Lilypad Sales Leaders Interview Series
“If you’re not thinking about every one of those interactions being curated for your customer right now, then you’re just wasting a lot of time and money in my opinion.”
Yazoo Brewing has been a respected leader in craft since the 1990s with their cemented footprint in the southern United States. Today they are focussing on growth more than ever before with a production expansion in the works and new life being breathed into their brand. Neil McCormick is a Yazoo journeyman who is now shifting his attention to keeping the Yazoo name relevant in the evolving craft beer landscape. In this interview, he shares his thoughts on why it is so important for smaller breweries to take ownership of their brand at every customer interaction. From distribution to technology, Neil offers relevant advice to any craft brewer who is thinking critically about meaningful growth going into 2019.
Lilypad: Let’s start by learning a little bit more about you. I saw that you previously worked at Lipman before you went over to Yazoo. What made you want to make the switch from the distributor side to the supplier side?
Neil: Well, when I first started at Lipman they were sitting at around five people in the whole craft beer division. All they distribute are craft and import, they don’t have any domestics to anchor them. So when I started there, we were kind of growing up and I just got to a point where I topped out after helping grow that portfolio pretty extensively. Since then they have probably quadrupled or 10x’d it. We had also done the exact same thing when I was there. Yazoo had been in business a little over four years at that point. I met Linus and Lila, our owners, and became good friends. Then they asked me to come on board, so it just seemed like a natural progression of the way the industry and the market were going.
Linus and Neil take from CraftBeer.com
When you joined Yazoo do you know how many barrels you were putting out? I know you’re sitting at about 20,000 barrels annually now.
Yeah, we’re at about 20,000 or 23,000 right now. Something like that. But when I started we were below 5,000. I think we were pushing about 4,500 on the verge of 5,000 at that point.
So that means that in 10 years you guys have put on an extra 15,000 barrels or so. That’s awesome.
Yeah only about 10 years, man. It’s hard to believe it’s been that long, kind of all went really quick.
On that journey in the last 10 years, does anything stand out to you as a big part of what led to that success? Maybe there were certain initiatives that you guys put on?
I’ll be honest, we really never had a set cut and dry plan, “this is what we’re gonna do and chase it down.” The question I’ve gotten most over the years is different people trying to nail down what our business is and who our customers are. We always kind of looked out into our tap room and it was always a very diverse group of people – from older, younger, black, white, whatever. We covered a pretty broad spectrum of people. And we just wanted to put ourselves in a position to be as inclusive as possible. We always chased that down from a marketing perspective. There was never a target number of people that we wanted to get in front of. If it was two people, then we were going to take the same time and effort to get in front of those two than we would for 200. So for us, it was a lot more hands-on digging in and never saying “that’s not our market” or “that’s not our customer.”
“If it was two people, then we were going to take the same time and effort to get in front of those two than we would for 200.”
So when you talk about being inclusive and making sure you’re getting in front of people, no matter who they were, what kind of programs did you guys put on?
We pretty much answered every phone call, every email, and took every single meeting of anybody that ever wanted to meet with us or wanted us to be a part of their event. I can say that out of my 10 years at Yazoo, about six to seven of those were spent out and about or on the road. Just being everywhere that we possibly could be and in front of as many people as would have us. To use the parallel of fans of musicians, you start at a point where you’ll take anybody that will listen to you, even if you’re playing for free. That was a unique time, but even now there are still so many more non-craft beer drinkers than there are craft beer drinkers in the markets that we’re in. So we’ve used that as an opportunity to be the first craft beer that anybody ever had while trying to negate any pretension that came along with it.
I know you’re the sales and marketing manager and obviously you’re spending a lot of time out there preaching the good word. Is that something all the reps are doing? Is that a company-wide philosophy or are you mostly responsible for having those meetings and going to those events?
