Unboxing Twelve-Packs —

When building or expanding a brewing operation, an endless series of decisions require extensive thought into the kind of brewery you want to be. Whether the size of the brewhouse or the sophistication of the packaging line, those decisions will dictate what can and cannot be accomplished moving forward. When I joined Revolution in 2016, one of the first tasks I was handed was reviewing and signing the legal agreement for our first “cartoner”, allowing the brewery to efficiently package 12-packs. That head-first dive into the capital investment required to produce these “multi-packs” at scale lead to a rigid philosophy as to how many craft breweries could realistically compete in this space. But as the pandemic hit and now continues to get worse, nearly every trend confronting the beer industry has been accelerating, causing me to completely reverse my stance.

During the pandemic’s initial pantry loading phase beginning in March 2020, no positive trend caught the bigger craft breweries by surprise more than the rapid acceleration in 12-pack sales. Two areas atop consumers’ minds as they prepared to shelter-in-place were groceries (including beer) and limiting their stops. During this state of anxiety, many consumers were, and still are, looking for a familiar, reliable outcome whether its reruns of The Office or a Two Hearted IPA. With financial uncertainty swirling, most also had their eyes peeled for deals. With a larger pack size comes not only a stockpile of beer, but a couple dollars of savings versus buying two different six-packs.

The core benefits of multi-packs may be obvious, but there’s a number of less talked about, indirect opportunities that can positively impact a brewery’s future prospects. I could have come up with twenty reasons to make a 12-pack, but I love a good theme, so here’s a dozen reasons why every craft brewery should at least be kicking the tires on this package format.

(1) Volume

The most obvious and important reason to consider 12-packs is volume. The resulting boost in sales from a volume (vs. margin) driven product is critical for any brewery looking to grow into or utilize the infrastructure they’ve invested in, continue creating opportunities for their people, and lower costs by adding scale & efficiency to the brewing and packaging process.

For established breweries, certain brands will always be on the uptick, with others trending downward. Going for volume is a means to double-down on what’s working, perhaps in place of a product on a steep decline, and prolong its lifespan by catering to a wider group of consumers. With losses in keg business due to bar, restaurant, and venue restrictions & closures, it’s hard to imagine a faster and more effective way to compensate.

(2) Input Savings

Adding a large pack size to an existing brand will allow for more efficient purchasing of not only the raw ingredients for those top sellers. For small breweries using stickers or sleeved cans, the additional volume could cross into the land of printed cans some day, where the cost savings are massive. The majority of breweries in the US are unable to order printed cans because in most cases, an entire 25-pallet truckload is the minimum quantity that may be ordered. For some, the issue comes down to lack of storage space of that many empty cans and/or the cash flow hit that comes along with buying so much upfront. In most cases though, the brewery doesn’t focus enough on any one single beer, nor do they have deep enough distribution to sell through those 500+ barrels of cans in a reasonable enough period of time.

Graduating to a printed can is a big deal because it’s no more expensive than a blank can, believe it or not, but attaching a $0.15 - $0.20 sticker is no longer necessary. When extrapolated over a case, that’s at least $3.60/case being spent on the stickers alone, often more. For a brewery selling direct-to-consumer, that cost is easy to absorb by capturing full margin. For a brewery self-distributing to retailers, it’s not ideal but still manageable, especially for the more premium-priced recipes. For a brewery selling through the 3-Tier System though, that extra cost could be a deal breaker to making adequate margins.

The introduction of a 12-pack has the potential to vault a brewer toward that printed can threshold or at least greater volume discounts on their labels or sleeves through more efficient purchasing. By strengthening the commitment with can and/or label suppliers, which is especially important during this [hopefully temporary] can shortage, the doors open to greater flexibility in the future.

(3) Narrower Focus

One of the best parts of working in craft beer is playing some type of role in the creation of new beers. That “New New” becomes addictive for both the consumer and the brewery alike, but turns into a never ending cycle of stress around the timing, recipe development, artwork, packaging, communication, transitions, and countless other variables. We’re all guilty of paying to much attention to this “noise”, where we over-index on the small and new, while neglecting the strongest brands that have wide and long-lasting appeal. Taking the number one seller and backing it up with a 12-pack helps naturally establish greater focus and a more proportionate amount of resources applied toward its continued success.

(4) Opening the Door to a Variety Pack

Also scorching hot in 2020 are Variety Packs. With most drinking occasions happening at home these days, a thoughtful assortment has the opportunity to build a specific experience for the customer. Rather than displaying dedication to a single brand, a variety pack lowers the commitment involved with sampling any one recipe, instead catering to different tastes in a single purchase. The mix-pack approach could also see success by featuring an assortment within a style that wouldn’t historically sell well in a 12-pack. Four Hands Brewing out of St. Louis for example is seeing early success with their Stout Mix Pack, featuring a coffee stout, milk stout, and peanut butter stout.

Variety-packs are also the perfect venue to debut new innovations or offer exclusive beers to encourage that bulk purchase, which I refer to as “the hook”. Another opportunity and my favorite of them all, is to use those hooks to also remind the drinker of a classic that they may have been neglecting. During stay-at-home orders, many are looking for predictability in an unpredictable world. Variety Packs have the opportunity to facilitate that nostalgia and breathe new life into the cornerstone of a brewery’s portfolio.

Firestone Walker has recently rolled out an approach that hits on all these opportunities with their latest IPA Variety-Pack. The multi-pack includes their original IPA success story, Union Jack, their 2019 hazy debut Mind Haze, and their recent entry into the low-calorie field, Fly-Jack. These three options cover and highlight the majority of Firestone’s non-805 portfolio by volume, but the final beer is what grabbed my attention. The pack includes a 4th beer from their Propagator Series, named after their R&D Brewhouse in Venice, CA which “sets the pace for what's next from Firestone Walker.” While some customers will be frustrated that they cannot buy the Propagator Series beer on it’s own, this strategy bolsters the value for picking up the 12-pack and helps it pull through.

