Thirsty for digital disruption

Thirsty for digital disruption
SparkOptimus TeamKatja Knox
Written by
Katja Knox
The SparkOptimus Blog Team
August 4, 2022

When you think about digital disruption, beer or brewing is not an industry that first comes to mind. However, for an industry as old as brewing, the beer world’s ability to keep up with the times is almost second-to-none. An increasing number of breweries from around the world are beginning to realize that they could learn a thing or two from digital disruptors.

So today, on International Beer Day, we take a look at some innovative technology that is being adopted by the beer industry, and some success stories from pioneers and early adopters who found ways – using technology – to serve customers and consumers better, faster and cheaper.

No stranger to technology

We could talk about how the beer industry is employing artificial intelligence (AI) and Machine Learning to customise and personalise alcohol content, flavour, colour, aroma, and make product development much more viable and faster, but let’s concentrate on what will always be the primary goal of the beer industry: the customers drinking the beer.

The beer industry is forever undergoing adaptations due to a tight job market, climate change, changing drinking preferences, and many other factors. It has long since adopted the use of digital marketing and apps that make enjoying a beverage easier, more social all the while giving breweries real insights into their end-users, allowing them to make data-driven decisions.

Probably the most well-known example is Untappd, a smartphone networking app that allows users to score the quality of beers they’re drinking, see what their friends are drinking and even make recommendations depending on the user’s preferences – thus enhancing the consumer’s overall experience.

But aside from benefiting the beer drinkers, Untappd also helped the brewers and bar owners alike better understand their customer’s purchase behaviours and provided analytics to help them make strategic customer engagement and inventory decisions.

And while we’re on the subject of bars, we’d be amiss to not mention some innovation that breweries that sell their products at scale implemented. Working with us, Heineken simplified the process of ordering their products tenfold with an app.

“The first development we worked on together was a digital app we gave to our customers in Mexico, who are typically family-owned small shops. They were visited once or twice a week by a sales rep and he would take up the order and then it got delivered by our trucks. You can complement the sales rep with an app so they can also order directly themselves.” Jean-François van Boxmeer, former CEO Heineken told our managing partner Alexandra Jankovich during an interview in our CEO stories series. “Everybody has a smartphone. People find it easier to handle things online instead of having to wait for a sales rep. So we adapted to that.”

It’s like we always say: start from customer needs and then translate this into technical and organizational requirements. New technology in itself is not the goal, but when new technology can help to better fulfil a customer need and remove barriers that previously couldn’t be removed, we have a recipe for disruption.

The pandemic pivot

Like many industries, beer and brewing were hit hard by the pandemic: consumers changed their purchasing habits, shifting priorities from on-premise to off, leaving brewers to pivot, and then pivot some more.

The COVID-19 pandemic and associated government restrictions related to the mobility of people significantly affected how much and where, and indeed if, people were consuming beer. According to The Brewers of Europe, COVID-19 measures taken by governments in 2020 have had a disproportionate impact on bars and restaurants, reducing 42% of beer sales in Europe and weakened positive contribution of beer value chain to the economy.

“A shock like this forces businesses to examine every aspect of how they operate, brew, market, treat its employees, etc.,” Mark Hellendrung, CEO of Narragansett Beer told Forbes.

The huge – and probably permanent – shift towards digital brought about by the corona measures resulted in a surge in e-commerce sales across categories. Businesses had to act fast to adapt to new customer preferences in order to recover their revenues.

And the beer industry is nothing if not resilient, and quick to acclimate – so they embraced digital.

A survey by Tavour, an online craft beer retailer, saw over 125 breweries join the platform over the pandemic. According to Tavour, New York’s Evil Twin plans to continue selling roughly 50% of their beer through online channels, while Energy City Brewing in Illinois is prepared to do as much as 80% of their business online moving forward.

Instead of selling their stock to bars, restaurants and retail, breweries are going directly to the consumer. Why is this disrupting the entire industry? Because owning the end-user relationship and data can result in a fundamental profitability advantage through higher margins and better-tailored products and services.

By the way of an example we can look at the boom in beer subscription box services. What are these? Simply put, a beer subscription box is a service that delivers beers to your door on a regular basis. Some beer subscription boxes provide a variety of styles, while others focus on only a few styles or even one style of beer. Breweries like Uiltje have hopped on to the trend, and digital giants like Beerwulf have perfected their offering.

Going where no macro brewery has gone before

Of course, one can’t talk about digital disruption in the beer industry without referencing Beerwulf – or more accurately – how Heineken disrupted the craft beer market without brewing a new drink.

Heineken understood that digitisation was driving a seismic shift in how people connect, consume media and consume products, which led them to launch, through collaboration with us, a broad set of digital initiatives across functions and markets throughout the world, with a view to ‘staying in the game’ and learning along the way. One of these initiatives was an innovative venture known today as Beerwulf.

In Beerwulf, Heineken wanted to tap into the consumer trends of discovering and enjoying specialty beers, and they set out to create a digital platform that enabled consumers to discover and buy beers from small breweries that don’t have the infrastructure to reach wider markets.

From design to build to scale-up, we worked with Heineken to create this corporate venture intending to merge the rising demand for craft beer with ecommerce. And Beerwulf’s popularity speaks for itself:  they now are a Europe market leading player with 1m+ transactions per year – not to mention their achievements granted them the 2018 golden Dutch Interactive Award (DIA).

Where to from here?

It’s quite clear technology has played a significant role in the way brewers make their beer and how people find it and enjoy it. While it’s easy to romanticize the old-world methods of brewing beer, the industry has largely moved on: the beer industry is one of the most technologically advanced industries in the world today. These innovations demonstrate the industry’s progress and huge potential.

But make no mistake: no industry is safe from disruption. However, disruption need not be a threat: it’s a power, and it’s in your hands.

Digital transformations help your business, whether it’s beer related or not, to better organize around the customer through cross-functional processes, relevant KPIs, and digital capability-building. SparkOptimus has supported several leading businesses in designing, building, and further accelerating D2C propositions and Route-to-Market digitizations. In these – usually longer-term – engagements we work shoulder-to-shoulder with our clients, empowering them with the right skills and tools to further accelerate.

International beer day

Want to know more?

Heineken’s former CEO, Jean-François van Boxmeer and Alexandra Jankovich, Co-founder & Managing Partner of SparkOptimus discuss digital initiatives, transformation strategies, innovative start-ups and what it takes to lead in digital as one of the world’s largest brewers: Watch the interview here

Read here how we worked with Heineken to design and build Beerwulf

… and how we helped digitise Heineken’s B2B Route-to-Market

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