Mar 312020
 

We can all agree that the Corona virus has turned the world upside down. But perhaps a more accurate explanation is that the medical and political response to the virus has turned the world upside down. While the effects of the virus are uncertain, one thing is certain: it will be awhile before we know the full impact of the Corona virus… what it has done to our world, our nation, and what will be the repercussions of the decisions made in response to the virus.

We know that many business models developed by other CPG companies failed to perform in the early days of the virus. The highly acclaimed just-in-time business model supported by the made-to-order inventories collapsed under the public’s panic buying. What did work, and what was the most effective delivery model, was beer distribution. With the on-premise accounts closed, most distributors adjusted their off-premise teams by adding merchandising and delivery workers. The results were evident in the number of record sales produced. Many wholesalers had all-time record weeks, not seasonal records, company records.

Going forward, many wholesalers believe their all-time sales highs will slow as consumers begin to realize that grocery, liquor, and c-stores will remain open and well stocked. Once again, wholesalers proved their value to retailers and consumers. If sales begin to slow, however, expect wholesalers to being lay-offs.

While the world and the beer industry are working to get through this crisis, the next question is: what will the world look like when the virus ceases?  What will be the new reality? First, it is almost certain that we will experience a recession during the last half of the year. Unemployment numbers are already massive, with more to come.  The newly passed Congressional bill may convince many workers to stay home, as they may make more money not working than being employed.  This will leave restaurants, bars, and even craft breweries who survived the downturn, scrambling for workers.

Expect to see states with self-imposed shutdowns to become cash-strapped and begin to look for revenue streams. New or increased state taxes may come in the form of income taxes, sales taxes, property taxes, etc. States that have resisted legalized gambling may decide that such a revenue-producing stream might not look so bad after all. Consider how many direct and indirect jobs could be created from casinos. Sports booking could raise its head in every state. And the big one, marijuana sales, could be legalized nationwide. Even raising taxes on beer could become a reality. States will be strapped, and everything is on the table. Expect brewers and distributors to take a long hard look at their go-to market model. A 1990s video made about the Spanish Flu pandemic of 1918, which killed over 30 million people, suggested that those who survived did not even feel comfortable going back to church until 1922.

Consumers, too, will view the on-premise differently, but to what degree? Wholesalers may make the on-premise sales virtual, thereby reducing their sales teams, and putting more pressure on the brewers’ sales teams to become the in-market sales function. Expect brewers of all sizes to ramp up their chain departments. In the future, expect that off-premise will be the major battleground. Of course, online marketing and home delivery will become the big opportunity.

Consumers and retailers now know that the antiqued liquor and beer restrictions are irrelevant. This pandemic has made that fact crystal clear. And consumers will not put up with old laws. Most states have suspended restrictions for on-premise accounts to help them survive the current crisis. Look for the possibility of states permanently changing the laws once the reality of an increased revenue stream from beer sales tax sinks in.

There is a very realistic chance that the worst is yet to come. Regardless of that, the beer industry will adapt, improvise, and overcome. It will never be the same…that is the reality.

Now I am trying to decide:  ponytail or man bun? Barbers are going to be in high demand.

This is the age of disruption.

 Posted by at 6:00 am
Mar 102020
 

Decades ago, beer wholesaler warehouses came in all sizes and shapes. The Coors warehouse in Dallas, where I worked in the summers during college, was a building not specifically designed to be a beer warehouse, but it was new and had recently been modified for Coors. The volume at that time was under a million cases, yet the building was complete with a hospitality room, locker rooms, an open area for supervisors, and some executive offices. Trucks were loaded in-doors and, of course, there was a refrigerated warehouse for the beer.  

The Falstaff warehouse in Austin was in a very old building with a small office area and the trucks were loaded by hand just outside the building. In Oklahoma, a Schlitz operation was located in an old railroad station and some small Lone Star operations were located in barns. The most modern beer operations in those days were the Schlitz warehouses because of Schlitz’s dominance.  The warehouses were designed for beer and many had been built within that decade. Most of the warehouses had the same design, small offices, a meeting room, a check-in area, inside loading, and warehousing. Many new warehouses had added storage for p-o-s and draft equipment.

Once Miller Lite became dominate, the Miller wholesalers followed suit with new and updated warehousing. Previously drivers had safes in their trucks and would unlock their safe and deposit their money in can trays and proceed into the check-in area to reconcile their daily sales. The newer warehouses designed by AB, Miller and Coors now provide their drivers with securely locked check-in offices.

