Tuesday, October 03, 2006

News: Brooks' "Longneck Tail"

Thanks to Jonathon for passing along this article by Jay R. Brooks that links the success of craft breweries to Chris Anderson's Long Tail theory.

A summary for those not familiar with the theory: traditional business models follow the Pareto principle, which states that about 80 percent of sales can be derived from the top 20 percent of product. Anderson has observed businesses turning this model on its head. The two most cited examples, Amazon.com and iTunes, make more money cumulatively from the 80 percent of their inventory that is purchased less frequently (the obscure books or songs) than the "hits" that make up the top 20 percent.

Brooks relates this theory to craft-brew by noting that although three main brewers still dominate the market (Budmillcoors), the craft brew industry survives by catering to the less mainstream tastes.

The Long Tail theory is hot right now, so it's being applied to all sorts of industries. Could this be a backlash against corporate homogenization? Whatever the case, it's certainly good news for those who brew and those who appreciate craft beers.

And be sure to check out Brooks' beer blog, Brookston Beer Bulletin. Brooks is a veteran beer writer with great insight into the industry.

No comments: