Finding new opportunities in reviving classic products.
Before it went out of business in 1983, Narragansett was the quintessential beer of New England. During its heyday in the 1950s through the 1970s, Narragansett was the official beer sponsor of the Boston Red Sox. At the start of every broadcast, longtime Red Sox announcer Curt Gowdy would greet fans with the company's tag line, "Hi, neighbor! Have a 'Gansett." The beer even had a memorable cameo in the movie Jaws.
Mark Hellendrung, a native Rhode Islander and former president of Nantucket Nectars, had fond memories of Narragansett. He also happened to be looking for a new business venture. In 2005, Hellendrung and a group of investors relaunched Narragansett Brewing, bringing back a brand that had been out of existence for more than two decades.
Rohit Deshpande, a professor of marketing at Harvard Business School, says this is a perfect time to bring back old brands. Baby boomers have grown nostalgic for the brands they grew up with, while consumers of all ages have shown a willingness to pay more for products with a reputation for high quality, which legacy brands often have. Hence the return of, for example, Lilly Pulitzer and Mini.
Butterfields Candy is another regional favorite that has recently been given a new lease on life. Founded in 1924, its signature product, a hard candy called Peach Buds, was a well-loved treat throughout the South. The company abruptly closed its doors in 2009 after the owner fell ill, and the candies disappeared from store shelves. Dena Manning, the company's new owner, is confident Butterfields can make a comeback. Last year, she bought the company out of foreclosure and put Peach Buds back in production.
Acquiring an old brand does involve some legwork. If a brand has been extinct for a long time, it may require some detective work to determine exactly who maintains ownership of the brand. However, if the owner has no plans for it, then buying the rights to the brand should be a fairly straightforward negotiation. Of course, there may be other expenses to consider, such as outstanding debt or the cost of reestablishing operations. Manning ended up spending close to $200,000 to renovate Butterfields's factory, which had fallen into disrepair.
As Narragansett has revamped its brand, it has attracted a slightly different demographic than in the past. In its original incarnation, Narragansett was a mass-market beer. Today, Narragansett primarily attracts drinkers who prefer craft beers as an alternative to brands such as Budweiser and Coors. Its customers tend to be relatively young, under 45. At first, Hellendrung attempted to draw in more middle-aged, blue-collar consumers, but he soon realized that demographic was less willing to try new beers. "It's the opposite of what we thought when we started," he says. "The younger demographic is so much more experimental. For a party, a young guy might buy six different kinds of great beer. The older guy will buy a 30-pack of Bud Light."
That's not surprising, according to Deshpande. For old brands to regain new life, he says, they must be relevant to contemporary customers. As a result, they may have to undergo a significant departure from their original approach. For instance, Old Spice, though not defunct, had languished until the brand was retooled to reach younger consumers. Though tweaking a long-standing brand's identity is a significant challenge, entrepreneurs who acquire old brands often have an advantage over the brands' previous owners, says Deshpande. "They're not prisoners of history," he says. "They can come up with fresh ideas and rethink what the brand could be."
Alterations may be especially necessary if a brand's reputation has taken a hit. Narragansett, for instance, suffered from the perception that the quality of its beer went down after Falstaff Brewing, the previous owner, moved production out of Rhode Island and into Indiana in 1982. When Hellendrung relaunched the company, he encountered middle-aged consumers who associated the brand with cheap quality and remembered being betrayed by the previous owners. "They really had a bad taste in their mouth, living through that experience," he says. "That's been the group that is most difficult to reach." But the company's frequent attendance at beer festivals and other events has helped combat that perception, he adds.
It's a delicate balance, however, as brands must keep some connections to their pasts to maintain authenticity. Both Narragansett and Butterfields emphasize, on their websites and in their packaging, their products' faithfulness to their companies' original recipes. The owners even recruited former employees to ensure that their products' original quality would be upheld. "Our candy is still made the same way as it was in 1924, and we don't want to change that," says Manning.
At Narragansett, Hellendrung hired the original company's former brewmaster, Bill Anderson, to ensure the authenticity of the new beer. It seems to be working. Last year, the Brewers Association, an industry trade group, ranked Narragansett as one of the top 50 breweries in the U.S.
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