Creating a Marketing Story — With Humor — That Appeals to All Faiths

Ruby Tuesday Pick of the Week: Shmaltz Brewing Company
Why It’s a Gem: Creating a story – with humor – that appeals to all faiths gave an added boost to a craft beer of divine quality

Even before the Great Recession, small businesses knew that if they were to compete against the big guys, they had to stand out. One way to do so was by telling their story – of the company’s creation, their philanthropic ties, their unique ingredients – in order to appeal to an audience that might otherwise have been lured away by the big-budget marketing campaigns of larger competitors.

That’s precisely what Shmaltz Brewing Company did. By creating a brand tied to a heritage, Jeremy Cowan’s brainchild tapped into a ready-made tale thousands of years in the making – and they do it all with a hearty dose of humor.
(This interview has been edited for clarity and length.)

Lynda Resnick: In this week’s Ruby Tuesday, we’re speaking with Jeremy Cowan, CEO and creator of Shmaltz Brewing Company. For our readers, describe your business model. What is it that Shmaltz Brewing Company actually does?

Jeremy Cowan: We make the country’s first and only Jewish celebration beer. In addition, we actually make the country’s first and only sideshow freak beer. I’ve worked with some of the best brewers in this country. We make high-end craft beers, ales, and lagers, and unique flavors and styles and recipes. We distribute them in about 30 states around the country, and Canada and the U.K.

I have custom recipes that I own. I approach breweries that I’ve worked with and have them produce small-batch, high-end beer for me exclusively. And then I write all the shtick and create brand labels using my artist, Matt Polacheck, and another friend of ours who’s a tattoo artist.

LR: But you don’t brew them yourself?

Jeremy Cowan, CEO and Creater of Shmaltz Brewing Company

JC: No, we’re what’s called a contract brewer. Much like in the wine industry, there’s a lot of boutique wineries who will buy either grapes or buy wine and blend them to their specifications. We actually have specifications that I work with. [We use] one brewer, and he brews all these beautiful, delicious, complex beers exclusively for me, under our labels, that we buy and resell to our wholesalers around the country.

LR: That’s a very interesting business model, because we’re hearing more and more of that lately. Successful companies [are] going from the manufacturing model of the ‘40s and ‘50s to a model and business where we can outsource certain things. We don’t have to make everything ourselves, but we have to make sure that it’s made as well as we would make it, right?

JC: That’s the goal. Actually, this is the model where they will make it better than I would make it. I’m an English major, not a brewer. I wanted to find the absolute best brewers in the country that could make me beers that would be much more spectacular than I’d be able to make myself — and ask them to really push the boundaries. I’ve gotten really good, at this point, at drinking beer and tasting beer. I call myself a beer geek. (We use that in the beer industry as an affectionate term.) But I don’t necessarily need to own a lot of stainless steel and a lot of hoses and pay the lease on an enormous building and have to deal with all of the issues that a small brewery has to deal with. I want to get out there and hustle and have my vision for what I want to create: something really special and high-end and unique. That’s what I’m spending my time doing.

LR: Would you explain what a craft beer is?

JC: So, traditionally the beers that you would have thought of as the beer of America -– Budweiser and Coors and Miller -– are made in enormous industrial plants. And they’re essentially making a widget, which is in the form of a beer bottle, and then marketing it and advertising it. Craft beer is much different. It’s small, human-scale. It’s small batches using 100% high-end grain, exclusively barley or wheat. There’s no adjuncts and no additives. There are high-end flowers called hops; we use an enormous amount and variety of hops to make very special flavors. Complex ingredients. Traditional brewing processes. It’s the difference between going to a giant supermarket and buying bread that’s starched, white and bland, versus going to a local farmer’s market and buying a loaf of bread that’s unique and flavorful and made with a lot of passion. It’s just a different process, and I think a different experience for the end consumer.

LR: And your price structure? How does it compare to a Coors?

JC: Well, it’s interesting. The end consumer is lucky, because the craft beer industry didn’t realize exactly how special they were in the beginning, and a couple of the bigger [craft-brewing] companies felt that they had to actually compete against the bigger beer companies. In wine, you’ll get a small wine producer whose wine costs ten or twenty times more to make it, and they need to make a margin. [There’s] limited availability, so they can charge an enormous amount. Whereas craft beer sells for [only] two or at the most three times as much as some of the bigger beer companies. The big beer companies spend 80% of their actual product cost to advertise.

LR: Fascinating. I have so many questions for you, I’m so interested, because I know what it takes to make a beverage. Now, Water is untouched by man; but , even though it’s 100% real pomegranate juice, it is made more like a fine wine; you blend between orchards and blend between different years to find the perfect balance. And I’m sure that in beer making there is a set of artistic talents for creating the right product.

Is your business growing in the recession?

