How to build a brand without traditional marketing?
Interview with Enn Parel, CEO of Põhjala Brewery
Põhjala Brewery is often considered the flagship of Estonian microbreweries. It was founded at the end of 2011 by four Estonian beer enthusiasts and home brewers. Põhjala Brewery currently exports to over 30 markets, including almost every country in Europe.
You have often emphasized that Põhjala as a brand was built without any traditional marketing. How is that possible?
I think it is possible if you put the product at the centre. Product development is at the basis of everything for us. We brew beers that have a lot of flavour as well as great stories and we hope that the product speaks for itself (and so far it has). This is basically our marketing and other than that, as in marketing communication wise, we only use social media, we do not do any traditional advertising.
Even if you have the best product in the world, you somehow need to gain awareness. How?
Social media has helped us a lot, also community-based sites for beer geeks like RateBeer.com and Untappd. Our beers are listed across all rating sites and so far doing very well. We have a widespread recognition amongst the worldwide beer community. We also do a lot of appearances at beer festivals, covering nearly 30 festivals each year. I am just back from Hong Kong and going to Moscow tomorrow. Our sales manager and head brewer are constantly on the road, which also helps to spread the word.
You just opened a new venue which has become one of the most popular restaurants in Tallinn. Experience is also marketing in a broader sense. How would you describe the importance of experience in your business model?
I think it is a crucial part of our business model. When we were building our new brewery, we had basically two options: either we could move to outskirts, build a production facility and produce beer, or move closer to where people actually go and have a strong retail presence. We obviously went with the second option. I think it was an important strategic decision that brought us to a new level. Our new home is a really beautiful renovated early 20th century building and it works as a brand extension for us. Põhjala offers a 360-degree beer experience. You can come here, see the production, walk around the brewery, taste our beers in the tap room paired with the great food. I think it was The Financial Times that called it a Michelin-level pub grub. You will also find merch like T-shirts, hoodies, caps, glasses, etc. Thus, the experience part is definitely important for a craft brewery.
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Craft beer is a very crowded category. I assume there are maybe tens if not hundreds of thousands of different craft beers around the world. Yet, you are also successful in global markets, like the US, which is probably the most competitive beer market in the world. What is your secret to success?
We have a clear strategy for our faraway markets, for example we never ship IPAs to the States, because there are loads and loads of good IPAs available there and IPA does not travel well. So, we have concentrated all our efforts in the US market on our dark beers, barrel-aged beers and sour beers that travel well and are actually more interesting and have more flavours than easy-drinking beers. That is what we are known for.
Yes, there is a lot of competition around and there are more than 25 thousand breweries around the world according to 2018 data from RateBeer.com. The users of RateBeer have rated us to be among 100 best in the world, I think we are in the 57th place in the world. This is a big honour and big achievement, and has blessed us with fans from all over the world.
Craft beers came as a big trend many years ago and now as with any trend, there is a threat that the fad might fade away. What is your feeling, what is the future for this segment?
I do not think the craft beer per se will fade away because I feel that it is not only the beer category where this trend is prevailing. With food and design products, small producers have an edge these days because people do not want a mass-produced and mass-marketed product. They want something special with a story, something that is unique, and I think this has helped the craft beer to thrive. So, in the long run maybe the term “craft beer” will fade away, there will be just “good beer” and “mass-produced beer”. I think independent breweries are here to stay as long as they will not be acquired by big players. There is quite a bit of consolidation in the beer market and several well-known and big craft breweries have been acquired by multinationals, AB InBev, Heineken. Just yesterday there was a piece of news that our good friends from Oedipus Brewing from Amsterdam sold their minority stake to Heineken and there are lots of these examples. So, consolidation is taking place, but I do not think craft or independent breweries will disappear anywhere in the near decades.