The future belongs to the niche players

When I first wrote a post about the analogy between books and beer (3 April), I intended it as a whimsical one-off, rather than a start of a series. But I keep finding quality online content about brewing that prompts further analogical thought, first Pete Brown’s ‘From cider to lager: UK’s mass market misdeeds’ and now an interview with Jim Koch, founder of Boston Beer Company, the brewer of Sam Adams beer (Reuters.com, 6 December).

Koch disputes the idea that small, craft, brewers are in competition with the large players. He uses an analogy with food: “I’m not going to compete with the big guys… [like Macdonald’s and Burger King]…I’m opening a gourmet restaurant”.

A corollary of Koch’s view is that, contrary to popular belief, you don’t market growth in general in order to grow one’s business. If your sales are very small, total market size is of little relevance – there will always be room for one’s sales because they represent such a minute fraction of the whole.

According to Koch, craft brewers like Sam Adams “are not riding a big tide lifting all beer”. Instead they are achieving growth by what (to use the language not of Jim Koch, but of Chan Kim and Renee Mauborgne) a blue-ocean strategy. In Koch’s words: “Small independent brewers like Sam Adams are in a way creating their own growth by making unique flavorful beers that are changing perceptions about beer but also bringing in wine drinkers, spirit drinkers”.

In publishing terms, one way to bring to the book market consumers who don’t define themselves as traditional book consumers is to position books amongst other kinds of resources. Books can, for example, provide guidance and analysis and in the process come to be seen as attractive (and, indeed, economic) to consumers of those products.

Interestingly, some of Sam Adams’ products find niches at the top end of the market – for example, Utopias, a specialist brand of beer that sells at $175 a bottle. This has direct relevance to professional (and scholarly) publishers, which can publish into guidance-and-analysis markets products that are expensive as books (cp. beer) yet – compared to resources such as conferences, consultancy, and journals  – inexpensive as guidance-and-analysis (cp. wine, spirits).

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