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CBB The post-pandemic bounce hasn’t quite panned out like some predicted. How has changing consumer behavior over the past 18 months impacted Highland? In terms of brands and packaging, how have some of these trends continued and what has shifted?
LWA Consumers have shifted in two ways that are separated by one letter. They’ve become more value conscious, and they’ve also become more values conscious. So, of course, we’ve seen that when buying multipacks in grocery stores, the power of promotional pricing was exaggerated through the pandemic. And we haven’t seen on-premise come back fully, so the draft lines aren’t really there. That changing purchasing behavior is combining with values consciousness—people’s personal values are also affecting their buying decisions, and their expectations of the companies they purchase from have to include that values-based message. Whether that’s social justice, environment, or something else, we must be better at getting that message out. That’s easy to do at the taproom and really hard to do on the shelf.
CBB How do you do that? Within one door of a beer cooler, that small amount of customer-facing information has to be colorful and slick and stand out. How do you convey values and try to make a connection with the consumer in some sort of meaningful way?
LWA We haven’t nailed it. And we’ll never be done.
CBB By the time you figure it out, it’ll change again.
LWA We took a first step in streamlining the portfolio. There’s limited shelf space, and the pressure is so high to move quickly, but give it focus, and offer new stuff—but not too much. Finding that balance is hard. It will be different for everybody, depending on your business model, your geography, the number of wholesalers you’re working with, and individual markets. We have new things coming, in the right amount of new—enough that we can still wrap our arms around and promote effectively. The other part is looking at marketing and more creatively tying in our story and our brand to experiences in the market. How do we go beyond the shelf but have people remember something about us when it gets to that shelf?
CBB Before the pandemic, Highland had engaged in a pretty broad rebrand—simplified, modernized. I remember the old days of the brand, when it seemed very aligned with Asheville’s Scottish history and had a very classic feeling. What was the motivation behind that and how did you all figure out where you wanted to go?
LWA We had this Scottish guy who we called Scotty—real creative—and he had bagpipes in a mountain background with plenty of plaid. It served us beautifully for a long time, especially with our name Highland (which I would never change). Over the 20 years that we had that look, our beer portfolio changed dramatically and was not predominantly Scottish beer. But our brand screamed “Scottish.” When it clicked that our brand and our beer were sending two different messages, I knew we had to make a change. The branding company we worked with did a great job, and I gave them free rein. I thought we might do a minor change, but once they took a deep dive and figured out that our pioneering spirit was something that not only got us started but was prevalent in our daily discussions, they encapsulated the idea with a simplified compass, and the pioneering spirit became central to our new brand.
CBB How much is internally driven, and how much is externally driven in that process? You want to reflect who you are as a business and a brand, but that also needs to connect to other people.
LWA You have to get customer input, which also means your staff, and their reactions will be all over the map. Once you get all the input, distill what’s most important—in a room with your branding company and marketing manager—and decide what the right message is moving forward. Then get the story perfectly clear, so that you can go back to everyone and say, “We heard this, so we went in this direction. You were part of this process, and here are the results.” And then you just don’t look back.
CBB We have seen other iconic brands go through a similar rebranding process and find a lot of pushback, because even if things may need updating, people still have a connection to those things. Change is hard, no matter how necessary.
LWA No matter what the change is, you’re going to get pushback. You just have to accept it. If you’ve done the right process, and you believe in what you’re doing, it is the right thing to just keep facing forward and give all the reasons that you’ve done this right thing, which takes into account all the input that you got. The input we got was from our wholesalers, industry, friends, customers, and our own staff. It was definitely the right thing; it just takes a minute. The ones who disagree will speak up first and speak loudly, then the opposition will die down, and people will speak up to support. Eventually it just goes away. It’s going to be fine.
CBB Then it becomes the new thing that people are comfortable with. Sure.
LWA It’s going to be okay.
CBB You mentioned that this process of innovation has to happen in a controlled way—that you need to create “new,” but you also can’t create too much new. How do you evaluate new opportunities for products? Given the large number of possibilities, how do you narrow down to what those best opportunities are and the best way that Highland as a brand can fit into some of those opportunities?
