The World Series and the New England Patriots…
If your market happens to be attached to either of these two entities, you’re one of the few lucky breweries this year to be gifted with a nice, healthy boost in sales this holiday season.
- Stadiums are buying.
- Parties are happening and drinks are flowing.
- Loyal fans are stopping by the taproom to either gloat or drown their sorrows.
But… these are the exception to the rule.
For those who aren’t so lucky to have either hit the jackpot with a team that’s headed into the Fall Classic…
Or have set up shop specifically close-by to Belichick and Brady hoping some of their magic ju-ju would rub off (no love lost on us non-Bostonians but there’s no denying there’s something special going on with this crew)…
There is a cold, dark reality attached to winter season for breweries.
You can reliably expect a 30-40% decrease in demand from December through February.
We call this The Holiday Dip.
A few things that are happening when the cold rolls in:
- November is the final wholesale push for the year as distributors stock up for December holiday sales… and then go on a “pick-up vacay.” That means that although you’ll likely get a nice bump next month, on the distribution side breweries will have their hands tied into the early portion of 2020.
- People’s pallets shift when the decorations come out. Summer is over and so are the kettle sours and Berliners (although I’m curious to see how the lager holds up this winter, given its recent rebirth). In their place, fall ushers in bigger, darker, hazier, browner beers. It’s also the case that holiday parties are typically flush with wine and spirits in addition to beer – a diversification factor that may also dilute demand.
- Beer and the cold have a great relationship. Leaving the house and the cold? Not so much. The simple fact is spring, summer, fall = let’s get out of the house! Winter = how fast can we get back home right now?
Happy Holidays everyone?
In all seriousness, this pattern is reliable and predictable. And that means we should have a plan in place that maps to this seasonal dip.
So over the next two weeks, we’re running a mini-series focused on two key strategies that allow successful navigation of the Holiday Dip.
Week 1: Cash flow management.
First, we attack the problem from the finance side. The objective here is loss mitigation. We need to protect the brewery against negative impacts that tends to accumulate when we don’t plan ahead to protect the downside.
Week 2: Creative revenue generation.
Is it possible to turn the Holiday Dip into an opportunity? I say, yes. We’ll cover some examples of how to create revenue that wouldn’t be there otherwise. The important part isn’t the specifics, but instead the underlying principles you can apply to unleash your team’s creativity on the problem.
We’ll kick off on Monday.