Neshaminy Creek Brewing Company would not have survived the pandemic by continuing with the status quo. Heck, the Pennsylvania brewery was on the verge of bankruptcy before the pandemic.
“I quickly realized ‘wow,’ I had no idea what I was getting into,” says Jenna Ball, now CEO of Neshaminy Creek, assessing the situation at Neshaminy Creek when she started as a director. financial in June 2019. “These guys are like very close to bankruptcy, right there on the brink, and we have a lot to figure out to live on just to fight another day.
Neshaminy Creek is a production brewery, but not of a ridiculous size, with a 15-barrel brewhouse, producing 10,000 barrels a year. They have the ability to reduce or increase quite quickly depending on the situation.
When Rob Jahn was 25, he was one of three co-founders of the brewery. As head brewer and production manager, he was not always aware of day-to-day finances, which were starting to spiral out of control. Decisions were made to make Neshaminy Creek a 70,000 bbl brewery and give some public appearance.
“In the past, the vision for the brewery was ‘grow, grow, grow, grow, grow, grow’ in any way possible, let it be the right decision at the time. We were selling a huge amount of beer and growing, but we took the economic hit of the business with the expectation of growth,” Jahn said.
It’s an easy trap to fall into for a production brewery, which started in a different era, pursuing ridiculous growth targets as a way to make margins work.
Speaking with Jahn and Ball on Google Meet, it’s obvious that Jahn and the brewery are in different places than where they started.
“The learning curve over the past 12 years has been incredible,” says Jahn. “There was a business plan, with the laws in place, the competitive landscape being what it was then… things have changed, and we have to change with it. Many decisions were made with this growth trajectory that was no longer realistic with the amount of competition that entered the market.
Neshaminy Creek has since righted the ship. Here’s how they did it.
Pursue growth “in the wrong direction”
Here are two examples of continued growth in the wrong direction:
1. Go wide instead of deep: To expand into as many territories as possible, Neshaminy enlisted numerous vendors in Pennsylvania, Maryland, Delaware, and New Jersey—13 in total—none of which were self-distributing.
“We were paying somebody to build these territories, to make sure we hit the CE rate, but at this point, from the fifth to the eighth year, the number of breweries that were opening in these territories and across America, the ability for a small production brewery, for us, to grow to that size was just not a realistic goal. Since then we have calibrated and our sales team is working closely with our channel partners,” said Jahn.
2. Marketing by emotion and not ROI: In terms of marketing, well, just found out that in 2020 they spent “$60,000 on a freaking billboard,” as Jahn put it.
“We’ve learned that there are times when you want to go big, but what you really need is to stop and check whether or not it will create the direct impact you want. We now know that being more targeted with things like logo t-shirts and caps for big accounts will go further and build loyalty. We could have spent the money smarter to help us grow.
Thirty years ago, a billboard could have been a great way for a small, up-and-coming operation in a less crowded field to achieve these goals and stand out. In 2020, in the world of social networks and some 9,000 craft breweries? Unless your brewery is printing money, this billboard is a marketing blunder.
New direction, new vision
“I spent a lot of time thinking about how Neshaminy Creek got here,” Ball says, asking like me, “How did we get to this perilous position when we were selling so much beer?”
Ball does not come from a brewing background, previously working as a controller for a medical device and technology company in Baltimore. After she and her family moved to Bucks County and she was ready to get off maternity leave, a recruiter pointed her towards a CFO opportunity in Neshaminy Creek.
Jahn immediately wanted to hire Ball, but the feeling was not immediately mutual.
“I didn’t know if I was going to be a good candidate. Branding at the time didn’t necessarily feel like it resonated with me. But in my interview, I asked Rob ‘which breweries do you really admire and would like to emulate?’ and he mentioned Allagash. I thought, if that’s what you’re looking to build, I want to build it too.
Almost immediately, Ball was moved from his role as CFO to CEO.
“She really organized this chaos in a relatively quick way,” Jahn says, immediately getting into motion:
- A cultural shift
- A coordinated effort on social media
- A quality rebrand
- Securing relationships with wholesalers
- Keeping prices stable
What does “culture change” look like?