LWA It’s different for off-site and on-site. We have two critical parts of our business. Off-site, our process is much like our beer portfolio—we have traditional celebrations, and then we have new drinking occasions that are always under development. Further developing your story is important in these new opportunities. For example, Chinese New Year—we celebrated with a collaboration with Lucky Envelope in Seattle because they’re also Chinese-owned. That’s such a rare thing in the brewing industry, and we saw the opportunity to bring some attention to minorities in the brewing industry through a cultural experience and a beautiful beer. That’s an amazing off-site opportunity.
On-site, Lower Falls is a great example—a 3.9 percent ABV IPA. As we built our volleyball court—we have three professional sand volleyball courts here, which has been my dream for 10 years—we needed a beer geared for activity, and that’s now my beer. I’ve heard other staff say the same—that’s the beer they drink when they’re playing volleyball because they can do both at the same time for a longer period of time. It falls into the healthy trend that we’ve seen in the market, but we did it because it fit into what we’re doing and who we are.
CBB As you think about new brands, do you have a lifespan in mind for them? The days of thinking, “We’re going to create a new beer, and this is going to be something that will last for a decade or two” are out the window. In talking to some other brewers, if they get 24 months out of a new beer, they’re happy with it. What does something need to be able to do in order to elevate it into that broader production lineup? How much time do you hope to get from it?
LWA A 24-month lifespan is pretty good at this point. That flies in the face of our Cold Mountain Winter Ale, at 26 years old, and our fall seasonal Clawhammer märzen, which is out right now and 14 years old. Fortunately, we have some exceptions. But if we’re creating the next hazy IPA, two years is great. That’s a huge shift for an older company like us, whereas newer breweries, they enter with that being the norm. For some of them, that’s going to be a strength.
CBB It also creates production challenges—bringing in ingredients, cans, packaging—it changes the overall investment and the way that you have to think about building things like hop contracts for a new production beer like that.
LWA When we started, we could write hop contracts for five years and not blink too much because we were going to make the same beers five years later. It’s radically different now; this was not the world in which we were born.
CBB Your dad retired just in time!
LWA He didn’t even want a taproom.
LWA No, he’s like, “I’m not getting into retail, too much responsibility.” We’re like, “So we’re going to do this thing.” Now we’re going to host 100 weddings and feature volleyball courts and disc golf. We’re even going to open a restaurant sometime in the future.
CBB The decisions that you make, as someone who owns and runs a business, can be different when you view business through a multi-generational lens versus what we see more commonly in America—the build, grow, and sell model. How does thinking about that long term change the decisions and investments that you make?
LWA We have made a lot of decisions that would never have been made if we were building to sell. And that’s not to criticize anyone who builds to sell—if that’s the goal, that’s the goal, and that’s okay. It was my dad’s dream—before I knew it—that I would lead the company. I was the last one to know. With that transition, and with a lot of years ahead of me, we’ve made so many decisions that give us so much pride and that tell more of a story about what Oscar Wong had in mind for Asheville and the southern Appalachian area. We have, for example, a tight geography in four states. We’ve pulled back—we were in double that number of states at one time—yet we’re selling the same amount of beer, or close to it. That means our beer is fresher, the carbon footprint is smaller, we have fewer and deeper relationships with wholesalers, and everyone in our footprint can drive to the brewery and meet our people and see where the beer is made. In addition, we have a land-management specialist—if we were building a company to sell for the highest dollar, that would never happen, but it makes us feel so good that this 40 acres we’re on, for example, has invasive species being eaten by goats. The property was impassable—you could not get two feet into the woods at one time—and now it’s this beautiful place to wander around in.
CBB That experience of place has become even more important and integral to the idea of the brand itself.
LWA We offer what I feel is the essence of why people come to western North Carolina—indoor and outdoor space, the view from the rooftop bar, the ability to walk through the woods, the tree-lined meadow—all with an amazing beverage in hand.
CBB Let’s talk about managing people. As a business operator, you want to take care of employees, but you also need to be fiscally responsible. What are some of the strategies that you’ve employed to both bring staff together and make people feel that their work is valuable, given that there is so much flux in the world of hospitality right now?