Old, established breweries such as Schlitz, Bud, Pabst and Miller all had a similar look and feel. They all had a castle-like appearance, built with bricks, as this was popular during the 1800s. The executive offices of Schlitz’s corporate headquarters in Milwaukee were dark, walnut paneled, with heavy thick carpet. Executives were dressed in suits and all had administrative staff. The personification of the corporate world at that time. Visiting both Schlitz and Pabst corporate offices, one found that security was focused only on deliveries to the brewery. Basically, what was coming into the brewery and what was leaving, and that was it. 

At Coors Brewery in the 80s, we were issued ID cards which opened the front doors and operated the elevators. Perhaps the most secure operation was West Coast Beverage, Coors and Pabst operation located in the Watts area of Los Angeles. The operation was inside a compound, surrounded by a 15-foot-tall brick wall with barbwire and managed by guards located in a drive-in guard house. Only employees of that warehouse were allowed in the offices.

New warehouses and breweries years have extremely tight security with electronic passes at every door and access to all areas is limited to a few employees. With the addition of security cameras and security guards patrolling the grounds, one feels quite secure.  

The recent horrific shooting at MolsonCoors in Milwaukee illustrates that not even top level security can guarantee one’s safety.  Rest assured that MolsonCoors, along with many other beer companies, will review their security and procedures…perhaps the one good thing to come from this tragedy.

The industry is rallying behind MolsonCoors with financial support through GoFundMe me and other means. Over 1.1 Million has been raised so far. That is what makes this industry great, the beer people are there for each other when needed.

There is no safety in numbers, or in anything else.

 Posted by at 6:00 am
Mar 032020
 

The long-anticipated expansion of Coors into central and South Texas in 1976 had retailers chopping at the bit. The Coors Brewing Co. appointment process was highly published and hundreds of individuals applied for franchises. As the distributorships were awarded, the media jumped all over those announcements and people were excitedly anticipating the rollout. Coors rolled out in San Antonio in March 1976. The largest chain at the time was Handy Andy, and when the Coors arrived at their stores, space had already been allocated in the box next to Schlitz, the market leader and giant. There was no paperwork, no scanning, no presentations, no spreadsheets, no resets and no round tables. All the retailer expected the driver to do was to price the six packs and stock the beer.  It should be noted that the few chains that existed during the 70s did not participated in the annual reviews and resets which are common today.  Annually, there were few, if any, new products or packages and since all sales were Diver Sales, it was incumbent upon the driver to sell the products. Fortunately, such sales were relatively easy. 

In 2020, the industry is looking at the spring resets for all chains including seltzers, which, of course, are on fire. To put things into historical perspective, one must consider that just HEB alone, one of the larger chains, has approved 509 new SKUs this spring! 509! How does one handle 509 new SKU’s? Did 509 old SKU’s get replaced?

While most vendors and distributors anticipate the upcoming resets, AB and their wholesalers’ rollout of Bud Light Seltzer was nothing short of remarkable. AB, aired a TV spot for the Seltzer during this year’s Super Bowl, used that spot and their wholesaler network to take Bud Light Seltzer to market. This led to obtaining a place in the market where within three weeks and Bud Light Seltzer recorded just over 10% share of the seltzer segment.  This is remarkable and shows the industry how effective the AB system is when all the components come together. It also illustrates the frustration the remainder of the industry, especially the crafts; have in getting their beer to retail. Crafts, historically have not, or will not, invest in experienced chain personnel or financially support chains, thus creating a level of frustration with the execution of the AB and MC networks.

The industry awaits the beginning of the spring resets while AB and their wholesalers benefit from their ability to move and execute. It will be interesting to follow the success/failure this spring and summer of the 509 new SKUs. And it is a safe bet that AB will have something to say about those 509 SKUs and that success.

Execution beats strategy for lunch.

 Posted by at 7:00 am
Feb 182020
 

The fact that celebrities endorse or represent a particular brand is nothing new in the beer industry.  Immediately following World War II, many regional beers, using the new medium of television, utilized cartoon characters to represent their beers; while in the 50s and 60s, print ads hosted sport stars and Hollywood actors/actresses to endorse a particular brand.  During this era, the use of celebrities was most closely associated with the current national brands including Pabst, Schlitz, Falstaff, and Budweiser. 

