Allagash Founder Advises "It's Going to Get Tough"

Discussion in 'Beer News & Releases' started by officerbill, Mar 7, 2020.

  1. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

    Nice article about Rob Tod's talk at the New England Brew Summit.

    Particularly his comments on choosing and developing your distribution footprint
    "Just don’t be too cavalier about opening these distant markets,” he continued. “And keep in mind that if you do open a distant market, you’re competing with an awful lot of local breweries.”


    and seltzer:

    “One of my big concerns is last time I went to my local grocery store, I wasn’t noticing them adding more coolers, and these seltzers are going in a cooler space that was previously occupied by beer"

    I like everything Allagash puts out and I'm happy to see realistic expectations for continued success.
  2. Foyle

    Foyle Savant (951) Sep 29, 2007 North Carolina

    He is spot on about shelf space being occupied by seltzers. I have a harder and harder time finding many craft and import beers that just a couple of years ago were carried where seltzers now sit.

    I realize that retailers (and brewers) will simply follow market forces and give people what they want, I just find it very frustrating as a non-seltzer, non-flavored beer drinker that those products are eating away more and more space on the beer aisle.
    Alefflicted, DBosco, BeerDoge and 8 others like this.
  3. Todd

    Todd Founder (5,941) Aug 23, 1996 California
    Staff Moderator Fest Crew Society

    Grocery stores around me have already cleared significant cooler space to make room for hard seltzers, resulting in less options for beer drinkers.
  4. ATL6245

    ATL6245 Initiate (195) Aug 16, 2018 Georgia

    Amen! 100% with you on this sentiment. Preach!
  5. ESHBG

    ESHBG Aspirant (275) Jul 30, 2011 Pennsylvania

    Count me in as another who has seen massive reduction in shelf space for beer and a huge increase for other alcoholic beverages. Without fail when I am in the alcohol aisle of a local grocery store that sells such things it's an easy 4 to 1 people buying something other than beer and I hear the employees being asked constantly, "Do you carry ___ flavor of White Claw?"

    Then factor in all of us who have reduced our beer consumption for whatever reason. I read an article recently about a new hard beverage and many of the comments were from former beer drinkers. Also factor in some of the fad diets that have taken off e.g. Keto and you have the perfect storm.
  6. ATL6245

    ATL6245 Initiate (195) Aug 16, 2018 Georgia

    Quote from 12/10/19 Forbes article:

    "...One regional brewery owner in the Southeast recently told me that large chain retailers are planning to reduce shelf space for craft beer in order to make room for hard seltzer SKUs. If that’s true, those outlets would be wise to consider that craft beer drinkers are two times more likely to purchase hard seltzer than the average drinker, according to Nielsen..."
    russpowell, Foyle and FBarber like this.
  7. IKR

    IKR Defender (680) May 25, 2010 California

    Hard seltzers...who would have thought Zima would come back:angry: Zima and wine coolers back in the day seemed to always encroach upon space reserved for beers. They had a huge fad following (to old dudes like me, remember the Zima spokesperson/dork with the hat:laughing:) back in the day and then they died out hard and swiftly. With all the good craft beer around hopefully the space encroachment by the hard seltzers is temporary. I never bought a Zima back in the day and don't intend to buy a hard seltzer now so let's see if we Beer advocates can get the latest version of Zima off our lawn!
  8. Eefinn

    Eefinn Initiate (38) Oct 19, 2019 Vermont

    Does hard seltzer deteriorate like beer if it isn't refrigerated? Could we get it out of the cooler?
    kuhndog, cjgiant and officerbill like this.
  9. eppCOS

    eppCOS Meyvn (1,177) Jun 27, 2015 Colorado

    Every time I'm in my local, I ask loudly "where is the beer in your beer section?" when I'm feeling peevish. (It's ok, they get it, and I get it - but still like to joke about the invasion of the tasteless, gas-producing bubble invasion).
  10. Prince_Casual

    Prince_Casual Disciple (345) Nov 3, 2012 District of Columbia

    Yes but as the old wine salesman's saying goes "if it's cold... it's sold!"

    The entire proposition of spiked seltzer and RTDs ("ready to drink" in general )is vodka soda or other highball cocktails that you take to the pool/ park/ tailgate, and don't have to mess with bottles and measuring and garnishes.

