Coronavirus Boosts Innovation in the Beer Industry

It's Friday evening and virtually everyone in the whole country is at home. On a regular Friday, people would go out, meet friends, drink beer and celebrate the weekend. Not today thanks to coronavirus.

According to GastroSuisse, alcoholic beverages are the second most important source of revenue for restaurants (20% of the total turnover), and beer alone constitutes a steady seven percent (7%) of the turnover made in an average Swiss restaurant. Restaurants and pubs are the main distribution channel for over 1200 breweries, Swiss supermarkets are only the second choice of purchase for beer consumers. While 65% of all breweries in the country heavily rely on local events, restaurants and bars for the distribution of their products, home delivery is usually only an option for the largest ones. With closed restaurants and bars, and events cancelled throughout the country, the coronavirus crisis is putting the beer industry in a tight spot.

While the situation can be daunting for brewers at first, the virus is also opening up new market opportunities for them. From the production of supplies for hospitals to a temporary diversification of their portfolio, breweries in Switzerland are proving to be innovative and resilient to the crisis. For instance, Docteur Gab's has identified that with their current infrastructure they are able to react to two of the biggest challenges in the country right now: the delivery of groceries to people in isolation and the supply of alcohol to medical facilities like the CHUV. While coop@home, LeShop and Farmy are currently saturated, dealing with over a 10-day delivery time, Docteur Gab's has realized that their distribution facilities and connections to local suppliers are unique assets during these times. With their distribution trucks and drivers, Docteur Gab's has launched a food delivery package including vegetables, fruit, meat, bread and cheese. In addition to this, breweries are using their facilities to produce alcohol and disinfectant products which are scarce at the moment. Brauerei Farnsburg, in collaboration with Nebiker distillery and a local pharmacist, are creating disinfectants out of the beer that was left over in the brewery. Similarly, Gab's is efficiently using their facilities to produce alcohol to be used later at the CHUV.

In addition to this, our almost voluntary isolation is creating uncertainty among brewers on how the consumption of beer will change after the crisis. Beer is a social drink per definition and while we are spending more time in isolation we might be also changing our drinking habits. What can breweries do in this regard? How can they better prepare for reconnecting with customers? Here are a few ideas to think about:

Individual drinking experiences

After spending some time by ourselves, we may possibly discover that enjoying a beer or two on our own might actually be fun. This is the moment when breweries should start thinking about the act of drinking beer as an individual experience rather than just a social activity as it is usually perceived. In so doing, it is important that breweries think about all potential 'touchpoints' between the customer and the beer. For instance, when do customers enjoy drinking beer the most? Maybe a hoppy beer over dinner, a light one while Netflixing or a fruity one when reading their favorite book.

Authentic and local beer

With closed restaurants and bars, many small breweries are now left with quite a few liters to sell. Although daunting, this can be a unique opportunity. Small breweries offer a great variety of beers that are unlikely to be found just anywhere. Unique recipes, own creations and funky bottles make these kinds of beer very interesting options that customers may want to try out during this time of isolation.

Home delivery

Home delivery becomes an essential channel for reaching out to customers while the usual drinking establishments are closed. The small brewer might find this rather challenging because it's not their usual method, but this should not stop brewers from thinking creatively. For instance, WhatsApp messages to clients have allowed Brauerei Braukunst to sell all their beer within a day. Similarly, the Bier Factory is currently showcasing small breweries and delivering their beer throughout the country. However, home delivery should not be seen as a temporary measure. Now more than ever, the average customer has discovered the convenience of home delivery options and this is likely to remain an important channel for many of them.

All in all, Swiss breweries are proving resourceful and creative in spite of these difficult times. This is the moment for them to highlight their local and unique touch, to be creative and to create an emotional connection with the end customer. Being able to understand what the customer needs at this precise moment and rapidly adjusting to these needs will be paramount in winning back customers after the crisis.

EHL Hospitality Business School
Communications Department
+41 21 785 1354
EHL

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