching a new soft drink or hop water can serve the product in a distinctive glass with a unique garnish to help differentiate the new product. 

Deliver a Message 

In today’s crowded beverage market, even the highest quality and most exciting product will not sell unless people are aware of the product, and more importantly, given a reason to try it. Marketing campaigns are rarely one size fits all. Successful product introductions will consider the target demographic, the beverage type, the medium, and most importantly, the message. This is true in the on-premise, but critical in off-premise sales. Providing distributors and retailers the support of a strong marketing campaign should be considered a prerequisite in securing retail shelf space in today’s competitive market. 

Research and Planning Lead to Success 

Expanding your brewery’s production of beyond beer beverages presents both opportunities and challenges. Often you will find yourself competing with experienced and well-financed producers, often with the advantage of scale. Thoughtful research and planning will help ensure that your new products are not only financially viable but differentiate themselves and drive consumer interest with quality and value. 

Watch for future insights into the challenges and opportunities presented by specific beyond-beer beverages.