CASE STUDY
Leveraging Small Batch Standard's Expertise, Fernson Brewing Company Obtain Big Wins in the Taproom and a New Financial Outlook
SERVICE
Brewery Benchmarks Assessment
LOCATION
Sioux Falls, SD
The overall goal was obviously to sell more beer, but he also gave us a lot of pointers on how we should go about doing that with bigger releases and trying to develop key partnerships to create stories around beer releases."
Fernson Brewing Company is a leading South Dakota craft brewery dedicated to creating a craft beer culture in Sioux Falls.
They’re regularly featured in Brewbound, Siouxland News, and Sioux City Journal for their unique branding, creative beer releases, and involvement in the local community.
Overview
✘ Disillusioned as a company
✘ Lack of data-driven decision making throughout the business
✘ Unclear on next steps to sell more beer profitably
✘ Engaged Small Batch Standard for an on-site Brewery Benchmarks Assessment
✘ Met with each member of the team and analyzed finance, taproom, operations, distribution, and leadership performance
✘ Provided custom findings and recommendations for profit and growth
✘ Sold 90 barrels in 2 hours through their website
✘ A new data-driven mindset for running the brewery
✘ Maintained sales and reduced costs through COVID
✘ Set for their best financial position yet by end of year
The Challenge
A Market Trailblazer Struggling to Break Through
Despite brewing incredible beer with the region’s first production-level craft brewery on the back of a strong, cohesive brand, the business ran into its fair share of growing pains.
From scaling up their facility, to navigating distribution, to managing their team and culture, Co-Founders Derek Fernholz and Blake Thompson witnessed first-hand the challenges that come along with forging an untrodden path in an untapped market.
"As a company, we were a little disillusioned. We obviously knew we needed to sell more beer, we just didn’t know what was the best route to go and what parts of the business we needed to really focus on. And so we reached out to Small Batch Standard to help us become more focused and aligned with what we needed to do to make our company successful."
After some initial discussion, Blake and Derek asked Small Batch Standard to visit Fernson for a 2-day, on-site Brewery Benchmarks Assessment to meet with the team, evaluate their performance, and develop a customized plan of action.
The Solution
An Immersive, Personal, On-Site Assessment
First, as with everything at SBS, the process started with the numbers. Chris and team initiated an intake from the Fernson team, collecting information on their finances, taproom, operations, distribution, and leadership team, as well as specific issues and opportunities faced in their local Sioux Falls market.
By evaluating Fernson’s numbers against Small Batch Standard’s benchmarks and data set distilled from their work with 100+ craft breweries, Chris was able to establish a baseline evaluation to work with well before stepping foot into the brewery. This meant that by the time Chris showed up for the on-site visit, he could dig into the intangibles: the people, the beer, and the experience.
After two full days with the team, diagnosing, walking through, and experiencing the location and liquid in person, Chris delivered the assessment: a global review of all aspects of the business, the nitty-gritty in the financials delivered as a standalone Excel model, and a complete set of highly specific, actionable recommendations.
"He pulled everyone aside, went over everyone’s jobs and what they did, and spent pretty much a whole day listening to what our market is like, what people love about working here, and where they see the brewery going.
It was also nice that Chris got to come here and spend time with our sales guys out in the market and see our taproom in person and taste our beers. He did a lot of asking before he told us to do anything, so he fully understood our business. I think that alone provided a lot, and it also helped our employees feel like they’re a bigger part of the company, too."
The Result
Big Wins and A New Financial Outlook
As the Fernson team headed into 2020, at Chris’s urging, Blake and Derek dove head-first into a can release partnership recommendation, and teamed up with a local ice cream shop to create a new IPA release: one that turned out to be a big hit in the taproom.
"Around South Dakota, Minnesota, Iowa, and Nebraska, there’s this Palmeri Candy Company, and they make this candy bar called the “Twin Bing.” And we worked out a deal to do a beer with this candy bar called “Twin Bing Stout.” So we made 90 barrels of it and sold it in 2 hours on our website. And I’d say that was probably the biggest success of the year so far with that beer alone. Especially, because that was in April, right in the middle of the pandemic. And that was a pretty rough month. So this was like a light at the end of the tunnel to get us through it."
This success came on the back of just one recommendation— and there were plenty more. But what Blake and Derek love most is not just the wins, but bringing on an entirely new way of thinking about their business.
In the end, that’s been the biggest win of all. And as a result, Fernson will likely end up in the best financial position they’ve ever been at the end of the year.
"We’ll probably be in the best financial position we have ever been as a company at the end of this year."
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Small Batch Standard
Can Help Your Brewery?
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