Brand strategists and marketers know about these issues, yet high profile brand extensions still roll out every single day. 

Why is this?

We’ve helped dozens of breweries position, brand and launch extensions. So we can say with first hand experience that when you have a great selling brand, the pressure to extend it can be immense. Retailers, distributors, consultants, trade media, internal team members and even your fans can clamor for it.  

Add in a dash of FOMO from watching your competition grabbing headlines with their extensions and this pressure can be so intense that it may seem imprudent to not throw your concerns and intuition out the window on this matter.

For those keeping score, Bud Light Seltzer Hard Soda would be a Brand Extension of a Brand Extension of a Line Extension. It's extensions all the way down.


Where does CODO fall on this issue?

For as much as we harp on the importance of positioning, we're not as stalwartly anti-line (or brand) extension as you might think. Yes, we're always cautious about the impact a new product can have on an overarching brand (and have, more than once, been a dissenting voice in strategy meetings).

But we also think that Trout and Ries’ line of thinking is more applicable to the zero sum world of international conglomerate brands who can genuinely vie for that first or second “slot” in consumers’ minds more so than a localized industry like craft beer (where a major driving force behind craft's growth has always been diversity and brand promiscuity itself).

This idea coupled with fragmenting consumer tastes (beer > seltzer > kombucha > RTDs > Lo&No…), generational shifts (Gen Z becoming a buying force) and the still-not-yet-entirely-realized impact that the DTC trend will have on the industry, leads us to believe that a few well conceived extensions can actually enhance a brewery’s overall brand and portfolio by offering options that their fans are already buying from someone else. 

The hang up is that the extension has to make sense. You can’t leverage your parent brand into another category just because it’s well known. And you shouldn't line extend just to make a quick buck either.

There has to be an intuitive link between your parent brand and the extension. The extension should not only build its own brand, but reinforce the parent brand's story and values and good will as well. 

Can a popular brewery make a great RTD cocktail? Sure, maybe. Can that same brewery make a great frozen lasagna meal?

If you’re dead set on launching a brand extension, here are a few quick guidelines to keep you from having to later cut a commercial to directly address how confusing it is that your brewery’s name is also on a hard seltzer can for some reason. 

Less is more

One or two extensions can work well if the subsequent releases reinforce the parent brand's positioning and value props (Blue Moon > Blue Moon Light Sky is a great example here because it brings a seasonal flair to the mix). More than one or two and you stand the risk of making the entire lineup too convoluted for your fans to follow, particularly if you start layering in line extensions on top of those brand extensions. (peep that Budweiser extension-mania image above for reference. "yeah, gimme a Bud Light… Lemonade Seltzer Soda, please?")

How to avoid this issue altogether 

If you’ve determined that a brand extension does not make sense, this doesn’t mean you can’t launch the product. It just means you have to explore another brand architecture strategy for bringing it to market—e.g. a subtly-endorsed brand, some sort of shadow endorsement or even a standalone brand if you have the capacity to properly manage it.  

The most important question

Does this new product naturally align with your parent brand’s values and value props? Is this something your brewery would launch? Does it make sense at a gut level? 

If there’s any doubt, then you need to be extremely careful with putting your brewery’s name on that product. Yes, you could possibly see a short term bump in sales by leveraging your parent brand’s equity of the gate, but it likely won’t last beyond the honey moon phase. And it could end up doing far more damage to your positioning in the long run.

There's a lot of fun stuff here, but there are two themes I want to focus on for today's conversation specifically—reframing value props and the importance of living by your brand values. 

1. Reframing Value Props (even negatively perceived ones) into powerful differentiators 

Light Beer existed for a decade or so without becoming a mainstream sensation because it was seen as an inferior product—something that women and men (whose doctors and wives had them on a diet) drank. A true blue collar guy (this was the 70's, relax people) wouldn’t be caught dead with the stuff. 

That is until some smart marketing folks at Miller Brewing discovered an interesting consumer insight. Some men were drinking Light beer not because they were worried about their health (or, presumably, their glorious 1970’s dad bods), but because it tasted about as good as “regular” beer, but was less filling. So they could drink more of it. 

This subtle shift—this alchemy—completely recasts the exact same product as not a drink for women and dieters, but for "real" men who want to drink more beer after a long day at work. 

Folks who study advertising history will recall a number of these reframing feats from the past, like Guinness’ Good things come to those who wait, or Hertz’s We're #2 so we try harder. 

