From Strangely Unique (Gluek’s) to Positively Ordinary (Cold Spring)

Being in the brewery business today is not easy.

The competition for the U.S. alcoholic beverage market remains intense. Beer is a core product, followed closely by wine and other spirits.  It all depends on who you are, where you live, how much you make, and in which circles you socialize.  Suffice to say, big beverage has you pretty well pegged.

Older consumers are bombarded with advertising from massive beverage conglomerates.  Tastes and habits tend to be pretty well entrenched by the mid-thirties, and getting people to switch after that age is difficult.  (It is not just the difference between "wine drinkers" and "beer drinkers." Think much narrower:  A Bud Light drinker is not a Miller Lite drinker, etc.)  Given that reality, large beverage marketers (Diageo, Anheuser-Busch, etc.) can and do pour billions into developing new product extensions, infiltrating the bar/restaurant business channel, and providing direct incentives - all to move a few percentage clicks into someone else's market share.

Brutal.

The younger consumer market is no easier.  While their tastes may not be as well defined, they trend much more fickle.  If Guinness is "in" for the youth set, its sales are up.  If Guinness is "out," its sales are down.  Simple, and unpredictable.  To make matters more complex, the traditional "beer, wine, and spirits" options - while popular - are no longer an exhaustive set of choices.  Hard ciders and lemonades got their start here.  Coffee mixers are on their way.  And alcoholic energy drinks are a huge niche market (e.g. Red Bull and Vodka, etc.).

So what is a small competitor to do?

Little Gluek's Brewing Company, a Minnesota-based brewery (one of the only ones left), is making a good show of it.

As a small competitor (not small by "ultra-microbrew" standards, but a speck on the eye of Anheuser-Busch), Gluek's ran with the only viable strategy available: Niche marketing.

Banking on the micro/local-brew strategy as a wedge issue in its regional market, Gluek's has the product lines people in this area want: Pale Ales, an Ebony Wheat, Honey Almond, Pilsners, Lights, Ices, and Lagers.

Add to that a line of Pub Pints and Hard Lemonades, and Gluek's has an answer to these sustaining trends in the industry.  Better yet, from a product management perspective, the company has staked out a solid position in the energy drink market.  In fact, if you play with the math a bit, Gluek's maintains almost a dominant position in this sub-market.  Clearly, Gluek's is no Red Bull, but they have a good answer to a popular trend.

Any way you look at it, Gluek's offers a very complete line.  It gives its distribution partners ample ammunition to sell within both major and niche retailers, bars and restaurants, and specialty resellers.  In the Minnesota regional market, both older and younger consumers can find something they like.  And they know it.  Gluek's, astutely, plays its local card to maximum advantage.  The company is well positioned to capitalize on the "buy local" trend made popular, in part, by organic foods and farmer's markets.

You could make an argument Gluek's makes all the right decisions.

Save one.

Changing its brand name.

In 2008, after over 150 years, Gluek's Brewing Company changed its name to Cold Spring Brewery.

The company's stated reasons were pretty clear, and on their surface, sensible.

A proud and grateful corporate resident of pretty Cold Spring, Minnesota, the company wished to forge a deeper tie with the town.  What better way than to name itself after its host?  Seems reasonable.  Additionally, the name "Cold Spring" highlights the purity of the water source, and by association, the quality of the beer itself.  Again, a reasonable assumption.

A phonetics expert could even make a solid case against the name "Gluek's."  It is hard to say correctly unless you have heard it before.  And besides, most naming experts would advise against building a brand name containing embedded negative words ("lick," "ick," "eck," or "ook," depending on your pronunciation).  Finally, Gluek's sounds too "Northwoods," effectively limiting its overall market potential.

Besides, new management had just saved the family of brands from a slow, painful death at the hands of their disinterested corporate owner (G. Heileman Brewing Company of LaCrosse, Wisconsin).  The new owners wanted to make some changes.  Infuse some fresh energy.

It all sounds very sensible.

And all faulty.

First, dispensing with over 150 years of history should not be done lightly.  The name and the tradition are a source of pride and uniqueness is a sea of bland corporate shells.  Gluek's has character built in.  Cold Spring does not.

Second, phonetics rules are made to be broken.  It is the Northwoods character that made Gluek's unique.  Yes, it may limit its overall market potential, but the Gluek's name is not responsible for that.  The answer in niche marketing is not to try to copy the number one and number two in the industry, but rather to make yourself stand out.  Gluek's stands out.  Cold Spring does not.

Third, in order to reach into the youth market, especially with an aggressive push into the energy drink sub-market, you need something special.  Something that will make people feel unique when they are drinking it.  Without a multi-million dollar advertising budget, word-of-mouth is your best friend.  And word-of-mouth requires a memorable catch phrase.  Gluek's, you remember.  Cold Spring, you forget.

The underlying theme is simple: The cardinal sin in branding is not pronunciation trouble, or campy regional flare, or a patchy corporate history.  It is being forgotten.

Naming is actually pretty simple.  There is only one rule: Never be confused with anything else. Cold Spring? Bottled water or beer?  Without knowing better, my money would be on the water bottler.

Cold Spring, as a name, was the safe choice.  It sounded nice.  It made people feel good.  But it was not good branding.

And that's too bad.  If we don't want our every beverage option to come from our friends at Anheuser-Busch, I wish Cold Spring good luck.

Comments

[Jason]

Interesting article and argument Mr. Voiovich! As a Marketing Manager myself, I too would tend to shy away from complete re-branding efforts. It's a huge risk; after all, brands are only as good as their following. If the following gets lost, well, so does the brand.

One argument the brewery could make is that they're making an effort to capitalize on the younger generations, some of which haven't even heard of Glueks. One could argue that Gluek's sounds like an "old man's" beer (akin to Hamms or High Life) and may lose market share as the current following passes on. Cold Spring, on the other hand, may be more welcomed by the younger generations as a refreshing beer, brewed locally.

Perhaps the ultimate re-brand could have been "Glueks of Cold Spring," "Glueks Granite City Brewing Co.," or "Gluek Brewing Co. of Cold Spring"... something to that effect. We'll never know.

Great article!

J~

[peter]

One word: Suicide.

[Whatsername]

Two words: Kegel Brau.

Bye bye, Gluek's. Hello, swill.

[Annie]

Jason, don't know who your sources of information are, but the ORIGINAL name of said brewery was Cold Spring Brewing Company. After several permutations, it was sold to a group from Colorado, which named it Gluek's about 10 years ago.

[Jason Voiovich]

I have a policy of not commenting on my own work, but I will do so when my facts are called into question. (Not to say that I have not been wrong before, mind you.) In addition to other news sources, this little bit of history comes directly from the corporate website:

"In 1857 on the bank of the Mississippi River in an area which would someday be known as Minneapolis, German immigrant Gottlieb Gluek started the Mississippi Brewing Company. Soon the name was changed to the Gluek Brewing Company, and by 1964 Gluek became Minneapolis's oldest continuously-operated business."