When the pandemic hit and the U.S. (along with most of the world) went under lockdown, Chad Brodsky, CEO and Founder of City Brew Tours, wasn’t quite sure what to do.
His company offered in-person craft beer tours in 11 different cities throughout the US and Canada. They sold a bit online, but the majority of their revenue came from their award-winning in-person tours.
And business had been doing well. City Brew Tours brought in $3 million in revenue last year, and before the quarantine hit, they had hundreds of thousands of dollars in tours lined up.
A New Business Model Leads to Success
After furloughing all employees, Chad and his partner, Barry Hansen, regrouped to figure out their next steps. They ultimately decided to create two virtual events that would rely on their team’s skills and wealth of existing knowledge: a beer and cheese happy hour and a live homebrew class.
In the happy hours, which cost $15 per session, participants learn about what beer and cheese pair well together. For an extra $50 to $125 per person, they can get boxes of cheese and beer delivered to their house.
Customers can sign up for a public happy hour or purchase their own private event, which serves up to 20 people, for $150. The happy hours have been all the rage with companies looking for team-building exercises and groups of friends celebrating socially distanced birthdays.
The live homebrew class is three hours long and costs $99 per person. In the class, avid beer drinkers can learn how to brew beer in their very own home (ingredients and kit included).
Both virtual events have been a total hit. City Brew Tours has since been able to rehire all of its furloughed employees and bring in a whole new stream of income that they had never even previously imagined.
I was lucky enough to interview Chad to find out more about the virtual events they offer and how he and his team have succeeded in making it all happen.
Here’s what he had to say…
Getting Started with Virtual Experiences
Mary: When did you start the virtual experiences? And what gave you the idea to do that?
So we started the virtual experiences about 10 days after the announcement of the shelter-in-place order started. So I think it was Friday March 17th, like mid-March essentially and by April 1st or right before April, we had a new product that we were going to offer that was taking essentially different aspects of our award-winning tour experience and bringing it to a video conferencing platform.
Mary: Could you maybe tell me a bit more about the virtual experiences? I know I’ve seen on your website that you offer a beer and cheese pairing, a brew-making class…
Chad: Yeah. So we have two different offerings that can be virtual experiences. We have a beer and cheese pairing e-happy hour, which consists of an hour-long experience of—and we offer this to the public and private so it’s kind of different depending on the group—but the e-happy hour in essence is a fun way to connect via zoom, over beer and cheese, where we’ll talk about how beer and cheese pair together, how they’re a match made in heaven (they’ve been around for 8000 years, so a very long time), and how to pour a proper pint, icebreakers like if you could drink with anyone dead or alive, who would you drink with…
So this very fun, interactive, engaging experience that is around beer and cheese, and that can either be a BYO, where people bring their own beer and cheese based on guides that we provide or we will deliver pairing or tasting boxes for private groups prior to the event, of curated products of beer, cheese, chocolates, smoked meats, things of that nature.
And so from a corporate side of the business, that’s been really popular for team-building, people moving to how they can engage their teams and clients, customers in this virtual, new reality.
And then we also have a live homebrew experience, which is the most fun you could possibly have behind a computer screen, where we actually teach you how to make beer, while we’re also making beer. Many of my employees are avid home-brewers that have been around—most of our guides are our home-brewers.
And so we’ve taken this idea where they already are brewing their own beer, we’ve created a custom kit that gets sent to participants prior to their Zoom homebrew experience, where they get all the ingredients to brew up to a case of beer, which is two and a half gallons, and will then be able to brew with an expert homebrewer, teaching them how to brew in the step by step process. So no experience is necessary. Great way to be entertained, engaged for about two to three hours.
And then about three weeks later, people can then, for the corporate groups, hop on and taste their beer together through a facilitated tasting from one of our expert guides or for the public. We offer everything to the public as well as to private groups, so if you just want to join on a Saturday, you’ll be brewing with random people from all over the country. Or you can do it as a teambuilding activity or for some type of corporate event or a birthday event.
Mary: So, you can join as either a group for a company or could be just a bunch of individuals that are interested in learning.
Chad: Exactly, or bored or trying to figure out what they’re going to do while they’re quarantined. And same thing goes for the happy hour, it could either be they joined for only $15 and they bring their own beer and cheese or that we curate a box [for them], where it could be anywhere from $200 a person. Depends on kind of what they’re looking for.
Mary: In terms of where people can sign up, is that only on your site or anywhere else, like Airbnb experiences?
Chad: So we just joined Airbnb experiences for beer and cheese happy hour to the public side of the experience. So we’re going to be featured in their Father’s Day email blast. So that’s just going to be exciting.
But that’s pretty much the only place besides our website that you can sign up. There might be maybe one other third party, like we’ve put up events and stuff like that through our PR and stuff like that or event calendars, because a lot of event calendars have moved to putting up virtual experiences in their event calendar. So there are also those places…but they’re still signing up through our website.
