How To Be Profitable in a Saturated Market with Chris Squires

GUEST BIO:

Chris Squires is the Co-Founder of Ten55 Brewing Co. Together with his co-founder, JP Vyborny, he brews and sells his own craft beer, called Ten55. In 2018, they expanded their business and opened a house-made sausage and beer food restaurant in downtown Tucson, Arizona.

SHOW SUMMARY:

Myth: New businesses think they need massive distribution to be profitable.

Today’s guest is Chris Squire, the Co-Founder of Ten55 Brewing Co. in Arizona. Chris has proven successful in maneuvering a saturated market of craft beers. He attributes Ten55 Brewing Co.’s success to being able to invite customers into their brewery and create long-term brand advocates.

In this episode, Chris explains how to exploit marketing gaps in loud markets and why he isn’t fighting for shelf space at franchised grocery stores. He walks us through Ten55 Brewing Co.’s expansion into the restaurant space and gives aspiring entrepreneurs advice they may have never expected.

This is the Lean Commerce Podcast.

TOPICS:

00:00:47 Chris began brewing beer as a hobby prior to his entrepreneurial pursuit with JP.

When you first started, how did you tackle supply chain problems?

00:02:45 Chris couldn’t stress more about the advantages of regulation and distribution of liquor sales in Arizona. Using their regulations, he has been able to deliver beer directly to his consumers, expanding his brand’s reach and advocacy.

00:06:39 A highly competitive market is forcing local brewers to hire sales representatives. The advantage of signing a contract with a distributor, like Hensley, is they already have sales representatives ready to advocate for your brewery.

What percentage does the distributor want if you have your own sale reps?

00:08:17 Chris provides a simplified version of a real case study, showcasing how it can change depending on the situation, state and market.

Where does the biggest sale volume comes from, direct selling or restaurant?

00:11:00 Contrary to most of Arizona packaging breweries, who focus on selling through bars and restaurants, Ten55 generates most of their revenue from on-premise selling. Chris explains how the in person interaction is better in terms of profitability and branding perspective.

How do you compete with big brands?

00:14:36 The real competition for him was with other local breweries as the craft beer trend has drastically risen.

00:17:30 Craft beer has a “local face”, helping consumers to relate to the brewery and the people who work for and created it.

What is the long term goal of a microbrewery? Do you want to scale up?

00:23:25 Chris doesn’t believe in fighting for shelf space. Following the path of Karl Strauss and Gordon Biersch, the business model for Ten55 is to sell directly to consumers by increasing their locations. This model also provides better control and higher margins.

What was your experience opening a new restaurant?

00:29:22 Restaurants are extremely more capital intensive than brewing facilities. Once the foundation is set, restaurants differ from breweries in allowing for juicy investment returns and increased creativity.

Chris also adds how Ten55 took advantage of a new state law, creating a lot of media attention and motivated investors, as well.

00:36:43 The first phase is to direct the best customer experience. Then, build a system that allows for easy replications.

What advice do you have for the Lean Commerce audience?

00:38:29 Figure out how distribution systems work and be cautious of placing them as your end goal. Sometimes smaller, is better. In this case, it has been the reason for Ten55’s success.

Resources mentioned in the Podcast:

Ten55 Brewery and Sausage House: 

Hensley Beverage Company: 

Anheuser Busch beer 

NEW BELGIUM BEER 

Karl Strauss Brewing Company  

Gordon Biersch  

Sierra Nevada Brewing Co. 

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