Money, Loyalty, and Home Brewing: The LHBS Dilemma

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I'm surrounded by local home brew shops (LHBS).  Too many, probably.  There are four within 20 miles of my house.  

And I patronize them all.  Why?  Because I help organize competitions and events in the area, and frankly it's convenient for each one of these shops to know I'm a customer.  I also write about beer, and in the event I need a shop owner's perspective on a story, there are plenty of folks to take my call.  Plus I'm out and about a lot anyway.

The point of this piece, though, isn't to talk how many there are and whether there are too many: it's to ask whether (and how) you should be shopping there in the first place.  

At What Price, Local?

The reason this is coming up now is because of a conversation I had on- and off-line with some folks about just how much they're willing to pay to keep their business local.  It was kicked off in a social media group by someone mentioning that they were paying $250 for a basic kegging/draft setup, but they found the same thing at an online retailer for $170.  

This individual wanted to know if he was being unreasonable for thinking about buying from the online retailer.

I shop locally.  It's convenient, and it maintains relationships with people in my local beer community.  And I'm willing to pay a premium to do so, and to help keep them in business.

But if I walk into a shop and see something running a 50% markup?  

I'm probably going to buy online.

I'm also sure that some of you are thinking, "sellout," or "traitor," or "cheapskate."  

What you should be thinking is, "economist."  Because I'm more than willing to pay more for identical products in order to support my local beer economy - but I'm not willing to pay any price, and you shouldn't be either.

Sustainability

LHBS, the traditional brick-and-mortar kind (even if they do some online sales), are obviously facing a market headwind.  When large retailers leverage their economies of scale and purchasing power and sell at near-cost because they can, it puts enormous strain on LHBS to compete with - much less match - their prices.  I get that.

Then there's the fact that homebrewing is "leveling off" or dropping in terms of sales, if not in number of homebrewers (it looks like more are simply brewing less, but it might only be a matter of time before the number of homebrewers actually drops).  

What's a LHBS to do?  One option is to raise prices and lean on sentimentality and loyalty and look askance at any homebrewer who confesses to concealing a life as a secret online shopper.  Another is to find a business model that lets you make money while not pricing my purchase as though I'm buying for two neighbors of mine that stopped homebrewing a year ago.

If you can't compete with online retailers for everyday brewing supplies and ingredients, maybe find something online retailers are bad at (teaching about homebrewing, or customer service in many cases) and lean into that.  Focus on selling heavy-weight or perishable products that don't ship well (fresh fruit for fruit beers and meads).  Build your own client base by starting or hosting homebrew clubs in your area.  Host events and festivals.

But you can't change the economy.  EVERY retailer is struggling with this.  While homebrewing was growing by double-digits every year and everyone needed a hand with what to buy because they were new and/or there weren't good resources online, then LHBS were easy to sustain (if not terribly profitable).  The moment that's not the case, you're going to be caught up in the same dilemma every other traditional retailer is grappling with.

Where to Buy

I'm not going to stop shopping at my four local shops.  I wouldn't even if I didn't have a mercenary motive.  But I definitely shop with a strategy.  I'll buy yeast, bottles, and some equipment from shops.  I'll buy things that I know the shop can get more or less in bulk, like tubing.  

But loyalty has its limits.

If shops are saying, "we can't stay in business by selling those things," then, harsh as this sounds, maybe you can't stay in business, at least not with your current approach.  I'll help in any way I can.  I'll even overpay for lots of products, within reason.

But loyalty has its limits.  

I'm positive that many homebrewers identify with the "craft" ethos and want to support local businesses.  For sure, I encourage people to buy local, and to look for items that their shop seems to offer competitive prices on and make the trip to get those things there.  I encourage them to attend a live class so they can get their specific questions answered (though online classes are a great option for those in homebrewing deserts).  

But loyalty has its limits.  And the clock is ticking.

Keep it simple.

JJW

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