Mary: So the customers that you have, are they mostly former customers or new customers that have heard about you in the media or wherever else?
Chad: So we reached out to all of our corporate, like all of our private business, when we first started, as a catalyst to get people interested, because everyone was looking for virtual experiences. And then, as we did that, word of mouth started to grow, because when one person does it from one team, and then they were like, “Oh, we can do this in our team.” So it’s kind of been like this catalyst of growth from that perspective. But it’s a mix, I would say it’s probably about 30% to 40% of existing customers and then 50% to 60% of new customers. So about 50/50 split.
Learning the Ropes
Mary: Did you have any experience with the virtual tours before coronavirus or was it completely new?
Chad: No completely new, we had to learn how to do fulfillment which is a completely different animal…we knew how to run tours, but now we have to put together boxes and manage vendors from a perspective of like homebrew equipment and lead times and things of that nature which all never existed.
So definitely a lot of logistical hurdles that we needed to figure out on the fly. Now I think we have a much better process in place. But the beginning was very messy, where people weren’t receiving boxes in time for their events and just kind of figuring out like, “oh, this person now has to drive to 30 different houses in Boston to deliver boxes.” So just kind of figuring out those things like how long does it take to go to 30 different homes, figure out the right routes and things. So just like a lot of those types of questions that you didn’t think about. But from the experience perspective, I think it was much closer to where we already were because it’s leading a tour or leading an hour-long experience, so that we had experience with, but not from anything virtual related.
Mary: But do you feel like now things are kind of more smooth-sailing or are you still figuring things out?
Chad: We just started like a week and a half ago…we feel like we’re just getting our feet under us, from like a process of fulfillment side of things, because we’re getting a lot of leads and probably more leads than we were getting when we were doing tours.
So that’s just been great, we’re super excited, so kind of starting to see what that looks like. Like where we’re going to be three months from now is going to be very interesting…will we be able to get back to the revenue that we were able to do from a business that took almost 12 years to build in a matter of months, which would be incredible if we can do that. But it’ll be very interesting to kind of see where this new business goes. Because essentially, that’s what it is. It’s a brand. It’s a completely different product and business essentially.
Getting the Word Out
Mary: But great that you’re getting more leads than you were beforehand. So it sounds like whatever you’re doing is obviously working.
Chad: Yeah, we set up some affiliate marketing programs…we didn’t have that in place prior. So now we know for when we get to tours, like we’re going to set those up for our tours too. So I think creating our own affiliate marketing program has definitely been very helpful as well.
Mary: Do you think your marketing has changed since the pandemic? Did you do affiliate marketing beforehand or only with the virtual tours?
Chad: So we never did any affiliate marketing. I’d never done any real press outreach. Like when we launched in a new city, we usually do a press launch type thing, but we’d never worked with a PR company or anything from that perspective. So when this all was happening, first we furloughed our employees for two weeks, so it was just me and my partner trying to kind of get our bearings for the two weeks of what’s the future of the business gonna look like? And then after, we kind of had a good game plan in place, then it was about getting the word out.
So I probably spent a full week of just doing press outreach and curating lists of people and reaching out to them and setting up drip marketing campaigns for these PR people, which I think was pretty helpful. And just getting that up and then setting up the affiliate programming, figuring out where people were searching and whatnot and doing outreach to try to connect with different channels that we’ve never explored before.
Mary: So what would you say has been the most effective technique? The PR outreach or affiliate marketing?
Chad: I would say the affiliate marketing program. Setting that up has been the most beneficial thing that we could have done. And then writing various blog posts. Like we did a virtual beer tasting blog post. And that’s been a really popular keyword term–if you search for “virtual beer tasting”, we’re coming up I think, typically in the top five or something.
Going 100% Remote
Mary: I’m also curious to know how you transitioned your team and company to go 100% online. How did you manage to do that as well from a company and team standpoint?
Chad: So we are actually already remote prior to COVID which was lucky. We had a fire in our office in November, and so we’d made the decision in November to go fully as a remote entity. We don’t have brick and mortar offices in each of the cities that we operate, because we’re more of like a transportation tour business, so we didn’t need that head office, everything was being run out of our headquarters.
And then once our headquarters went remote and we didn’t see any decrease in productivity, we just decided we’re just going to go fully remote as an entity. So we were kind of already set up, everyone was already in their routine once COVID-19, of people having to go remote. So that was kind of, I think, helpful too, because it wasn’t that learning curve. We did that three months prior.
Mary: So your team is how many employees?
Chad: There are 60 employees, including our part-time guides. We have about 15 full-time people.
Mary: And everyone is based primarily all over the US or…?
Chad: Yeah, for the most part. We’ve got people on the east and west coast.
