Aug 232016
 

Tx Beer AllianceThe beer industry of the 1980s was quite different than that of today.  Of course there have been many brand changes, and there is the obvious rise of crafts and imports, but there has also been an underlying transformation in the culture of the industry as a whole.

Consider that in 1980, there were less than 50 operating breweries in the US.  At the same time, however, there were approximately 4,550 operating beer wholesalers.  Today there are more than 4,200 operating breweries with over 6,000 brewing licenses, yet the US has only 3,000 beer wholesalers.  The growth in the number of breweries, is, in itself incredible, and has dramatically changed the industry. One could, however, also make the case the that loss of over 1,500 wholesalers has had an even more dramatic impact on the industry than the growth in number of breweries!

In 2013, the beer wholesalers in Texas were able to get a law passed that prohibited breweries from selling distribution rights, yet allowed wholesalers to continue to sell those rights if they so desired.  In 2014, three breweries sued the state to overturn this provision: Live Oak, Revolver and Peticolas.  The court heard both sides this past week and a ruling is soon expected.  It is possible this case could end up in the Texas Supreme Court.  As of late, this case has been a hot topic for industry publications.

This is just one key example of how the middle tier has evolved due to the resulting decline in number of wholesalers.  Even though the overall numbers have declined for wholesalers, and an unprecedented number of breweries currently exist, the franchise laws which protect the wholesalers, have strengthened.

Another example of this change is apparent in vendor-wholesaler contract negotiations.  Most wholesalers of any size, even the new start-up craft/import specialty wholesalers, have their own contracts.  All have been written by lawyers familiar with the beer laws of that particular state.  These contracts, to some, are heavily sided to the wholesaler.  Even a few contracts are evergreen. Given the fact that access to market is now so limited for craft brewers, many feel compelled, or even forced to sign these contracts just to get to market.

Is this the definition of a partnership?  Wholesalers will say the same about a brewer’s contract, that it is one-sided in favor of the brewer, even if the contract has the language supporting that state’s beer franchise laws.  For the small brewer, the relationship starts with a bad taste in their month.  Many feel as though they figuratively have a gun to their head.

But as we all know, this does not apply to those larger, well established crafts such as Yuengling, Founders, or New Belgium.  For the big boys, it is a different ball game when it comes to contract negotiations.  Such breweries can have a dramatic financial impact on a wholesaler, especially if they are awarded the brand.   Even with a substantial financial support commitment, most wholesalers will do whatever it takes to land one of the big suppliers.

In the foreseeable future, crafts will be addressing this contract issue through the legislative process. Many believe the Texas law will be overturned and allow self-distributing brewers to sell their distribution rights.  Stay tuned!

Success is how high you bounce when you hit the ground…

 

 Posted by at 6:00 am
Aug 162016
 

Stroh BohemianHistorically, when a brand died, it was truly dead. This adage, however, was proved untrue when Pabst Blue Ribbon became a favorite of the young anti-establishment consumers.  Pabst changed what was once a tried and true rule in the beer industry.  You might even say that Pabst was the incubator for the retro trends we are seeing and continue to see.  While the industry enjoys the benefits and growth of crafts, retro beers like Pabst, are sliding under the radar, albeit some retro brands are more successful than others.

What is the definition of a retro beer?  One definition is as simple as saying it is a beer that your parents drank!  Or, depending upon your age, maybe a beer your grandparents drank!  Several years ago the on-line news Thrillist, named 23 retro beers your parents drank.  Some of these included: Narragansett, Rheingold, Ballantine, Schaefer, National Bohemian, Dixie, Jax, Falstaff, Iron City, Stroh’s, Schlitz, Schmidt, Hamm’s, Grain Belt, Old Style, Lone Star, Pearl, Olympia, Rainier, Brown Derby, Acme and Lucky Lager.  Shiner was also named, but some others were left out, including Drewry’s and Grain Belt.

Last week, Pabst, owners of many of the above brands, announced that it was bringing back Stroh’s Bohemian Style beer to the Detroit area.  Stroh’s, like many of the other retro beers who are making a comeback, appears to be resurrecting an old line extension.

There seems to be no one definitive strategy that works across the board, as each brand has a different approach.  Pabst is just Pabst.  And Lone Star is just Lone Star.  Both brands are doing quite well without line extensions or flavors.  Rainier is another beer with one brand doing well, although a new Pale Ale in a retro style bottle is out.  These are examples of simple business models which hold on to their traditions and regional appeals.