Sports marketing came to the forefront after Philip Morris bought the Miller Brewing Company and Miller began a race with AB to see which establishment could purchase the rights to various sports and stadiums. Miller introduced Miller Lite and supported the brand by using retired, famous ex-jocks with their “taste great, less filling” highly successful campaign.  In subsequent years, Ed McMann of the Tonight Show with Johnny Carson became a longtime spokesperson for Budweiser. Other famous celebrities included Paul Newman who switched his endorsement from Coors to Budweiser and shortly thereafter put a Bud logo on his racing car. Coors selected Mark Harman to endorse their beer, followed by Pete Coors, and the brand has successfully used Sam Elliott’s voice-overs for years.

Domestic brewers have had varying degrees of success using celebrities; however, imports as a whole have not used screen idols to endorse their products with the exception of Heineken who has used cameo appearances with some celebs. In recent years Heineken tied into the James Bond franchise going so far as to use Daniel Craig in some of their ads. The brand also retained Neil Patrick Harris as a spokesperson for Heineken Light. One can argue as to the effectiveness of these ads, however, that particular campaign was short-lived.

Heineken recently announced the hiring of professional golfer Phil Mickelson as spokesperson for Amstel Light. This is somewhat baffling in that Amstel Light is almost a memory in beer. Heineken recently tried to pursue Michelob Ultra using Amstel Xlight, a low carb light beer that went absolutely nowhere. Perhaps by using Mickelson for a beer that has little to no distribution, Heineken is trying to reach Generation Xers, or the last of the retiring baby boomers. In some way this campaign resembles what Pabst did 10 years ago with Schlitz. Pabst targeted Florida, which witnessed the first wave of boomers retiring and reintroduced Schlitz, a beer that generation grew up on.  Pabst employed billboards and new distribution in the hopes of motivating the boomers to return to the beer. Unfortunately, the ploy did not work.

Heineken will be using Mickelson to advertise a beer that has no distribution, especially in the on premise accounts. This campaign appears to be a reach for Heineken and a waste of Mickelson’s appeal. Had Heineken used Phil to promote their Heineken Light, at least they would not be speaking to empty shelves. The question is: why is Heineken using a highly regarded golfer to prop up a basically non-existing brand? Mickelson has become somewhat of a social media sensation with his posts, but this relationship seems to miss the target. Remember, Ultra is the main beer sponsor of men’s professional golf.

A goal without a plan is just a dream.

 Posted by at 7:00 am
Feb 112020
 

When traveling either within the U.S. or outside the country, I typically look for which brands of beer are sold in the area, as I’m sure others in the beer industry do likewise. Call it a habit, but brands particular to an area characteristically tell a story of that region’s beer industry.

Several weeks ago, I visited the Dead Sea in Israel. While there I encountered the “Lowest Bar in the World,” (honestly, the name of the bar) which was located 420 meters below sea level. The Dead Sea is visited annually by tens of thousands of people from all over the world. This bar, the only one located at the Dead Sea, offered two styles of Israel’s Gold Star beer, in addition to Stella, Heineken, and Weihenstephaner. The bar also offered Corona, Tistango, Carlsberg, and Paulaner in bottles. Obviously, visitors to the Dead Sea were coming from all parts of the world, so this selection of global beers made sense…beers from all over the world for the people from all over the world. 

Such was typical of our trip to Israel: massive crowds of tourists lined up at every historical and religious site. At times, it felt like the Super Bowl on steroids. At each site we visited, and at the hotels where we stayed, the restaurants served multiple brands of beer, with the lead offerings provided by Gold Star’s two brands, followed by Heineken and Stella, all of which were on draft. 

A majority of the tourists were Americans; however, one could not find a single American beer! No Budweiser, no Coors, and no Miller, much less any other brand. The question is: why would such global companies, including ABInBev and MolsonCoors, not have beer in Israel considering the international tourism? The simple answer might be that these global breweries look at countries such as Israel as a second-tier market. When one reviews the global markets in the media, most articles deal directly with China. It seems many breweries have their eye on China and that country’s massive population. And if the focus is not on China, then it is on India, Africa, or South America. If a global brewery was intent on expanding or building their flagship brand, it would seem the international visitors to Israel would be a natural go-to place. At least the Europeans seem to see it that way.

Traveling around the world is one thing, but to be home is something special.

