Sep 252012

There is an old East Texas saying: “Are you the pig or the chicken?” This is in reference to the breakfast meal with bacon and eggs … the chicken is part of the meal but the pig is really committed. I have used this analogy many times in discussing business models with wholesalers and suppliers.

In talking with wholesalers all over the country, many claim they are “committed” to either the import or craft segments. Having Corona or Heineken in one’s portfolio, however, doesn’t make one committed to that segment. Nor does having Boston, Sierra, or New Belgium in craft make one committed to that segment. Having a Speciality Sales Manager is certainly a start, but this falls more along the lines of being a chicken, than a pig.

Some years ago, while visiting JJ Taylor in Tampa, I learned about the model they were building to address the changing business and I was quite impressed. While realizing the importance of building the sales/marketing function, JJ Taylor first decided to build an infrastructure to handle logistics and warehousing. I saw first-hand the investment this company had made to “do it right.” Once completed, JJ Taylor then moved to expand their sales team knowing the volume could be supported. In this instance, JJ Taylor would be considered the “pig,” … totally committed.

The same rules apply when dealing with importers/breweries. Many think (or wish) that all they have to do is bring their brand to market and it will sell. Theses importers/breweries don’t understand the size of the investment required to establish a US business.  Nor do they comprehend the amount of time, and I’m talking years, that it takes. Getting a distributor network is the easiest part, supporting it is the hardest part.  At this point, the importer usually is considered the “egg.”

Some years ago at Glazer’s, I was contacted by the largest selling brewery in Germany. This brewery had sent a rep to the States and he was living in New Jersey. The rep want Glazer’s to distribute his brewery’s products in all 12 states. On five separate occasions I asked him to present and explain his marketing plan.  Each time his response was “we are the largest selling brand in Germany.” In other words, he had no plan, no support, no marketing, no sales force. Needless to say his products never got off the ground.

In the early 90’s, I worked with a contract brewer who had acquired the brewery name and brands from a very successful oil wildcatter who had decided to get into the beer industry. The wildcatter had actually uncovered and trademarked the old “Texas Brewing Co.” name and 13 labels. The brewery had closed during prohibition and had never reopened. The wildcatter built a small micro brewery in downtown Dallas, received the required license, and started brewing. Soon, however, the wildcatter learned he couldn’t sell his product directly and that he had used the incorrect bottle size and packaging.  In reality, however, this individual’s real problem was poor quality beer.

Eventually, the wildcatter sold to another company who retained Stroh Brewing Company to brew the beer. Consequently, Stroh improved the quality and packaging of the beer. At the request of the owner, I set up a beer distributor network, however, he subsequently decided to go statewide with a W&S house. A year later the owner and I met again for lunch.  His request at the time:  “Help me sell this business.” He owed $26K in bill backs to the distributor and had only produced one order. Shortly thereafter, the owner closed down and the creditors took over the brands.

So now when I discuss business  models with importers/crafts I ask them, “What are you having for breakfast, eggs, bacon or both?”



 Posted by at 9:22 am

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