As I wrote in my previous post, the cannabis world is receiving a lot of interest from the multinational alcohol suppliers. And for good reason: not only do these global companies have decades of experience and relationships in heavily regulated markets, they know how to build brands and IP that generate long-term revenue. As the market develops, competition will heat up; potentially challenging mid-level producers the most. In light of that, today I’m sharing seven more insights cannabis upstarts can borrow from alcohol beverage marketers.
6 - Go local, but be bigger than that - Local brands are important. Everyone wants to support the local person’s new business. And that can work really well . . . to a point. If you build your brand on only local values, how can you expect to go national? Local craft beer and craft spirit brands are struggling to break past local/regional success because as they grow, well, they start bumping into the next local/regional success. You don’t need to go to Whole Foods to know those shelves are getting crowded. And if there’s nothing that sets a brand apart other than their locality, then . . . well, you get the point. Use your provenance to your advantage if it’s special, but develop a brand with national potential.
7 – Or don’t – The above advice holds true if you aspire to build a brand with regional or national appeal. But what if you don’t? What if you just want to be big enough to support a good standard of living for you and your family? Perhaps you value maintaining the long-term control of your company over a high value exit with a big payout. Some beer and spirits suppliers are recognizing that ‘bigger’ doesn’t always mean ‘better’, and that the definition of success can evolve past simply ‘more income’. In an interview I did with Scott Vaccaro of Captain Lawrence Brewing he talks about how he isn’t interested in selling his brewery, but rather “getting to a point where we can run efficiently and run a sustainable business, not just growing for the sake of growth.” Success is different for everyone. Decide what YOU really want and pursue that.
8 - When it comes to innovation, follow the little guy - Much of the innovation in spirits is driven by entrepreneurs. Generally speaking, the multinationals aren’t set up to facilitate the nimbleness and determination required to start a new brand, but they’re there to acquire you and help you scale when you’ve hit a certain threshold. It took the craft beer movement to upend big beer (but there’s no shortage of consumers willing to shell out 16 bucks a six-pack). When you’re starting out, you can take bigger risks, implement a ‘test and learn’ mentality, and leverage patience and persistence to see an early stage company through the rough patches. Use your smallness to your advantage – don’t follow the trends, start one.
9 - Stay ahead of the curve on social. As a broader culture, it's no secret we just haven’t figured out social yet. The pace of development of technology and content is happening faster than regulators can keep up with. DISCUS, the Distilled Spirits Council of the US, has tried to create standards for marketers to abide by. Yet, not all spirits marketers abide by those rules. I’m not saying it’s easy, but perhaps cannabis content marketers can figure out a way to lead the conversation in a socially conscious way that works for both marketers and consumers.
10 – Don’t skimp on the packaging – In the excellent book Beer School, Steve Hindy, co-founder of Brooklyn Brewery, says one of the best decisions they ever made was to not settle on a logo and identity that wasn’t perfect. Their patience and determination ultimately led them to discover and hire the legendary Milton Glaser to design their logo. When you’re establishing your brand identity, don’t compromise. Find something distinctive and remarkable. If design isn’t your strength, let someone who has that talent guide you. And once you’ve got a great identity, make sure it extends throughout all your packaging. In a world saturated with microbrands, great packaging and the marketing collateral that goes with it (t-shirts, website, socials, etc.) is table stakes for winning the game. For a good example, I’m really liking my friends’ new brand Weekenders Cannabis.
11 – Own Home – Your first test as a brand will be to win over your local market. Can you win the hearts and minds of the people you see – and who see you - every day? Can you convert the majority of your locale into advocates for your brand? If not, you won’t have the credibility or the resources to expand into new markets and support them once you’re there. Go deep before you go wide.
12 - Get involved in your community – Small companies can leverage their small marketing budgets by spending it in the community they serve. Word-of-mouth is still the most powerful form of marketing, and creating relationships and sampling products at local events helps generate genuine positive sentiment amongst your local customers (This is why you see so many alcohol sponsors at festivals, running races, fundraisers, etc.). In the early days of a brand’s growth, this one-to-one connection will do more than any flashy advertising to create a strong following for your brand. Depending on regulation, the sampling part may be tricky for cannabis marketers, but that only challenges you to find other original ways to support and build trust in your community.
These twelve ideas are just a few highlights from our experience in the beer and spirits industries. By and large the beer and spirits world is a fun one, and I’m sure cannabis marketers will include a healthy dose of that in their efforts, too. We’re looking forward to seeing how things shake out in the next few years, and just how big the upstarts and innovators in the cannabis market can dream!
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