 Posted by at 7:00 am
Jan 212020
 

This week, MillerCoors announced the closing of its Irwindale brewery which comes as no surprise for beer industry people. Pabst Brewing Co. has an option to purchase the brewery but their window to exercise this option is short. Pabst’s response might give the industry an insight of the brewer’s future.

A day after the MC announcement, a local Ft. Worth brewer, The Collective Brewing Project, announced it had closed. The Collective Brewing Project, founded in 2014, was noted for their wild and sour beers. The timing of both closings is ironic in that the industry is simultaneously experiencing the cessation of both one of its largest and smallest breweries.

It will be a while before the industry publishes its final 2019 numbers, however, we do know that there are currently over 8,000 working breweries in the States. What will be interesting is the ratio between the number of breweries opening verses the number of breweries closing. For years the number of those opening has dwarfed the number of those closing, however, that difference has recently narrowed. The day is coming soon when we will experience more closings than openings. 

Aside from the dramatic size difference between MC and The Collective Brewing Project, the two breweries have one thing in common: neither brewery is selling beer.  If they were selling, the plants would not be shutting down. MC does have the funds to keep their brewery open, but they are obviously trying to stay ahead of the costs and maintain production capacity at their other two breweries. The Collective Brewing Project probably has a similar sales trend, however, the owners may have decided that enough is enough and they want to limit their financial exposure by pulling out. Neither brewery is growing or offering beers that consumers are eager to purchase. 

The new leadership at MC seems to grasp reality and has started to adjust the company to ensure the structure fits the current sales and market position. This does not mean that each quarterly financial statement that reports a loss of sales will be followed by a statement of MC’s increase in market share. Traditionally, MC looses sales, but increases share of market with their light beers, but this only means their losses are less than AB’s losses.  

Like more and more struggling breweries who finally call it quits and move, on MC and The Collective Brewing Project did what each had to do. People will lose their jobs, money will be lost, dreams will end, but that is the beer industry today. Needless to say, 2020 will be interesting, but the condition of the industry in 2030 will really be attention-grabbing.

Sometimes we stare so long at a door that is closing that we miss the fact that another that is opening.

 Posted by at 7:00 am
Jan 072020
 

One week into a new decade, the 20s, is for me, the start of my seventh decade in the beer industry. This might seem a little misleading as I started in the last year of the sixties and this is only the first year of the twenties.  It still works out, however, to seven decades!

This is 401st post since starting the page. While the blog began as a comment on a handful of industry topics, the response from readers that first summer was quite positive, and I have continued writing about past and current matters.  The thought was that the industry might consider looking at issues in a different light. While the subscriber base, which has contained itself to beer industry readers, continues to grow as posts should pass 200K views in 2020.

So, what can we expect and what will the beer industry look like in 2030? Go back to 2010…did anyone think that there would be over 7,000 operating breweries today? Did anyone know what a seltzer was much less see the coming explosion of seltzers? The major domestics continued to lose volume and share as many of their line extensions had seen only minor success. 

A decade can be defined by the changes in the industry.  Take, for example, the 60s, a decade in which AB and Schlitz battled for industry leadership while other nationals, like Pabst and Falstaff were just hanging on. The 70s could be defined as the decade of Light beers and the beginning of the end of the regional beers. The 80s brought the close of big brewers like Schlitz, Pabst, and G. Heileman with Coors expanding east and regionals began the process of consolidation. The 90s could be best known for the rise of Corona and the beginning of crafts. In the 00s, we remember the crafts’ growth, the selling of AB, and the merger of MillerCoors. Finally, the last decade as highlighted above, saw the growth of breweries and the beginning of seltzers. It could also be defined as the end of the big AB and MC brands, but we will know for certain in 10 years. Toward the end of the last decade, a number of large, successful craft breweries had sold to foreign owners, while many medium and small crafts had closed, downsized, or modified their business model.

The famous John Kenneth Galbraith, once said, “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” We will know in 10 years and while I will address these beer industry changes as they happen, it will no longer be on a weekly basis, but instead when the time is right.  I plan to periodically write on beer industry issues and the posts, when written, will still be published on Tuesday mornings.

Again, thanks to all the readers and the interesting and kind comments sent to me over the years, but it is time to scale back. Who knows, you might still hear from me for many months to come, but maybe not. Until the next post, let us see how this decade unfolds.