It was pretty much me for 90 percent of that time frame. We had a part-time sales person that called on Memphis but the rest of the time I was handling everything in the rest of the state and Mississippi. Then about four years ago, we hired a person to take care of Knoxville and Chattanooga. Then about a year or two after that we hired somebody full time for Mississippi and Memphis. Now we’re in the process of hiring a couple more people for here in Nashville. We have recently brought on a new sales director and I’ve taken a step back away from that because after 10 years of being deep into it, it’s time for somebody new to take the steering wheel and, you know, shape us into what the next 10 or 15 years of Yazoo will be.
So you guys distribute in Tennessee and Mississippi. How did you know when the right time was to tackle a new region, pick up another distributor, and make those key hires?
We really haven’t added any new distribution except for one or two markets over the last four or five years. And the reason being is when I started with the company we rolled into northern Alabama, which is Birmingham and Huntsville, and we saw that there were really only about five other craft breweries there outside of the big guys. That was only like us, Abita, Lazy Magnolia, and Terrapin. We rolled into those markets just because there was an absence of craft beers – there was only one local brewery. What we had in our portfolio was its own unique thing. And when we rolled into Mississippi, where our owners are from, it was the same exact situation there.
“But now if you look at any market, especially in the southeast, the saturation level has grown. The amount of breweries has grown exponentially in comparison to the market share.”
I mean, in this day and age, there is a new brewery rolling into every market and it’s just commonplace. But five to seven years ago that wasn’t really happening. There was maybe only about two to three new breweries a year going into any new market if you were lucky. And those varied between being breweries our size or something like a New Belgium. So our strategy was to look at the market and see what the mix was. But now if you look at any market, especially in the southeast, the saturation level has grown. The amount of breweries has grown exponentially in comparison to the market share.
That makes a lot of sense and is something we have heard a lot this year at Lilypad. So then going forward, how does Yazoo make sure that your beers are staying on tap, your brands are still loved by the consumers, and that you’re still growing? How do you separate yourself?
For us, what we’re going to have to do is just the physical work part of it. I mean, you have so many people in the industry right now that just want to email their way into a solution, beat on their distributors, and spend time trying to point fingers at somebody other than themselves. The reality is, as breweries, we have to take more ownership of our brand. I mean, distributors distribute. That isn’t a slight against any of our distributors. It’s just the market. The distributors have a ton of stuff coming at them.
Yazoo Sample Circle taken from Yazoo’s Instagram
So not only just with Yazoo, but breweries in general. We’re all going to have to figure out that the way things were a year ago, two years ago, six months ago, isn’t the way that business is going to need to be done moving forward. This isn’t just a pandering comment because you’re on the phone, but the reality is that what Lilypad does helps. If breweries resist adapting to the vast amount of information that’s available to them right now and put 20 reps into a market but aren’t being strategic about where they’re spending time, money, and resources, then they’re just pissing away money for no reason. It’s kind of like our early days, it wasn’t about the number of people that we were talking to, it was about the strategic ones that we were talking to.
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Makes sense. So for a brewery that is at that 5,000 to 10,000 barrel mark, given what you just said there, what are those activities, strategies, and tools you’d recommend they use in today’s world?
If I was a five thousand barrel brewery right now wanting to grow, I would sit down with every single person in my company at a table with a few pints of beer and establish direction. Yes as ownership, you need to have direction but as a group you have a lot more opportunity. Have everybody at your brewery being a salesman for your company at every touchpoint. And that includes where they go out to eat, where they do their shopping, so on and so forth. Sit down and ask, “What is important to us? What is our focus? What are we really all about?” And go that direction with every special interest, every charity, and every promotion you work on. You’re not so much trying to cover a lot of space. You’re going deeper instead of wider and localizing in your own neighborhood. You start from there and grow out.
“Have everybody at your brewery being a salesman for your company at every touchpoint.”
The expense and the amount of time that it takes to distribute has diminishing returns. Especially if you want to sign up with distributor after distributor. I don’t know if anyone’s ever done the exact math on it, but your spend the farther away you get from your home brewery to be relevant is exponential. So if I were a brewery, I would just try to be the go-to brewery for people that come to visit our area and grow from there. We have more people now, especially people below the age of 30, that food and beverage dictate where they travel and what they do. If whatever you’re selling or serving that represents you isn’t Instagramable or the customers aren’t willing to tell other people about you via social media or digital platforms, then it really doesn’t matter. No one gives a shit. If you’re not thinking about every one of those interactions being curated for your customer right now, then you’re just wasting a lot of time and money in my opinion.