    Just like people buy crappy sauvignon blanc and chardonnay while buying dinner just because it's cold (cold wine space is 1/10 or less vs beer in most retailers), the companies selling and marketing these products will fight for every inch, and truth be told I don't think Allagash (who I love) has a leg to stand on if they're talking about product turnover in a store, and how they deserve the cooler space vs Truly/ High Noon/ etc.
    KRug, tzieser, FonyBones and 4 others like this.
  11. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

    Canned hard seltzer stays "fresh" for about 9 months without refrigeration. Even after that it's not the alcohol that goes off, it's the flavorings that fade. An unopened, undamaged can of unflavored hard seltzer will probably taste the same after a year.
    But it's like beer, unless you're buying by the case or 12 pack, most people prefer to buy it cold.

    In my area stores don't have room to add coolers and at least 1/3 of what was beer space (cooler, shelf, floor display) is now hard seltzer, tea, cider.
  12. Scott17Taylor

    Scott17Taylor Poo-Bah (1,773) Oct 28, 2013 Iowa
    Society Trader

    The market is getting tougher, but I do think it’s inevitable with the amount of brewers opening the regional ones will feel the squeeze. I don’t think smaller breweries will struggle.

    I also worry about seltzer more than anything. It’s steeling so much shelf space. Imports are very hard to find and a huge portion of craft is just ipas spurs and stouts. Here’s hoping we get back to a larger variety of styles.
    beaulabauve, officerbill and Foyle like this.
  13. Obsidian81

    Obsidian81 Initiate (53) Mar 3, 2016 Illinois

    As long as I can continue to get Lagunitas, Stone IPA, Sierra Nevada, and FBS and Porter around me, I’m good.
  14. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    I do feel that people are drinking less; or maybe they are just drinking wine and hard booze. I know I see many people leaving the stores with either a sixer of cheap Lager and a BIG cheap whiskey Magnum or a variety of flavored vodka and 2 bottles of cheap wine in hand.
  15. beardown2489

    beardown2489 Devotee (406) Oct 5, 2012 Illinois

    No. The only reason it goes in a cooler is for customer convenience
    Alefflicted, Prince_Casual and Eefinn like this.
  16. beardown2489

    beardown2489 Devotee (406) Oct 5, 2012 Illinois

    More and more states legalizing marijuana is going to punch the beverage market in the gut as well.
  17. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

    "First they came for the quads, and I did not speak out—
    Because I do not drink quads.
    Then they came for the weißen, and I did not speak out—
    Because I do not drink weißen.
    Then they came for the gose, and I did not speak out—
    Because I do not drink gose."
    Then they came for the..."
    KentT, KRug, DBosco and 23 others like this.
  18. beardown2489

    beardown2489 Devotee (406) Oct 5, 2012 Illinois

    Enter Mel Gibson “But they’ll never take our....”
    DBosco, ESHBG and officerbill like this.
  19. Justonemore91

    Justonemore91 Aspirant (244) Nov 24, 2018 New York

    No one ever checks for canned on dates on seltzer and I see they move a shit ton faster than beer. I'm not mad at stores that replace beer for hard seltzers. Catering to hard seltzers consumers is a lot easier than catering to craft beer ones
  20. readyski

    readyski Aspirant (260) Jun 4, 2005 California

    Is it really just about the high, or does this "hobby" entail a bit more :thinking_face:
  21. Beer_Stan

    Beer_Stan Initiate (153) Mar 15, 2014 California
    Industry Trader

    They (hard seltzer) have a very limited presence in my store. We are very much a craft-centric store and our beer cave remains unsullied by the uptick in interest in hard seltzer. We drew the line at hard kombucha and cider which still gets respect from us as a more "craft" beer alternative and still requires some sort of skill to produce with quality.

    That being said when breweries scale back distro to protect themselves, they only get traded more. So there's that.
    Alefflicted likes this.
  22. lackenhauser

    lackenhauser Poo-Bah (2,517) Dec 10, 2002 Maryland
    Society Trader

    What's a hard seltzer?
    beergoot and BrewHound601 like this.
  23. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

    It's when you put a can of soda water in the freezer to get chilled and then forget about it. :slight_smile:
  24. Space_Cowboy85

    Space_Cowboy85 Initiate (49) Dec 24, 2018 California

    Perhaps it’s the cynic in me, but I am happy to see a lot of the trend chasers that were into beer a few years ago have moved on. It’s never been easier to pick up world class beer. Just last night I saw a bottle of 4 Hands Madagascar on a shelf at TW and was reminded of when that beer came out a few years back and it was impossible to acquire.
    KRug, tzieser, GuyFawkes and 6 others like this.
  25. Jason

