Jan 222019
 

As I write this blog, the governmental shut-down continues.  In fact, this governmental shut-down is now the longest in history.  We all know that such action means the TTB label approval process has ceased.  It has been reported that for every day the TTB is closed, three additional days are added for the label approval process.

Obviously, one would think that this situation is not good for the industry. There are some, however, that believe this shut down might not be so bad considering the markets are not currently being flooded with new or updated beers.  Many of the craft brewers survive by selling seasonal or one-off products with new or different flavors.  The bigger brewers are probably in good shape as their label approvals were completed last year, however, plans for later this year or next could suffer.

While the industry sits on new brands, more and more small local and regional crafts are closing their doors.  As noted in last week’s post, many of these financially strapped breweries are no longer able to raise or generate the funds needed to expand and/or stay in business.  Some industry pundits believe this is the long overdue industry shakeout that many have been expecting.

So the question in early 2019 is:  how is the beer wholesaler managing the uncertainty and turnover in brands in their respective markets?  It is no secret that the craft’s biggest issue with wholesalers is the lack of focus given to crafts.  As many crafts/breweries are closing and many brands are tabled, we see that the current environment is a personification of this lack of focus.

When a craft closes its doors, for whatever reason, how does a wholesaler retain and/or change that draft handle in their market?  If the wholesaler is an AB or MC distributor, is that handle converted to one of the AB or MC craft brands and at the expense of the local crafts?  Is such action fair to the locals who did what the wholesaler asked by putting people on the street and hustling chain authorizations?  Crafts experiencing such a situation could feel not only left out but perhaps even believe they have been lied to.

A craft brewer who has dedicated people, resources, money, and commitment to a wholesaler may perceive that they have no future with that wholesaler if that brewer is not on a wholesaler’s priority list.  If this is true, then that brewer has few options.

This is a no-win scenario for the wholesaler, brewer, and the consumer.  It is easy to believe that the wholesaler will support their “rainmaker” supplier but then not focus on their struggling brands or those that are more brewery-supported.  Either business model has a similar effect.

As more and more craft breweries close, along with the coming flood of new labels and brands, wholesalers should look at the ensuing push-back from their suppliers.  It will soon be coming to a head.

Action expresses priorities.

 Posted by at 7:00 am

  2 Responses to “Action expresses priorities.”

  1. Two sides to every story………….When a distributor has to destroy hundreds of thousands worth of craft each year due to going out of date negates all the other things you stated …..The craft brewery made their profit and the distributor loses Big Time It takes many many profitable cases to make up for one lost case due to out of date beer

  2. Your presumption is that the wholesaler is still making the decision as to what handle to put on in any account.

    Any responsible bar owner should be the one listening to what their customers want and therefore determining what handle to put on next. The bar owner and staff spend far more time with their customers than the wholesaler could ever be expected to. The days of a bar owner blindly letting the wholesaler choose what handle to put on should be history by now.

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