“If you’re not thinking about every one of those interactions being curated for your customer right now, then you’re just wasting a lot of time and money in my opinion.”
You talked a little bit about what it takes to win in your home territory and going deeper rather than wider, but you also talked about how these distributors that you work with have more on their plates than ever before. How does Yazoo manage their relationships with their distributors to make sure that they’re top of mind and that they’re placing the right beer at the right place?
I’ll be 100 percent honest, man. You know, our local distributor makes up probably about 80 percent of what our distribution footprint is. This may sound defeatist, but the reality of it is, there’s this perpetual cycle with distributors, whether they be beer, liquor, wine, whatever, of the carrot or the stick. Whoever shows up with the biggest carrot or whichever distributor has a culture with the biggest stick to beat their people into submission. It takes a lot to break through that noise, and a lot of that is one on one relationships with the street level people. I can go into a distributor and offer five iPads for a certain sales goal, but six months later I have to offer 15 to get the same exact performance. That is inherently what the cycle of distribution is now.
Whether it be the pay for performance that a lot of the bigger distributors are going to that often represent bigger breweries, you’re still fighting for noise. Like they say in public relations, you don’t fight people that buy ink by the barrel. It’s the same way. There’s no way you’re going to out spend somebody that buys media by the millions when you’re a smaller craft brewery. Something that has been very interesting to me is seeing that the Lagunitas of the world have allocated amazing amounts of their funding to marketing podcasts, very strategic podcasts to get the ears of those people. I think even a few months ago they announced they’re going to be putting even more marketing spend in that direction.
“I think the best advice I can give anybody if they’re looking for a new distributor or looking to expand is find somebody you think is going to answer your phone calls and your emails.”
So being very strategic with where you’re putting money and trying to support the street level people as best as possible by being there whenever they do make a phone call is something we’ve really tried to do. I’m not saying you can’t get attention through a distributor, it’s just getting harder and harder. The better distributors out there are the ones that are being the most honest about the situation instead of just trying to get you caught up in a cat and mouse game. I think the best advice I can give anybody if they’re looking for a new distributor or looking to expand is find somebody you think is going to answer your phone calls and your emails. I got a piece of advice from Adam Avery probably about 12 years ago about how he chose his distributors at the time. He said, I usually stop at the market and meet up with everybody to try to have a beer. The people that I’d much rather have a beer with and we get along with are the ones that I usually sign with. You know there’s going to be ups and downs in the market and if they’re not going to return my phone calls or emails when there is a problem, and there’s always gonna be a problem here and there, then how are we ever supposed to have a long-term relationship?
So it sounds like the theme here, be it getting to know your customer or getting to know your distributor, is going deeper. Just having more meaningful relationships.
Yeah. And it takes a lot longer, man. It’s not easy. I physically cannot go and do a pint night or a tap takeover because of the industry now. Why does all the creativity stop as soon as the beer leaves the brewery? So many people’s default is to give away free pint glasses or to put as many tap handles on a wall as they possibly can. We have to set the bar higher by being more creative with our promos, connections, and the value that we bring to our customers. Part of that is by taking the time to get to know the customers and to listen to what they want instead of just walking through the door and blasting them with information then asking them for to buy shit from you. Everybody’s just so conditioned to not respond to that anymore.
“Why does all the creativity stop as soon as the beer leaves the brewery?”
Can you share any specific ideas that Yazoo has come up with in the last year to help get through that noise?.