Or even the perniciously powerful Marlboro Man campaign. Historically marketed as a women’s cigarette brand, Marlboro embraced the image of a stoic cowboy fending for himself out in the West (Flavor Country?) to capture the hearts of millions of male consumers who had returned home from war only to find themselves stifled by 1950’s office life. Gross and cynical? Yes. Effective and powerful? Very.

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Quick aside here: this is also the quintessential examples of why Categorical Differentiation is so powerful. In doing this, Miller Brewing single handedly defined, and owned, the Light beer category for decades.

2. Compromising your values is a road to ruin  

Schlitz Brewing was once one of the best selling beer brands in the world. It was so powerful that it threatened to put Budweiser and Miller out of business for decades. 

Then in the 1970's, Schlitz management decided to start juicing profits by cutting production costs, namely, using cheaper ingredients and employing state of the art brewing process "efficiencies" (a churched up way of saying "make it faster and cheaper").

Looking for cost efficiencies is good business. But finding those efficiencies by using cheaper, lower quality ingredients and assuming your customers are too dumb to notice is bad business. 

Fast forward a few years and Schlitz's bad business practices caught up with them. A string of QC issues begat major PR issues begat a complete loss of trust from their customer base. 

The straw that broke the back of Schlitz's once powerful brand was a new stabilizer that caused proteins in the beer to bind and hang in the glass. This was described as being "Hazy" (they were about 50 years too early on that trend) at best, and "looking like mucus was in the glass" at worst. Ouch.

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You brand (reputation) is your brewery's most important asset. Yes, even more valuable than your beer itself. But no amount of great branding can cover for a low quality product. And definitely not for a product whose quality suddenly declines. 

Since we're talking about beer in the 1970's, let's close this out with some sage grandpa wisdom:

Trust is hard to earn and easy to lose.

I believe we're going to see something of a shakeout over the next few years as breweries across the country (sub 5k barrels per year outfits, specifically) begin retiring these seltzers from their portfolios or relegating them to summer seasonal releases. Particularly from those breweries that rushed to market by creating an entirely new brand (so option 1 to some extent and definitely option 2, from above). 

This shakeout will be driven by a few key macro trends:

1. The market is maturing (so overall consumer trial is stalling—seltzer isn't as novel as it was over the last few years).

2. The tidal wave of new seltzer brands hitting the market seems to be causing consumer confusion (hard seltzer SKU-maggedon?) 

3. For the next year or more, we'll (hopefully) be contending with a channel shift back from almost entirely off-premise to a more standard mix of off- and on-premise as the pandemic wanes. 

4. Consumers moving to hard seltzer over the last few years might have been indicative of a move beyond beer in general, more so than a move toward hard seltzer specifically. So kombucha, RTD cocktails, teas and functional beverages are all in play as the next "thing."  

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But I think there's a more mundane reason that will drive this shakeout as well. Managing multiple brands is expensive. And it's hard work. And it's expensive and hard every day because building and maintaining a brand never stops. You have to continually invest in branding and marketing to drive sales. 

And if you've created a separate brand that has to be actively managed—complete with its own values, value props, social channels, messaging and positioning objectives—and it's not gaining traction (say, hovering around 5 to 7% of your overall sales), then it could be a distraction and not worth the effort to keep in rotation. 

We've heard this very sentiment from several breweries directly.

Despite what you’re seeing in headlines—“Hard seltzer boom goes flat” “Boston Beer stock is crashing because the hard seltzer boom is basically over”—the hard seltzer category is still growing. It’s actually outpacing beer by a long shot, but this growth is largely up top amongst the established players. For everyone else, the hundreds of smaller brands scattered across the country, it’s going to be increasingly tough to stand out and gain anything resembling velocity. 

To close us out here, let's revisit what David Bower, President of Upland Brewing said about hard seltzer in our 2021 Beer Branding Trends review:

…The size of the hard seltzer category does not equate to the ease in which one can find success within it. The hard seltzer space is as embattled as the rest, and you have to be dedicated to long-term, perseverant brand building efforts to be a contender. It’s not simply a choice of turning on the seltzer money faucet. It’s the familiar slog. Like anything else, it’s critically important that you love what you do and stay true to your passions.

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What do you think? Have you had these conversations with your team? Shoot me an email to let me know if I'm close or way off base here. 

