Ben Perreira

My head's dropbox.

Month: January, 2014

Craft Beer and Astroturf

As someone who enjoys an occasional alcoholic beverage and studying the way consumers interact with producers (i.e. economics), I’ve found the craft beer explosion over the past several years pretty fascinating.

MillerCoors announced today that it would be producing and selling a beer that tastes like bourbon in an attempt to reach 21-27 year olds who are keen on the flavor of whiskey.

Now, whiskey and beer are my two favorite nighttime drinks, but for different reasons. Beer’s cold effervescence is refreshing on warm days, the likes of which are many in Los Angeles. Whiskey, on the other hand, warms the body and soul with its spiciness (rye) or its sweetness (bourbon), its potency causing it to linger on one’s palate. I like to talk about rituals as one way to understand how people consume things and experiences. The rituals attached to whiskey and beer are very different.

I do not think MillerCoors’ whiskey beer, dubbed “Miller Fortune”, will be a commercial success. Aside from having to do a substantial amount of shaping of rituals, which is certainly possible from a marketing standpoint, I think that we can look at craft beer success and failures as a guide.

In the world of craft beer, Sierra Nevada is king. How much so? The upper limit of what a brewer may produce and still be described as a “craft” or “micro” brewer is frequently raised to account for Sierra Nevada’s growth. Sierra Nevada Pale Ale is far from the easiest beer to drink. Its bitterness takes time to appreciate and the closest thing to sweetness is a floral finish.

Last year a few friends opened a craft brewery in San Diego. As a fan of Kolsch style beers (blonde ales), I found theirs to be phenomenal. It is light and crisp yet smooth, an uncommon feat among lighter colored beers. The company’s branding was also excellent. The problem they faced was that their IPA (India pale ale) was not top notch.

Who cares how their IPA is, one may ask, when they make other great beers and the market is flooded with great IPAs? Craft beer drinkers care. You could make the best Kolsch in the world and 90% of people who drink beer wouldn’t be able to tell the difference between that and a Budweiser poured into the same glass. IPAs are the litmus test for craft brewers.

IPAs are distinctive in flavor and color. One Central California brewer put “quadruple hopped!” on a label and saw sales skyrocket. Hops mean bitterness; enjoyment of their flavors and aromas means savviness. Savvy drinkers despise anything yellow and fizzy. They also love the stories of creation, struggle and triumph that come along with their favorite craft brewers.

Whiskey drinkers are the same way. They want to know the story behind what they’re drinking. It goes well beyond the simple flavor notes that can be blended into beer for some Dr. Frankenstein hybrid.

Let’s return to the story of Miller Fortune. Like Coors has done to some success with Shock Top and A-B InBev did less successfully with Budweiser Black Crown, MillerCoors will market Fortune to craft beer drinkers. “Fortune favors the bold” will be a central message. “You take chances in life. This is the beer for you.”

Beer lovers love to take risks. They know that trying new craft beers is critical to finding a new favorite. They also know that the big guys are trying to produce beers that mimic what craft brewers are doing. This is called astroturfing.

And those 21-27 year olds? They either know their beer and want something unique or don’t care and “gimme a Miller Lite.” Same goes for whiskey. It’s unlikely they care/ know enough about beer to want something unique, but care/ know little enough to be comfortable drinking a whiskey-flavored beer made by the second largest producer of beer in the world with no authentic story attached.

Now if you’ll excuse me, I’m thirsty and I need to decide between Woodford Reserve and Pliny the Elder.

(Full disclosure: I’ll drink any kind of beer.)

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Going Pro

Image

This photo of me was taken in Costa Rica almost ten years ago to the day. I got lucky that there was a photographer on the beach who would then sell images on a CD. (GoPro cameras or not, I never would have gone pro.)

Fast forward to the recent long weekend in which I drove a couple hours north of Los Angeles to find some surf. Among the perhaps 100 surfers who joined me at my secret spot, I witnessed at least dozen GoPro cameras mounted on heads, chests, arms and boards. One fellow even had a camera set up on the beach and a sensor on his body that guided the camera with him as he rode waves.

Like this photo sitting deep in my archives, GoPro cameras have been around for ten years. But why have we seen an explosion of their use in the past 1-2 years?

A key to the proliferation of GoPros is the removal of barriers: low quality video, a place to share, and examples of their capabilities. Of course, these all converge at various points.