(5) Wider Customer Base

While the majority of craft beer’s package volume comes in the form of 12oz cans and bottles, a significant number of breweries utilize the 16oz format exclusively. The 16oz format is very much en vogue and, in addition to on-premise sales, appeals heavily to craft’s most engaged fans who I describe as those who follow breweries on social media, attend releases, participate in forums, and skew younger. For many breweries, that audience is all they need to sustain a solid business and there’s no reason to move into the more mainstream, less profitable 12oz size. But as I always say, my mother, who is a frequent craft beer shopper, would never buy a 16oz 4-pack of anything.

Chicago’s Half Acre Brewing was the first brewery I noticed who specialized in 16oz 4-packs, later add 12oz cans of the same brands specifically for 12-packs. They’ve continued this approach for a couple years now with their couple biggest sellers. Now in a smaller can and volume-driven pack size, Daisy Cutter finds its way into more occasions. Beyond the shopping habits and restrictions of the pandemic, craft beer shoppers typically wouldn’t accommodate a large guest list with 16oz 4-packs due to price and volume constraints.

(6) Incremental SKU

Multi-packs don’t just provide additional volume for the supplier. They also provide an incremental boost to distributor depletions and retailer basket sizes. That’s a great combination for not only getting opportunities for the package on the shelf, but incremental positions where the brewery isn’t forced to sacrifice another priority in exchange. With local continuing to win at retail, but often lacking when it comes to large pack sizes, the prospect is a win-win for all three tiers and acts as a springboard for breweries hoping to rise in the ranks as far as their distributor and retailer’s share of mind.

(7) Billboard Effect, (8) Communication Opportunities, (9) Merchandising

Whether you’re shopping at the grocery store or your local bottle shop, there’s always a deep and overwhelming craft selection to browse. Each shelf location has a very limited opportunity to catch the consumer’s eyes. With most breweries, especially smaller local ones, utilizing 6 or 4-pack holders, properly faced cans will drastically impact each’s success. A shopper has to really know what they’re looking for if the winning choice had the UPC and government warning facing outwardly.

Multi-packs provide what industry insiders refer to as the “billboard effect”, thanks to exponentially more real estate for graphics and text to win the battle to connect with the shoppers’ eyeballs and lift all of its packages. The carton also provides significantly more opportunities to communicate. While some beers are as straightforward as I-P-A, others are trying to accomplish multiple goals and speak to a myriad of consumer segments. A box offers comparatively unlimited real estate to share the brewery’s mission, describe the beer in detail, and project the imagery to associate with the brand. When the can itself is the only space to message, it can be very challenging and sacrifices must be made.

Lastly, these flat surfaces save the brewery, distributor, and retail employees countless hours of time merchandising (facing cans), which may get thrown off each time they’re handled. A well-faced shelf set helps support the supplier/wholesaler’s velocity on the shelf, while increasing the retailer’s odds of the consumer being swayed into multiple selections.

(10) Convenience, (11) Green

A little while back, I put out a question on Twitter directed at consumers who have asked their favorite breweries to put a particular beer in a 12-pack. I can’t tell you how often I see people commenting on social media that “you should put this in 12-packs,” so I asked myself what is driving that request? The traditional thought is that the volume pricing leads to the majority of the sales and on a macro scale, I believe that’s 100% true. A 12-pack will typically show at least a 10% discount compared to the cost of two equivalent six-packs, sometimes more. But with craft consumers, and especially fans of the small, local breweries who traditionally wouldn’t consider multi-packs, I had a feeling that saving $2 wasn’t their primary motivation for asking.

There’s an element of convenience that is attractive to multi-pack buyers, thanks in part to the handle on the box, but more simply the uniting of all cans or bottles under one roof. That portability, versus the awkwardness of carrying two 6-packs, was cited often. There’s also a growing perception of less waste being generated by cartons that’s translating into purchase decisions. The convenience and recyclability aspects can combine in many situations, for instance my softball league games where we use the outer carton to collect the empty cans and put them directly into a recycling dumpster after the game.

(12) Pride

Craft beer drinkers are a proud segment of consumers and they’re eager to put that loyalty on display. Just like how beer fans will proudly rock their favorite brewery’s logo on a t-shirt or pour their beer into a properly branded glass, there’s a feeling of gratification when grabbing that large, well-designed box and carrying it home like a badge of honor. There’s a sense of commitment both consciously and subconsciously that’s hard to explain, but no doubt is influencing decisions in the beer aisle.

Rooting for a craft brewery has many parallels to following a local sports team. The more time invested going deep “inside baseball” via brewery tours, staff interactions, social media, attending events, and taproom experiences, the more invested consumers feel in the company brand and its culture. As Metropolitan’s Lead Brewer Peter Anderson told me, “Everyone’s bought a twelve-pack of Miller Lite, or High Life, or something like that in their life. And being able to get that package from a craft brewery, kind of makes it feel like that craft brewery’s made it.”

Fold It Up

The pandemic didn’t create the trend toward 12-packs, but the restrictions and fallout have accelerated its evolution. Small, locally-focused craft breweries are seeing the door open to borrow a page from the national and regional playbook. There will be challenges that come along with exploring this space at a small scale, including carton costs & order minimums, hand-packing, and pricing against certain 4 or 6-pack equivalent. But with uncertainty swirling, it’s impossible to ignore this opportunity to sell more beer, strengthen relationships, and deepen that crucial bond with the consumer.