October 10, 2019

So… White Claw is a really good tech company

So… White Claw is a really good tech company

Now that we’re squarely in fall, let’s take a moment to reflect how White Claw absolutely TOOK OVER this summer.

  • In July, more White Claw was sold than Budweiser 🍺
  • In Sept, there was a NATIONWIDE 🌎 shortage of White Claw
  • White Claw owns 60% of a market growing 300% YoY 📈

Is it a leap to think that consumers found White Claw incredibly valuable?

We define value as quality divided by cost, or the price consumers pay.

Consumers want to optimize value. We’ll buy high-value goods, but we won’t buy low-value goods… unless of course, we’re in the dollar section at Target 🎯 and all logic breaks down 🤷‍♀️

We likely buy goods where quality equals cost. These are either inferior goods (think $2 flip flops from Old Navy) or luxury goods ($200 flip flops from Tory Burch)

Where does White Claw fall?

First, consider cost. On a per-unit basis, White Claw is certainly more expensive than DIY vodka sodas and light beers (substitutes), slightly more expensive than other spiked seltzers like Truly (competitors), but is less expensive than premade vodka sodas (more similar substitute… fun fact… this is because liquor is taxed at a higher rate than beer, which is what the gov’t classifies spiked seltzer)

Quality is much more complex since each consumer has unique preferences. And yet there are a few factors that obviously drive consumption:

  • 😝 taste
  • 🥗 nutrition
  • 🏪 ease of purchase
  • 🧳 ease of travel
  • 🥤 ease of consumption
  • 💁‍♀️ it’s cool

White claw ranks highly on a few of these dimensions but is not an obvious winner across all of them.

With a sort-of expensive and a sort-of high-quality product, White Claw is not clearly high value.

But people are not buying White Claw because it is high value, they are buying it because they PERCEIVE it to be high value.

In this case, the difference between PERCEIVED value and ACTUAL value is the SOCIAL PROOF that White Claw has built over time.

Social proof is one of the six key principles of influence, defined by Robert Caldini as “the tendency to see an action as more appropriate when others are doing it.”

AileenLee took it a layer deeper, defining five types of social proof, of which White Claw has three or three and a half:

  • ❌ Expert social proof
  • ❔ Celebrity social proof (I’m not sure if youtube counts!)
  • ✅User social proof
  • ✅Wisdom of the crowds
  • ✅Wisdom of your friends

This social proof is made possible by the viral nature of White Claw cans and culture. Everywhere you go, White Claw is there:

  • 💻Shared online: videos, ‘grams, tweets → celebrity & social proof
  • 💃 Shared in person: people consume white claw around other people: at pools, outdoor parties, the beach →wisdom of crowds & friends
  • 🏪 Everywhere in-store: mounds of white claw “tall can” cases sit in corner store isles, endcaps, and refrigerators → wisdom of crowds

White Claw is so viral because it is consumed and shared with other people. Other B2C companies with products like clothing (e.g. Everlane or Outdoor Voices) experience the same lift: “I love that dress, where did you get it?” or “I’m having so much fun hiking around in these pants!”

Using social proof and product-driven virality is less common in the B2B and B2B2C worlds — we more often see invite credits or referrals drive viral growth — but it exists, largely when a mobile application is involved.

📱 Ritual (B2B2C) — enables group food orders for pickup (My favorite ordering app).

  • The piggyback feature lets colleagues jump on another colleague’s lunch order. That person will pick up all the orders and bring them back to the office. This incentivizes sharing the app among people you work with → Wisdom of friends
  • In-store signs direct customers where to pick up orders, bypassing the order and wait workflow. It is an effective way to get non-users googling Ritual to see how they too can skip the line → Wisdom of the crowd

📱 RoadSync (B2B, an Hyde Park Venture Partners portfolio company) — mobile payments for logistics

  • When drivers pay warehouse fees or for repair and tow services, they receive invoices and receipts from RoadSync. These prompt drivers to download the application for mobile pay and electronic reimbursement → Wisdom of “friends”

Building virality into one’s core product is unique. 🦸‍♀️

Once virality is inherent, social proof increases, perceived value goes up, and growth becomes easier. 👋

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