Out of Code Beer and Etiquette

Exactly. "Stuffing the pipeline" is always an issue...whether breweries sending a ton to the distributor, or the distributor overloading a restaurant or shop towards the end of the month. Both are obviously the opposite of "quality first," and tend to result in older beer on the shelf.

 

I can't comment about NC but I have gotten to know the owners/managers of several of my local beer retailer in PA very well and the principle sales process is that the retailers 'pull' the product; they order what they want from the Wholesale Distributor. I was in one of my local beer stores when the manager 'educated' the person who was delivering beer that several of the cases on his dolly were not consistent with his order. He made the guy put those cases back on the truck. In this instance I think it was simply a case of the wholesale distributor person screwing up the order sheet.

Where things get 'dicey' is when the Wholesale Distributor tries to influence the ordering process. A classic story is that the Wholesale Distributor will promise x cases of Goose Island BCBS if the retailer would also purchase x pallets of Goose Island IPA/Honkers Ale. The retailer will agree to do this so they can provide some BCBS to their rabid customers. The retailer then discovers that the pallets of Goose Island IPA/Honkers Ale is a few weeks from going out of code. In othere words the Wholesale Distributor delivered a few cases of BCBS so that he could off-load pallets of product soon to go out of code (or maybe even already out of code). These sorts of 'wheelings and dealings' can be rather unsettling.

Cheers!

 

It isn't quite that black and white. Technically it's a pull relationship, as the distributor does put in an order with the brewery. There's definitely push involved in some situations though. The bigger and more influential breweries especially can dictate what the distributor will take to some extent. Generally there's some back and forth though.

 

Hi Jack,

This is a good question. In general a wholesaler will order based upon "pull" which is the anticipated demand based upon a weighted trailing daily rate-of-sale. However, with craft beer having wildly volatile and unexpected surges in demand, a wholesaler can sometimes be out-of-stock and also sometimes sitting on a ton of product if there is a massive "push" to jam as much product out into the marketplace.

This is a very similar component of what took General Motors down. Their "sales" looked great but in reality they were just stuffing their wholesalers with cars they could not sell. Then wholesalers colluded with banks to sell cars to non creditworthy borrowers (i.e. subprime auto loans). Of course, the whole thing came crashing down and ended in disaster in the end...

Jack -

You have highlighted one of the reasons why it is "a big deal" if large brewing conglomerates keep purchasing independent craft brewers. They will use the coveted and rare specialty items as a lever to jam other product into the trade, which ultimately crowds out other suppliers and leaves lots of stale old beer on the shelves. Its a tactic that ultimately hurts the beer customer, which is never good.

 

Shane, my personal response to the specific scenario I discussed previously is that the retailers need to 'step up' here and not permit the wholesale distributors to manipulate them. If was the owner of a beer store I would state to the Wholesale Distributor who has 'strings attached' to providing me with BCBS to keep that beer since I have zero desire to accept the 'old' Goose Island IPA/Honker's Ale.

And while I recognize the broader picture you are bringing up concerning "large brewing conglomerates keep purchasing independent craft brewers" again the retailers need to 'step up' here as well to ensure they are properly serving their customers (the end cusotmer).

Much of business is a negotiation in some form or another. In the context of the craft beer industry we beer consumers are also part of the puzzle. I participate in this 'negotiation' by discussing with my retailers my personal wants along with my broader views. I actually state to my retailers that I haze zero interest in purchasing BCBS for example (since the whole sh@* show associated with a Black Friday release is unappealing IMO) so maybe in my small way I am relieving some customer demand pressure here. In the context of 'old' beer I tell my retailers that I will personally not buy beer that I consider 'old' (and certainly out of code beer is old) and I will negotiate to see if they could obtain a desired beer in fresh condition (it took nearly a year before a local retailers could get me fresh FW Union Jack for example).

I do not have any magical answers on how to 100% solve a systemic problem of so much 'old' beer on retailers shelves but I will negotiate as best I can within the exiting situation with the hope that collectively we can improve the situation.

Plus continue to homebrew; I will be bottling a batch of Tmavý Ležák (Czech Dark Lager) tomorrow for instance.


Cheers!

 

I'm sure the college kid making $9 an hour really cares about the age of your IPA.

 

Jack,

Perhaps do a beer trade for some of that dark lager? :-) Haven't had a good dunkel since I left Munich ;-)

 

Yup, it would be my pleasure.

I have a Classic American Pilsner carbonating right now. Next is a Bohemian Pilsner (which if lagering right now) and thereafter another reconstruction of an 1896 Michelob Lager.

Let's negotiate!!

Cheers!

 

Yes, we get notified if you report it. I'm speaking as a distributor.

 

Thanks, I appreciate the response. Cheers!

 

Even though I do still trade, I'm with you 100% on this statement. I really don't think a lot of folks take this in to consideration, and are fine trading for that hip new IPA as long as its "fresh." One could catch a fish and put it out in the sun to rot, then technically still call it "fresh caught" a couple hours later when the stink sets in.