Then you have the brands that are playing not only on the retro wave, but also on the craft wave, none more so than Narragansett.  They are producing a myriad of flavors including Light, IPA, and Hefeweisen, in addition to their flagship beer, Narragansett Lager… all with great success.  Stevens Point is another brewer that has also been successful producing multiple lines.  Iron City has both focused on their retro core brands, while also adding flavors along the craft lines.

Yet other brands, even with support and dollars invested, cannot seem to get the traction their owners had envisioned.  Look at Schlitz and, although localized, Drewry’s in Indiana.

Rumors and stories abound about where more retro brands will be reintroduced, including Jax in New Orleans and Olympia in Washington, both great old beers that have a long heritage.  The demise of many of these breweries and brands vary, but it always boils down to two things:  money, or lack thereof, and/or questionable management decisions.

Whatever the reason, the demise of these once viable brands has now been reborn to new consumers and a new generation that may has yet to come to appreciate their heritage.  Let’s hope all can be successful.

“You hear about all the fourth quarter comebacks a guy has, and I think it means a guy screwed up in the first three-quarters.” - Payton Manning.

Beer Fodder;  http://bit.ly/1hy9W0U

 Posted by at 6:00 am
Aug 092016
 

GuinnessPerhaps the only thing more desirable to a beer wholesaler than Guinness, are the Modelo and Heineken brands, though Stella could be a close second.  Even before the 1970s, when imports were the crafts of that time, Guinness and Heineken were considered staples.

As discussed in previous posts, no brand of beer owns a holiday as well as Guinness .  Sure, Cinco de Mayo is all about Mexican beers, but Corona, Tecate, Dos Equis and other Mexican beers have their own share in that holiday.  Oktoberfest belongs to the Germans, but it’s more a style of beer that celebrates that holiday.  Many German beers do well, including the six Munich breweries who are the official Oktoberfest beers, and other German breweries that brew special beers for the fall celebration.  Though not sold in Germany, these exported beers do well in the States as well.  To thicken the competition for Octoberfest, many American crafts brew Oktoberfest beers. Even at this time of year, one will see Oktoberfest beers on the shelves.

When March rolls around and St. Paddy’s day arrives, however, it is all about Guinness!  Over the calendar year, the month of March could represent 50% or more of  Guinness’ annual sales.  So the question is, what else does the future hold for Guinness?  In the mid-1980s, Diageo came out with Smirnoff Ice, one of the first RTDs, along with Bartle and James from Gallo.  In test markets, Smirnoff Ice was a big hit and when rolled out nationally, the brand did very well.  Today with all the competition, Smirnoff Ice is still a viable brand.

Then there is probably the biggest flop in the beer industry. In 2002, Diageo rolled out  Captain Morgan Gold. An immediate flop.  Diageo spent hundreds of thousands of dollars on not only marketing, but destroying unsold product.  Needless to say it left a bad taste in the mouth’s of many.  Since that time, Guinness has added more line extensions, some of which have failed while others, like Guinness Blonde and Nitro, have succeed.  Through the first half of 2016, Diageo’s beer portfolio is off three percent, including Smithwick and Harp.

Diageo just announced it was expanding its investment in the US beer market by changing its name to Diageo Beer Co. USA.  This will signal the company’s “commitment to the broad category of premium beer,” the company said.  On Friday, Diageo said it has “a deep innovation pipeline for beer and flavored malt beverages” including creating a new alcoholic soda line and launching a Smirnoff spiked seltzer.

This expansion represents a culture and mind-set shift for Diageo which, on the surface, should make all the Guinness wholesalers happy given the investment in the US.  Even as early as last year, Diageo was focusing on Asia and Africa for growth. This shift in their approach will mean one or two things for Guinness:  one much better growth and profitability; or two, Diageo could just be positioning its beer division for divestiture, as has been speculated by many pundits in recent years.  ABInBev….

Sometimes the right path is not the easiest one….

Editors note;  52 week Nielsen numbers show that Guinness dollars are up +9% and volume up +8.2%.

 

 

 Posted by at 6:00 am
Aug 022016
 

AmericaIn the popular movie often played on many cable channels, Heartbreak Ridge, Clint Eastwood plays marine Sargent Tom Highway, who has been in the service for decades.  There is a line Eastwood refers to regarding his win/loss record as a soldier:  “No wins, one loss, and one tie.”

Prior to 2008, one can argue that AB’s win/loss record was spotless.  It seemed that everything AB touched resulted in a home run.  All wins, no losses.  Let’s look at AB’s win/loss record since 2008 when they were purchased by InBev.  How does that win/loss record look since that year?  More losses than wins?