I haven’t quite gotten the hang of this retirement thing.

 Posted by at 7:00 am
Dec 172019
 

The interview process I experienced during the late 1980s for the general manager’s position at Coast Distributors was definitely unique. Although I spent the majority of the interview time with owner of Coast, I also had dinner with the GM’s three director reports:  the Director of Operations, the CFO, the Director of Sales, Jim Cline.  I was offered the GM position and accepted it in early 1988. 

Shortly before accepting the GM position, Coast had been awarded distribution rights to Coors in all six of their Oregon houses. At the time, they were the largest Pabst distributor in the country. Hamm’s was their number one brand and the best selling beer in Oregon. Coast also had a multitude of other imports including: Modelo, Heineken (in some markets), and others, along with a wine portfolio, which produced 10% of revenue. Jim Cline played a key role, not only in aiding Coast with the Coors expansion, but he also had a vision for the future and had agreed to acquire Rogue, one of the earliest crafts. Coast was Rogue’s first wholesaler.

Jim grew up in Oregon and had gone to the University of Oregon where he aspired to play football. Unfortunately for him, the football career did not materialize, but Jim did earn a degree in biology. One of Jim’s favorite sayings was that he might not know how to sell beer, but he knew how to make it. Using his strong work ethic, Jim performed his way up thru the ranks at Coast to become a key member of the management team. Jim, more than another vital employee, was a major factor in the success of Coast. He quickly became my right-hand man and was a great help in negotiating new union contracts for Coast’s five local shops.

After several years of profitable sales, at the request of the family, I helped sell the company to Dick Lytle.  Dick changed the name of the company from Coast Distributors to Mount Hood Beverage, which in turn later became Columbia, the giant multi-state house.

Jim stayed during the transition from Coast to Mount Hood, but as is typical, he departed after the new management assumed control.  Jim was quickly picked up by Jack Joyce, the owner of Rogue Ales.  This decision led to one of the beer industry’s best leadership groups with Jack and Jim growing Rogue into not only one of the top selling crafts, but also one of the top selling brands.  Following the strategy of jack and Jim, Rogue expanded across the country. Jack retired and passed away some time ago, but his son took over from him and continued, with Jim’s help, to grow Rogue.

Jim was one of the beer industry’s unique leaders in that he took a traditional long-time family owned distributorship and grew it it into one of the nation’s top ten.  Not only does Rogue Ales span multiple states, the company also has a definite grasp on the future of the beer industry.  

After decades at Rogue, Jim has now retired to spend time with his wife Amy and his beloved horses. When I see a can of Coors or a bottle of Rogue, Jim comes to mind. Jim Cline, the Oregon Duck. 

2019 = Jim Cline – Rogue Ales

2018 – Ray Teutsch – AB Distributor

2017 – Charles M. Duke, Jr. – Coors Distributor

2016 – Carter S. Huber – Schlitz/Miller

2015 – Albert Jaenicke – Hops

2014 – R.D. Hubbard – Coors Distributor

2013 – George Henricksen – Royal Imports

2012 – Diane Fall – Warsteiner

THIS IS THE LAST POST OF 2019.  I WISH EACH OF YOU A HAPPY HOLIDAY SEASON AND A MERRY CHRISTMAS.  NEXT POST WILL BE ON JANUARY 7, 2020.  

 Posted by at 7:00 am
Dec 102019
 

Almost 50 years ago when the tobacco company Philip Morris was flushed with cash, they purchased the Miller Brewing Company. Miller immediately had access to PM’s marketing expertise along with the resources necessary to attack the beer industry. Miller created Miller Lite just as the baby boomers were turning 21, and the rest is history. One could argue that Philip Morris’ purchase of Miller Brewing was a defining moment in the beer industry

This acquisition by Philip Morris started a shift in the beer industry that continues today. Schlitz Brewing, in trouble for years due to their brewing process, finally sold out to the Stroh Brewing Company, also a struggling brewery. The massive debt Stroh had incurred with the purchase of Schlitz might cause one to wonder how Stroh ever believed they would survive. And they did not.

The G. Heileman Brewing Co. had been successful with the acquisition of regional brands, support of those brands, and the expansion of other brands. A key to Heileman’s success was the fact that they would award brands in a market to different distributors, thus pitting the distributors against each other. This model was effective until distributors got together and changed state laws to prevent such action from occurring.

