SweetWater's 420 Fest is a chance to show its global buyers how it engages a local audience.

SweetWater Brewing Co.’s annual 420 Fest is a decidedly local affair, a celebration of good music and easy living in the heart of the local craft brewer’s hometown. 

But this weekend, cruising Centennial Olympic Park and listening to headliner Widespread Panic will be a bevy of foreign faces seeking to understand the culture behind some of their favorite American beers. 

Sowady Lor

Their host, Sowady Lor, is the company’s Netherlands-based export director, or “chief explorer officer.” He says the annual event has become a way to show customers from a few of its 12 overseas markets the truth behind what they’ve bought into — the story of how two students followed their passion into business because they cared “more for beer than books.” 

Mr. Lor, who also runs Craft Connection Export, said foreign beer distributors value taste and price, but in a crowded field, they’re also looking for something intangible that can translate across borders. Especially when taking the risk of stocking a new American product, identity and story matter. 

“It’s 90 percent of the work which is already done. They will buy the story before they buy the brand or the liquid,” Mr. Lor told Global Atlanta. 

Luckily for Mr. Lor, who met SweetWater’s leaders through a mutual distributor during the brand’s first export foray in Ireland, the company had the size and product lineup to back up its countercultural, live-in-the-moment narrative. That persuaded him to take on the brand as his exclusive American craft beer. 

“It’s not a young company. SweetWater has 22 years in the market in the U.S. They are doing a lot for their local community, they have great beers and a fantastic energy in terms of the branding — it extends out of the shelf,” Mr. Lor said. 

To some, craft means small, which can be a liability for buyers that need consistent supply and are wary of breweries that lack the financial backing required for a patient export strategy. Among the more than 4,500 craft breweries in the U.S., Mr. Lor estimates that only the top 20 or so have the infrastructure to support global sales. 

“You cannot export if you don’t have the quality and the consistency in the liquid and in the process. It takes more time to learn, and you will be making mistakes and learning,” he told Global Atlanta. “If the beer has changed or doesn’t have the same taste, (the consumer) will switch to something else, to another brand.” 

As No. 14 among craft breweries in the country by volume, SweetWater is larger than many breweries in Europe. And its leaders cherish their independence, making distributors confident they won’t be painstakingly building a brand for a beer that is just going to get acquired soon by an industry giant, Mr. Lor said. 

Perhaps all these attributes were in the mind of SweetWater’s executives as they persisted in global sales, despite a bad first experience. (After multiple inquiries, SweetWater declined to make executives available to comment for this story, but Mr. Lor said co-founder and “Big Kahuna” Freddy Bensch and Chief Revenue Officer Paul “PK” Kirbabas had a clear-eyed view of global markets.) 

Mr. Lor said that when SweetWater went into Ireland in 2016 to capitalize on publicity from a Georgia Tech football game held in Dublin and a related Atlanta business delegation, they ran into a “bad payer,” a distributor that didn’t hold up its end of the bargain.

Still, SweetWater could see the promise of global markets. Its classic IPA and the more “approachable” 420 extra pale ale had the hoppy flavors that many overseas customers look for in American craft beers — with an unexpected twist.  

Research on the South Korean market, for example, showed that about 60 percent of the shelf space was stocked with West Coast IPAs. Being the largest craft brewery in the South and the only one in the top 50, SweetWater’s geography went a long way toward creating curiosity among buyers.  

“They are triggered also by the origin, and it’s a big point of differentiation, being from the Southeast, because they don’t expect this,” Mr. Lor said. 

Other flagship brews include Hop Hash, an IPA infused with flavors from the “hash” left over after leafy hops are crushed and pelletized; the pineapple-flavored Goin’ Coastal IPA and the Triple Tail IPA, which incorporates papaya, pineapple and passionfruit. 

These the company is pushing across all 13 markets it’s currently pursuing: the Netherlands, Sweden, Norway, Finland, United Kingdom, Germany, Russia, China, Korea, Singapore, Canada, Guatemala and the military channel. It’s also aging beer in oak barrels at a new warehouse in Atlanta, marketing these under the Woodlands brand, which will also be sold abroad. 

Introducing this many products across a wide range of geographies has created myriad challenges, from navigating regulation to ensuring freshness on journeys across the world. 

Sweetwater’s newest brew, the G13 hemp-flavored 420 strain, is a prime example. Its cannabis content — hemp is said to be a cousin of hops — bars it from some markets, while it has been heartily embraced in test runs in the Netherlands and Sweden. They’ve even found a loophole in notoriously strict Singapore, Mr. Lor.

“The most difficult markets are the best markets to go in, so we always trying to find those unique voids for the brands to come in,” he said.  

In Sweden, where beer advertising is limited by law to pictures of the beer with a blue background, SweetWater has had to return to basics, positioning itself as an outdoor-focused and socially conscious beer. Its trademark trout on the label, for instance, is backed up by a commitment to clean water programs. 