While the billboard was there marketing to a wide audience, back at the brewery the workplace was clearly aimed at one group.
“I walk into this workspace, and it’s an intimate and fun brewery environment, but it’s still a business, and there are inappropriate designs and posters everywhere and, yeah, I don’t like it. that,” says Ball.
There haven’t been any major inappropriate behavior scandals to report, just that pervasive and often oppressive boys’ club culture that exists in far too many craft breweries and nearly every male-dominated industry.
“We needed some serious changes, and we made them, and we continue to make changes as we go along because not only does it align better with personal values that Rob and I and our management team might have, but it’s It’s also just a better, more inclusive business. Because let’s be honest, the goal is to sell more beer. And you do that by creating a bigger, more diverse audience that feels welcome and wants to be a part of what we do,” says Ball.
“If Jenna hadn’t seen that we had the will to grow as a company, she wouldn’t be here,” admits Jahn.
And listening to employees and the management team is an integral part of this culture change. In the past, it was all about leadership making final decisions and missteps. Then their missteps multiply and worsen over time.
[Our staff] “are good at what they do, and if they have a point of view on something that I don’t personally deal with every day, whether it’s supply chains or something from a brand perspective , we’re all collaborating and trying to get each other’s points of view,” says Jahn.
Change in growth strategy
Neshaminy Creek will still be a production brewery, but the ambitious growth plans are more in line with the reality of the industry in 2022: “We are at a point where we are ready to expand and we absolutely want to increase our number of taprooms . I would love to see us open several more taprooms,” says Ball.
Taproom’s revenue accounts for around 45% of overall business. But sure, in terms of margin, taprooms are “pretty cool, yeah,” as Ball puts it. Only 10-11% of overall production goes to drinking places, so there is enough capacity to continue growing in drinking places. “We’re in this unique in-between space where we were originally built for mass production, but then we incorporated the local consumptive room element, and I think we’re actually positioned to have a huge advantage because we we can supply so many consumption rooms with what we can produce,” Ball says.
On the sales side, they’ve reverted to three reps, one in Philadelphia and two in New Jersey (although sales and marketing manager Kyle Park and Jahn occasionally show up on accounts).
“It is essential to be present in our national markets. Distributors have so many other brands they represent as well,” says Jahn. “You have to be an ambassador to your own distributors to get airtime because they all have a million things to do. Why are they going to see our name first out of their mouth if they have someone’s ear? »
This is to be an asset for the representatives of the distributor. Another great way to refresh that relationship is to change your own branding.
Brand change decisions and shelf appeal
The money spent on advertising is much more coordinated these days than it was in the past. With a new management team and a new philosophy came a new brand image.
“We had some really cool artwork, but that doesn’t always translate to good marketing effect on the shelf,” says Rob. “We kind of wanted a transition from the old cartoon-style illustration to a more mature approach to the graphic novel. It wasn’t too much of a departure, just a more grown-up version.
It goes back to the idea of inclusivity – gathering more opinions and involving more people in decision-making. This includes distributors, Ball notes:
“If you just have your own tunnel vision, you can create something really cool and beautiful, but you also want everyone who needs that piece of art and relies on it to also have their eye on it,” she says. “If they say, ‘hey if you position it this way, I won’t know how to orient the can on the shelf.’ So we really went through a thorough process and got a ton of feedback, lots of revisions and I’m extremely proud of what we’ve put together.
Neshaminy Creek’s renaming is only six months old, but sales of its core brands are growing.
“It works. Our numbers are definitely up,” says Jahn.
Set the 12-year history of Neshaminy Creek in Pennsylvania—from inception to opening to rebranding—to the tune of a fun, fast-paced 2010s jam, and you’ve basically got a montage of the evolution of the craft beer business model and industry culture over the past decade.
With the mount behind Neshaminy Creek, it was time for a party and a high-five freeze frame. Neshaminy’s birthday party did the trick, and more, which caught our eye and ear for its impressive guest list and fun activities.
“We have to constantly evolve, change and mature,” says Jahn, summarizing each change the brewery has undergone – from finance to branding – as an overall maturing process. “We’re still dealing with offshoots of the past, but with the evolution of what we’ve been doing over the past three years, it might as well be a completely different brewery.”