A Migration Towards a Niche Market

In a recent post published at The New School, Ben Edmunds, a columnist for the site, prompted us to think about the point at which Portland would be considered a saturated beer market.  Framed in the article as the Portland Beer Apocalypse, Ben offers his take on this very real possibility, saying:

"I fear for the Portland brewpubs. Already forced to compete with a tough restaurant scene, brewpubs are strained by large outlays of cash and credit for brewing systems, as well as the challenge of running both a brewery and restaurant."  He goes on to say, "I fear that good beer and the best intentions may simply not be enough to make a brewery succeed. I hope I am wrong, but I’ll be surprised if the city can handle forty-plus breweries and brewpubs sustainably."

As you might expect, the post was met with comments of varying opinion.  It was also met with another insightful look at the subject from Jeff Alworth. 

While the conversations that followed both of these posts raised some great points and allowed many to express their opinions (not to mention some creative math),  it's still not clear whether or not we've reached that point of saturation.  There's a real possibility that we won't know we've reached that point until we're actually there.  At the same time, we may never reach that point at all.  Still, there is no denying that Portland is a competitive beer market.  And depending on how you look at it, Portland could be considered the most, or at least one of the most competitive beer markets in the world. 

Personally, I find the topic of local microbrewery market saturation to be pretty fascinating.  I consider myself lucky to live in a city faced with such an issue.  So when I heard that McKean Banzer-Lausgerg, a managing partner at Migration Brewing, one of Portland's newest microbreweries, was going to discuss Launching a Brand in a Competitive Space at an American Marketing Association event last week, I signed up to attend.  And I'm glad I did.

The interview-style discussion began with a question about making marketing decisions in a competitive or almost saturated market.  McKean's response to the issue of saturation was one of the more interesting of the afternoon: "we stay away from that word," he said.  Instead, he refers to Portland as an established market.  While the difference between saturated and established may not be obvious to some in this context, it was apparent from the conversation that saturated is perceived as carrying a more negative connotation than using the word established to describe the market.  Either way, I was happy to see McKean set the tone with this distinction.  He went on to say, "within an established market, there are opportunities to be had."

From a marketing perspective, differentiation is one of the greatest challenges facing Portland's breweries.  That said, it was encouraging to hear McKean talk about some of the decisions that Migration's team has made to position the brewery as different in a crowded marketplace.  The most notable of these points of difference, and perhaps the most revealing about the brewery's future direction, is its focus on session beers.  To this point, customers have only had the opportunity to try two Migration Brewery beers.  As a result, we've been left to guess about what the standard lineup will entail. 

While other local breweries do brew session beers, I can't think of one that focuses exclusively on them.  The closest that comes to mind is 60+ miles from Portland:  Everybody's Brewing in White Salmon, WA.  Even then, the definition of session beers seems to become more inclusive everyday - especially in the Pacific Northwest.  It will be interesting to see how Migration draws parameters around its session beers, and how it moves to occupy a space in the market that will allow them to target this specific niche directly. 

Referencing both the brewery's visual identity and its beers, McKean discussed his team's deliberate choice to get away from the hops as means to cut through the clutter.  He's right: Migration Brewing's logo is devoid of hops.  Instead, the visual identity is dominated by a strong letter M with wings and a beak of sorts, which hints at the concept of migration without actually spelling it out.  The name Migration also holds an interesting back-story.  McKean discussed two main reasons why his team selected the name: 1.) Portland is home to a lot of people who have moved from other parts of the country, and 2.) the brewery is part of a new generation of breweries. 

Despite an early question from the audience about where Migration Brewing is located, McKean expressed excitement about the brewery's locale.  The location must be pretty good, as Coalition Brewing, another new microbrewery, is slated to open six blocks from Migration later this month.  While some may view this as direct competition, it doesn't sound like Migration's team views it as such.  McKean points to Coalition Brewing's slightly different approach, specifically pointing to Coalition's unique program for homebrewers, as a primary reason why the two breweries will not be competing directly.  And, as we've seen at the intersection of SE Division and 12th, perhaps this kind of beer cluster will serve as a stronger draw to people both within and beyond the immediate neighborhoods.

Saturated or not, several more new breweries will open their doors this year in Portland.  Migration Brewing has taken a step that will become increasingly important as additional breweries enter the market: it has identified what it perceives to be unoccupied space in the market, and it's moving to fill that space.  

There's a finite amount of available space out there.  And available space for breweries in Portland will become more difficult to find as the market welcomes new entrants.  At the end of the day, the consumer culture of Portland (as suggested by Jeff in his post) may support some breweries, but it's not likely that culture alone will support them all. Success will depend on a brewery's ability to identify lucrative available market space, meet the demands of a specific audience, and offer real value through differentiated products (ie. great beer) and experiences. 

I'll be interested to see how newcomers will enter the market, how other breweries adapt, and how the community responds to it all.  In the meantime, I'll look forward to some session beers on Migration's patio this summer.