Let’s look at the hot new trend of flavor blasted(!!!) hard seltzer punches and lemonades. 

This packaging is all bright and full color, with nary a predominately white can in sight. But how can this be? How will people know these are hard seltzers if they don’t look like hard seltzer?

Aside from speaking to a specific product attribute (e.g. Welcome to Flavor Town®, baby!), how can they pull this off?

This works because these are not hard seltzers. Not in the way that the category has come to be defined. 

By having a different functional benefit (e.g. full flavor without all the carbs), and different emotional benefits (e.g. I can indulge without ruining my diet), these are essentially a new category. 

It might be too early to make that bold a claim, but you can see the beginnings of that shift through the packaging and positioning of these products already.

They are not hard seltzers. They are hard seltzer punch. Or hard seltzer lemonade. Or hard seltzer tea. And this means they are not bound by category rules and visual vocabulary of hard seltzer, proper.

This same idea is at play in beer packaging where certain styles, and regions, just have a look. IPAs are green. Lagers look like nostalgic regional brands. Big barrel aged stouts look brown and, well, big and intimidating. Even domestic macro brands have a certain look—which is why, to the trained eye, it’s easy to spot fake craft brands out in the wild. They just can’t shake that mega brand provenance and sheen. 

This framework makes it easy to stand out, visually. Even more so if you don’t have to worry about duking it out with the number 1 brand in a category and therefore can’t take a wild chance on boundary pushing package design. 

Some fun examples? Hazy IPAs have a look that completely separates them from traditional IPAs—namely, maximalist pressure sensitive labels (with minimal branding) slapped on a brite 16oz can. 

Though they share the IPA style in name, Hazy’s have a markedly different visual ruleset than traditional (clear?) IPAs. This styling helps them to be categorically differentiated from traditional IPAs.

So Hazy IPAs are a great example. And sour beers before them. It would’ve been cool to see where the Brut IPA aesthetic could have landed (I’m guessing more nostalgic regional aesthetics). But alas, us fickle beer fans moved onto the next shiny thing, effectively killing it in the cradle before a common language could be defined. 

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The point I’m trying to make here, is that by breaking down visual vocabulary and category “rules,” you will have a framework for working within, and around, depending on your communication and positioning goals. 

You can make something different, just for the fun of it. For the wit and surprise and delight that it brings. 

Or, you can get strategic and create a new category to bypass all of those rules in the first place.

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TLDR: go shotgun a Truly Hard Lemonade Punch this weekend. Just don’t call it a seltzer.

Say you’re considering opening a brewpub in an undeserved market and want to create a small, fun place. You don’t want to take over the world—why should you invest in your branding?  

Point 1: Branding as a signal 

Investing in your brand is a signal that you intend to stick around for the long haul. Otherwise, why would you invest in your identity? I never want to oversell the importance of a logo (on its own), but it does serve as a quick evaluation tool for people. "Does this place look cool? Then I bet their beer is pretty good."

At a base level, branding is a signal that a company is well run, puts out a quality product and is to be trusted. 


Point 2: What if you grow?

If you ever want to extend your brand—get into packaging (because of, say, a pandemic…), produce a non-beer product, open a satellite taproom, create a festival, open any other type of concept—then having a solid foundational brand will be crucial. How can you expand and extend something that is non-existent to begin with? Even if you have no intention of extending your brand and building something larger right now, you should set yourself up so that you can if the right opportunity presents itself down the line.

One of my favorite examples of this is our work for Big Lug Canteen. And now, Big Lug Brewing and Hospitality. 

We branded Big Lug Canteen as a one-off concept back in 2014 (read about that foundational project here). Eddie and Scott’s flagship brewpub was so successful that it acted as a springboard for several more restaurant concepts (each one as unique as it is beloved here in Indianapolis). They also restructured their brand architecture, creating the Big Lug Hospitality parent brand plus a rapidly-expanding production brewery.

Investing in their foundational brand, even when they had no grand vision beyond a fun brewpub, gave Big Lug the platform it needed to be on track to brew 10–13,000 barrels of beer annually over the next few years. 

Would 0 to 13k bbls per year have been possible without great branding? Big Lug co-founder, Eddie Sahm himself, doesn't think so—listen to this podcast episode where we discussed this very topic.

