Grow Your Beer Subscription

Craft-brew, micro-brew, and larger distillers endured the screeching halt in sales in 2020, courtesy of a global pandemic, and survived because they pivoted their business models. Even though sales were no longer flowing from local bars and restaurants, people were still drinking. Many beer providers launched beer subscriptions and created a direct-to-consumer (D2C) model. This pivot helped existing beer makers fulfill consumer demand without relying on a face-to-face establishment. Even though most of the country is now open for business, beer makers are not only continuing their beer subscriptions but doubling down on them. This article will discuss the benefits of launching a beer subscription, possible complications, and how to grow your beer subscription.

Cash Flow Predictability

Cash flow predictability is one of the main reasons to launch a beer subscription. Do not rely solely on the ebbs and flows of sales through distributors, bars, and restaurants. A beer subscription allows your brewery to capitalize on a consistent revenue stream month-over-month. Furthermore, cash flow predictability helps build investment capital to grow the business beyond its current stage.

Higher Margins

Not only does offering a beer subscription provide consistent cash flow, but it also provides higher margins on products than wholesale or retail. Effectively, you cut out the middle man when you offer a DTC beer subscription program. As a brewmaster, you can make more money for the hard work and craftsmanship you put into each bottle. Your customer will thank you as well. More than 84% of craft beer drinkers claim they would like to receive their favorite beverages delivered directly to their homes.

Higher Customer Retention, Lower Acquisition Cost

With a beer subscription, you can personalize the products according to their tastes. Tailor their subscription to their flavors and seasonal preferences. Not only that, but you can build entire engagement communities around your subscribers. From offering private content to marketing contests to win more beer, your customers feel like they are part of the fun. Consumers who jump from being brand aware to becoming brand advocates stick with your company longer than a one-shot-imbiber. In addition to retaining and engaging customers, offering a beer subscription can lower acquisition costs. If you already put in the effort and resources to get someone to sip your suds, it’s a quick transition to offer the ongoing beverage enjoyment. This is particularly easy in the craft-brew industry, where customers pride themselves on experiencing unique brews.

Restricted DTC Shipments

As of July 2022, only Ten states and the District of Columbia allowed for DTC beer shipments. A few states allow for a modification in direct-to-consumer shipments. Some states allow consumers to purchase face-to-face in another state and have it shipped directly to them. Another alternative is for a distributor to ship products to a retailer in the consumer’s state of residence for a local pickup. In Montana, residents can purchase a “Beer Connoisseur’s License,” which allows them to have beer shipped directly to their homes. Ironically, wineries have access to nearly 97% of adults aged 21 and older in the US. While DTC beer shipments still face complications, the demand is high, and legislation change is likely.

Compliance Is Complicated

Similar to the restrictions on DTC shipments, other regulations plague the beer subscription model. Remaining compliant when shipping state to state is confusing and often requires the expert knowledge of a regulatory attorney in order to abide by the law. Whether you are orchestrating a home delivery or managing a retailer shipment, violating one aspect of the alcohol legislation could cost you your license and ability to sell in the state. Check out beer distribution laws in your state.

Fulfillment Obstacles

When launching or growing a beer subscription, inventory must be produced, stored, shipped, and allocated with a high degree of intention. Coordinating pick-ups, warehouse receivables, and speedy delivery to maintain product quality becomes tricky. To fulfill the beer subscription model effectively, it typically requires a committed internal employee to manage the intricate details. Additional staffing is needed when your brewery wants to offer a seasonal sale, promotion, or event. Not only must the subscription inventory be protected, but it is also first in line for the special promotion. (Remember, that is how customer retention is maintained.) The need to place beer subscribers’ products in a particular place or staging area increases the need for allocated warehouse space.

Upsell

One of the easiest ways to grow your beer subscription is to upsell existing subscribers. Offer them more value for more revenue. Whether you offer a slightly higher price point for a few more bottles of liquid craftsmanship or merch, this is the easiest way to increase profits and customer satisfaction.

Award Social Proof

The trend across eCommerce that is not going away anytime soon is social selling or social proof. This is the psychological phenomenon whereby people make decisions based on the behaviors and actions of others. Simply put, we buy based on whether or not our friends, social community, or the broader world is doing the same thing. Customer reviews, shares, likes, and tweets are all ways your consumers can help you tap into unexplored territory! Offer customers free tastings, first look, and even trips to the brewery in exchange for sharing their tasting experiences, reviews, and shares of promotions.

Create an Affiliate Model

Similar to the social proof idea, you can offer serious beer subscription advocates a slice of the pie for every new subscriber that uses their link. Most social influencers make a lot of money through affiliate marketing! Any person who is passionate about your beer can become an affiliate and share their love with their friends, family, and followers. The profitabilities are endless when you produce a quality product and award your loyal customers.

Offer Speedy Shipping

The most notable drawback for one of the US’s top beer subscriptions was that it took anywhere from 10-15 days to receive their shipment. That is simply too long for a serious craft-brew snob to wait. Whatever you have to do, make sure that once a customer enrolls for their subscription, they receive their box within 2-3 days tops!

Streamline Beer Fulfillment

Provide your beer subscription customers with a white glove fulfillment experience. A premier fulfillment company can help increase sales and recurring customers by ensuring a branded subscription package is delivered promptly at a price that can beat traditional retail and wholesale margins. Falcon Fulfillment can package and ship your beer subscription with “same-day” efficiency. They also provide inventory management flexibility for irregular seasonal brews, holiday promotions, and new product launches.