Pull back the dam curtain – Part 2

Last week, Belching Beaver Brewery owner Tom Vogel offered an unobstructed view into the inner-workings of his Oceanside-based business, touching on subjects such as early business decisions, financial tenets and expansion. In this, the second and final installment of his Voices of San Diego Beer guest article, he discusses branding and packaging missteps and course corrections, and digs into the practices and principles that drive hiring (and firing) decisions as well as what is expected from staff once they’re brought aboard. (Click here to read the first part of this guest article.)

Branding and packaging

Labels and packaging matter…a lot! So, what was wrong with ours in the beginning? One of the biggest—maybe the biggest—mistake I made was coming out with our initial packaging. It was terrible. You couldn’t see who made the beer or what it was. Sales declined. I literally thought we were going to go out of business. That was 2016. We had sold distribution and put every penny into our new Oceanside production facility. Having signed with a distributor, we had lost 30% of our margin, and had moved from 22-ounce bottles into six-packs, where there is less of a margin. And that packaging wasn’t selling. I was getting the phone calls a business owner dreads: “Hey, you owe us X number of dollars and we’re going to stop selling packaging to you.” That’s a long and involved story, but in the end, packaging matters.

To fix it, we had to refresh our packaging. We changed the visibility of our six-pack carriers and changed our logo, making it bigger and more welcoming. Sales instantly grew by 33%. Most importantly, we survived. They say refreshing your brand increases sales by 20%. What we learned was that the customer needs to easily see your label and your brand. Now we add creativity to our labels, which has increased the sales of our specialty beers. We have an in-house artist as well as outsourced artists we consult with for non-core brands.

As for the backs of our labels, I like to write the verbiage that goes there. If a brewer or a member of our sales or marketing team write them, they stick to information about what’s in the beer, but If the back-label mentions the brewer that came up with the beer or venture attempts at humor, chances are I wrote them. I think customers like the story that makes our beer and our company. I like to poke fun at our brewers: Troy Smith, Thomas Peters and Peter Perrecone. Troy screwed up our double IPA and had to change it, so we named it “Fall of Troy”. We also have a beer with a similarly errant origin story called “Peter’s Mulligan”. And one label reads: “Thomas’ beers are so expensive, we had to cut up his American Express card.” I think including brewers’ names in our story gives us personality. And if a brewer’s name is part of a beer’s moniker, it’s because they screwed that beer up and had to save it. But mainly, I like to give the brewers the credit they deserve for the beers that they make.

Company credos

We have a lot of sayings at Belching Beaver, which have helped formulate our overall business philosophy:

• We don’t do this then that. We do this and that.
• Our customer is our boss. We will make our boss happy first.
• We make beer for everyone.
• No guts, no glory.

Another saying we have is, “Saying ‘I can’t,’ ‘we can’t,’ ‘it’s not possible’ or ‘no’ are cause for termination.” We ask that employees instead adjust their ways of thinking to approach issues and obstacles by saying, “Got it. Let’s look at it. Let’s find a way. We’ll figure it out” This isn’t always easy for people. Humans are programmed to resist change, but such resistance will kill any company. When someone says we can’t do this, that or the other thing, or uses the excuse, “other breweries don’t do that,” I break out my most oft-used of our company sayings: “Free your mind and your ass will follow” It basically means to think outside of your box.

I really don’t care what other companies are doing. There has to be a way of getting things done. The reality is team members who throw up their hands or dig in their heels are coming from a point of resistance, perhaps to more work. Belching Beaver did grow fast and some of our crew initially thought that growth would mean more work for them. Our response was: “The more people we hire, the more we will make and the less you will have to work.” This is only true in an environment like ours where sales out-paces production. And for staff who were making enough money and had become comfortable with their situations, we advised: “Raise your ceilings.” Comfort is nice and all, but can breed complacency and stagnancy, both of which can spell disaster for a company.

The business of people

They say, “Be slow to hire and quick to fire.” I have brought on some people I thought would be rock stars, only to find out that I was wrong. I let a sales manager go once he literally said, “You think I’m bad? Let me tell you about my team.” The territory he was responsible for was in decline and I couldn’t figure out why. We replaced the team and sales increased by 200%. The truth was, he wasn’t out there selling. I hate letting people go, but almost every time I do it’s followed by a vast improvement in the overall work environment. Most importantly, it’s not fair to other employees that have their heart in the game to keep a slacker or a complainer. That said, our turnover rate is extremely low.

A lot of the people that started with us in roles including human resources, sales director, national sales, head brewers, restaurant managers and chef are still with us. They grew with the company as we all did. They have all worn many hats, so they have well-rounded experience, and all of them are profound contributors. I have hired the girlfriends of a couple of our brewers, one of my wife’s best friends, someone that worked for me in the nineties, and our brewmaster’s girlfriend…who is now his wife. Stupid, right? They are all still with us and are some of the best employees we have. I also hired all three of my kids. My daughter bartended her way through getting her master’s degree. My son started when he was 16 cleaning toilets, worked his way through college, and ended up running our software systems until his recent departure. And my 17-year-old busses at PUB980. It’s everyone’s hope that my son will take over my job someday and I say, “You know that means that I’ll be gone, right?” They just reply: “Yeah, he’ll be great!”

So, who do we typically hire? We hire managers with an entrepreneurial spirit or talent, then get out of their way. You have to be really smart to effectively manage people. I am not smart, so I hire people that can take the ball and run with it, come up with their own ideas, get executive buy-in then execute their vision. If they need a lot of handholding, Belching Beaver isn’t the place for them. As for members of our brewing team, we hire or train talented people, then get out of their way.

We are growth-oriented, so I don’t go nuts with our people about cost-cutting or margins at this stage in the game. For us, it’s all about quality and production. As long as our financials are in range, it’s all good. We want customer satisfaction while building our brand. If there’s something our brewers say they need which will result in a better-quality product, we’ll invest in it. If it’s something that can increase production, let’s do it.

Similarly, our meetings with the hospitality team are more about finding out what our restaurant managers need from us. I think the more responsibility I give someone, the better they will do. Other than in training situations, I don’t like just telling people what to do. We try to encourage them to come up with ideas themselves. It took me two years to get Brussels sprouts on the menu at our brewpub in Vista. My wife wanted them, but our chef didn’t. Two years! I could have just ordered that they be added to the menu, but then I would have risked hindering our chef’s creativity, so I didn’t. They are now not only on the menu, but one of our best-sellers. So, sometimes people are wrong, but I love that.

I think it’s important to remember instances when you were wrong more than the times when you’ve been right. It causes you to second-guess yourself…in a good way.”

Tom Vogel, Owner, Belching Beaver Brewery

What it all comes down to

Every business is a business of personalities. How do you, as a business owner, create an environment where people know they are needed, can take part in your company’s growth, and are happy to come to work? To me, that means being proud of the product you put out, growing your company, having fun, listening to and implementing your team members’ ideas, and always doing the right thing by your customers and your people.