Believe it or not, Craft Beer, or the very business of it, is just like any other business. It’s sole purpose is to create profit through the production of successful products. It is not there to make friends with everyone it meets along the way. It will however make friends along the way, but not in the way of ‘Hey, this is my new DIPA, buy it and I’ll be your friend forever’ It does it by saying ‘Hey, this is my new DIPA, buy it, enjoy it, and then I’d like you to buy the rest of my beer’ Which of course, is exactly what you do.
You do become friends, but at no point during this process does it permit you, or anyone else for that matter, to claim any form of ownership of the brewery, business. However, the merest of contact with the beer turns instantly into perceived ownership. You’ve touched it, held it, tasted it. The haptic sensation of holding the beer in your hands, it’s yours, or at least you think it is.
The successful brewery, which it is now, as you’ve drank all of their DIPA and moved on to the rest of the range, is turning a massive profit and generating some interest from who you may perceive as being outsiders. Which of course they are not. They are people from within the same industry, who see your favourite new brewery causing a stir by producing some great beer, and like any savvy businessman, they want a piece of it. The equally savvy owner of your favourite new brewery sees this as a potential for investment, a way to further improve his product and expand the brand he has worked so hard to create.
Now, he can do one of two things, reject it or take it. Rejecting investment can be detrimental to your business, however, it could earn you some further respect from your hardcore fans who have stuck by you throughout your growth. This respect is good, however, respect alone cannot make your business profitable. Investment and future growth will make your business profitable. This growth, however, can only be achieved if your product is good and you have loyal fans to support your product. Now you can see it all needs to come together, or at least in the following order; good product, loyal fans, investment and future growth.
Your loyal fans may end up criticising your decision to expand, they shouldn’t though, as truly loyal fans should welcome and embrace this investment and see it as an opportunity for you to grow and fulfil your dream as a successful brewer, businessman. In return for their support, you will continue to produce great beer that will continue to be loved.
There are of course other forms of investment, including crowdfunding. This is a great way to draw in funds from eager fans willing to donate generously to your cause. It’s a great way to achieve that short term goal which will assist the growth of the business. It will also bring your fans closer to your business and its development, thus solidifying its place in the market.
What crowdfunding lacks however, is the financial clout and potentially limitless expertise and knowledge that only experienced and seasoned investors can bring. Another thing that crowdfunding can lack is the potential to spread your brand and its products to a larger market. The large investors however, are professionals at this and your product could literally be catapulted into areas of the market that would previously have been beyond your reach. Areas of the market where people still respect good beer, but are not caught up in the politics of what may or may not be craft. They just want good, reliable, consistent beer that satisfies with every sip. Something that your favourite new brewery is good at and will be even better at once it has a little injection of investment from the correct place.
There is another issue with crowdfunding. It is as follows, ‘why should you invest in a company that is quite clearly profitable, and why aren’t they using their own profits to develop their own business? Usually a profitable business develops itself by reinvesting its profits to further increase its growth. So why would it need crowdfunding?
In addition to the above forms of investment, there is another option. The owner of your favourite new brewery could approach the investors on Dragons Den. If you saw your favourite new brewery on Dragons Den pitching for an investment to fund larger premises, which would allow for an increase in brewing capacity to keep up with demand, how would you feel?
There is one more thing to consider too. Put yourself in the shoes of your favourite new brewery. You’ve worked hard to set up your own business, created some amazing products and have amassed a base of loyal fans. All of which hasn’t gone unnoticed and some pretty keen investors are on your tail. What would you do?