Wednesday, September 24, 2014

Sorry, Heady....It's You, Not Me...

Heady Topper...the "Unicorn of Northeast Beers". Extremely desirable IPA, extremely limited availability...

My wife and spent a weekend in VT visiting friends, and could not find the stuff even after it had been delivered to distributors less than 24 hours earlier. Quick inventory from the places we hit showed that they had received somewhere around 100 cases, yet none was left. The only place we could find any Heady Topper was a couple of $9 cans at the Burlington Marriott bar.

A quick primer for those not familiar with this beer: Heady Topper is the flagship Double IPA from Alchemist Brewery in Waterbury VT. It is a very smooth IPA, not very bitter, very fruity. Highly desirable, Heady has a following that rivals almost anything else. In order to get this beer, the brewery publishes its production schedule and distribution channels, and fans will wait in line for hours to be able to buy it by the case. In fact, the traffic got so bad at the brewery's retail outlet last year that it caused complaints from the neighbors and they were forced to stop selling at the brewery and disperse case sales to its geographically-local distribution network.

Fans - fanatics, really - watch for deliveries, even stalking Alchemist trucks to discover where they're going. There's a web site, Heady Spotter, that claims to "democratize the hunt for the most elusive beer in the country, HEADY TOPPER." It even has its own Twitter feed, #headyspotter.

So bottom line, while Thea and I were casually traveling through Vermont, casually attempting to discover some Heady Topper, we had absolutely no chance of finding any; I'm guessing all of ~100 people (and their really close friends) got to enjoy fresh Heady Topper this weekend. Big "fale".

I've had Heady Topper many times before; hell, my "retired" brother-in-law brought a can over just last week (for a direct comparo to New England Brewery's Ghandi Bot; they were comparable). Last year the bro-in-law and I even drove up to Vermont and stood in line at the brewery to get a case, just before they stopped selling at the retail store (I was unemployed at the time). It's a very good beer; in fact, it is the only India Pale Ale that my wife likes...and that's saying a lot.

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So we spent a few hours along the way to visit friends, and came up empty. It was pretty disappointing; I mean, while I wanted a case, we would have been satisifed coming home with a few 4-packs. We stopped at several places between Andover (where we were staying) and Burlinton (where we were meeting friends) and no one had any; hell, a couple guys actually laughed when we asked. All others just rolled their eyes ("oh, you're one of them??"). Everyone had a printed sign - not hand-written; a printed and laminated sign suitable for common re-use - hanging in the beer area, "HEADY TOPPER SOLD OUT". We used up several hours and at least a twenty-spot in fuel to come home with...a couple of beers at a hotel bar. Basically, "nothing".

On the other hand, we stopped at several good breweries and brewpubs along the way, and came home with much, much more than that, all pretty darn good stuff (Vermont is truly a beer lover's paradise). Which has to make me wonder...with all the excellent options out there, maybe Heady Topper has simply jumped the shark? As one friend noted, "...the hype and procurement process is getting extremely tiring..." Is it really worth all this hassle? If procuring this beer requires either being unemployed and/or taking a day of vacation, and you end up spending $12 for a four-pack, is it really worth all that hype? I suggest not.

Heady Topper is becoming a victim of its own success, potentially a fad that will slowly fade (as all fads eventually do). It does the brewery no long-term favors by supporting this flawed distribution model. What will they do to sell their beer, once the fad passes and the rest of us have found alternatives? In only two days in VT we found a large handful of very, very good beers to take home...and they were all available on the shelf. But absolutely no Heady Topper. How is this good?

Alchemist is building a new direct sale outlet that is supposed to open next year, so then it will be like before: show up, stand in line, get your beer. My "retired" bro-in-law says there will always be enough local folks to buy it all and the certainty of the new place will alleviate the issue. But I don't think that a "factory retail outlet" will 'fix' the problem; after all, the same problem(s) existed before but were confined to a single location, just as they are proposing to do now. The "problem" is that they are allowing a limited number of individuals to hoard their limited supply, artificially inflating demand -- and causing hype.

This was an excellent short-term strategy, one that worked great for building the initial hype. That also works for a company that does not have long-term plans to expand production capability; after all, who would not want to immediately deplete all inventory mere hours after reaching production capacity? If the Heady rage continues - and that's really the question at the root here - and they have no plans to significantly expand capacity, then they can play with the pricing (shocked they haven't already) and ensure profitability for a long time to come.

Problem is, this kind of hyped-up demand is very short term. Tastes changes, tolerances change, competition changes, and inevitably some day Heady Topper will be seen as just another one of those very good beers. The only way this company can maintain their current status is to expand production capability; under the current model, as that supply increases it will hit a wall of how many people are willing to stand in line for a case of (very expensive) beer.

They are in a very desirous and unique position, and they should be leveraging that potential for future growth; adding an outlying retail outlet only changes the geography of the problem. What they should have done when faced with this recent distribution problem is geographically increasing their distribution network to handle future increased production, while at the same time working toward increasing their market share. Instead, they are further isolating their distribution network to a discrete location and working to maintain existing, limited market share.

Assuming their goal is increased production and distribution, what *I* would have done when faced with closing the brewery's outlet was to come up with a "Heady licensed/approved" distribution model marketing schtick, continuing to ask distributors to limit the number of 4-packs per person and giving them financial incentive to do so, all while attempting to increase the geographical reach of the product. Parallel to that I'd be looking into capital investments to increase production capability, such that once production capacity is online the distribution network would already be in place.

So I sincerely wonder if they have no interest in increased production or they would just prefer to maintain their status as a geographically-limited boutique beer. There's certainly nothing wrong with that; after all, business growth is a very difficult and very painful process (look up Greiner Growth Model). But status quo leaves Alchemist vulnerable to the limited tastes - and tolerances - of its customers; taste is a fad, and fads always fade. And I'd really hate to see them get pushed aside.

Is this rant nothing more than "sour grapes"? Could be; I'm confident that had I found a case of Heady Topper to take home this past weekend, I'd not have given this much thought. I like the beer, it's very good. But how much can you enjoy a beer, given the effort it takes to get it? How much can you enjoy it when you're not sure when you'll get the next one? Should we create a Heady wine cellar and put them on the shelf for future display ("yes Lovey, that's a Heady '14 there, obtained during the late summer vintage...it was a velly good year...")?

I'll continue to enjoy the beer whenever it's available. But I'm not the only one that's finding this whole distribution model to be way past its sell-by date (see what I did there?) while finding a large number of more-easily-accessible and less-expensive beers coming up to its flavor profile. And I'm not the only one that's decided that going through all that squeeze maybe just ain't worth the juice...

Heady, we love you, but I think it's time we see other beers. Really, it's you, not e...

09Jan2015 Postscript:

Small Is Beautiful: Why Heady Topper Probably Won’t Be Coming To A Store Near You

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