As of today we know that SABMiller will soon be rolled into ABI.  In the past week China’s regulators have approved the merger which was the final regulatory precondition.  Prior to China’s decision, in a classic study of the game of chicken, SABMiller’s board recommended that it’s shareholders accept ABI’s final offer.  This final offer had been increased to L45 a share, up from L44 a share.

Per the Wall Street Journal:   “The drop of the British pound by more than 10% against the dollar drove the value of ABI’s cash offer to SABMiller well below its alternative cash-and-share offer because ABI shares are priced in euros. Initially, the cash offer was designed to be a premium.”  ABI had increased the offer by $2 billion to head off any game of chicken.

Both ABI and SABMiller need this merger to happen.  While senior management at ABI may look at their record and see an unbeaten one, their performance is certainly not coming up roses.  Second quarter profit dropped $1.77 billion, which was tied to a currency hedge.  According to the WSJ, ABI is spending an estimated $450 million a quarter in interest on debt to finance the deal.

It is no surprise that this merger is going to happen.  SABMiller’s performance has been weak and this offer is a premium to the share holders.  Neither SABMiller or ABI could risk losing this merger.  There is no doubt that once this merger closes, ABI will chalk it up as another win.  This score card , however, might be graded differently if the question was directed to an ABI US distributor who has lost market share and volume.  Much has changed for ABI distributors and employees since 2008.

ABI’s recent seasonal promotion, American, which uses their packaging to celebrate summer and the Olympics, initially created a buzz across all media lines.  Now, however, AB’s numbers illustrate that the renaming has not positively affected Budweiser’s sales as was hoped.  Another loss?

First it was AB, than Modelo, now SABMiller. All have been acquired by InBev, along with a number of smaller crafts and some AB US distributors.  Expect more to follow no matter what their agreement with the DOJ states they can do or cannot do.  It might just not happen as quickly as ABI would like.

At the end of the movie, HeartBreak Ridge, Highway has acquired a win. He now states he is “one win, one loss, and one tie.”  The US beer industry will keep score on ABI after this merger, but do not kid yourself.  ABI will continue its assault on the US market.

The essence of strategy is you must set limits on what you are trying to achieve…

Beer Fodder: http://consumerist.com/2016/07/20/how-americas-two-signature-beer-companies-became-expats/

 

 

 

 Posted by at 6:00 am
Jul 262016
 

beer 101To better understand the role of a beer distributor, take a look at the following analogy:  The distributor’s job is to get the dog food on the shelf; it is the brewer’s job to get the dogs to pick the food up!  It may be simplistic, but it does make the point that the role of each tier in the beer industry is different.

Having said that, a distributor’s insights into selling to a particular demographic are many times more insightful than a brewery marketer’s ability to pinpoint a particular target audience.  No matter how it is defined, people will segregate.  People will segregate into various categories based upon age, education, income, professions or even the college one attended.   Segregation might even be based upon a particular beer or beer segment.

Brewery marketers and ad agencies will develop target demographics such as college educated males, ages 25-39, income $65+ etc. and the brewery then develops marketing strategies to fit the named segment.  Typically, there is little to no input from the distributor, and despite the fact that the brewery or advertising staff go into the market or visit a distributor, they could still not glean a total understanding of the bigger picture.

Beer distributors sell to all demographics across all lines.  There are no boundaries when it comes to selling beer.  My first route was in east Austin, and the accounts were mostly Hispanic.  Since I was selling Falstaff, and Falstaff was sinking in popularity behind Schlitz, Lone Star and Pearl, (Schlitz was about 20 times larger than Falstaff, however, each account was always good for 1-2 cases), it was a rough route, but we all got along well.  Even when my truck was broken into and some beer stolen, the accounts helped out by looking for the robbers.  You do not mess with the beer guys!

No matter where you went to work, beer guys were always accepted by the accounts they called on. About the only way one would dare walk into a bar in Starr county in far south Texas was with having on a beer shirt.  Where riding routes in Watts or Compton when working in LA, or the high end routes of Beverly Hills, I again found that no one messed with the beer guy! There was an unwritten rule on the retail side of the beer business.

Based on this knowledge, beer distributors have the innate ability to sell beers that are the favorite of the various demographics.  Distributors are in the accounts every day of every week of every year.  Every account gets treated equally.  Service is based on volume.

