{"id":5995,"date":"2020-05-05T06:00:04","date_gmt":"2020-05-05T11:00:04","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=5995"},"modified":"2020-05-03T11:03:08","modified_gmt":"2020-05-03T16:03:08","slug":"the-way-prices-are-rising-the-good-old-days-are-last-week","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=5995","title":{"rendered":"The way prices are rising, the good old days are last week."},"content":{"rendered":"\n
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During college, while working for Willowbrook, the Dallas Coors distributor,\nsome of my time was devoted to keg routes. This somehow \u201cqualified\u201d me to be my\nfraternity\u2019s official keg buyer for our renowned Ice Cream Socials which\nentailed 15 kegs of Coors and 10 kegs of Budweiser or Schlitz. Thankfully for\nme, the pledges were in charge of returning the empty kegs and equipment. <\/p>\n\n\n\n

Over the years, kegs have played a large role in the success of the\ncompanies I worked with, whether it was running beer distributorships or as an\nimporter. At some companies, the kegs were as much as 40% of a company\u2019s total\nvolume, something that was especially true at Warsteiner. Kegs have always been\na profitable item for the three tiers, particularly during the years that\nwholesalers and brewers did not split handles. Throughout my time at Schlitz in\nLouisiana, the company enjoyed a 70% draft market share, while in some parts of\nKansas, Coors also benefited from a 70% draft market share. Today, one can find\naccounts with more than 100 different flavors on tap from a variety of\nwholesalers. Some large on-premise accounts, like the Flying Saucer, honor those\ncustomers who work their way through the brands on tap by placing an honoree\nplaque on the wall of the establishment.  <\/p>\n\n\n\n

As important as the keg segment has been in past decades, the current\nCoronavirus pandemic might change that model. Closing the on-premise killed both\nthat segment and kegs. The cost of closing kegs is now surfacing.  MolsonCoors\u2019 Q1 results show kegs\u2019 aggregate\ncosts in the $50 million range, with an additional $18 million lost in finished\nkeg inventories which are not expected to sell. As bad as MC’s results are,\nwait until AB reports on their<\/em> keg\nlosses and write-downs.  The question is:\nhow does the industry evolve the keg segment now assuming the on-premise\nbusiness will not return to its previous state?  One can assume that in the immediate future,\nthe on-premise keg segment will be much smaller due simply to mandated capacity\nrestrictions.  Expect that both\nwholesalers and brewers are creating plans to mitigate any future catastrophes.\nThe financial losses are staggering.<\/p>\n\n\n\n

Is it reasonable to believe that the PTR for kegs might double? If the\ncurrent margins increase from 35% – 40% to 70% – 80%, or more for both tiers, any\nfuture disasters might not be as expensive. If the overall percentages of keg\nbusiness drops to five percent or less, will that be considered good or bad?\nEven with keg cost increases; retail could add an increase of a dollar per\nglass and still provide a good margin. <\/p>\n\n\n\n

Ordering a pint in the future might be getting a pint glass and a 16 ounce can of beer, while some enterprising retailers might create this program with a 19.2 can.\u00a0 Even pint glasses may disappear and be replaced by 16-ounce plastic cups.\u00a0 No kegs, no pint glasses, just a 16 ounce can and a plastic cup.\u00a0 All of which could decrease the retailers\u2019 overall volume, but increase profit and minimize future losses due to closing and the resulting loss of business.<\/p>\n\n\n\n

It is fair to say that, at least in the short term, the on-premise business\nwill change, and it may never return to its previous state. For hundreds of\nyears this country has socialized in taverns, now we are socializing over Zoom.\n<\/p>\n\n\n\n

The way prices are increasing, the good old days have passed us by. <\/p>\n\n\n\n

Editor\u2019s Note: During the past\nweek, the industry lost two former Coors wholesalers: Willie Davis, the Green\nBay Packers Hall of Fame football player and former President of West Coast Beverages,\nand R.D.Hubbard, the previous owner of Coors of Kansas, owner of Safelite Auto\nGlass and horse racing tracks across the nation. <\/p>\n\n\n\n

I worked for, or with both gentlemen. They were special people and will be\nmissed. <\/p>\n","protected":false},"excerpt":{"rendered":"

During college, while working for Willowbrook, the Dallas Coors distributor, some of my time was devoted to keg routes. This somehow \u201cqualified\u201d me to be my fraternity\u2019s official keg buyer for our renowned Ice Cream Socials which entailed 15 kegs of Coors and 10 kegs of Budweiser or Schlitz. Thankfully for me, the pledges were […]<\/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":"","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-1yH","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/5995"}],"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=5995"}],"version-history":[{"count":13,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/5995\/revisions"}],"predecessor-version":[{"id":6009,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/5995\/revisions\/6009"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}