Friday, July 20, 2012

Reading the Beer Leaves

Whether or not you are a beer drinker, there are some interesting lessons from looking at what is happening in that business.

Back in our grandparents time there were lots of little breweries, beer gardens, local and regional brands. Then little by little, a few big breweries became the dominant players, buying up some of the smaller brands and adding them to their product line while other small brewers went out of business and a few others managed to survive as marginal players. The three biggest companies sold most of the beer in the whole country.

The dominant beers became pretty bland as they used the power of advertising to make light beers the most popular items.

But then during the last 20 - 30 years, small companies sprouted up all over the country, drawing on classic recipes for making beer, sometimes adding new twists like fruit flavorings, but often simply reverting to a greater emphasis on traditional ingredients like hops and in some cases using locally grown hops and other ingredients to make their brews.

The new brewers must be doing well in terms of creating profitable companies and new jobs because some of the more successful ones are expanding capacity, opening additional plants, expanding distribution.

The taste of the products from the microbreweries has created a loyal and growing fan base. Beer tasting festivals have become very popular events. Brew pubs where a person can taste the various offerings made right on the premises have become popular restaurant destinations. I know for myself that if I go to a party and all they have is light beer, I'll opt for water instead. I really enjoy the classic flavors, with a penchant for pale ales myself.

We may see a time where the situation devolves to the point where a growing portion of the beer consumed comes from the small breweries rather than the few giants. So the industry may come full circle again.

This observation may offer hope and inspiration to many entrepreneurs. Just as a growing market share wants produce from organic farms, and growing numbers of beer drinkers savor the flavors from the microbreweries, think of other businesses where this same model may work.

Some business that you might like to be in may be dominated by a few big players, but there is always room for people who doing things very well and only serve a small part of the market. With time and effort that small part of the market can grow. And in time, industries can shift away from a few giants to a number of smaller players.

Think about ways that can work for you.

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