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Virtual Shopping case: Deschutes Brewery
BA 663 – ASSIGNMENT 7.2Bellevue University
Jamie AngovePrepared for Dr. Okash
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 1
The one key measurement of any brand’s success is whether or not the product sells.
Research has shown that most purchase decisions are made based on how the product is viewed
on the shelf (Decision Insight, 2009). Even with purchase behaviors shifting towards more
online shopping, a brand needs to stand out and cut through the clutter to grab a consumer’s
attention. Appealing packaging is crucial in consumer purchase decisions (Decision Insight,
2009), and this paper will explore Deschutes Brewery’s sales prospects and competence from the
perspective of visual appeal, shelf presence and brand equity.
Deschutes Brewery is a family and employee owned company, founded in 1988 in Bend,
Oregon and focused on community, experimentation in brewing, and ingenuity (Deschutes
Brewery, n.d.). The insurgence of the craft beer market over the last ten years expanded the
brand’s reach, leading to the distribution of Deschutes beers in bars, restaurants, and stores
across most of the United States and a couple of provinces in Canada. The product line is broken
into several categories: year-round offerings including pale ales, India Pale Ales, a porter and a
stout, seasonal beers, the Bond Street Series named after the original brewery location, a Reserve
Series, and two collaboration brews (Deschutes Brewery, n.d.). Loyal customers to the brand
appreciate the wide variety of brews and the notoriety of the well-established Pacific
Northwestern brand: still a craft brewer, but no longer microbrewing.
Sales
At the end of 2014, Deschutes Brewery grown to be the seventh largest craft brewer in
the United States and twelfth largest brewer overall (Ditzler, 2015). Competing against
macrobreweries and securing a position this high in sales is no accident. The company produced
over 337,000 barrels of beer in 2014 which was an increase of 50,000 barrels over 2013 (Ditzler,
2015). Deschutes attributes growth to implementing a new bottling line, improving product
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 2
development, and improving the taste of its beer (Ditzler, 2015). Additionally, Deschutes plans
to open a new brewing and shipping facility on the East coast by 2019, further planning for
increased growth and sales.
Deschutes also continues to improve sales by creating customer loyalty. It considers
every aspect of the customer’s experience in order to make it extraordinary, creating a positive
impression of the brand for consumers (Morgan, 2013). In-store marketing of the product must
reflect the pub experience that consumers get which connects them to the brand. The image that
pub patrons get of fresh, local beer paired with locally sourced food and upcycled spent grain
must be imposed onto supermarket shoppers through packaging and product placement.
Shelf Presence
For this study, Deschutes beer placement was evaluated within a Hy-Vee grocery store.
Hy-Vee is a large chain grocery store, primarily located in the Midwest. Many of the Hy-Vee
stores have a Wine and Spirits section with beer, wine and liquor heavily stocked and set-off
from the rest of the store, but this particular store simply had a single aisle between produce and
canned goods designated for alcoholic beverages. Based on the smaller size of the store and
scaled down alcohol selection, only three Deschutes beers were stocked: Fresh Squeezed IPA,
Black Butte Porter, and Red Chair NWPA.
Comparing Deschutes offerings to competition, there were roughly the same number of
selections available for Deschutes as for other breweries. One exception was a Midwestern
brand, Goose Island, which had six varieties available. Although Deschutes has a much wider
line of products, the small scale of the store and competing against more local brands make the
limited product offerings justifiable. Interestingly, shelf-scarcity of a product may actually
improve consumer demand. Provided that consumers believe scarcity is caused by high demand
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 3
and popularity of the product by other consumers, may cause customers to choose the scarcer
product (Parker & Lehmann, 2011). In addition to few product offerings, each of the three
available beers were limited to about two to three six-packs on the shelf, potentially increasing
consumer demand by scarcity.
The Deschutes beers were all found directly in the middle of the beer aisle. Each style
was stocked on its own shelf, only one facing for each, with the Fresh Squeezed IPA nearest the
top, the porter in the middle, and NWPA at the bottom. There were two shelves above this
placement and one shelf below stocked with beers from other breweries. Essentially, they were
in a vertical line directly in the middle of the beer section. Research has shown that buyers
respond best to products positioned on middle shelves, often called the bull’s-eye zone (Kosek,
2014). Since Deschutes is a well-established and recognized brand, it has been able to maintain
this prime shelf position and improve potential sales.
Key Message Communication and Brand Equity
Deschutes Brewery coasted by for the first six to eight years of its existence without
having to intentionally sell any beer (“Deschutes rides a swift current,” 2008). The brewery
operated in a pub, was easily accessible to locals, and was a product that supported the local
economy, a culture that the Pacific Northwest is passionate about (“Deschutes rides a swift
current,” 2008). Even with 90 breweries operating in Oregon in 2008, market saturation still has
not proven to be a problem for sales (“Deschutes rides a swift current,” 2008).