Distributors have historically hired employees that are representative of the demographics of their respective markets.  They had to.  It has not been done due to any contractual agreement, it was simply done because it made good business sense and was the right thing to do.

There is a fine line in marketing between the breweries and the distributors.  This applies to both tiers; however, distributors know the demographics of their market.  Brewery marketers can learn more about marketing to consumers from distributors.  Distributors do not exclude any account.

Beauty is in the eye of the beer holder…

 

 

 

 Posted by at 6:00 am
Jul 192016
 

Joe OwadesBy the spring of 1986, it was apparent that Corona, with its clear bottle, introduced a couple of years earlier, was a hit.  Corona sales had increased each year even though it was only available in a 20- bottle loose case.  This package made Corona a predominately on premise package so the brand’s potential was still up in the air.

Spring break of that year gave an indication of Corona’s potential.  During that one week on South Padre Island, five containers of Corona were sold!  We could not keep the accounts stocked with beer.  In fact, we continued to have to pick up extra beer from the San Antonio wholesaler.  It was crazy.

Fast forward ten years, while at Gambrinus, Corona, which was now available in 6-packs, had long established itself as a viable brand.  Wholesalers were trying to get distribution rights for Modelo.  Distribution for Corona was still under indexed, but the 12-pack took care of that with an aggressive price point.  Corona had long moved away from targeting on premise Mexican restaurants and was now into mainstream trade channels.

Gambrinus, the Modelo importer, started putting effort into Modelo Especial cans.  Tecate cans were the dominate package in Hispanic off-premise accounts, so Modelo was targeted at this trade channel.  In a very short period of time in the Hispanic grocery and c-stores, Modelo cans had achieved a space index similar to Tecate.  Sales were zooming and soon Modelo bottles were targeted at upscale on- premise accounts.  Especial started to fly off the shelves

In 2002, as previously noted, AB introduced Michelob Ultra as a test product in Florida.  Ultra-did much better than expected and soon started growing.  AB has continued to market Ultra using the same lifestyle theme with great success.  In less than 20 years, Ultra has become a powerhouse brand and the only the light product that has continued to grow, and grow at double digit number for some years.  Ultra is a classic study in targeting a specific demographic.

None of these products were an overnight success and all of them took years to find traction.   Corona had to change their look from a squatty brown bottle to a longneck clear bottle.  The rest is history.  Modelo launched with the support of the Hispanic community from Mexico.   Ultra, hit a sweet spot in the beer segment while being supported by AB.

There are many brands today that are doing well, but none have the volume base and the growth trends of Corona, Modelo Especial and Ultra.  These three are major players with great market share.

If you are an AB distributor and fortunate enough to also represent the Modelo portfolio, you are a happy camper! Throw in Yuengling, if you are on the east coast, and several other craft brands, and your distributor’s future looks bright.

Corona, Modelo Especial, and Ultra, they are the industries Gold, Silver, and Bronzes medals…..

 

 Posted by at 6:00 am
Jul 122016
 

beer flagThis post begins the fifth year of Beer Business Unplugged and as usual, I will comment on past posts and the industry in general.  While this year’s posts did not produce one blog in particular which resulted in an off-the-chart read, the one post that brought in the most responses was, ironically, last weeks’ Remember the Alamo.

I enjoy receiving and reading all the responses as most come directly to me.  Those responses that do not come to me are posted to the blog on which the comment which made.  The number of subscribers continues to increase, now well in the thousands, and during this coming year, the blog will pass 100,000 reads!  In no way did I ever expect results like this.  Thank you all!

In the last post of 2015, Just the Kiss of the Hops, we honored Albert Jaenicke, who is the personification of what the yearend post aspires to; that is to honor a longtime retired contributor to the beer industry.  This post is usually my favorite of the year to write.

In the first half of 2016, the industry is experiencing what some are calling a graying of the craft segment.  While craft volume numbers are slowing, their dollar volume continues to increase.  This, in itself, could be a major contributor for the slowing of craft sales.

8926-craft-beer-local-chart

Number of Breweries and Brewpubs in U.S. Production_2015

One wonders, as they review the overall numbers, why this phenomenon is occurring during the first half of the year when interest in the craft segment continues to be very high.  In fact, during the winter semester, my class at Portland State had 50 students registered, all highly engaged and most already in the industry in some capacity.  A major US brewer even requested to post job openings for their operation on my class webpage.

The industry numbers and the interest in the industry seem to counter each other.  The upcoming year will be interesting.  The year will include a look at not only the upcoming AB/SABMiller marriage and how it will  pan out, but also how said marriage will affect US and global beer sales.

