Farmers Brewing has made a name for itself by producing high-quality, farm-to-glass beers. As the Northern California brewery continues to grow, it has strategically chosen to expand its territory into Idaho and Montana recently.
This move is not just about entering new markets, says co-founder Bill Weller, but it aligns with regions that resonate with the brand’s core values. In tandem with this expansion, Farmers Brewing is also focusing on SKU reduction, a crucial step to ensure long-term sustainability and profitability for the company that launched in 2020.
Farmers’ decision to expand into Idaho and Montana was driven by careful consideration of market alignment and distributor reputation, he told Brewer.
Initially, the brewery had considered expanding southward into larger markets such as Los Angeles and Las Vegas. However, after evaluating their options and engaging in extended discussions with potential distributors, Farmers Brewing pivoted to focus on Idaho and Montana.
“We just turned and did a 180, and went the other way,” he said. The demographic alignment between Farmers and the types of consumers in that territory also aligned better, he noted.
“Farmers, that’s our demographic, and Idaho and Montana fit our brand,” he said, adding that the brewery’s core identity, rooted in agriculture and rural life, resonates well with the culture and lifestyle of these regions.
Yet, the decision was heavily influenced by the excellent reputation of Hayden Beverage Co. of Boise, Idaho in early June.
“You just go around town and ask people about them,” he recalled. “These guys have a phenomenal reputation.”
The expansion has been executed swiftly and efficiently. Within the first two months, Farmers had already completed two full deliveries to the new territories. To ensure a strong presence in these markets, the brewery sent six sales team members for two weeks to conduct crew drives and engage directly with retailers and consumers. Additionally, one sales rep will be relocating to Boise, in January to maintain a consistent presence in the region.
Weller highlighted the importance of having “boots on the ground,” not only to build relationships but also to hold distributors accountable.
“You gotta think of your distributor as a partner and not fight them all the time,” Weller advised, stressing the value of collaboration in ensuring that the brand’s products are properly represented and available on shelves.
As Farmers expands its reach, it is also making strategic decisions to streamline its product offerings. Early on Weller said they experimented with a wide variety of SKUs, including four seasonal beers and several other unique brands. However, he quickly learned that this approach was not sustainable, especially when considering the realities of shelf space and packaging costs.
“In the beginning, I had eight or nine different SKUs,” Weller recalled. “And then you learn that shelf space doesn’t work that way.”
One of the major challenges was the cost associated with different types of packaging.
“Printed cans bring your cost down per case immensely,” he said. “So that’s why we only went with the ones that have the volume where we can justify printed cans.”
Reducing the number of SKUs has allowed Farmers Brewing to focus on its core offerings, which include its flagship Farmers Light and other popular varieties like Valle, a Mexican Lager, and 530, an unfiltered Wheat Ale named after the local area code.
READ MORE: What are the Keys to Developing Territory Expansion?
This focus has also enabled the brewery to reduce costs associated with seasonal beers, which often come with high packaging expenses and the risk of unsold inventory. Now the brand has five cores with just two seasonals, a lemon Lager (Summer Kickback) for the warmer months and an upcoming Dark Larger for the cooler months.
“If you don’t make enough, you lose that shelf space,” he noted when talking about chain and retail sets. “You make too much, no one wants a winter seasonal when it comes springtime.”
By simplifying its product line, the brewery can maintain consistency and better manage its costs.
SKU reduction is not just about cutting costs; it’s also about ensuring that the products that do make it to market are given the attention and support they need to succeed.
“The simpler the better,” Weller said, underscoring the importance of focusing on quality over quantity.
As Farmers continues to grow, the brewery remains focused on saturating its current markets before considering further expansion.
“We still have a lot of room to grow in the current territories we’re in,” Weller said, acknowledging the challenges of balancing expansion with maintaining a strong presence in existing markets.
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