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So, to wrap this up: Can you operate a functional brewpub without spending the time and resources to develop great branding? Absolutely. But why would you want to? Compelling branding is the most cost-effective way to stake out your position in the market. A strong visual identity and a clear brand direction gives you a plethora of options should you decide to grow or pivot your efforts down the line. Otherwise, you could be painting yourself into a corner for the future. Plus, what will stop three other great breweries from opening in your neck of the woods later on? You need to attract customers and demonstrate why you’re their best choice, now and for the future. Great branding can help you achieve this.

We also received a thoughtful email from Drizly about an opportunity most craft breweries are missing out on that can directly lead to an increase in beer sales. We read this email verbatim in our podcast episode, but wanted to include it here for you all to read as well. 

From Jay Sobel, Senior Data Analyst at Drizly 

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One thing that jumped out from my perspective working with catalog operations at Drizly were the sections on brands going digital. There's an emerging digital angle missing from this piece that I think a lot of brands are sleeping on right now which is catalog management on leading eCommerce sites. 

Drizly manages a catalog of 200k+ products. Each product should have an image, description, a UPC, locality info and more. There are literally thousands of new products launched each week, and the only economical way to keep up has been outsourcing the work and prioritizing products in a "top down" fashion (slow for small brands).

What a lot of brands don't know is that Drizly has a site called Drizly Supplier (supplier.drizly.com / brands.drizly.com for sign up) that allows them to directly manage their products within the Drizly catalog (their existence, their images, everything else). It's a relationship that hasn't accelerated nearly as quickly as consumer preferences for delivery have through the pandemic. Products that gain an image triple their add-to-carts, and product data (when it exists) is leveraged throughout the consumer funnel in automated features like recommendation emails and "because you bought" shelves. There's money on the table for the small brands that can perfect their portfolio on sites like Drizly soonest — before it becomes a norm, and it's just generally one of the highest ROI 'digital efforts' especially compared to social content.

There are lots of funny cases where a small brand has a great website and a solid Instagram presence, but on Drizly — where there's an actual "buy" button – they are underperforming by 10x because their products are barely represented.

In the bigger picture, these sites rely on product attributes a bit differently than retailers have in the past. For example, UPC is absolutely critical to inventory recognition. Brands that use the same UPC across variety packs or changing seasonal products are shooting themselves in the foot (maybe leg) on eCommerce because that does not play well in our system.

Bonus thought 

We’ve seen a lot of breweries put their beer cans across the front of a box, label it a “variety pack” or a “party pack” and call it a day.

Putting cans on the box is fine (it’s actually become a category convention, stemming from when breweries first started putting 6-pack cans in boxes. How else will people know what’s in these boxes!?). But this naming convention is lazy a missed opportunity.

A variety pack should be viewed as its own unique brand with its own unique value proposition. And it should be positioned and named as such.

Consistently inconsistent? 

What are the downstream effects on brewery package design systems? For smaller breweries who are packaging their beer for carryout, as opposed to off-premise sales, does it matter if packaging doesn’t billboard on shelf? Does it matter if the packaging is inconsistent or doesn’t perfectly provide a style and tasting notes and all the things we’ve come to know as need-to-haves for consumer packaged goods (CPG)? 

The designer in me says, “Of course these things matter. You’re still selling a beverage and your branding needs to elevate the product.” But the pragmatic, non-designer in me also realizes that without the context of other beer packaging competing for your attention—these cans are essentially small, aluminum growlers. They can be well branded, but they are utilitarian first—simply a means to get beer home. 

Flagship packaging (and flagship beers for those who can produce it at volume) will always be important because it is easy to market and scale. But for the small brewery that has no problem selling everything it cans, the design language could drift to become more inconsistent and individual to each beer release, style and beer name itself. This has actually been happening for years with small batch, hype-y breweries with line-around-the-block beer “drops.” But COVID-19 could accelerate this trend beyond that niche to mainstream status.

ON STRATEGY & GOALS

We don’t have access to the project brief and behind the scenes strategy. However, after rebranding a few dozen breweries, we do see a similar set of goals that they typically want to accomplish through this process. I’d put money on Anchor focusing on the following:

– We want to breathe new life into the brand and reach a younger audience 

– We want to clean up inconsistencies across the packaging

– We want to better billboard on shelf

– We want to clean up our label hierarchy and fix the “Anchor Steam Brewing” vs. Anchor Brewing issue

– We want to increase revenue by XXX%

Again, these are guesses, but not exactly shots in the dark. Let’s assume they’re correct and move onto the next major point. 