 

Depends on the beer. Some IPA drops off a lot after 60 days. Some is just fine at 120 days. Try then fresh and with age and you will find what you are ok with. Don't base taste off of what you had on tap either as that can be fresh or old and to me tap IPA taste different than bottles no natter how fresh they are. Never had a good bottled sculpin even at a few weeks. On tap it can be amazing. Sone IPA gets better with age , burton baton and 90 minute are awesome with a few years or more.



Enjoy

 

The problem I see here is that from what I've heard this tactic is, and has long been, a routine for Breweries of all sizes, i.e., giving more of the popular limited supply beers to distributors who sell the most of their other products. I've also been told that often the importing distributor relies not only on their own numerical sales records but also on information provided by Sales reps as to which retailer has sold the most beer from Brewery X or should get the limited supply beers. So we're talking about needed a fundamental change in the distribution system that I'm not seeing on the horizon any time soon.

 

Why should that change? If a store carries no bell's beers all year, they should just be able to order as much hopslam as they want and short a store that actually sells it?

 

The last 2 cases I bought were "out of code" - both were RIS. Both were awesome!

 

Perhaps I can shed some light here...this is a difficult process for us as a retailer...to set the stage we can only sell in 12 packs and cases as a PA retail distributor

• First we do everything in our power not to sell old beer...if a case gets by us we refund no questions asked
• Certain wholesale distributors in this area are notorious for sending old beer to us...as @JackHorzempa mentioned we check everyone of those shipments at the dock and send back any out of code beers and any beers we feel we can't move before it is out of code...FYI we send back at least six cases a week...the drivers for these wholesalers who are super cool and patient with us while we check codes say few if any other stores do this...just to let you know in one instance I received the same out of code case of beer four times over the span of nine months...how do I know? I marked it after the second time
• Other wholesalers will pull expired beer from our shelves and move it to a dump site or give us credit
• We order conservatively often time running out of trending beers to avoid having this problem in the first place so be wary of store that has a shit ton (sorry for the industry jargon) of a particular beer... watch that pile as you frequent the store...and don't be afraid to ask some one at the store... a few times our regulars have pointed out our own oversights...we were red-faced but grateful
• We do our best to monitor our inventory...old beer gets pulled and we mark it down...we are all familiar with our inventory (I am very fortunate to have smart craft beer loving employees) we do our best to check inventory at the register...if a case happens to be out of code we alert the customer and offer to mark it down for them or help them choose a similar beer with better codes
• We have a out of code section with old beers that are marked down sometimes by almost 50% selling them at a loss...I will also add that many many people have purchased year old beer from our discount pile and come back to buy more stating that the beer was fine...as employees we have also sampled many of these beers and while they are different many of them are still enjoyable to drink
• I have found personally and through feedback from customers like Jack that some beers change or even fall off a cliff while in code...so there is some experimentation involved...if you have a favorite retailer share your experiences with them
• If you catch old beer on their shelves let them know...if you buy old beer a good retailer should refund or exchange...without making judgements the retailers who would be most afraid of a policy like this probably don't have a rigorous code policy
• That being said be patient with us...it is difficult to police so many beers and beers do get by us

The difficulty for us is to offer a wide selection to a very fickle market...I can go for 3 months without moving a case of a certain beer and then suddenly it shows up on tap close by and everyone wants a case...or as many of you know the "it" beers suddenly gets forgotten when the next "it" beer hits...very difficult to predict how to order to make customers happy and keep our margins

Also don't short change a shop that doesn't have the beer you want on the shelf especially if it's not popular...give them an opportunity to order it for you and ask them to check the dates upon delivery...I recommend this to many customers and often turn away their orders on delivery because they are out of code...in this scenario no one really gets stuck...

Hope this is helpful even though it is long winded

 

I wasn't really suggesting a change so much as asking about whether it was an inherent situation in the three tier distribution system that would require change for all players if there were to be any change at all. Which I don't foresee happening.

 

It is very helpful post and an illustration of how, in my experience, the better retail outlets are run in coping with the flood of new beers and the one-and-done crowd. I never fault a place for not having the beer I want and long ago found that places where I am interested in taking my business will indeed do their best to order something for me if it gets into PA in bottles or cans. But, if they can't be bothered, neither can I.

But you have also just given me a new litmus test I didn't realize I was occasionally using, i.e., when looking at the stock in a particular retail outlet. See what their reaction is to having out of code beer brought to their attention. I know of at least one fairly well regarded bottle shop where they had an out of code bottle on the shelf but I decided to gamble with it anyway as it was a style of beer I'd never tried. Later when I brought to their attention the fact the bottle was out of code, pretty well degraded, and should be pulled I basicallly got ignored and they wound up just moving the remaining couple of bottles to a new location in a different cold case. Needless to say I buy less beer there than I used to and if I'm shopping there I check every single date on any bottle I consider buying.

 

@RobH there is an excellent post by Joe (@KOP_Beer_OUtlet) above that I would encourage you to read.

Cheers!

 

The craft beer market is a demanding one...I don't understand how some places stay afloat without understanding this...in fact when I shop anywhere I don't understand how retailers don't understand the benefits of "bend over backwards" customer service