Thursday, June 9, 2011

Is Greed Environmentally Good and Other Questions from "Yes We Can!"

The history and business stories of canned beer discovered while writing Yes We Can! pretty fascinating, and raise a number of interesting questions. Here are few that came to my mind as I wrote it.

Can greed be environmentally good?
I couldn't help notice that every brewery I talked with distributed their beer into cans primarily as a business decision to expand their markets. Reducing their environmental impact was a secondary motivation. I believe each brewery's management genuinely cared about the environmental consequences of their operations, and certainly many of these business are quite "green" but at the end of the day, the old business objectives of increasing revenue and cutting costs drove the decisions. Maybe if environmental awareness becomes part of a business's DNA, good business decisions are by extension, good environmental decisions.

Is "The Innovator's Dilemma" alive and well in canned craft beer?
I absolutely love the story of Cask Brewing Systems stumbling into a successful business by developing a small, manual canning system that was originally designed to serve an extremely limited market. Today, they can't build their canning equipment fast enough for all the small breweries looking to get into canned beer. These simple, cheap canning systems that seemingly had no market, yet became a lucrative business recalls the idea of "disruptive technologies" as described by Harvard business Professor Clayton Christensen in his ground breaking book, The Innovator's Dilemma. Christensen noted that many disruptive business technologies take root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors. Craft beer itself can be considered a "disruptive technology" an idea I outlined in an earlier post, and this certainly sounds a lot like what is going on with Cask Brewing Systems.

Cask Brewing's small manual canning systems would seem to have a very limited market 10 years ago that no larger manufacturer of brewing equipment would likely have any interest in. But now, their small scale approach seems well positioned to grow in a North American brewing industry where most of the growth is in small craft breweries which looks at bottled beer increasingly less favorably. Perhaps the fact that Sierra Nevada will be using a European competitor that manufactures smaller scale canning systems in European breweries suggests a certain limitations to Cask Brewing System's growth.

Did Dale Katechis bet his company putting beer into cans?
I unfortunately never got to speak with Dale Katechis for this article, and my questions were referred to his marketing person instead. I really want to know what drove his seemingly risky decision in 2002 to put Oskar Blues Pale Ale in a can. Given the highly negative perceptions of canned beer at the time coupled with what had to be a serious investment of time and money for a brewpub to install the first automated small scale canning line, it certainly seems like a "bet the company" move. The was actually no guarantee that Cask Brewing Systems could pull off an automation line in the first place, since they had no prior experience with volume manufacturing equipment. Of course, it's quite possible Katechis simply predicted the future a lot better than everyone else, but its hard not to conclude it was a big gamble. There seems to be a lot more to the story than just the "Dale likes to go against the grain" statements plastered all over the Oskar Blues website that his marketing guy answered repeatedly to virtually every question asked. Maybe someday we'll find out something more.

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