EVOLUTION VS. REVOLUTION 

Any move to rebrand a legacy brewery is going to include an element of modernizing the overall aesthetics. And while there are no universal rules, it’s easy to go just a little too far and lose what was special about an old school look in the first place.

We frame this conversation with our clients as Evolution vs. Revolution. Are you completely reshaping your brewery’s culture and positioning? Are we throwing your logo out with the bathwater and creating wholesale visual change across the board? Or, are we building on decades of work and hard earned goodwill to make subtle updates in a natural progression? 

The deciding factor here, beyond specific goals and project context should be driven by Brand Equity. This is the total amount of goodwill your brand has with its customers. What lore and visual cues that, if lost through the new design work, would confuse customers and lead to lost sales.

And while the goals listed above are legitimate and do require some major changes, I just can’t imagine the conversations that lead to deciding that nuking 125 years of brand equity is the right move.
 

ON RETRO VS VINTAGE

We’ve had a now decade-long conversation at CODO about what constitutes vintage aesthetics and what this means for our current moment in time. “Vintage” is a word that gets thrown around like “craft”—it’s hard to pin down and means something different to everyone. 

From 2010 to 2020, hundreds (thousands?) of breweries came to market with vaguely retro / vintage / throwback branding. We called this “Nostalgic Regional” in our 2020 all-decade beer branding trends review.

My point here is that those breweries had to fake it. They had to rip holes in the knees of their jeans, so to speak. They had to use mish-mash typography and faux textures and every other little info type that we designers love to use (e.g. ESTD. 2019, TRDMRK) in their branding to look older than they were because they wanted that story.  

And to have a brewery like Anchor—with a genuine provenance that an untold number of other breweries are all seeking to convey—jettison that very story so abruptly like this is just… disappointing.

And beyond all this, ironically, Anchor might’ve had a better chance at courting Millennials (who have forgotten about them) and Gen Z (who have never heard of them) by leaning into their fun vintage look. See recent refreshes like Ranier, Iron City and even Budweiser for reference.


IN CONCLUSION

To conclude, this is a rough spot, both for Anchor and their agency. Anchor desperately needed to make a change, but it seems undeniable that they’ve missed the mark here.

I’ve avoided specifically calling out issues with the design itself in this piece. But to be blunt, even if Anchor had made a different (though equally drastic) update, I don’t think the response would be as negative if the result didn’t look so half-baked and stock. Put frankly, this looks like an early sketch. The typography needs more refinement and consideration. I don’t understand the different type treatment for the porter. The anchor illustration (arguably the most important element at play) is clunky, and has no sense of the history of this iconic brand. And the colors, while technically eye-catching, are garish and unrefined. 

This feedback isn’t particularly constructive and we can discuss subjective opinions about design all day. But the real barometer here—the one that matters more than anything else I’ve said—is will this update help Anchor right the ship and sell more beer?

Maybe Anchor knows something that we don’t, and this was the right move.

And as a fan, I hope they do.

If you’re thinking about launching an extension in 2021, you need to consider what role these products play in your portfolio and how your current positioning helps, or hinders, their chances for success. 

Let’s look at 2 examples—the specialist brewery and the generalist, both planning an extension.

1. The Specialist Brewery

If you’re an all sour brewery (and renowned for that), releasing anything other than sour beers can harm that positioning. You want people to think of your brewery when they want a sour beer. This example can apply toward any brewery that is known for a singular style—lagers, Belgians, functional better-for-you beers, barrel aged beer, etc. In this case, it might make sense for the sour brewery to create an entirely new brand—name, identity, packaging and website—for this hard seltzer. 

2. The Generalist Brewery

If you’re known as a generalist brewery, you have more flexibility in what you can produce because that’s what people will come to expect. Releasing a Pils one week and a Baltic Porter the next are the norm and would, in a way, give you more leeway to release a hard seltzer under your parent brand (because you’re not known for any one thing). In this case, it could* make sense to launch the hard seltzer under your current brand.

*But even this isn’t always the right choice. 

We’ve found that Brand Architecture isn’t black and white. Even when building fancy decision trees and rule sets, a decision should be weighed just as much against your core values, market opportunity, demand, and your parent brand’s positioning. 

We’re working on a cool resource to help breweries manage this process. Stay tuned, more on this later in 2021.