JC: It is. In the last five years, we’re up 1,000%. Last year, even in the midst of all of this mayhem, we were up 80%. This year, we’re showing those kind of numbers, but a lot of that is because we’re still not a huge entity.

The knee-jerk reaction is, “Well, beer [and] liquor [are] recession-proof,” but actually that’s not the case. Fine wine is down anywhere between 10-25%, depending on where you’re looking, and liquor sales are not surging. Big beer is down. Imports like Corona and Heineken last year were down 4-5%, whereas craft beer was up 10-15%. I think people are realizing what an affordable luxury that craft beer is. You can buy the most spectacular craft beer for $10 at the grocery store. If you want that kind of quality out of a bottle of wine, you’re spending $50, $60, $80.

LR: Let’s just talk about the name and the brand. “The Chosen Beer.” I love it. What niche market are you appealing to? I think I know.

JC: It’s the mother lode of marketing. It’s a niche within a niche within a niche. I don’t think any sane businessman would suggest you start with a community that is 2% of the population, the Jewish community, [then] cross that with the market for craft beer, which is about 4%.

My whole goal in the beginning was to start the first and only Jewish celebration beer, and it’s grown from that to where we want to make beers that can stand with the best craft beers in this country. Based on the quality, we’re able to be creative and super-playful and add a very unique personality to the brands.

LR: Are you using social media?

JC: Yes. The beer community actually is very web-savvy. There’s a lot of online activity, and we’re very much involved with that. It’s time-consuming, and it’s not free.

LR: No, it’s not free, but it’s certainly not expensive compared to traditional advertising.

JC: Right. We would certainly not be in a position to do traditional advertising at this point.

LR: Of course not. But you don’t need to. That’s why there’s an opening. There wasn’t an opening for the last 20 years for the small businessman and woman, but today there is because the big guys are suffering, and they have huge overhead and massive debt. If you’re nimble, you can get in there and make a name for yourself in the new-media space. Viral projects and [web-based] public relations are not expensive in comparison. But what they are is time-consuming and a bit technical and intellectual, so you need smart people to spend a lot of time doing them. And you have to motivate those people, and give them direction so they understand the brand.

JC: You need to tell those stories, and that’s what small business is so good at in some ways. And it’s real. It’s human scale. They identify with it. They feel the passion and they appreciate the quality, and that’s something that big businesses simply don’t do anymore. That’s not their model.

A lot of companies, when they try to grow, they make their flavors bland, their message innocuous, and they try to play to the lowest common denominator. That’s not what craft beer is about. You play to your strengths, which [are] uniqueness, imagination, and innovation. And have fun and make it special, and that’s kind of what I’m trying to do with Shmaltz Brewing.

LR: The things that I talk about in the book [Rubies in the Orchard] and that we run our businesses by are intrinsic value in the product, which you certainly have with the craft beer; unique selling proposition, the way you market it with the humor and the personification, the beer becomes a personality; and transparency/community, which I assume you have because of your Twittering and social networking. Now, do you give back at all? Do you have anything that you do to make the world better, besides putting a smile on their face?

JC: From the very beginning, our main focus has been on participating in the community through fundraisers and festivals, whether it be Jewish film festivals and JCCs [Jewish Community Centers], [or] things like alternative culture and the arts and being very involved with underground artists and emerging cultures, as well as the food culture that’s also [in an expansion mode].

I’m at the point in my business [where] I do need to consider how big I [want to] get and how quickly I [want to] get there, so that we keep the momentum and the enthusiasm of growth, but that we don’t overextend ourselves into things that we’re not necessarily ready for, or not necessarily even good at. It’s also hard to find help. People tend to be either [overqualified] and removed, or very small and struggling.

Part of a Shmaltz Brewing Company ad campaign

LR: There are so many people out of work. And so many good people that have to change careers. I’ll tell you what I look for in employees. I look for the talent, of course. I look for a work ethic that compares to my own. And I also look for people who are well adjusted. It’s very difficult to work with people that have personality defects, even though they may be fun at a party.

Just make sure you have the best distribution. You’re keeping your overhead down. Grow like a healthy animal. But this is not our last conversation. I’m interested in your business. I really am.

JC: Well, keep your eyes out for our pomegranate beer. The brand is called He’Brew, and that particular beer is called Origin.

LR: Because it was a pomegranate and not an apple in the Garden of Eden. You really nailed it.

JC: I couldn’t come up with quite as much shtick on pomegranate as you guys did, but we did our best.

LR: You can borrow anything you want from us, I don’t care. It’s biblical, for God’s sakes. And I have talked your ear off, but I’ve enjoyed it.

JC: I love it. That’s one of the reasons why I’m in sales and why I started this. I love the narratives, and I love hearing people’s stories.

LR: This is inspiring. You’ve got to get your story out there, you really do. Thank you, Jeremy.

JC: Thanks for your time, have a great afternoon.