In March 2019, the Turnaround Management Association (TMA) held a panel called “Challenging Times for some US Beer Companies” where the successful turnaround of Smuttynose Brewery was analyzed. Panelists were turnaround professionals and attorney’s representing all parties in the case of the attempted turnaround which eventually led to Smuttynose changing hands through an auction. A fantastic event, there were many lessons learned and here are our key takeaways from our panelists.
Avoiding large Capital Investment
With improvements in technology and the increasing inter-connectivity of today’s world, a specific type of beer does not depend on the brewery. Recipes can be brewed in any location. In essence, any brewery can brew any beer. The uniqueness of a site no longer matters and smaller operations are more nimble, being able to adapt more quickly and outsource production when needed. Production can be outsourced instead of investing heavily. Avoid large capital projects which are based on meeting future projections.
The drastic change in the sales process
One thing the panelists talked about in great depth was the sales process and how it has changed, dramatically. The market is filled with intense competition. New breweries are aggressively going after the market with new and innovative flavors and are equipped with larger marketing budgets. Sales reps used to court breweries, today’s these same sales reps have a multitude of flavors and prices points to choose from. Staying vigilant and monitoring sales goals and marketing efforts is important to remain competitive.