{"id":4527,"date":"2018-01-23T07:00:05","date_gmt":"2018-01-23T12:00:05","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=4527"},"modified":"2018-01-20T17:32:12","modified_gmt":"2018-01-20T22:32:12","slug":"millions-saw-the-apple-fall-but-newton-was-the-one-who-asked-why","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=4527","title":{"rendered":"Millions saw the apple fall, but Newton was the one who asked why.."},"content":{"rendered":"

\"\"<\/a><\/p>\n

In just the last month I have had a couple of small and new craft breweries, those which opened \u00a0within the past two years, with successful taprooms, vent their frustration at process of bringing their beer to market.\u00a0 One craft brewer already had a distributor in place, while the other wanted to bring their beer to market.\u00a0 \u00a0Neither brewer had any direct industry experience prior to building their brewery.<\/p>\n

In situations such as the above, two simple, yet effective explanations revolve around comparing the three tier system to an hour glass.\u00a0 The top bowl is the brewers and bottom bowl is the retailers.\u00a0 The sand, represented by the beer, has to go from the top bowl to the bottom bowl thru the neck.\u00a0 The neck is the middle tier or beer wholesalers.\u00a0 The sand can only shift from the top to the bottom by going thru<\/em> the middle which is clogged and slow.<\/p>\n

The second explanation is simple; it is the history of what has happened in the last 40 years.\u00a0 In 1980, there were less than 50 production breweries in the U.S. with there were more than 5,000 beer wholesalers.\u00a0 Now the opposite is true. In 2017, we have close to 10,000 breweries with less than 2,500 wholesalers.\u00a0 The tiers have effectively turned upside down.<\/p>\n

The history lesson examines the death of the small to mid-size regional breweries and the death of mega-brewer Schlitz, both of resulted in a devastating effect on the middle tier.\u00a0 Now, in 2018, the industry could be re-living the 1980s.<\/p>\n

Early shipment and depletion numbers for 2017 are in, and to no one\u2019s surprise, it is not a pretty picture for AB or MC.\u00a0 Recently, however, the industry began to feel the true impact of the decline of these breweries.\u00a0 As we know, millions of barrels of beer have been lost by both AB and MC and the trend is set to continue with no end in sight.<\/p>\n

Now, however, the industry is seeing a repeat of the Schlitz wholesaler\u2019s responses. Those AB and MC wholesalers who do not currently have the Constellation portfolio are now\u00a0restructuring<\/em> their companies.\u00a0 This is industry speak for layoffs!\u00a0 The MC or AB houses that are lucky enough to have Constellation and Femsa are seeing their Mexican imports at 50%+ volume and 60%+ in GP in total!<\/p>\n

No doubt, in this day and age, the times are substantially different for wholesalers than they were in the 1980s.\u00a0 Both houses have more brands, crafts and imports.\u00a0 AB still has the hottest beer in the country with Ultra, and the MC houses have two major light beers.\u00a0 These houses have relied on the volume from these low calorie beers for years,,<\/p>\n

But in 2018, this beer segment may be facing its greatest challenge. Led by Founders All Day IPA, large craft brewers, who are looking for accelerated growth, are bringing low carb and low calorie beers to market. Crafts see an opportunity to increase their volume with the introduction of these reduced calorie beers.\u00a0 CBA just announced a national rollout of their Sessionable beer and Firestone 805 is doing likewise.\u00a0 More lights will be produced in the future, including Corona Premier and Ultra-Pure Gold.<\/p>\n

If these light beers and other beers yet to come are successful, it will not be good for either MC or AB.\u00a0 2018 will be interesting.<\/p>\n

Millions saw the apple fall, but Newton was the one who asked why.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In just the last month I have had a couple of small and new craft breweries, those which opened \u00a0within the past two years, with successful taprooms, vent their frustration at process of bringing their beer to market.\u00a0 One craft brewer already had a distributor in place, while the other wanted to bring their beer […]<\/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-1b1","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/4527"}],"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=4527"}],"version-history":[{"count":13,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/4527\/revisions"}],"predecessor-version":[{"id":4544,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/4527\/revisions\/4544"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}