Just below the glowing crimson peak of Camelback Mountain lies OHSO, the Outrageous Homebrewer’s Social Outpost – the creativity of the name says it all. The Arizona-based brewing company has emerged as a place for beer drinkers (and dog lovers) to bond over their love of different craft varieties (and breeds) and even compare brewing strategies (and dog biscuits). It is also a space for the entire town – four-legged friends and all – to come together as a community, and patrons can even bike along a scenic canal to access the facility’s outdoor seating area. Even as the company has grown and opened new locations all over Phoenix, it has still managed to maintain its local homebrewing spirit that combines special care for the surrounding community and a knack for finding innovative ways to increase revenue. The day we posted this episode of Glass Half Full, my Phoenix-area family called and texted pictures from their OHSO experiences (which are regular).
Here are a few of my takeaways on how to structure a small business:
Engage Customers Deeply with Unique Experiences. OHSO tailors their business to their most loyal customer, the craft beer enthusiast. OHSO designed the “Brew With Us” program geared towards making its patrons’ dreams a reality. This service acts as a brewing lesson from OHSO experts in the production process. The experience is tailored to the enthusiasts as they can bring their hops or additives, to personalize their beer. OHSO was able to analyze their customer’s need for a product, devise a creative way to solve it and grow a new revenue stream while deepening customer loyalty.
Expand the Total Addressable Market (TAM) with Small Marginal Offerings: Organizations strive for continuous growth and ways to appeal to new and diverse customers. This opens up new revenue streams and inspires a company’s ideation and innovation culture. For local beer enthusiasts in the Phoenix area, OHSO is a gathering place that allows friends to catch up over a cold beer and a good meal. These loyal customers have been the main source of revenue for the company. Still, OHSO recognized that they were fully saturating the profit potential of this demographic, so they turned their attention to families and non-beer drinkers, a portion of the market that seemed less serviced by their existing products. Their strategy was to open Little O’s Market, which sells coffee and donuts to guests in the morning. This makes OHSO’s business model less reliant on a single category (alcohol) and creates opportunities for different types of consumers to patronize OHSO. This drives revenue throughout the day and grows the market.
Local Businesses Can Make a Global Impact Together: Being a small business does not limit an organization’s ability to create a positive impact. Instead, a regional footprint provides the opportunity to impact the community and develop social initiatives while scaling up. OHSO’s “1-800-273-Talk” initiative created a beer that is named after the suicide hotline phone number to spread awareness about mental health. OHSO began the project by partnering with over 75 breweries, which were mostly Arizona-based. Once they succeeded in their local geography, they expanded the scope of their efforts and now partner with almost 500 breweries nationally. The story of OHSO’s community initiatives is one of remarkable growth and inspiration for businesses that want to make a positive difference.
Sustainability Unlocks New Cost-Saving Opportunities and Revenue Streams: For new small business owners, thinking about creating more sustainably-built production processes can be difficult. However, the benefit for those who get creative and embrace the challenge is real. OHSO proves this, and, as their Brewery Production Manager Scott Brady explains, “When you start looking at sustainability, it actually helps your process out and…your bottom line.” OHSO has designed its facilities to reduce waste of all types. Most importantly, the brewery’s location in Arizona’s desert climate necessitated innovative solutions to help reduce water consumption. For brewers, something as minor as a leaking valve can translate to four dollars an hour of water waste, so focusing on maximizing the efficiency of each stage of the water-usage process is paramount to achieving cost and water savings. To increase this efficiency, OHSO is exploring recycled-water brewing techniques (which involve treating and reusing wastewater). As a result, the brewery cut water costs – inspiring reduction in other areas. brewing creates excess grain that is thrown out. Like many sustainable beer operations, OHSO sells this product as feed for livestock, additionally, they use it for baking dog treats for their four-legged visitors. The dog treats have become a brand flag for OHSO.
(Water Waste Information via The Growler)