  • In the early days, GoPros did not produce HD video. Actual pros didn’t want to use them because they would be distributing low quality content. And they didn’t have great places to share it.
  • For amateurs the only viable places to share were (1) your computer, (2) YouTube, and (3) Facebook. As Louis CK points out no one watches your video on Facebook.
  • Pros who distributed content to their own websites relied on longer format videos. Even social media pros and GoPro advocates like Kelly Slater didn’t maintain their own social channels until a few years ago. (Having worked for his agent and set up his Twitter account in early 2009, I experienced this first hand.) Today, Slater’s Instagram feed is top notch because he lets fans into his head and shows them how he experiences the world.
  • Lack of quality video and quality outlets meant creating with a GoPro was not a priority, meaning a lack of inspiring use cases for GoPro to share. Use cases from pros provide amateurs a frame of reference for their own videos.

Today, use cases are everywhere. From the producers of “The Deadliest Catch” putting the cameras in crab pots to tinkerers putting them on drones to fly above Pipeline, creativity is flourishing. Athletes who are (very) amateur can find inspiration for how to use their GoPros all over YouTube/ Vimeo and via Instagram videos. The act of riding a wave/ mountain/ ramp/ trail now extends into the preparation for getting certain angles, the feedback that comes from that footage to oneself, and the feedback one gets from his/ her friends and followers. 

Professional action sports athletes keep the paychecks coming by giving fans new ways to be amazed. Athletes are always looking for inspiration. We want to push the envelope and ourselves. By creating a better tool for a changing social media ecosystem, GoPro helps us do that.

Maybe GoPro’s next step is getting into content distribution (another revenue channel that captures those who may never own GoPros) like Beats by Dre (Beats Music) and Red Bull (Red Bull Media House). Whatever they decide to do next, I’m staying tuned.

Enough is Enough?

In the quest the quantify everything we do, we find ourselves obligated to question what our endgame is.

Yesterday Google announced that it had bought Nest, a producer of smart thermostats, for $3.2 billion. The deal will most certainly turn out to be worth the price for Google. The question is whether it will be good for consumers.

Google’s raison d’etre is data. The more they know about us, the more they’re about to serve us ads that reflect what we may be in the market to buy. Better yet, they may be able to predict (or at least triangulate) based on (1) our personal demographics, (2) who we interact with and (3) things we search for on our Android phones, through Google Maps, watch on YouTube that we need a vacation, are looking to go to graduate school, or are considering proposing to our girlfriends.

There are a couple critical problems with this “quantify everything” perspective:

  1. Data can feel creepy: One of the things that makes buying things enjoyable is the discovery of a shared perspective with a brand. It’s sort of like falling in love: “We both went to Yosemite as kids and would love to go back!” When I search for a specific suit then three companies serve me ads for that same suit, I’m left without the ability to discover what makes each of those sites unique. I get the transaction without falling in love, sort of like meeting someone on Tinder.
  2. Data has diminishing returns: Marketers use data to better understand consumers and this information can be very valuable. But after a while more information can just be distracting. Jumping at every “signal” just means being distracted by the “noise.” More and better are seldom suitable bedfellows. 

Of course, we don’t have to do it this way. Great companies know that building a brand and building a company are not the same thing. They know that they need to take calculated risks to find new ways into the hearts and minds of consumers (see: the iPad and even the Galaxy Note). We should use the information we have to do things in new ways rather than just remove risk from doing things we think once worked. The underlying paradox is that this illusory removal of risk is perhaps the riskiest move a consumer brand can make.

Filter

People often ask me what makes me a good strategist. It’s a really hard question to answer. Unlike designers or engineers, who have portfolios to show, my profession depends on finding abstract solutions to complex problems, and once something has already been done it no longer sounds abstract. It is also a difficult question to answer because, like almost everybody, I have metacognitive biases, or the difficulties associated with accurately assessing one’s own attitudes toward a variety of things. Many of us cannot see our own strengths and weaknesses as well as others can see them.

However, as Thich Nhat Hanh said, “Once the door of awareness has been opened it cannot be closed,” and I’ve learned a few ways to trick myself into getting closer to the source. Conducting tons of consumer research has helped me refine this skill.

A critical element to exhibiting above-average talent across various skills is the ability to filter:

  • A college professor knows 1000 times more things than she teaches her students; she tells them what they need to know based on their skills levels and the course’s objectives.
  • A baseball player can hit any ball thrown to him; he chooses to swings at those that give him the best odds to hit the ball where he wants it to go in that situation.
  • A poet knows hundreds of thousands of words; she finds the one with the right definition, texture, meter and rhyme to finish her poem.
  • Anyone can point and shoot a camera at a subject; a great photographer adjusts his shutter speed and aperture then frames his subject in a way that makes our minds wonder how it can even be real.

Creating strategy is pretty simple if one thinks about it in this light. We have access to most of the same information as everyone else. We keep asking questions until an answer becomes clear. The better we are at asking questions, the clearer that answer is.