    Jason Founder (8,513) Aug 23, 1996 Massachusetts
    Staff Moderator Fest Crew Society

    Ciders will again be the most hard hit, the numbers from 2019 were not good and I don't see it getting any better for that drink segment. Specialty Imports will be be hit as well. As for "craft brewers" ... obviously the brewers that are now drink companies will do well even if their beer sales are in decline. Brewery taprooms that are not in a already saturated market and can retain their traffic won't notice much. We'll see more consolidations, consortiums, & buyouts in 2020.
  26. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

    TBH, when I started this thread I knew seltzer would get mentioned, but I thought there would be more discussion about sustainable distribution.
    After all, in 15 years barrel sales increased 1900% after Allagash cut their distribution territory almost in half.
    To me that's some damned savvy management.
    beertunes, GuyFawkes, Scrapss and 6 others like this.
  27. billandsuz

    billandsuz Devotee (427) Sep 1, 2004 New York

    Yeah, Rob Tod is a smart dude, no doubt about it. Super friendly too but that is another thread.

    Used to be back in the good ol' days circa 2010 if you made a mediocre beer and were within 250 miles it would sell. And if people thought you made a great beer you could distro across the nation. What could possibly go wrong? Experienced brewers saw it coming and began pulling it in, while a few others are standing with their pants around their ankles. And we mostly know exactly who they are.

    Seems like everyone is up in arms that craft brewers have to compete for sales. Hard Seltzer? Wha wha what!!?? So just to be clear, the drinks business is not special. Beer is not special. Consumers do indeed have choices.

    As it stands we have an embarrassment of beer choices today, and I am not really shedding a tear for all that many brewers who assumed their market was wide open forever.
    That's my two cents.
    tzieser, beergoot, Scrapss and 3 others like this.
  28. HorseheadsHophead

    HorseheadsHophead Poo-Bah (2,076) Sep 15, 2014 New York

    It's not just hard seltzers and malt beverages. NEIPAs were already pushing all other styles off the shelves before hard seltzers arrived. It's not that NEIPAs aren't beer, but the point is that it's a very competitive market right now and traditional styles are being replaced by whatever is new and trendy.
    pudgym29, bubseymour and officerbill like this.
  29. Grounder

    Grounder Initiate (52) Jun 20, 2019 Illinois

    LaCroix + vodka
  30. thesherrybomber

    thesherrybomber Initiate (165) Jun 13, 2017 California

    What is wrong with the rest of the country? Allagash will always have a place in my home bar...
  31. keithmurray

    keithmurray Meyvn (1,361) Oct 7, 2009 Connecticut

    Yup. Anything that isnt along the lines of the IPA spectrum/sours/stouts and recently "pilsners" are essentially endangered species.
  32. unlikelyspiderperson

    unlikelyspiderperson Meyvn (1,247) Mar 12, 2013 California
    Society Trader

    Sound advise for brewery owners there it seems like. I don't understand all the hand wringing from consumers about this though. I read all the time on these boards that there's too much beer everywhere, shelves covered in old beer, beers "turding" up the shelves left and right. So obviously we should have less beer on the shelves. Its not like beer is going to dissapear completely but maybe, with a little less of it out, what's left on the shelf will be fresher. I hope more breweries limit their distribution so I can stop looking over their old beer that never sells
  33. traction

    traction Zealot (505) Dec 4, 2010 Georgia
    Society Trader

    I can think of at least two breweries in my general area that are addressing the hard seltzer issue by making their own hard seltzer and hoping customers will choose local.
    beertunes, AlcahueteJ and officerbill like this.
  34. bubseymour

    bubseymour Poo-Bah (2,903) Oct 30, 2010 Maryland
    Society Trader

    Are corked wild fermented barrel aged sours still selling well? My friends and I still love them and a Nancy, Farm to Face, Coolship etc are frequent at our bottle shares, but I really don’t hear as much buzz for people chasing after the really good ones in last few years like say 5-7 years ago. If you were a beer nerd, funky, wild sours were the pinnacle of beer styles to get into.
    DBosco and GuyFawkes like this.
  35. unlikelyspiderperson

    unlikelyspiderperson Meyvn (1,247) Mar 12, 2013 California
    Society Trader

    They seem to hold a steady simmer of buzz around them. They haven't really blown up in popularity (despite the gobs of folks saying they like "sour" beer but meaning kettle soured with lots of fruit juice) but they certainly haven't lost their cred. Our best bar in town always has a few on tap and they are often north of 1$/oz, sometimes pushing 2$ but they still move through kegs and their bottle selection turns decently as well.
    Honestly, I think cost to abv ratio makes them a serious luxury item in a lot of people's eyes. But at.least where I sit those.are still a pinnacle of serious beer nerddom
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  36. ESHBG