LWA The wholesalers, maybe more than anyone—I feel for them. But for us, transparency is the most important thing, and the hardest thing—we have not nailed it by any means. It’s hard to know when the right moment is to relay information if you don’t have all the information. I’m constantly balancing those things. But I do know that our greatest successes—our greatest relationships with people who have come to Highland—are when employees have a very honest and open relationship with their manager. And one of the things that I want to do is provide a consistent employment experience. We’ve talked as managers about that and how we need to train together about how to handle different conversations, so that we’re more consistent, and our company and values and practices are better understood when we’re consistent to all of our employees. That’s hard. We’re over 100 employees now, and it feels really big to me because when I got here 10 years ago, we were 30 or 40.
CBB Have there been any initiatives that you’ve put in place to increase staff retention or improve the working environment?
LWA Not too long ago, we became living wage–certified by a local organization. We were on the bubble for quite a long time, but we took the initiative, like, “Let’s just complete this, let’s make some adjustments.” We made pay adjustments and explained what that means. But ultimately, it aligns with that values-based employee—not just the consumer, but the employees who are also more values based. We also created more full-time benefited positions in hospitality, with health care. Ours is probably an easier side of hospitality—I feel for the restauranteurs and the bar owners because of the complexities and late hours.
CBB From a broad macro level, how much more investment have some of these employee measures required? How significant is this to the overall bottom line of the business?
LWA We made different adjustments in different areas. When you’re a company that’s been around for as long as we have, some inconsistencies in pay develop just because of time, not because of intention. So, we looked at all of that, placed the strategy around it, and corrected it. We looked at the living wage and met that goal. In hospitality, we also made some big changes. We felt it from top to bottom—making adjustments in compensation is always impactful, and when you add that to everything else people are seeing today with cost increases in freight and raw materials, it’s a squeeze. But I know that we can’t cut corners. We can’t buy poor ingredients. We can’t treat our people poorly. There are certain things we can’t do because that long-term damage is too hard to recover from.
CBB How have you addressed all of these increased costs while still trying to hit all of these other goals of being living wage–certified, taking care of people, building a compelling experience, and taking care of the environment on your own property? Are there any strategies that you have employed to manage around these increased costs over the past year?
LWA I wish I had a silver bullet. I think that it’s a strategy we would have employed anyway, which is taking advantage of our taproom and brewery. We used the pandemic as an opportunity—when there were no people around, it was an opportunity to build volleyball courts and a disc golf course. Now, we have had so much success in that effort—bringing music back, having special events, having a weekly market in the meadow on Sundays, trivia—all of the things. But it’s built up to great success, and that has really helped with a new balance. But it’s ongoing. It’s this puzzle that we have to keep trying to figure out. These cycles are cycles— they’ll change. Making it through tough times is part of the gig.
CBB Often, we look at certain public-facing people as the most important in the business, but for you as a business operator, are there specific roles in the brewery where you find that the impact of those individuals can deliver an outsize return on the investment in them? Every employee in the business is crucial to success, but what are some of those roles where you may not have realized just how impactful they can be?
LWA Two examples come to mind. Andrew leads all production departments, and he’s a Six Sigma Black Belt—he knew enough about lean to know that we needed a lean study, so we had somebody do that, and we learned some critical lessons. He finds efficiencies, and that’s not the public-facing job, but the volume of value that he has brought to us—whether we’re pushing beer through pipes in a different way to get all of the beer eventually in a package, or we are pouring less down the drain, or using our utilities more efficiently—has been incredibly important.
The second one, which would also probably not be in any annual calendar of beer jobs, is someone who has stepped up from the sales team to connect production and sales. I don’t even know what to call it, but the alignment has been so important. Production understands what sales is looking for better than ever. And sales understands production’s abilities and challenges. They’re asking much more sophisticated questions of each other.
CBB What keeps you up the most at night? And what excites you the most about this next year?
LWA “People” is the answer to both of those questions. If we’re going to succeed, it’s because of our folks and connecting with what they want to do and love to do. How they can contribute in making sure we’re covered. Then, since most of our beer is sold through wholesalers, I want them to succeed. I want to be in the room, pitching Highland. I want to be with them more often than I have been. That’s part of my dream for next year—to be more present with them. But it really is people. I have had the luxury of not worrying about the quality of our beer, ever. I don’t brew, so my life is in the hands of our professionals. And that’s people, too. That’s what keeps me up and gets me most excited.
This interview has been edited for length and clarity.