The first real beer Ryan Koga ever tasted changed his life. He was 25 and was working in a local brewpub trying to make ends meet doing the college thing in Billings, Montana. The goal was to get a Master’s Degree in Athletic Training.
That beer changed everything. Completing his degree, his newfound love of beer drove him. That’s when he approached his younger brother, Zak, who he convinced to start a new venture with him. In 2012, they opened the doors to Karben4 in Madison Wisconsin, the home of Zak’s alma mater the University of Wisconsin is.
Driven by Ryan’s passion and Zak’s drive, they created a recipe to level up the Madison beer scene, including high-quality beer, creative branding and brotherly sense of humor. Today, Karben4 distributes in Wisconsin, Minnesota and Illinois.
CBAM sat down with co-founder Zak Koga to get an inside glimpse of the Karben4 Brewing brand and what the future holds.
Give us a snapshot of today’s craft brew market from your perspective. What’s likely to happen next?
Craft beer and the industry looks much different than it did when we opened Karben4 in 2012. We’re experiencing a period of back pressure, with high saturation in both the number of different beer SKUs on the shelf and in the number of brewery establishments open. It’s awesome that we’ve diversified the marketplace and brought craft beer to more people across the country, but it’s turning into SKUmaggeden.
As a result, there has recently been a winnowing down of brands and styles to only leave the best of the best. This process is being accelerated by distributors who are no longer interested in carrying brands because they don’t fit into their portfolio. It’s ultimately going to be beneficial for the market, as it will force the top quality brands to rise to the top and bring up the overall quality of the industry.
In the near future, we can expect to see a further narrowing down of the craft beer market, with the best of the best surviving and growing.
What trends are defining the space?
The main trend that continues to define craft beer is quality over quantity. Consistent quality is so much more important than pumping out a ton of beer. Driven by increasing competition for cooler space, really only the highest-selling products will remain on shelves.
Niche products are moving to smaller quantities and taprooms, while quality needs to improve to remain competitive. We’re seeing trends from outside of the space also beginning to make an impact on craft beer. Breweries are dipping their toes into spirits, RTDs and cannabis.
What’s your story from a brand perspective?
When we opened in 2012, we were joining a generation of growth. In Wisconsin, Ale Asylum was one of the brands from the previous generation that hit it big, and we were inspired by them. With the demand for craft at the time, we had a lot of success starting as a production brewery and growing into our taproom. That being said, I would not build the business the same way if we were to open today.
Our brand strategy is focused on distribution and celebrating beer as a connector between people. We have been very deliberate about our growth, and are intentional when adding new markets. We started by growing our presence in Wisconsin, and we are beginning to look at entering new markets. We have kept our branding fun, avoiding the “Beer Nerd” label and staying open to all types of beer drinkers.
Instead, we keep our focus on the human connection that beer can bring. We see beer as a part of our culture – it’s been a connector between people for thousands of years. Let’s keep it fun and celebratory and lighthearted.
What’s the biggest issue today related to the marketing/sales side of the craft beer business today?
It can be challenging to focus on long-term growth and sales execution rather than just trying to release new beers. Being creative is fun, it keeps the work fresh, but it’s important to focus on the core best products, telling the brand story, and executing an effective brand strategy through packaging, newsletters, and press.
It is also essential to get back to the basics of the business. Craft brewers have seen early success in the past decades, but now it is about the long-term execution of the fundamentals.
What’s the secret to creating a branding story that consumers can buy into?
Pairing technical skill and high quality with humility and lightheartedness is the secret to reaching consumers. Don’t take yourself too seriously, in person or on the shelf. We’ve used this strategy since the beginning, when we were one of the original cans featuring really crazy artwork at retail in our state.
We found a great artist in Jason Hueser, who created total face melter work for our labels. Karben4’s Fantasy Factory cans have a cat riding a fire-breathing unicorn. It’s a super high-quality, technical painting, but it’s just fun and ridiculous at the same time. It’s similar with beer. Don’t get pretentious—execute at a super high level and then get out of the way.
What’s the one thing that every craft beer brand should be doing in the way of marketing?