    ESHBG Aspirant (275) Jul 30, 2011 Pennsylvania

    Due to this discussion I was really tuned in when I went to pick up a few beers at the store last night and it was an easy 5 to 1 hard seltzers to beer. A group of younger folks came in and as they walked past me they were talking about different ones that they liked and ended up going with a 12 pack of some brand I am not familiar with. One in the group said, "You are going to love this, it's like a cocktail in a can."

    Ah yeah a good point that I had forgotten to mention. PA has legal medical marijuana and there is a bill now to legalize recreational sales and usage.

    You may be on to something here however I think that this may be more anecdotal and I feel as if we are seeing this because breweries are producing more and the beer drinkers moved on just because, as I find that they always do. The fact that I can get KBS year round now and there are still piles of CBS blows my mind when I think about years passed.

    Bells is saying that they won't be chasing this trend but time will most certainly tell:
    unlikelyspiderperson likes this.
  37. jesskidden

    jesskidden Poo-Bah (1,970) Aug 10, 2005 New Jersey
    Society Trader

    I take it that is based on sales you saw while there, as opposed to the actual stock/shelf space?

    What kind of PA licensed store - convenience/grocery or retail distributor?
    beertunes likes this.
  38. ESHBG

    ESHBG Aspirant (275) Jul 30, 2011 Pennsylvania

    Yep this particular comment was based on sales but I can say that it is shelf space too, this Wegmans moved their entire alcohol section a few months ago and when they did they cut the beer selection. Now wine, hard seltzers and other alcoholic beverages (but no hard liquor per PA state law) take up an easy 60% of the section and I saw that the cooler space was knocked back a bit for beer as well. Also, floor displays now have large stacks of different hard seltzers, used to see beer only on floor stacks.

    And while not as bad as what @officerbill saw here yet, hard coffee now has a huge floor display also:
    #38 ESHBG, Mar 8, 2020
    Last edited: Mar 8, 2020
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  39. socon67

    socon67 Poo-Bah (2,181) Jun 18, 2010 New York

    The other part of his observation stuck with me. If a brewer wants to expand distribution outside of their area, the competition with local breweries is greater than ever. It used to be that national breweries were a staple. More and more space is being allocated to the "drink local" mantra, and brewers need to be judicious with expansion.
  40. islay

    islay Disciple (333) Jan 6, 2008 Minnesota

    I mostly agree with Rob Tod, who's one of the sharper guys in the business, except on the quality point: I haven't at all observed a causal relationship between high-quality beer (in the "quality control" sense) and sales/growth. I think the direction of causality is reversed: As breweries grow to reach sufficient size, they can afford to invest in advanced quality control and assurance processes and expensive labs. I think catering to the tastes of the local market, which, in large cities, for instance, usually means sexy styles, hip taproom atmospheres, and eye-catching can art, is far more important to commercial success. I've seen repeatedly that consumers, including people who rate at BeerAdvocate, simply don't notice quality problems if the beer hits their tastes in the sweet spot (often literally these days).

    I'll also point out that I've seen a good number of small breweries that brag about their labs and QC processes put out low-quality beer nonetheless. Simply having a process does not mean that it works well, and most people that small breweries could possibly afford to perform those functions really are not qualified to do so. I think sophisticated labs are an impractical waste of money for most of the many tiny breweries out there, and I question the motives of large brewery owners who insist on their importance across the board. It's self-serving advice, as it both emphasizes their advantage in that arena and places a barrier to entry on competitors. It's also the kind of feel-good pablum to which people reflexively nod their heads without actually giving it much practical thought.

    Zima has over 20 g of carbohydrates whereas White Claw has none, and Zima has almost twice the calories. I think the cloying, juicy NEIPAs and fruited kettle sours are largely filling the role of Zima and wine coolers of yore in today's market. Hard seltzer, dry and "healthy" as it is, is a different phenomenon.