Yeah, something that we’ve done in one of our markets that has been a high volume on-premise for the bottle only accounts is start up a recycling program with our six-pack holders. That gives us a way to sit down and meet with the customer when in essence we’re just there to pick up their garbage that we can reuse. So, therefore, we get to see them more frequently. And when we do get to see them they know we’re not walking through the door 90 percent of time trying to sell them something. We’re on a relationship level to where it’s like, “hey man, just checking in to pick up your six-pack holders, you need anything?” If not, no worries, we’re good to go. That way it doesn’t turn into this thing where every time they see you they’re thinking, “shit, he’s going to try to get me to buy something.”
Yazoo’s 6-Pack Give-Back Program taken from Yazoo’s Twitter
In this day and age with the economy doing as well as it is, especially here in Nashville, our owners or managers are doing everything they can to run their businesses. They don’t have time to stop and sit down at the bar for an hour with somebody that just stopped by that they don’t even know. I mean, it’s kind of rude for us as the industry to think that is the solution to improving business. You need to take a look at their business and see where you can help. In a lot of those situations, you have to be willing to say there isn’t an opportunity to start this relationship. So when an opportunity does come up we already know each other. It’s really hard for people to understand that because it’s such a, “we need to sell right now, right now, right now” mentality instead of taking the time to build meaningful relationships with established accounts in your market.
That makes complete sense and is probably a big part of why Yazoo’s successful in your markets.
But you know, to be completely honest, it’s not all been teddy bears and rainbows. Something that we’re faced with right now is that a lot of the people we established relationships with for the first 15 years of business are not the go-to people at the bars or restaurants anymore. They’re hiring new staff or new people are coming from other markets. So one of our main challenges right now is breaking through that noise and establishing relationships with the next generation. The average drinking age for consumers is 21, 22, 23 years old. We’re talking about people that were eight, nine, 10 years old when Yazoo started. So literally we were their father’s beer when they were growing up. So now we have to appeal to the next generation and be relevant to them without being the old guy at the party trying to be cool, you know?
Right, you kind of hit the nail on the head earlier. If it’s not instagramable, if people aren’t remembering your brand, and if you’re not constantly working on those activities in your market, then you’re going to be forgotten.
A prime example, dude. You can search #YazooBrew and look on our Instagram. During the weekends, about one out of every four or five posts with that hashtag is our sampler boards from our tap room. Our original sampler boards were just a board with six holes cut into them where glasses would fit. We started realizing that people were taking pictures of the samplers and nothing said they were Yazoo beers or that they were here. So we went to a company here locally and had them create sampler boards that represented our brand with our logo. That became something people could tag and that’s the touch point when people are in our facility. At this point probably 15,000 people use #YazooBrew and there was probably less than 100 when we first started using those sampler boards. That’s just a small nuance of the different touchpoints that you have to be aware of that no one really gave a shit about 15 years ago.
Yazoo’s Sampler Board taken from Yazoo’s Instagram
I’ve just got a couple more questions for you here. You recently made a new round of hires and you’re talking about a lot of these new strategies that are on the marketing and branding side. When do you think is the right time for a brewery to be thinking about hiring someone to do that full-time marketing and to be full time at these events?
I think the industry standard has always been around 5,000 barrels. It just depends, though. I think Tennessee has the highest beer tax in the nation, so for us Linus and Lila probably waited a little bit longer before they hired me and we probably waited a little longer before we hired anybody else. I think it’s just dependent on the brewery. It’s kind of like on the production side, everybody feels at a point they need to have a centrifuge just to say they have one. It’s the same way with salespeople. It’s all about what this person can bring to the table and do you already have a workload for them if you’re going to spend $60,000 with benefits, insurance, phone, mileage, and all that stuff.
If you were going to spend $60,000 on a piece of equipment in a brewery, that piece of equipment would need to earn you two or three times whatever you paid for it to justify the cost. So as a brewery, I think that is a good direction to go. What can this person bring to the table, what do we need to be fulfilled immediately, and what can they grow into to justify what they’re getting paid? Are we setting them up so they can make significantly more if they do bring that contribution to the bottom line?
“If you were going to spend $60,000 on a piece of equipment in a brewery, that piece of equipment would need to earn you two or three times whatever you paid for it to justify the cost.”
