Deschutes Is a Model for How Craft Brews Can Fight Back Against ‘Big Beer’
From packaging to pilot brewing, an arsenal of strategies
Gary Fish is one of America’s most successful craft beer brewers. The twist on that achievement is that he never really set out to be one.
When Fish opened his Deschutes Brewery & Public House in 1988, he saw himself as a restaurateur. With a storefront location on Bond Street in Oregon’s old mill town of Bend, the brewpub boasted a locally sourced menu complemented with Fish’s own brand of porters and ales that he brewed in small tanks on the premises. At first, the reception for Fish’s beer was, well, kind of warm. “Bend was a blue-collar town,” he recalls. “It was very much a Bud Light kind of town.”
Little by little, though, Fish’s brews started to catch on. A few tavern owners from Portland started pouring beer brewed at Deschutes—a name Fish took from the river that wanders through the center of town—and demand at his restaurant grew. Before long, Fish had rented a building across the street to serve as a warehouse for his beer.
“We scrounged up some used kegs and got into the manufacturing business without even knowing it,” he recalls.
Today, Deschutes beer is among the most popular craft brews in America. Fish sells his brand in 30 states, the District of Columbia and three Canadian provinces. A three-story production brewery equipped with 10 fermentation tanks custom-built in Germany now produces the 450,000+ barrels of beer that Deschutes makes yearly. Fish has opened a second brewpub in Portland and a pub at the Portland airport. Additionally, to serve fans on the East Coast, he opened a tasting room in Roanoke, Virginia, in 2017, though announced plans to build a full brewery there are on hold.
From its handful of offerings 30 years ago, Deschutes now bottles nine year-round beers, several seasonal brews, a few draft-only varieties and six limited-edition, small-batch offerings that Deschutes calls “audacious, experimental, outrageously coddled beers.”
As American success stories go, then, Gary Fish and Deschutes are tough to top. But for Fish and independent brewers like him, the pleasant buzz of success increasingly comes with an aftertaste called stress.
Craft brews have grown so popular in America that they’re almost too popular: The 100 or so other independent breweries that existed when Deschutes started have mushroomed into 7,000, and Deschutes is, in theory, competing with all of them—for customers, for shelf space, for simple brand awareness.
There’s more. Primed to the growing popularity of craft brews among millennials and saddled with years of declining sales of their own brands, huge corporate brewers like MillerCoors and A-B InBev (“Big Beer,” to use the industry argot) began buying up independent labels a decade ago, creating a competitive dynamic that, understandably, many smaller brands consider unfair and misleading. By quietly operating small brewers, Big Beer is effectively leveraging its might to lure customers away from the actual small brewers—and many drinkers are none the wiser.
“The problem is transparency,” notes Jess Baker, editor in chief of CraftBeer.com, an information and advocacy site run by the Brewers Association, which represents the country’s craft breweries. The mega breweries, she explains, “don’t say they own these [craft] beers. What happens is beer lovers who want to spend local can’t always tell the difference.”
Actually, transparency is just one of the problems. The saturation of the marketplace, the hidden hand of multinational brewery corporations—Fish says it’s not just the inescapable reality of brewing beer today; it’s a permanent one. “I don’t see this dynamic going away,” he says.
As a consequence, Fish has had to up his game in most every respect, both to hold onto his market share and continue to draw new customers. Deschutes’ strategy—which touches most every aspect of the business, from operations to packaging—serves as a model for how the proverbial little guy can hold his own amid growing competition. As Fish puts it, “We have got to be more diligent, and more creative.”
Small beer fights big beer
Easier said than done, of course. But Deschutes has made several key moves to retain a competitive edge, the most striking of which is its packaging.
Deschutes now puts several of its sub-brands—including the citrusy Fresh Haze and the dark lager Schwarzbier—in cans. There was a time that aluminum ran contrary to a refined image, but Fish is untroubled. “The stigma that canned beer is a lower quality is clearly no longer an issue,” he says.
Cans also allow Deschutes with a convenient way to let customers sample its new and experimental varieties. The brewery tasting room features a machine that seals a lid on a crowler (a 32-ounce can) which visitors can fill with the beer of their choice. “They can take that beer straight from the tap back home,” Fish says. And since Deschutes listens keenly to customer feedback when deciding what beers to put into regular production, cans serve as a key part of the research and development apparatus.
The most obvious changes to Deschutes’ packaging, though, are visible on store shelves. Deschutes recently rolled out a redesign of its Red Chair Northwest Pale Ale. (Its Black Butte Porter and Mirror Pond Pale Ale have also been reworked, and other labels will follow.)
Craft brew packaging has long been famed for its quirkiness. To cite one example, 21st Amendment Brewery, based in San Francisco, has a seasonal brew called Fireside Chat featuring Franklin D. Roosevelt smoking a cig at his hearth and holding a beer in his hand. The problem: When scores of craft brews are busy being quirky beside one another, the result—from a brand-awareness point of view—is chaos.
“We joke that it’s a bit like the hipster movement. Everyone’s trying so hard to be differentiated that they all end up looking the same,” says Simon Thorneycroft, founder and CEO of Perspective Branding, which Deschutes retained to rework the look of its bottles and carriers. In a segment where packaging favors busy backgrounds and bizarre mascots, Deschutes now favors … its name.
By dropping the word “Brewery” from “Deschutes Brewery,” Perspective opened up space on the carrier and used it to run the name big across the front. (Customers, Fish believes, don’t need to be told that beer comes from a brewery.) Meanwhile, instead of using a jumble of colors, Perspective opted for one: red. “One brand—bright red, and I made that pop,” Thorneycroft says.
