Expansion dilemma brews for Garrison

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Garrison Brewing Co. had to temporarily shut down production a couple of months ago – but not because there wasn't enough demand for its beer.

Rather, there was too much. So the award-winning Halifax-based craft brewer stopped making beer for a few hours to replace its tanks with larger units that would expand production capacity by 50 per cent, up to a total of 2.5 million bottles a year. It was Garrison's third upgrade in the past three years.

"We're steadily growing by 25 to 30 per cent each year," says Brian Titus, owner of the privately held company, which opened its factory and beer store 14 years ago and has become well known in Nova Scotia for its unique seasonal brews, ranging from a beer made with Nova Scotia maple syrup to a holiday ale brewed with spruce and fir branches and sweetened with molasses and dates.

"Part of our brand is that we're always coming out with something new, and our customers expect it," says Mr. Titus, whose company has 35 employees. "As a result, we now have more than 20 brands of beer."

That's worked well locally. But now that Garrison is on an expansion track outside the province, all those choices are creating a challenge. With Garrison's sales and distribution network rapidly expanding, Mr. Titus needs to figure out the best way to manage and sell his company's wares in these new markets, where most people have never heard of Garrison beer. And unlike at his beer store, where every shelf is dedicated to the company's products, the liquor stores in these new markets have only so much shelf space allocated to the Garrison brands.

Last September, Garrison entered Ontario with one of just seven brands it produces year round, which it also began shipping to Alberta and Manitoba at the start of this year (Mr. Titus expects to soon be selling in other western provinces).

So what's the problem? From a production perspective, it makes sense for Garrison to export only its year-round labels. The seasonal brews, produced in small batches, are not really the big money makers. "They divert production time and money from our year-round brews," Mr. Titus says.

But Garrison has built its name on its unique seasonal draughts; if he only sells year-round offerings and not what makes his company stand out, Mr. Titus fears they might become a "blur on the shelves." That's no way to build a name, and recognition, outside the province.

"Logic dictates that we should always be putting our flagship brands wherever we go," he says. "But you have to remember that similar products are being done very well by other breweries."

The challenge: With strong demand straining its production capacity, Garrison must decide whether it will focus its out-of-province exports on its year-round brands – which are easier to produce but are similar to other brewers' products on liquor store shelves – or push the less-profitable seasonable brands on which it built its name. It's a critical decision that will define Garrison in these new markets.

THE EXPERTS WEIGH IN

Garland Chow, associate professor, supply chain management, Sauder School of Business , University of British Columbia, Vancouver

Garrison can probably easily forecast the demand for their basic brands. In contrast, they have all these rotating and new brands that are harder to forecast; this is where they'll run into production problems if the liquor boards in other provinces decide they want to put these on their shelves, too.

However, Garrison doesn't necessarily have to go out and sell to satisfy the market to the last bottle. In fact, they might want to limit the amount of bottles they produce to create some sort of a snob effect, particularly for their seasonal brands. The clothing retailer Zara does this very well; people know that if they see something in the store, they better buy it now, because by next week it will be gone.

Another thing Garrison may want to think about is contracting out their brewing capacity. This way, Garrison can expand their capacity without having to make a capital investment. But if they do this, they will want to keep a very close eye on the production process and quality. They're known for making beer a certain way, so they need to make sure the other brewery follows their process exactly.

Axle Davids, brand marketing technologist, Distility Branding , Toronto

The best brands don't try to be all things to all people. Rather, they sacrifice for the sake of creating an extra-potent brand.

Whether Mr. Titus decides to focus on his year-round brands or his seasonal brands outside of Nova Scotia, he needs to build a master brand that will stand out from the other brewers and be recognizable to consumers. Looking at his website, I noticed right away that the logos on his beer bottles fail to create a consistent brand. Mr. Titus has to have consistent logos across all his brands, and the Garrison name has to be prominent.

He also needs to get together a very high-level message about his brand – a one-page brand strategy that says, "here's our target customer, here's our brand promise, here's what makes us different, here's the rest of the brand attributes." Then he needs to make sure the liquor boards understand this brand strategy and adhere to it.

If Mr. Titus doesn't take the critical step of defining his company's brand outside Nova Scotia, the risk here is that other marketers – specifically, the ones at the liquor control boards in the other provinces – will define it for him.

Adine Fabiani, brand manager for premium wines, Andrew Peller Ltd. , Grimsby, Ont.

Brian Titus has a great thing going in his province because he is succeeding with both niche and mass products. How can he replicate this success outside Nova Scotia? One idea is to sell the brands that are making him money through the liquor boards while launching his niche brands through restaurants.

At the same time, he can get some marketing activities going in the restaurants to build his master brand, with visibility items like Garrison coasters, branded glasses and T-shirts that servers can wear. He can create a tasting program in the restaurants, or run a contest where maybe the winner gets to go to Halifax and tour the brewery.

Then he can leverage that recognition to drive success at the retail level. So when people go to the liquor store, they'll know the Garrison brand and his year-round brands won't be lost among the competition.

The best way for Garrison to help the liquor boards help them is by making sure their brand stories are concise and easy for people to understand. They need to figure out what is relevant in the new markets they're entering and form their brand stories around that.

Garrison also needs to work on having a common brand look so people know right away that they're buying a Garrison product. That signature look could be a particular colour, a bottle shape, or a certain foil. Whatever signature they choose, they need to be tight and consistent with it.

THREE THINGS GARRISON BREWING SHOULD DO NOW:

Create a stronger brand message

Put together a one-page brand strategy. Rethink the look of products and logos to be more consistent and recognizable.

Roll out the barrel in restaurants

Sell year-round brands at liquor stores outside the province, and put seasonal brands in restaurants. Create a buzz through marketing activities.

Look into subcontracting production

Instead of making another capital investment to expand brewing capacity, consider contracting out production to another brewery. But make sure you keep a close eye on production quality.

Special to The Globe and Mail

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