{"id":3123,"date":"2016-01-26T06:00:01","date_gmt":"2016-01-26T11:00:01","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=3123"},"modified":"2016-01-25T10:52:33","modified_gmt":"2016-01-25T15:52:33","slug":"resistance-is-futile","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=3123","title":{"rendered":"Resistance is futile"},"content":{"rendered":"

\"Hour<\/a>Over the years this blog has described\u00a0the three tier system using an hour glass to illustrate\u00a0how the beer industry operates. \u00a0In this description the top part represents the breweries, while the bottom part represents the retail trade. \u00a0The sand is the beer which must flow thru the middle part, aka the wholesalers, to ultimately reach the retail end.<\/p>\n

This hour glass model works well when describing how the industry operates to either those not involved in the industry, to students or to those new to the industry.<\/p>\n

An article recently published in\u00a0Beer Business Daily<\/em>\u00a0highlighted how quickly the industry is changing. Historically, as the article stated, the beer industry was slow to change, however, the dramatic growth of crafts forced change. \u00a0Until recently, the established industry believed that most of the newbies were somewhat oblivious to how and why the industry worked. \u00a0To some degree, they were right. BBD’s<\/em>\u00a0article goes on to state that crafts have, or are becoming, educated on how the process works, and they now have a grasp on industry operation.<\/p>\n

Perhaps one of the best ways to explain this change is to again examine the hour glass model. \u00a0When the industry had only 50 functioning breweries, the sand flowed smoothly through the hourglass from the top to the bottom. \u00a0The limited number of brands, or SKUs in 1980, expedited the flow of brands thru the middle tier. \u00a0\u00a0Currently, with 4,000+ breweries and brew pubs, all trying to get to market, there is more sand in the top and the sheer volume prevents the beer (sand) from reaching the bottom of the hour glass.\u00a0 The consolidation of the middle tier only exacerbates the problem<\/p>\n

The increased volume is causing the sand to flow over the top to the bottom, bye-passing the middle tier. \u00a0More and more craft specific, small, boutique-focused wholesalers are getting into the business, some are even offering statewide distribution, and almost all are focusing on craft-only accounts.\u00a0 Also, the issue of direct sales from brewpubs, where legal, must be considered.\u00a0 In addition, more start up breweries are self-distributing.<\/p>\n

While this model works well for distributors, many of breweries are looking at the success of Stone and Windy City.\u00a0 They are interested in acquiring additional partners, whether they be crafts or imports, thus building critical volume and filling a necessary void for others. \u00a0Similar to the course of Stone and Windy City, suddenly the brewery becomes a formable opponent in the market.<\/p>\n

As ABI continues their effort to buy distributors, closing one more option for craft breweries, it also creates additional opportunity for more sand to spill over the top or the hour glass.<\/p>\n

While crafts continue their march to 20% of the US overall market, expect a surge in craft\/import small boutique distributors in major markets.<\/p>\n

The sand is flowing over the top. \u00a0Resistance is futile!<\/p>\n","protected":false},"excerpt":{"rendered":"

Over the years this blog has described\u00a0the three tier system using an hour glass to illustrate\u00a0how the beer industry operates. \u00a0In this description the top part represents the breweries, while the bottom part represents the retail trade. \u00a0The sand is the beer which must flow thru the middle part, aka the wholesalers, to ultimately reach […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_s2mail":"yes","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xRTi-On","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3123"}],"collection":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3123"}],"version-history":[{"count":11,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3123\/revisions"}],"predecessor-version":[{"id":3146,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3123\/revisions\/3146"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}