Inbev's new distro incentives

Was wondering if I should post this on the Facebook pages of all my local wholesale distros? Maybe we all should nation wide.

 

Yes, that is indeed 1 case of an impact. But out of how many possibilities? Notice that it's also possible that that particular distributor was already looking for an excuse or that they already had plans to drop Deschutes. As the old expression goes, "One swallow does not a summer make." So I'd say its a bit premature of the author of the article to be generalizing very far from that one case.

 

“Manufacturing and commercial monopolies owe their origin not to a tendency imminent in a capitalist economy but to governmental interventionist policy directed against free trade and laissez faire.”

Ludwig von Mises

 

I'd feel confident in saying that beer distributors are already aware of this, and its been floating around countless beer groups on FB as well. Maybe people have been too busy standing in line or trading for BCBS to notice?

 

Big beer wants to crush competition - always has, always will.

 

Laws and distribution contracts vary by state, but in most cases there's at least a couple of ways for either party to get out. For example, if a brewery in Oregon wants to change distributors, they (or their new distributor) can pony up somewhere between 2-5x expected gross profit and buy their way out of their former contract.

This can be an expensive proposition if you're selling a lot of beer, but it is also a way to keep the original distributor from simply sitting on a brand in an attempt to keep them locked out, because the less beer they sell the lower the potential buyout cost will be.

There's also usually some sort of "good faith" clause in most contracts, and if either party can prove that the other one is intentionally sabotaging the arrangement they can use that as a means to break the contract.

 

I agree. I think it is good to let the wholesalers know that their customers are aware of what is happening.

 

or, you know, maybe BOTH a tendency imminent in a capitalist economy AND government interventionist policy etc.

 

Just looking locally, in Fort Collins, to take fullest advantage of this promotion American Eagle would (per their current website page of offered products) have to ditch Epic, Firestone Walker, Breckenridge, Odell and Great Divide but could keep (as under 15K bbl, and also as probably not enough volume to constitute 2% of total sales and therefore get American Eagle below the 98% necessary for max support) Grimm Brothers and High Hops.

This last point poses an interesting conflict--a distributor might want to keep a brewery, because as per @rgordon above, they are sort of genetically hardwired to never give up a brand, but are now incentivized to keep that brand's sales low enough so as not to disqualify the distributor from maximum support from ABI, which IIRC requires 98% of sales to come from Bud family and Bud-owned craft.

(In Denver the local Bud distributor is AB of Denver, wholly company owned; I don't recall ever being able to buy anything other than Bud Family and CBA and Goose Island from them back when I was in on-premise retail. Probably expanded to include the new acquisitions but no more. So no impact on my truly local Bud distributor, which was Bud.)

 

I will ask this again:

What Distribution companies are ONLY distributing Craft brands? I know Stone does in Southern California...and I know of a few smaller ones in the midwest...but can someone list which ones only sell "craft" brands not in any way associated with InBev, MillerCoors, Constellation etc?

If InBev tries to squeeze craft brands out, the independent distributors will benefit IMO. More choices for the consumer is always a good thing...and I would like to see the bigger independent craft breweries start to unite...be a unified voice so when stuff like this is pulled by InBev you have Sierra Nevada, NB, Deschutes, Stone, Bells, etc...all calling BS. Then we can move to truth in labeling (Who actually owns the brewery in question) so people picking up a garbage bottle of Blue Moon will know it's not "artfully crafted" but just brewed and bottled in the massive Coors brewery. It's not poor Keith sitting in a tiny industrial park cutting oranges in front on his kettles. Rant over...

 

Maybe all the craft brewers in an area need to band together and set up growler/crowler fill stations so you could walk in choose what you want, fill it up and leave. I am sure there is some B.S. antiquated laws that some states have that won't allow this, but I would love that personally.

 

AB claims they have "over 500 independent distributors " (that's down from around 900 in the 1990s), plus around two-dozen they own . Most sources had Miller and Coors both having around that same number when they merged, but something like 2/3 of them already also distributed the other brand before the merger, and since then MC has been trying to force the competing Miller and Coors house to either merge or buy the other one out, so they, too, are usually said to be around 500 nowadays.

The BLS put the number of beer wholesalers in the US at 2,039 in 2011 (source: Brewers Almanac) while the NBWA claims there are "3,300 independent beer distributors" (sometimes they use the phrase "independent beer distribution facilities" which might explain the two different numbers), so that list, if it exists, would be a long one. I imagine many of the non-AB and MC wholesalers might also distribute wine and spirits (where legal), as well as imports.

In NJ, Hunterdon is all craft/imports and is part of the large L. Knife/Sheehan Family group of beer distributors, some of which are also all craft/imports. Other NJ non-AB/MC distributors include Black River Traders, Mason Beverage and Regal Wine.

 

Many brewers self distribute like Stone does. I believe some states don't allow this, but many do.

 

Stone's operation is more a full blown distributorship, rather than simply a "self-distribution" set-up, since the latter implies only a brewer's own brands, and Stone distributes many other craft brands. Stone Distribution Company

Brooklyn Brewery once owned two similar "craft" distributorships, in NY and MA but eventually sold them both. Pretty sure they had the Sierra Nevada contract for parts of NYC at one time, and were one of the largest SN distributors on the east coast.

 

Correct, but only in SoCal. Up here where I am in NorCal Stone is distribued by DBI who also distribute Miller/Coors, Heineken and Pabst and a ton of craft breweries as well...what I meant to say in my earlier post is many brewers self distribute in their local area. It's not uncommon for one of the larger brewers in an area (like Stone) to carry others as well.

 

This is why I don't buy products from ABInbev or MillerCoors. I'm sure the craft brands they've bought are good, but the use of marketing tactics that are meant to limit competition rather than promote their own brands are not something I want to support with my money.

 

A local Brewer said it is relatively easy to enter into a distribution agreement with the distributor. It is very hard and expensive to get out of the agreement. He said, "it is like getting married, then divorced".

Edit - at least in MI.