In part two of the conversation, Jon interviews Micheal about how Deschutes views growth and marketing in the modern world of craft beer. Michael believes if you aren't growing your dying because of the rising costs of making beer. He talks about the biggest changes he's seen in marketing over his career, the marketing KPIs they use to measure success and the surprising way Deschutes views their 'competition'.
Show Notes
Michael talked in depth about how he views growth, marketing and competition. The reality is,
"If you don't grow, you die in the beer business." - Michael LaLonde, CEO, Deschutes Brewery
The status quo isn't an option for Deschutes and craft brewers like them. But, finding ways to continue to build a brand and invest in marketing when attribution is sometimes non-existent isn't easy. Michael goes into specifics around how they face these challenges as an organization.
Why if You Don't Grow You Die in the Beer Business
The costs of making beer are rising faster the beer prices. The only way to survive is to continue to find ways to improve gross margins.
The Biggest Change to Marketing According to Michael
Focus groups don't work. The consumer no longer behaves like they say they will when in a focus group. This means they have to do more experimenting in public and can't really predict what will happen.
The Marketing KPI's Deschutes Uses to Make Decisions
They look at Net Promoter Score and a few metrics to judge brand awareness but one unique to Deschutes is 'purchase frequency per household'. Even a small percentage shift in that KPI is a huge win for their company.
The Non-KPI Goals Deschutes has for Their Marketing Efforts
Michael wants their marketing to focus on the stories and values that make them who they are as a company. If their videos and content are doing this they are on track.
Michael's Biggest Struggle With Marketing
There is no ROI or it's almost impossible to see the ROI of any one marketing effort vs another in the beer world. Deschutes has had to make peace with certain blind spots in their tracking.
The Surprising Way Deschutes Views Their Competition
There are 7,000 breweries in the U.S., one in every congressional district but Michael views their competition not as other craft brewers but the non-craft breweries that still make up 85% of beer sales.
Why Deschutes has Never Purchased Another Brewery
Management has evaluated a few potential acquisitions but Deschutes has always felt their clearest path to growth was focusing on how they could get better, not adding new breweries.
Why Deschutes Has Never Sold
Michael discusses how the values of their founder still feed the decision to stay independent today.
Taking Over for a Legendary CEO
Being mentored by Gary Fish and what he learned from the way he ran the company was huge for Michael. The biggest lessons he took from Gary were to question everything along the way and don't be afraid to always ask why.
How Deschutes Grooms Their Future Leaders
Promoting people from within means nurturing them along the way. Michael uses his one-to-one meetings with his direct reports and people throughout the company to ensure that they are always thinking about the next generation that will lead the company.
Sending Employees to Work at Other Companies to Learn
Deschutes has a really cool employee swap program with Clif bar and others that let Deschutes employees do a tour of duty at another company to gain perspective. Michael thinks that it's a great way to see your own challenges through a new lens.
Podcast Recommendations
Michael loves listening to podcasts. his favorite right now is "How I Built This". The podcast covers stories from founders and CEOs about building and growing their companies.
Reach out to us with any ideas, questions, or feedback on the podcast!
✉️ Nicole@shape.io
✉️ Jon@shape.io
What is Shape the Conversation?
A shape.io podcast hosted by Nicole Mears and Jon Davis. Broadcasting from Bend, Oregon.