Other beers have more mundane problems. Though India pale ales are said to have been created to withstand long sea journeys from India back to Britain, today’s consumers are more discriminating on freshness than 18th-century sailors. 

SweetWater doesn’t pasteurize its beers, so those sold in the U.S. were limited to a 90-day shelf life. Now it’s is shipping about half of its exported beer in KeyKegs — disposable, stackable plastic receptacles that enhance freshness and cut down on space when shipping. Most of the other half is shipped in bottles, though aluminum cans are growing “exponentially” in line with trends in the U.S. Refrigerated containers have also helped extend shelf life, as has conditioning cans and bottles to allow for secondary fermentation inside the container, said Mr. Lor. 

Some exporters only see opportunity and not this type of minutiae, which is why it helps when tackling the world to have strong financial and compliance departments and decisive executives, Mr. Lor said. 

“You’re quite intrigued by the opportunity rather than what’s under the ice. You need to do your due diligence. It takes time. You can’t jump on the first opportunity. Sometimes people lack this common sense,” he said. 

He added that the upfront legwork is worth it, given how hard it is for a brand to come back from an ill-fated launch. 

“Once your product is out there, you don’t come back. You either lose, or you keep on growing, but if you lose it will take you twice the amount of time and investment to come back,” he said. 

SweetWater relies heavily on market research from companies like Euromonitor, but it also taps into brewery associations in various countries to learn about local regulations and preferences. In many cases, craft brewers are most concerned with growing the category, so they’re apt to share information.

Government resources like the Georgia Department of Economic Development have also been helpful with research and introductions, but sometimes a brand can get caught in political crossfire. 

With its rising middle class and substantial expatriate communities, China is one of the fastest-growing markets for craft beer, but trade uncertainty is dampening demand, Mr. Lor said. 

“The trade war between Trump and Xi has seen things going up and down. The trend is there but the distributors don’t want to take the risk,” he said. 

All this makes him glad to be with SweetWater, which has a measured approach but a clear strategy to grow exports into 10 percent of its sales volume in 10 years. 

“We’re not going to shoot everywhere; we’re going to be focused,” he said. “What defines a priority market is acceptance of American beers.” 

Editor’s note: Learn more about SweetWater’s approach to global markets in the below Exporter Spotlight interview with the Georgia Department of Economic Development, which sponsors Global Atlanta’s Trade coverage

GDEcD: How long has your company been exporting?

Mr. Lor: 2017 was actually our first year exporting. Last year we entered a number of new markets including Finland, Germany, the Netherlands, South Korea, Sweden and the United Kingdom.

GDEcD: What motivated your company to start selling internationally?

Mr. Lor:We started to realize the craft brew market in the United States was very competitive and to achieve the long-term growth that we envisioned for SweetWater we had to look outside the U.S. We basically sub-divided the world into three categories and prioritized our focus markets based on set criteria such as the ease and cost of doing business, influence on nearby markets and where American beer would be most accepted.

SweetWater’s team in Korea.

GDEcD: What is the biggest lesson your company has learned about exporting?

It takes time and effort to build a brand in a market, and in order to truly be successful the entire company must be involved with the export process. International business demands cross-functional tasks that involve every aspect of the company – marketing, sales, operations, finance, production, management, etc. At SweetWater we all “own” export and that is a huge part of what drives our success.

GDEcD: How have GDEcD’s International Trade Team and its partners helped your company achieve success internationally?

GDEcD’s trade division has added value to SweetWater’s export strategy from the very beginning. What stands out the most is the multi-functional aspect of how GDEcD works with Georgia exporters. They are very flexible in terms of services offered and cover a variety of areas – anything from prospecting, qualifying leads, reaching out to local distributors and helping with follow-up. We particularly appreciate the flexibility offered by GDEcD’s trade team. We can ask for help at any time during the export process from start to finish– whether it’s making introductions to high level officials, providing market research or leveraging its databases to check credentials on potential partners. It’s a resource we can call on at any time.

GDEcD: What advice do you have for companies that are just starting to export?

Don’t just jump at any opportunity that comes along. You need to think long-term and be strategic in your approach to exporting – that’s the only way to be truly successful. If you have a good product and a good story that is a start, but you need to be clear about your ambitions and export should be integrated into your company’s entire strategy. In truth, entering a market is easy, but maintaining the position is not. You have to remain open-minded and flexible in regards to language, culture and how business is conducted in the markets you target – remember that not every market will perceive your product the same way.

GDEcD: What has been your biggest export achievement?

From all the countries we entered last year, the Netherlands was one of our biggest successes despite being a difficult market to break into. Beer is very popular in the Netherlands, but the market for American brews is still developing and it’s not the easiest place to gain a foothold. Even with these challenges SweetWater has become one of the most successful craft beers in the country within just a year of hitting the market and is now one of our top three export destinations.

As managing editor of Global Atlanta, Trevor has spent 15+ years reporting on Atlanta’s ties with the world. An avid traveler, he has undertaken trips to 30+ countries to uncover stories on the perils...

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