As the craft beer market continued to grow, Deschutes discovered that it did have to
begin working at selling its beer. In 2014, craft beer sales represented eleven percent of the
overall beer market share, a number which is expected to grow to 20 percent by 2020
(Goldschmidt, 2015). The competition was growing. Deschutes traditionally preferred to
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 4
connect with consumers through an authentic experience, but realized that key message could not
be communicated beyond its hometown customers that were actually able to visit the brewpub
(“Deschutes’ beer barrel,” 2007). Deschutes debuted “Woody” the “Big Ass Barrel” in 2007 as
a form of experience marketing: a truck built to look like a beer barrel with sides that open as
windows where bartenders pour and serve Deschutes beer (“Deschutes’ beer barrel,” 2007). The
experience effectively increased sales in Seattle retail stores to over 24 percent, compared to only
8 percent in the rest of the Deschutes markets (“Deschutes’ beer barrel,” 2007). Additionally,
Woody generated the equivalent of five million ad impressions from Seattle media (“Deschutes’
beer barrel,” 2007).
Traditional advertising for Deschutes is still limited, partially due to restrictions on
advertisements for alcoholic beverages. Woody, however, now makes trips to festivals across
the United States, with two coming to Missouri in the next month. Social media and word of
mouth help boost the image and reach of Deschutes to more and more consumers.
Brand equity in craft beer is somewhat unique: the emotional connection and resulting
attitudes formed towards a brand left by an experience are typically strong enough to win
consumer loyalty following that single incident. Many breweries offer brewery tours and free
tastings, knowing that the connection that craft beer drinkers make to a brand through this
experience will drive future sales. Deschutes Brewery has positioned itself as a premier craft
beer brand out of the Pacific Northwest, offering quality beer with experimental flavors, thus
establishing a strong connection to consumers.
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 5
Aesthetic Appeal
The overall look of Deschutes packaging is a somewhat
folky, though the recently redesigned labels are slightly more
contemporary. Each six-pack is packaged in a cardboard
carrier with a bright background, a solid-colored bar at the top
with the brewery’s name printed in a blocky font, and an image
reflecting something about the individual product. Fresh
Squeezed IPA has a painting of a bright green hop, squeezed
until the presumed beer flavor
drips out. Red Chair NWPA features a red background with a ski
lift on the package. This reinforces the brand’s image of being an
outdoorsy company, based in Oregon in an area known for prime
skiing. Black Butte Porter features a fitting black background
with an image of the famous strato-
volcano, its namesake, found in
Oregon’s Deschutes National Forest. This porter is one of Deschutes’
year-round offerings, and the packaging closely represents the smooth,
creamy flavor of this coffee and chocolate-noted beer.
Each of Deschutes’ labels is strategically designed to fit into
an overall brand scheme, using the same blocky font at the top of the
six-pack cardboard carrier, a square painting representing the brew on the left-hand side of the
carrier, and the same circular logo depicting an Oregonian stream and mountain found on the
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 6
neck of each bottle. It is easy for consumers to quickly identify Deschutes’ products, a feature
preferred for brand recognition and driving repeat purchases. The designs are also all very
relevant, current and visually appealing to millennials, craft beer’s largest target market.
Conclusion
With its rugged, Pacific Northwestern image of a craft brewpub featuring the mantra
“Bravely Done,” Deschutes Brewery has established a loyal customer base. Setting up shop in a
smaller town attracted early adopters to the brand, but expanding into supermarket distribution
required careful planning to ensure the product would be aptly presented to attract new and
recapture existing consumers outside of the Oregon market. Through bull’s-eye shelf placement
and bright, eye-catching product packaging, Deschutes Brewery continues quickly growing and
furthering their brand equity with new and existing customers.
BA 663 – Assignment 7.2: Virtual Shopping Case – Deschutes Brewery 7
References
Anonymous. (2008). Deschutes rides a swift current. Oregon Business Magazine, 31(10).
Decision Insight. (2009). Kellogg’s goes virtual to test real life packaging. Retrieved on April 27,
2016 from https://cyberactive.bellevue.edu/courses/1/BA463CL-T301_2165_1/content/
_7929516_1/ Virtual_Shopping_Case_Study-_Kellogg%27s_Packaging_copyright_
2009_opt.pdf
Deschutes Brewery. (n.d.). All about Deschutes. Retrieved on April 27, 2016 from
https://www.deschutesbrewery.com/discover-deschutes/
Ditzler, J. (2015, April 2). Deschutes ranks as 7th largest craft brewer. The Bulletin. Retrieved on
April 27, 2016 from http://www.bendbulletin.com/business/3030452-151/story.html#
Goldschmidt, B. (2015). The art of craft. Progressive Grocer, 94(5).
Kosek, J. (2014, July 7). How shelf placement impacts retail buyers, shoppers. Chain Drug
Review, 36(11), 14.
Morgan, J. (2013, August 6). Brewpub files: Deschutes Brewery combines craft brews with local
flavor. Craft Brewing Business. Retrieved on April 27, 2016 from
http://www.craftbrewingbusiness.com/business-marketing/brewpub-files-deschutes-
brewery-combines-craft-brews-with-local-flavor/
Parker, J., & Lehmann, D. (2011). When shelf-based scarcity impacts consume preferences.
Journal of Retailing, 87(2), 142-155.