Alan Bond, acquired G. Heileman in a takeover.  Bond had so much debt that the company had no chance to succeed, especially given their declining brands. Standing in the wings was Paul Kalmanovitz, who was also buying struggling breweries, but instead of spending against them, he stripped them of their assets, cut marketing, and reduced staff. Brands struggled and died but Kalmanovitz made money.

In the last 20 years, the beer industry has seen AB purchased by InBev, and Miller combine with Coors. Both companies have lost market share and volume while simultaneously experiencing rapidly growing margins. These two companies have been successful in aggressively purchasing key craft brewers.  The craft segment, however, is struggling with the growth of seltzers.

Recently the industry has seen a number of large successful beer companies sell out.  Most recently New Belgium Brewery, an employee owned brewery, sold to Kirin. Perhaps the most eye-awaking of all such transactions, was the recent news of Constellation Brands selling Ballast Point to Kings & Convicts. Constellation Brands is said to have paid $ 1 Billion for Ballast Point which caught the industry by surprise. Four years ago, Ballast Point’s sales were at 430K bels. while in 2019 the sales volume will be less than 300K bels.  In recent years, Constellation Brands had several impairment charges which indicated that Constellation had overpaid for Ballast Point.

The question is: why did Constellation overpay for Ballast Point? Why did Constellation sell Ballast Point for only $75 million after just four years? In so doing, Constellation walked away from their distributor’s commitment to the brewery. Constellation is not a beer company that is struggling because they have Modelo. Constellation has resources very few companies have.

Expect Kings & Convicts to be successful with Ballast Point because the brand will be the priority for the brewery, not a bolt-on brand or one that is there to support egos. If that were the case, then do companies make a brand or does a brand make a company?

Don’t let your ego get in the way of your ignorance.

 Posted by at 7:00 am
Dec 032019
 

In the early 1980s, Stroh Brewing Company purchased the Joseph Schlitz Brewing Company.  Stroh quickly reduced market support in an effort to revise Schlitz’s downward trend.  At the time, marketing was limited to media, p-o-s (point-of-sale), and price supports.  Although Schlitz had been declining prior to being bought by Stroh, once Stroh took over, Schlitz’s decline accelerated, and the brand soon lost their market leadership position to Miller Lite.

In the 1980s, wholesalers were predominantly a one-trick-pony and I was no exception as 90% of my volume was Schlitz.  Yes, I had the regionals:  Pearl, Lone Star, and Shiner along with all the imports, (with the exception of Heineken), but Schlitz was my bread-and-butter.  Desperate to save their companies, many Schlitz distributors repositioned Schlitz pricing under Miller Lite and Budweiser in the hopes that the consumer would see value and come back to Schlitz. The repositioning had no chance without support from Stroh, and that, unfortunately, never came and the rest is history.

Corona had just transitioned to the clear bottle and Shiner was years from being bought out by Gambrinus. Needless to say, these beers did not have the traction they have today. Currently, the wholesalers’ portfolios are diversified enough that if one brand begins to slide the net losses are mitigated with the other numerous brands in the portfolio. If the wholesaler has White Claw or Truly, there is no real bump.

With the beer industries’ effort to upsell the consumer, now in its 12-year, wholesalers are ratcheting up pricing at every possible junction.  Some are raising prices even without the suppliers’ knowledge; the supplier is not raising their prices to the wholesaler without their knowledge.  Selective pricing, without supplier involvement, could be costly for the wholesaler; not as much in the wholesalers’ existing footprint, but in the event that the wholesaler has multiple warehouses and operations.  Targeted vendors will likely look elsewhere to find different wholesalers who are willing to work with them as they expand. In addition, new vendors, or those opening up markets, might want to rethink their strategy when interviewing or appointing distributors. Breweries may even attempt to add additional language in their contracts regarding pricing and strategy.

As more, large, multi-state distributors evolve from the traditional beer house to beverage companies; expect to see these companies create pricing professionals who study pricing trends and seek opportunities for the wholesaler. Many smaller vendors will come to rely on the wholesalers’ expertise in understanding the price points that are most beneficial for both companies.

There is much more at stake than just the premization of beer. The Schlitz wholesalers might have been better off not to reposition Schlitz but to wait and ride it out until the end with the best pricing model available. When you have only one pony to ride, however, you do not want to be thrown off.

There is no victory at bottom basement prices.

 Posted by at 7:00 am