In our last Brewer’s Blog we discussed New Product Development and we got through the part where we brewed a nano batch (1 BBL) of a new recipe and we liked it. That brings us where we are in this blog, Part 2 of New Product Development. In Part 2 we will discuss briefly the NoCoast process and challenges of scaling up a recipe, test marketing, developing the branding/packaging of the product, and distribution.
Scaling Up a Recipe
Scaling up a recipe is the process of converting an existing recipe for a specified volume into a recipe for a larger volume in such a way that the larger volume product tastes the same as the smaller volume product. If 1 lb of ground beef will feed 4 people, how many lbs do I need to feed 20 people? This is the part of the process that you don’t read much about, especially on homebrew blogs. Why would a home brewer want to scale up? They usually are designing and refining their recipes on the scale they plan to brew on indefinitely. But our goal at NoCoast is, of course, to produce our beer on an industrial scale, or at least on the scale of our current brewhouse. So, going from a nano system (1 BBL) to our brewhouse (20 BBL) is ultimately our goal. Simple, right? If there’s 50 lbs of malted barley in the 1 BBL recipe then I just need to multiply that times 20 to get my 20 BBL recipe or 1,000 lbs. Right? Wrong! If only it were that simple. There are numerous issues that need to be navigated in order to properly scale a recipe. Differences in mill settings, mash efficiencies, grain to water ratios, grain absorption, variations in temperature, length of time to dough in, mash out, and transfer, whirlpool characteristics (time and intensity), and knockout time, to name a few. I will not discuss each one of these issues here, but suffice it to say that all of these issues are highly equipment and brewhouse dependent and require experience with a specific brewhouse in order to gain any amount of proficiency. Obviously, the more experience you have the shorter the learning curve, but it still takes some trial and error.
Fortunately, brewing software helps to shorten the scaling process considerably, but any experienced brewer will tell you that the software is just a tool designed to get you close. It is the brewers experience and knowledge of their specific equipment that is needed to make the scale up process go smoothly. We at NoCoast use Beersmith to design and scale our recipes. As a home brewer I used Brewer’s Friend. There are many others out there. They each have their advantages and disadvantages, things they do well and not so well. But the key, if you are a home brewer, is to pick one, use it, learn it, and make it work for you and your recipes.
OK….Moving forward several weeks, we scaled our recipe, brewed it for the first time and TADA! It is exactly like the nano batch we brewed (which never happens). What now? Well, we know we like it, but does anyone else like it. Time for some test marketing.
General idea. Package the beer in something as cheap as you can (kegs are usually used), and sell it at local preferred on- and off-premise accounts. At NoCoast, we also can our new products in our XCoast Experimental Series cans for distribution to grocery stores and other off-premise accounts. These are 16 oz cans with hand written labels. They are distributed to local establishments, as are the kegs, so we can keep a close eye on how the product moves, who’s buying it and what the sales rate is. We also do tastings at those stores and bars to get direct feedback on the beer.
We usually do a couple of batches and test market at various times of the year and at various accounts, but once we determine the demand is high (based on continued requests for more beer), we consider making it a regular beer and then the real marketing and branding kicks in.
Often at this point we have not given the beer a name. Naming a beer. What can I say about naming a beer? Giving a beer a name can be as democratic or as totalitarian as you want it to be, but I would describe our process here at NoCoast as more of a stream-of-consciousness spewing of related or unrelated words until something sounds good and, in some way, resembles the product. Then we have to make sure that no one else in the world streams their conscience the same way we do. This involves some Google searching. More often than not, we find that no one in their right mind would think the same way we do so we are usually good to go.
Packaging – This decision has usually already been made based on the equipment the brewery has invested in. At NoCoast, we can our beer, but many breweries bottle. This is a marketing decision that has been made a long time ago, but there are those occasions where the style of the beer may justify a deviation from the normal branding. At NoCoast, we have ventured into 22 oz bombers for some of our barrel-aged products, but at this point, this packaging is somewhat experimental for us.
Label Design – Whatever you package your beer in, it needs a label. Label design is one of those areas where you can spend as much or as little as you want. Graphic designers aren’t cheap, but they know what they are doing and are well worth the money in the long run. It is important to maintain a consistent look across your products unless you are producing a line of beer that is designed to target a different demographic. Then you might want to distance it from your regular lineup.
That being said, once the graphics are done, then the regulatory gods kick into high gear to make sure you are not committing any regulatory sins. Actually, the regulations for labels are quite variable by state and if you only intend to sell your beer within the state it is manufactured, then state laws are your only concern. But if you plan to cross state lines, then the dreaded Tax and Trade Bureau (TTB) steps in with their COLA (Certificate of Label Approval) requirements. Everything from font size to government warnings. It is actually not as bad as you might think. Once you have done it a few times the process can become quite painless and it has gotten much more responsive over the last few years with approvals only taking about 10 days (it used to take months). Once designed and approved, the only thing left is to make and package the beer. The last challenges are sales and distribution.
Once the beer is made then all you have to do is sell it to your distributor and you start rolling in the dollars, right? Wrong? Sales are where the real work begins and distributors, for the most part, won’t do nearly as much work as you think they should when it comes to selling your beer. The truth of the matter when it comes to distributors, especially distributors for the Big Beers (Miller/Coors, Budweiser), is that your craft beer just won’t have the volume or the margins to demand their attention. They can make a lot more money selling domestics because their margins are higher and their volumes are much higher. This can all be different if you can find a craft beer distributor that is independent from the domestic distributors. A distributor that makes their money marketing, selling, and servicing the craft beer industry is really the only arrangement in which your distributor will actively “sell” your beer. At NoCoast we move that direction when we can. In Iowa, we distribute through Mahaska and in Texas we use Full-Clip. Both of these distributors are craft beer only distributors. Unfortunately, a craft-beer-only distributor is not always available, so you have to do what you can. What is needed is a serious discussion of the 3-tier system for beer manufacturing, distribution and sales, but it is a complex issue that might be the subject of a future blog.
But for now, we conclude this 2-part blog on New Product Development at NoCoast. We hope you learned something about the process in general, but more importantly, we hope you know a little more about who we are here at NoCoast Beer Co. Cheers.