Create brand consistency and let the brand values of the brewery shine. Every time you interact with a customer is a chance to reinforce your commitment to quality, give some insight into your personality and differentiate yourself.
Keep it fun and lighthearted, but don’t lose sight of the quality of your product. Use the tools you have intentionally and make a statement that resonates with your current and potential customers.
What do you see as some of your biggest opportunities moving ahead?
Retail (your taproom) with a subcategory of Beer Clubs. Direct-to-consumer shipping is the biggest opportunity for craft breweries across the country right now. Even though beer is about 30 years behind wine in this arena, we’re starting to see more desire and momentum for shipping to become legal, state by state.
What’s the biggest item on your to-do list right now?
My brother Ryan and I are working on bringing back some of the best beers in Wisconsin, from the now closed but still iconic brewery Ale Asylum. We started with Hopalicious in March, and we’re developing a production calendar to bring back more of our favorites from the Ale Asylum lineup in 2023. It’s a brand that means a lot to us. The Ale Asylum crew actually got their start in our current space, so it’s important to us to bring the brand back in a thoughtful way.
How does your taproom space integrate into your branding/marketing strategies?
Our taproom is critically important from a business standpoint. We’re not exactly restaurateurs, but we have worked hard to create a taproom space that is a reflection of our brand, and we use it as a platform to showcase our beers and engage with our customers.
We are always looking for ways to improve our taproom experience and make it even more attractive to our customers. We also use our taproom as a marketing tool, leveraging it to introduce our beers to a larger audience and drive more sales.
What are some of the adjustments you made with/to your business model surrounding the recent state of events?
The biggest adjustment we have made to our business model is a major focus on growing our contract brewing. The combination of pressure on our own volume and cost pressure from inflation has caused us to need more volume quickly. We don’t want to compromise on our core brand, so we are growing our overall volume by brewing beer and other beverages for other companies.
Chatting with… Karben4 Brewing’s Zak Koga
What’s the most rewarding part of your job?
Being so close to my family and getting to work with my brother, who is also a co-founder of Karben4. We have a lot of our family consolidated in Madison now, and it’s been so special to be together. My brother Ryan and I each have four kids. We bring them to church with their grandparents every Sunday. We fill up a big pew.
What was the best advice you ever received?
Know your “why”. We’re all big nerds about beer, and working in beer is really fun and rewarding, but at the end of the day, work is work is work. My reason for coming to work is my family, they’re my why.
What’s the best thing a customer ever said to you?
I’d be lying if I tried to quote something. I’m not very good at receiving compliments, and have often reflected on how I should be more polite and kind when people say something nice to me. I also try not to internalize the complaints too much. I had many coaches tell me I shouldn’t get too high when things are good and I shouldn’t be crushed when things are bad.
My favorite interactions with customers are usually anonymous. If I hear someone sharing a positive thought about our company or our beers, or I see a T-shirt on a stranger, those things tend to make me smile.
What is your favorite brand story?
Out of our brands, Fantasy Factory is my favorite. It helped us stand out at retail and gave people a reason to try our beer. The shelf was boring at the time, and Fantasy Factory pushed the boundaries of traditional beer labeling by incorporating bold colors and creative designs.
Interview by Michael J. Pallerino
Michael J. Pallerino is an award-winning writer and editor. Along with producing a number of business, news and sports stories for a number of local and national publications, he has executed a number of content strategy initiatives across myriad communication channels. Over the past 30-plus years, he has won numerous awards, including the Jesse H. Neal Editorial Achievement Award, recognized as the Pulitzer Prize for business-to-business magazines. As an editor in the sports product industry, his monthly columns generated national attention from USA Today, The Wall Street Journal, ESPN Magazine, Sports Business Journal and BusinessWeek, among others. One of the magazines he co-founded, SportingKid, serves as the official publication of the National Alliance for Youth Sports (NAYS). He also served as a communications specialist for the Metro Atlanta Chamber of Commerce, working closely with the Atlanta Committee for the Olympic Games (ACOG) during the 1996 Olympic Games.