Distributors: a factor in your drinking?

Top-of-the-line inventory software is the least of a lot of brewers' worries. I think most would be happy with a distributor that knows the beer they're selling, has at least an inkling of passion for it, and doesn't immediately add a 30+% margin (43% markup) to an already expensive-to-brew, small batch beer. There are a handful of distributors doing that now; most are happy to sell shitloads of "craft" beer without consideration for the small guys.

 

I haven't really thought about distributors before I read this thread, any beer I see at a shop is fair game for me.

 

I was out walking and saw a Coors Lite truck with New Belgium kegs being off loaded and then noticed the cab was a Penske rental. Whatever.

 

I work for the local distributor here, its a MillerCoors house, I'm pretty sure I'm not allowed to talk about the beers we have or don't have in the warehouse, but I can tell you our World Class Beer sales department is very knowledgeable in craft beers and whats up and coming. The sales department is run by our company, not by MillerCoors, I can only assume its like that at most distributors.

 

I'd like to know more about how this all works actually. I don't know much about distribution at all. Are there BMC owned distributors? Are there distributors that BMC uses a lot, but doesn't own? Are there smaller outfits that don't handle any BMC? And of course, I'd like to know all those answers as they relate to RI and Mass. Sounds like I have some research to do (if only I had some time to do it, ha ha).

 

There's MillerCoors houses, and Anheuser-Busch houses. Our warehouse is not owned by MillerCoors, we actually buy the beer from their breweries, and then distribute it.

 

Because it is the Distributors who play an important role in deciding which beers get brought into your area to be available to put on your shelf.

 

AB owns about a dozen their wholesalers, out of "more than 500".

At the time of the Miller-Coors merger, Miller owned none of their approx. 550 wholesalers, and Coors owned 3 (most in CO IIRC) of their 500 or so. 60% of the Miller and Coors distributors already carried the other brand, and since then MC has pressured the separate Miller and Coors houses to merge, but there still many that only carry one or the other.

Of course, in many (but not all) states, the 3 Tier laws prohibit breweries from owning distributors.

Yes, the Feds (via the BLS) say there are about 2,000 licensed beer wholesalers, the NBWA claims a membership of 3,300. (Not sure why the big discrepancy in the numbers - could be a factor of one is the "Beer" exclusive distributors, and those that also wholesale wine and/or spirits, etc.).

So, either way, less than 1% of US beer distributors are owned by AB or MC.

 

The only point about distribution that affects me is what they deliver and what they get on the shelf.

 

Thanks so much, I appreciate it. Any idea on how much influence BMC has on the distributors they use? In other words, how easy/hard is it for them to "nudge" the distributors they use away from carrying a specific craft beer?

That is a broad question, I know, but I figured if anyone was a clearing house for anecdotal info. on this subject, it could be you.

Thanks again!

 

Well, there are two different companies - AB and MC - with two different philosophies. AB, even prior to InBev, had a history of "discouraging" their wholesalers from carrying other brands -do a Google search for AB's "100% Share of Mind" program of the '90's, which awarded their distributors "incentives" for staying strictly AB. ABInBev recently made some pronouncements that they want to re-institute similar programs- and have tried (unsuccessfully- in IL) to buy into some distributorships. Jim Koch has mentioned that in the '90's he moved Samuel Adams to mostly Miller houses because of AB's anti-craft/anti-competitor pressure on wholesalers.

MillerCoors seems more concerned these days with pressuring their wholesalers to merge, to take advantage of the efficiencies of their merger. (In my area, the Miller and Coors houses are still separate and, possibly as a result of resistance" on them, they awarded the distribution rights of "Coors Batch 19" to the Miller house. ) They seem less anti-craft in general (perhaps because they only control closer to 1/4 of the US market, not nearly 1/2 like AB).

Quick answer - "A lot - if they want to use it." After all, AB and MC products account for the vast majority of sales of their houses - a lot of pressure and "influence" built into a business relationship like that.

 

My previous understanding of this issue was similar to what you have said above. Thanks for the confirmation.

What about non beer products? How much of the spirits and wine a bar/store sells is also owned by AB/inbev? I know I can find lists of breweries owned by AB/inbev online, but does such a list exist for non-beer companies owned?

 

Why in the world would you not be allowed to "talk about the beers we have or don't have in the warehouse"?
I work for a MillerCoors distributor and WE CONSTANTLY rep the beers we have.

 

mostly from the perspective i've had several cases from a specific distributor that (by the entire case) haven't been to my satisfaction. not really sure if it could be chalked up to extremely poor luck but obviously i'm to the point where i seriously contemplate making any larger purchases of product i know is handled by said distributor.

 

I would prefer that breweries not use BMC distributors but if a beer is on the shelf, which distributor delivered it doesn't influence my decision.

My preference is because I think the craft breweries are eventually going to get screwed. For example, many of the local craft breweries signed up with a local AB distributor. The distributor only distributes AB products in St. Louis City but was repping craft brews in St. Louis County and St. Charles County. AB decided that AB distributors shouldn't be distributing any products in areas assigned to other AB distributors. So these contracts were split up among three distributors. I don't think the craft brewers had any input into this, but I don't know that as fact. But now the craft brewers have to deal with three distributors instead of one. And one of the distributors decided to drop several craft breweries so now those craft breweries have no representation or distribution in that area.

So it does affect my buying in that some products I want are now longer distributed in the area I live.

 

To clarify my earlier post... I don't care if the distributor is a Bud house or a Miller/Coors house, or independent. (I might if I owned a brewery) My ability to buy beer is certainly limited by the way those businesses operate.

 

Yes. But not for the battle against the macro reasons the OP is referring to. There is a wholesale distributer in my area that I don't like their businesses practices, so I will avoid beer brands that I know they distribute to my region. (In PA "wholesale distributers" get exclusive distribution rights for a brewery's beer for their region, which can be half or even all of the state in some cases.)

 

I work at an AB house. I wasn't here in the 90's but I know we divested suppliers under that program. Now we are in the mode of adding suppliers - including craft. AB has a lot of influence due to the volume of product involved, but I haven't seen them use it against expanding our portfolio. Other brands choose AB houses (from what I have heard) because AB houses merchandise really well in terms of signage, displays, etc.

 

Interviews/articles on Brito (such as in Beer Business Daily's private posts) and comments like this one from an article in the St. Louis Post-Dispatch:

and:

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I don't care who stocks it, as long as it is stocked and fresh.