Jun 052018

In order to stay relevant and to effectively make use of their limited resources many of the established craft breweries have reduced or limited their brand’s footprints.   The recent collapse of Green Flash Brewing is the personification of a company that expanded too fast without the proper planning and resources.

Long established breweries including St. Arnolds and Summit Brewery, to name just two, pulled back their U.S. footprint to include only their home market and state along with some adjoining markets.  Again, these breweries have found out, perhaps the expensive way, that the further from their home market they move, the more difficult it is to get any traction.

Some breweries, like New Glarus in Wisconsin, have never left their home state and have been very successful in building their brands.  Karbach in Texas, now part of AB, has done the same.  Industry pundits have been supportive of crafts not expanding outside their home footprints.

While local is the industry model de jour, just how does that work for imported brands?  Sure, there are a number of small, expensive European imports that are not general market beers who only focus on metro specific areas such as New York, Chicago, San Francisco and others that demographics index toward their brands.  This model has worked well with most of these importers.  Some breweries have either pulled out or way back, such as Bavaria, who had a great U.S. business but left years ago due to the unfavorable exchange rates.

The story of Warsteiner has been well chronicled in past posts. This is a company which, when at the top of their success, was the number one selling beer in Germany.  At that time Warsteiner made the decision to develop the U.S. market and spent years so doing.  Now, with sales declining in both countries, Warsteiner’s future is very cloudy.

Krombacher, on the other hand, is somewhat a mystery.  This brewery is dominating sales in Germany as not only the largest brand, but the largest brewery.  Similar to Warsteiner, Krombacher decided to return to the U.S. in 2010 after a failed attempt to establish themselves in the late 1990s.

Within the first two years, Krombacher had established wholesaler networks in Florida, Texas, Louisiana, Georgia, New York, Illinois, Arizona, South Carolina, North Carolina, and Tennessee.  Since that time, they have left almost all those states except New York and Chicago.  The question is why?

Krombacher is not a company without great success and resources, but perhaps it is the personification of ownership that is blind to what can be accomplished versus, what they are being told is happening and being done.  Perhaps Krombacher is being led by people who have agendas different from that of the long-term success of Krombacher. Perhaps the leadership has their own short-term plans.

This happened at Warsteiner, now it could be happening at Krombacher.  Wholesalers in states where Krombacher pulled away have their own story to tell, but adding feet on the street with no direction or US. leadership can only be a dead end for all.

Krombacher has had some success in Chicago and New York, but after eight years of investment, one would think that ownership would question why Krombacher is pigeon-holed in the U.S.?

Whatever happened to Krombacher?



 Posted by at 6:00 am

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