Mary: Yeah, because you all give tours all over the country, right?
Chad: Yeah, we’re in 12 cities. We’ve got nine corporate locations, and then three franchises, as well as Canada. We’re in Canada and the US.
Mary: Do you think that you will continue with the online events after things go back to normal?
Chad: I think absolutely, I think people are going to be continuing doing virtual events going forward now with a lot of teams just going and choosing to go remote. So we definitely see this as a continuation. It’s also really helpful because like on our tours, given that a lot of our guides are homebrewers, people are always interested in learning, how did they get into the homebrewing kind of world. And so now we have this awesome product to be able to facilitate that. So now we can increase the lifetime value of the customer because they’ve had such a great time on a tour or they’ve had such a great time in a virtual experience, now we can get them to join our tour because they’re all kind of very different experiences, but all revolve around that same customer type and craft beer.
So I see that we just launched a couple of days ago a homebrew subscription service. So people that now have done a homebrew can now choose to get a monthly recipe delivered to their door every month to be able to brew beer. And that’s a completely different revenue stream that we’d never even thought about. Or like homebrew classes from Udemy and stuff like that…things now that are in our wheelhouse that we never thought about, like asynchronous beer-making courses or beer classes was not something we’d ever thought about doing. But now that we already have this curriculum that we created for the live homebrew experience, it wasn’t very far to take that and put it into something asynchronous.
Mary: So with the subscriptions, people sign up, and then you send them the ingredients each month that they need to brew the beer?
Chad: Yeah, exactly. We have commercial brewers on our team, and they help create different craft beer recipes. And we’re going to be working with breweries, like some of our affiliates to help put together recipes. So like, if you love a beer from this brewery, here’s going to be an opportunity to be able to get a recipe that’s been designed by that brewery’s head brewmaster.
So a lot of really cool and fun things that now we can do in this space that we have never had the opportunity to do.
Mary: It sounds like in a lot of ways your business has changed for the better and you know, definitely will come out stronger out of all this.
Chad: I hope so! We’ll see what happens with tours, because tours are going to be, I think, a very slow moving process, like the fact that we have to limit right now, where if we were to start right now, we can’t have any tours of more than 10 people type of thing. We did tours of up to 300-400 people prior to COVID. So it’s gonna be like our average corporate tours of about 40 to 50 people. And corporates aren’t going to be willing to go on a tour at least for another probably six months to a year. So just hopefully, wherever that transition happens, that we can…So three to six months from now, we’ll have a way better understanding of where…things are changing so quickly, that two weeks from now, it could be a different, different animal. Got to iterate very quickly in this new climate.
Mary: Your virtual audience is mostly based in the U.S.?
Chad: Yeah, we’ve had a couple people inquire from like South Africa and stuff like that. And they’re like, can you ship us beer? And we’re like, no, sorry.
But our marketing has been mainly the US and Canada.
Mary: Well still a massive market.
Chad: True. We’ve definitely expanded the reach of who would be a potential customer now. Before it was really geographically based, essentially people visiting an area that lived in the area, and now the area has no impact.
Mary: Would you say are there any other ways that you can think other than the virtual events that you’re offering, that your business has changed due to coronavirus, either internally or externally?
Chad: [Laughs] No, I think those are some really large changes within the business. We cut our marketing spend to next to zero once this all happened because we didn’t know where we were. And we’re nowhere near what we were spending prior to COVID.
Final Tips for Remote Companies
Mary: Any advice for remote companies?
Chad: I think one of the key things just from like a fully remote perspective is having video media as part of any call. We also have statuses, we do our daily huddle still in the morning. So there’s still those touch points. We still do one-on-one meetings, like each manager still does their one-on-one meetings and stuff like that. So kind of keeping that meeting rhythm still in place that you would still have if you were in person. We set up guidelines for working remotely. Like with lunch, if you are going to go on lunch, you’re going to put a status update that you’re on lunch and Slack or things of that nature. Just kind of setting those parameters. If you are going to have more than a five minute call with someone, you’re going to schedule a meeting and explain what’s the conversation, what’s the purpose of that meeting and deliverables of that meeting. Kind of putting those all those things in place has made it really helpful and effective to be able to work remotely.
Mary: And those were things that you had in place before, when you started?
Chad: No, we didn’t have them in place as much. I mean, yeah, we did, but not as much as we did now. Much more important now.
Mary: Yeah, especially since all of your business has gone online I guess. It’s interesting to see, I mean, you all sell products but you also sell…
Chad: Yeah, we’re like a hybrid. So yeah, we still need to be looking at analytics and being data-driven and decision making, because there is that conversion and that eCommerce aspect of it. But we’re also very much an experienced-based company, where the product isn’t over once…once we sell, we haven’t sold them anything until we deliver the experience. So we can’t even realize that revenue until we actually have delivered them that event.