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Today I want to talk about the House of Brands. 

This is a common Brand Architecture model amongst larger beer & beverage conglomerates (Molson Coors, Boston Beer, ABI, Diageo, et al.) where having a diverse line of products that span multiple categories, price points and distribution territory adds up to a robust portfolio.

But over the last few years, we’ve seen more of our smaller* craft clients lean into the House of Brands model as well, by launching targeted stand alone brands (e.g. a light beer brand, an RTD cocktail, a spirit brand, etc.).

*Note: smaller in this case can be anywhere from 1k bbl to 20k. They’re smaller relative to ABI. (Aren't we all?)

So this is a broadly applicable approach. 

Let’s start by defining the House of Brands and then get into some possible use cases for your brewery as well as some important caveats to be mindful of in case you think this is a good approach for your next product launch.

(Above): Read more about the House of Brands Architecture model here.

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What is a House of Brands? 

A House of Brands architecture is a collection of (mostly) disparate, independent brands with little-to-no ties between each other or to a corporate brand.

In this approach, each brand has its own value proposition, messaging, and positioning, and is completely independent as far as the consumer is concerned. 

And a quick note: We say “corporate” in this case because “parent” denotes some manner of a relationship with an extension (e.g. You extend your parent brand when launching a Sub or Endorsed Brand). In a House of Brands model, there is no parent brand connection whatsoever.

This approach allows you to target different consumers and segments with niche brands and products that are tailored to their specific needs and values without competing with other brands in the portfolio. This makes for a more robust overall business.

Traditionally the stock and trade of mega corporations like Procter and Gamble and Unilever, this can be a valuable concept for craft breweries to employ depending on their product mix, volume and sales goals as well.

(Above:) Prominent portfolio brands (House of Brands) from big to not-quite-as-big (but still kind of big). While we're here, I predict that we'll see a rise in Holding Companies over the coming years that spin up expressly to purchase and produce Legacy Brewery IP. 

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Benefits & use cases for a House of Brands model 

A House of Brands approach allows you to offer products to highly-targeted niche audiences without worrying about how to adapt your parent brand to the task

By creating an entirely new brand, you are free to explore each product individually under a House of Brands model without being governed by (or concerned with) any of your parent brand’s equity. Each product is able to have its own unique value proposition and attract different customer segments. And none of this will be confusing, because you are not beholden to a broader brand narrative. 

You can have a functional beverage along with a hard cider and an Imperial IPA and an NA beer in the same portfolio and no one will bat an eye (because they’re not positioned as being part of the same family). 

You can quickly seize market opportunities because you bypass all the work (and worry) of making sure your parent brand works in a new context.

The House of Brands approach allows you to be more agile, rapidly executing on new opportunities without considering what that might mean for your parent brand. You are free to move on an appropriate idea without being encumbered with existing equity or customer expectations. 

In this way, agility can be just as important as having a great product that is correctly marketed and positioned. Being first to market in a particular category can go a long way towards ensuring long term success.

(Above:) Virginia Beer Co wanted to build a light beer brand  that could travel to further afield markets where their parent brand might not carry as much weight. Enter Cold Drinking Beer.

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Caveats


Building a House of Brands can be challenging for smaller breweries 

If the biggest benefit of building a House of Brands model is the speed and ease at which you can bring new products to markets, the main drawback is how inefficient and expensive this can be. 

Here are the two main challenges a smaller outfit will face when trying to build a House of Brands.

A House of Brands is costly to build 

A House of Brands takes a lot of capital to construct because you’re simultaneously building multiple brands. This can start lean, but over time, as a new brand grows, you’ll have to develop (and maintain) new names, brand identities, websites, and perhaps even dedicated corporate structure and staff for each standalone brand.

Simply put, out of all the Brand Architecture models you can use at your brewery, the House of Brands requires the most work, investment and follow-through. 

To give every brand in your portfolio a fair shake basically amounts to setting up structures within your organization that can dedicate bespoke effort to each individual offering. Do not underestimate how much work (and budget) this will take to pull off correctly.

Capacity, capacity, capacity

The second big challenge is capacity. Capital is going to be important no matter what scale your brewery is at, but we’ve found capacity to be a more immediate governor for how effectively breweries can launch new standalone brands. 

For some real world project work, this usually looks like:

A brewery launched a hard seltzer stand alone brand and found that they need to bring it more in-line with their parent brand for marketing budget, distribution and/or consumer mindshare reasons. 

If you’re part of a small team at your brewery—of if you ARE the marketing team—then you may not have the time it takes to properly build a new brand.

(Above:) Sierra Nevada, Minneapolis Cider Co. and Schilling Cider have all released new standalone products over the last few years, effectively shifting their corporate Architecture to a House of Brands. 

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Wrapping up


People aren’t stupid 

Here’s a final caveat that’s not related to capacity and OpEx budgeting. 

A House of Brands doesn’t fully insulate your larger business from blowback. We saw this through the Bud Light fallout in summer 2023 as some of ABIs other brands saw losses and bad comps as well. 

Regular, non-beer industry folks walking around might not know that Twisted Tea is owned by Boston Beer Co. But this sort of knowledge isn’t really hidden anymore. A quick search can reveal who owns a brand. And if you have a big blowup — a PR disaster, a QC issue, etc. — you should expect your fans and the media to quickly spread this info. 

I’m not sure this idea is applicable to you, or any of the other 9,500+ folks who read BBT, but to draw a fine point here — building a House of Brands isn’t an excuse to launch a product that you’re not proud of, or that lacks integrity. 

Anything you put out into the world still needs to adhere to your personal and corporate values.

Otherwise, what are you building?