As always, I will continue to write weekly throughout the year.  Going forward I will cover industry topics based upon your continued interests.  Thank you for all your kind comments and feedback.  They are fun and informative.  And now, year five beings….

 

Beer fodder:

National Beer Sales & Production Data – Brewers Association

 

 Posted by at 6:00 am
Jul 052016
 

Logo The number one question I get about crafts is: “How large will the craft segment become in the US?”  Of course no one knows that answer, however, I do tell those questioning the future of crafts to look at Oregon and Washington to understand what the potential is for crafts.  Maybe the question should instead be: “How much business are AB and MC going to lose in the next 10 years?”

While SIRI, Neilson, and Guestmetrics all indicate a slowing of the craft segment, interest in crafts has never been higher.  We all know there are over 4,000 operating breweries and more than 6,000 brewing licenses in the US.  What is really behind this number is the large amount of micro or brewpub size operations.

These small operations, most frequently started in the back of a garage or in a small warehouse with limited funding, have experienced some degree of success.  All have taken advantage of the expansion of the craft segment and have leveraged their local roots to their advantage.  Smart brewers have grown and even some sold getting multiplies that are crazy.  Good for them.

While there is nothing to indicate a slowing of this model, the industry will soon see a different model which will change the craft segment.  Karbach Brewing Co., located in Houston, was started by the CR Goodman team.  Goodman was a longtime distributor in Texas and an importer who sold part of their great portfolio to Glazers and later sold the remaining brands to Ben E. Keith.  Funded by these sales, Goodman started a brewery in Houston, leveraging their experience and contacts as distributors.  Karbach brought in experienced and highly respected brewer, Eric Warner from Colorado.  Aggressively priced, Karbach is on fire in Texas which is not a surprise.

Wild Acre Brewing, located in Ft. Worth, is headed by a former Ben E. Keith executive, John Pritchett and has as its brewer, former Lagunitas alum, Mike Craft.  Wild Acre plans on shipping over 6,000 bbls. the first year out of a brewery with a 10K bbl. capacity.  Their main packaging will be cans with unique designs.  The DFW market is a 63+million case area, only five percent share, which is highly underdeveloped in the craft segment.

In Fredericksburg, Texas, the Scripps family is leveraging their media expertise in building what will be one of the most unusual breweries in the country.  Headed by highly respected master German brewer, Peter Boettcher, a former MC brewer who has designed and built a state of the art 10,000 bbl. operation.

Altstadt Brewing is targeted entry into the market sometime in October.  It has been built and designed to be a destination brewery, with the brewpub an actual 200+ year old German brewery refurbished and shipped to Fredericksburg.  The production brewery consists of the most technically advanced equipment available today.  The brewery will have a world class restaurant, beer garden, and meeting hall.  Initial brands will be a Kolsch, Lager, Alt and a seasonal Wit beer; all under five percent ABV and highly seasonable.  Branding has been created by Brandwrx, a highly acclaimed agency in Austin.

Breweries that are this well-funded and managed by highly experienced brewers and industry professionals are going to be successful.  As pundits predict when the craft segment consolidates, those built with these key characteristics will survive and prosper.  Those who do not, or will not, invest in the highly experienced brewers and industry professions will be gone.   Perhaps such near-do-wells will experience something similar to what AB, Miller, and Coors did to the regionals brewers between 1970s-1990s.

In Texas, it will be Remember the Alamo….

 

 Posted by at 6:00 am
Jun 282016
 

Make it yoursI moved to Kansas in 1978 as the executive vice president of Coors of Kansas.  Although this was not my first exposure to 3.2 beer, it would be my first exposure to selling the liquid.  So-called “strong” beer was sold only in liquor stores and private clubs, whereas 3.2 beer was sold everywhere.  As I recall, 80% of the Coors sold was 3.2 liquid.

I quickly learned that the state addressed strong beer in a much stricter manner than the method used for handing 3.2 beer.  Our trucks would deliver 3.2 beer to a grocery store, while next door sat a liquor store.  Coors of Kansas had separate routes for strong beer and 3.2 beer.  I had the routing changed so routes could service both accounts.  This was done by loading one side of the truck with 3.2 beer and the other side was loaded with strong beer.

Of course, to help this system I had changed the fleet, going from eight bay bobtails to 16 bay tractors.  The employees thought I had lost my mind in so doing, but the change resulted in no issues and by the end of the year, our delivery cost had dropped dramatically.  This reduction in expenses resulted in a 45% increase in operating income.  Obviously the owners were very pleased with the results.

