Forget the Price of Oil… What About My Beer?

As Charlie Byrne and Alexis Siemon (the two other microbrew fans in the office) know all too well, due to a worldwide shortage of hops, prices for craft beers have gone up over the past year.

When prices for hops quintupled (at least), many of our favorite microbrewers had to pass on the increase to consumers. And that could have put some of the smaller operations out of business. But they were saved by their competitors – yes, their competitors.

Both Boston Beer (Sam Adams) and Sierra Nevada, the big players in the craft beer world, came to the rescue. They made their stockpiles of hops available at cost to small breweries, cutting the market price by a fifth or more.

It was enough to make 75 million pints.

Keeping their competitors alive was smart – because, unlike mainstream beer drinkers, microbrew connoisseurs love to try a variety of beers. And that will include Boston Beer and Sierra Nevada brews. So, by keeping the smaller breweries going, Boston Beer and Sierra Nevada are ensuring that their entire industry will grow and thrive, even in tough times.

It may seem counterintuitive that you can grow your own business by “helping” your competitors. But remember: A rising tide lifts all boats. As Michael Masterson wrote in Early to Rise several years ago:

“Most business universes are expandable. If a new guy comes into your neighborhood and starts competing with you don’t assume that you are in danger. Every dollar he spends advertising his wares is a dollar spent advertising your wares too. The greater the combined promotional enthusiasm there is the stronger the interest will be, particularly in the minds of people who were not buyers previously.”

 

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