It’s good to be as transparent as possible with your folks. Especially when you’re hiring your very first rep, it’s good to sit down and lay out the expectations. Tell them that there is going to be a lot of overlap. When I started here we were at about 5000 barrels. I think at that point we maybe had five people working for the whole company. So adding somebody to the mix is a very important decision at that stage. Everybody is all hands on deck and there’s a lot of overlapping. So it’s just trying to find that right person that fits physically and financially.
You talked about making sure that you prepare these new hires and that you have work carved out for them. It kind of seems like justifying your investment there is almost the same as justifying your investment in tools. Obviously, we hope Lilypad is a tool that is making dividends for your company. So my next question is going to be, how has technology helped Yazoo as you’ve grown to 20,000 barrels and what do you think is going to happen with your operations and your tech as you grow to 30,000 barrels?
I’ve always been the spearhead for a lot of that. As far as tech goes it’s been night and day. Again, not just saying this because you’re on the phone, but what y’all have done is brought us to the forefront to see what sales look like. Before you guys, up to a certain point the dissemination of information had to come from distributors. And a lot of smaller breweries don’t know what information is out there because most of their technology for sales direction has been anchored by Bud and MillerCoors, and they’re not going to give that away for free.
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So Lilypad has kind of been the big equalizer and I think that information has too. So it’s all going to be about the process you use to access information and digging deeper into where your sales are as a company and where you want them to go. You need to see what makes the most sense and where you can spend your money. Up until recently, I’m talking in the last year and a half, the access to information that breweries that are under 30,000 barrels has had, has been literally little to zero. Until now. Y’all are leading the charge with it. For a brewery — I can’t even imagine starting at Yazoo with 5,000 barrels and having access to the information that Lilypad provides and everybody just takes for granted.
“I can’t even imagine starting at Yazoo with 5,000 barrels and having access to the information that Lilypad provides and everybody just takes for granted.”
I mean before it was just spreadsheets. Here’s what you sold of six barrels, half barrels, and where you sold it. But to be able to analyze trends and do running comparisons to year over year and all that – I just think that moving forward to see what the market looks like in real time is going to be fascinating. These are tools that the big guys have had access to for years that only now are a commonality. Breweries are either going to spend the money and adapt to it and understand that’s what the key to their success is, or if they don’t, they’re going to find out that they’re so far behind. It’s like the people that waited forever to adapt to a smartphone. When you get your first one you realize just how much access to information you have.
I mean even at Yazoo, it’s something that we’re going to really need to invest in. I’ve even heard recently about breweries that are less than five years old having more data processing people inside of the company than they have sales people out in the market. I can 100 percent see that being the trend. What does it matter if you’re going to spend or run these initiatives if you don’t know what you are selling and why and to who? Those questions now are more accessible to small and midsize breweries than ever before. So the pressure is going to be on whether you’re willing to make the investment for someone to dig into that information and see where you should be going and what you should be doing.
“What does it matter if you’re going to spend or run these initiatives if you don’t know what you are selling and why and to who?”
We’re happy to be a part of it. That’s what we’re here to do. Help breweries like you guys grow.
I mean what Lilypad has done to proactively look at how data is funneled from what happens on the street level is huge. There’s are so many people in the craft beer world that don’t know what they don’t know. Having someone present the opportunity to see things about their company and their sales and their beer that they never knew before is going to be super, super crucial moving forward. That’s my two cents.
Preaching to the choir, Neil. So, last question: do you have anything you want to share with the people who are reading about what’s on the horizon for Yazoo?
Yeah, we’re digging in on some new stuff right now. We haven’t really innovated that much over the last few years because we’ve been working on making our beer as good as it could be. Now we’ve got a couple new beers coming out. We got our 15 year anniversary coming up October 23rd and we’re in the process of moving our facility from around downtown Nashville to a 26-acre campus right on the Cumberland River. So pretty excited about that. So got some good stuff on the horizon.
That’s awesome man. I’m looking forward to new beers and I’m sure all your fans are too. Cheers.
This article is part of the Lilypad Sales Leaders Interview Series.