Ten years later, while working at Coors Brewing Co., I was sent to Utah to run a newly acquired distributorship.  Once again, I was in a state where 3.2 beer the dominated ABW.  Of course, working and living in Colorado presented the same issue, 3.2 beer in groceries and c-stores, while strong beer was sold only in liquor stores.

Fast forward 25 years and we are seeing states such as Colorado, Oklahoma, and soon Kansas, changing their laws to allow strong beer to be sold in all trade channels.  Like many industry laws and restrictions, the 3.2 issues were antiquated and should have been changed years ago.  But, by changing these laws now, it creates a new set of problems.

From the breweries’ perspective, consider how a brewery would handle producing 3.2 beer for only one state where it is still legally sold?  For brands such as Michelob Ultra, it is no big deal.  The same situation would hold true for other light beers whose ABV is 4.0% or less.  The consumer would have a limited choice.

The bigger issues, however, are in states where a brewery has duel distributors, such as in Kansas.  A liquor house has the rights to Corona in a strong beer, but the AB network has rights for 3.2 beers.  You eliminate the 3.2 beer issue, and now what happens?  Grandfather both?

The reality is that AB already delivers to the liquor stores, whereas the W&S company does not have the capabilities to deliver to locations that would have been the former 3.2 accounts.  That being said, if strong Corona was available everywhere, the volume in the liquor stores would drop dramatically.  The W&S company will be more likely to sell their rights.

This then becomes a question of value.  If Crown allows for dueling to continue, than it might be in AB’s best interest not to buy when you sell the same beer?  Obviously, this makes no sense.

Crown, and other vendors in this position, have some major decisions to make as these 3.2 beer laws are eliminated.  Prohibition makes you want to cry into your beer and denies you the beer in which to cry….

 

 

 Posted by at 6:00 am
Jun 212016
 

imagesIn the early 1970s, I purchased a new Chevrolet Caprice which was loaded with all of the bells and whistles.  It was a family car, and after owning it for three years, even with very low mileage, the car had basically fallen apart.  The dash panel had cracked, wires fell out from under the dash, the door side panels had fallen off and there were a number of other issues.  Simply put, the car was junk.  Being feed up with the lack of quality, I purchased a Volvo sedan.

This Volvo lasted 17 years with very little problems. In fact, it served as my son’s first car.  I felt my son was safe in the Volvo since the car maker was known, first for its safety and secondly, for its’ quality.  At the time, both European and Japanese car makers were highly regarded.

The success of foreign cars spilled over to imported beers.  Imported beers were hot and some very good imports were available.  Molson was one of the most desirable brands at that time, and the beer was expanding across the nation.  Molson had just entered Austin and had made the decision to go with the Schlitz distributor.  Molson Golden was a hit and Austin was selling five truckloads a month!  Considering all the Schlitz wholesalers were struggling with losing volume, getting a brand like Molson Golden with higher margins could truly make a difference.  It was a time when the new Coors wholesalers were not yet ready to sell out, which was soon coming as Coors was not getting traction.

It did not matter what new beer was coming to your market, the wholesaler did what they could just to ensure an interview; calls were made and strings were pulled for recommendations.  As a wholesaler, if you got an interview, you rolled out the red carpet.

These days, distributors are besieged by dozens of crafts and are pushing back on the deluge of requests.  Unless the craft is well established, think Yuengling, chances of a distributor meeting with a new craft brewery is, at best slim.  The standard distributor response to the craft beer desirous of an interview is:  “Send me some samples.”  Really?

If the craft is a startup, or a recent start up, the idea of sampling the liquid makes sense.  Much has been written on the lack of quality in many new craft beers.  In this situation, it does tend to be a decision which would save time, however, if the brewery has a successful track record, which includes new imports that have a successful and long history, it appears to be an unnecessary push back or an excuse.

Any distributor making a decision to acquire a brand which has a track record of success, without understanding the business model of the brewery, is only hurting their company, their retailers, and most importantly, their customers.  Access to market, or simply the lack of having the opportunity to present one’s products, and the ability to present business plans to the middle tier, is a major reason there is such frustration with the brewers and vendors.

Those distributors who are proactive, seek out growth, and listen to new opportunities, are the ones with whom vendors will select to do business.  Believe it when I say, vendors talk!  Take two aspirin and call me in the morning…

 

 Posted by at 6:00 am