Why give up the margin now? And do they need distribution when they've essentially cornered the state, as well as CT and NY? I'm more interested in where they expand to next...
Technically their beers do see some light outside of the Tree House walls...at Gillette. I could see them floating kegs around the Boston area at some point. Hill Farmstead has had a lot of success with that. According to multiple bar owners I've talked to Hill does quite well on draft. I wonder if Tree House will add another tap room. At some point it doesn't become as special and opening a tap room that fails has to hit the wallet hard. I had never been to Other Half so I swung by the DC location when I was there. Just didn't seem as special given they have ten tap rooms across the country. Also, you need to think towards the future. Beer isn't trending upwards, and while it still does well and has seemed to stabilize, your regular 40-something customers will need to be replaced with younger generations at some point.
Hard to see Tree House distributing at this point when they're selling everything in house now and the beers are turning over. They seem flush with cash so wouldn't be surprised at all if they continued to add tap rooms. Tree House fans are a special (derogatory) breed, so I don't see them hurting the brand at this point with expansion. Think the main difference between them and an Other Half (which I think is a good comparison) is that Other Half was already distributing some before expanding to new cities. The Tree House locations are expanding their taproom proximity and their sales proximity to different population bases. You can't get it any other way. I feel like their expansion has been quite methodical. Not as spread out as Other Half either, kind of owning a region. Personal anecdote, going to Other Half DC was cool but going to Other Half Centre Street felt like a pilgrimage. Distribution, whether cans or draft at retail other than their locations, would devalue the experience of going to a Tree House location. They may do it eventually, but hard to see them doing it soon.
TH locations are just beautiful places to visit, get a brew and hang, bring some home. ‘it’s a high end experience, exceptional customer care, great products. High end online presentation and social medias. Oh, the beer is excellent. Scarcity creates consumer desire, and as their national reputation grows, so will customers who want to try out this experience. ‘OH in the FLX is nice, but not in the same league. my guess is the next location for TH will be in the FLXs Btw: at least Alchemist has drop ships around, but it’s scarce, limited availability, and always flys off the shelf quickly. Russian River would be the same, although not ever seen it ever, except for friends sharing it in BA world. and, TH had a pop up event in Rochester this winter,,, sold 4 tractor trailers fulls of beer
Another reason is that Tree House is reluctant to go to distribution because then they are not able to control how their beer is handled once it leaves their docks. They can ensure their beers are kept cold at all times as long it is under their control. Granted they can't control what happens once it leaves their taprooms and into their customers' vehicles, but at least it is not sitting stacked on the liquor store floor for a month or two. I would think TH would do more pop-ups like the one they did in Rochester. That's amazing! And that was just for the weekend?
It’s was supposed to be for 1 day, they sold out all the stock in about 15 minutes (you had to order online) So they added a second day
Not just how it's stored but also how much places charge etc. I have seen stores jack up prices on Heady and Focal and definitely imagine places would do the same for Tree House. To me, it leaves a sour taste in my mouth about the store but I imagine some would hold it against the brewery as well.
There is absolutely zero reason for TH to distribute and there is only one reason for it…money. It makes no sense on their end. None.
It is money at the end of the day but Tree House's ultimate source of all that money is the goodwill they have created with customers and fans through the experiences they've cultivated and their hands on approach to everything. They give up the control and they ultimately jeopardize that goodwill then their money is at risk.
Yet all we read about is how it's a day care center on the weekends. I like drinking outside as much as anyone in the world, so maybe the greater appeal for visiting any TH location is just that. Their properties are centered around the visitor experience. But is visiting there a better experience than sitting outside at either Notch location? Better than Allagash? Better than Oxbow Newcastle or Fox Farm? If so, how? In my opinion, I enjoy those places better (probably more about beer style preference). Fun fact: the same firm that designs TH locations also designed Fox Farm.
There is literally nothing for them to gain in distribution. It would actually be a sign they’re in trouble honestly and I highly doubt they are or will be.
I think it's difficult to say NO brewery is ever in danger given the market hasn't stabilized. And also given the majority of people at the tap rooms are on the older side, I'd be nervous being ANY craft brewery until things settle down. Obviously if any brewery is likely ok, Tree House is usually at the top of the list. But I've been to their locations during the week (including in the winter on early Fridays) and it's low key. They produce a huge volume of different beers and products, and now have multiple locations. Maintaining those businesses indefinitely in a changing market is never a guaranteed proposition. I imagine they need to have a steady cash flow...is that going to remain the same in every location 5-10 years from now? Think about the craft beer market in 2021 and 2016 respectively. It's why places like Russian River and Hill Farmstead haven't expanded more. They're careful to not oversaturate the market with their product. They've begun distributing more and have seemingly been careful about how much and where they've distributed. Do I think Tree House is doing to distribute anytime soon? Heck no. Do I think it's safe to say they never will? I'm less confident about that.
They say alcohol is recession-proof. I’d say TH is brewery closing-proof. If any brewery is, it’s them. I do agree with the oversaturation of the market problem and would say they should “hold serve” at this point. I know plenty of breweries on Long Island have closed, including one I worked for, and some I would have thought wouldn’t, but TH is TH. People still seek them out, circle them on a map and make trips of it. There aren’t a ton of breweries like that anymore but the TH name is as big as it gets.
Completely agree on all of that. I also agree I would settle for a bit at this point with tap room expansion. They are smart about where they've expanded though. Most of the tap rooms are areas with little going on, especially regarding breweries. I think it's telling the Prudential is never busy, likely too much going on there (plus, it's only a few taps). I am curious though, I agree they have nothing to gain from distribution right now. So why send cans to Gillette? I don't think they need more exposure...
Kids and dogs don’t bother me, and TH is big enough for everyone to get along. Those breweries you mention, I hope they are awesome, never been. I’ve been to many breweries that don’t come close at all to TH.
I think it likely matters which location you go to. I love going to Tree House in Tewksbury for a beer, beautiful facility. I refuse to go on a weekend. It's a nightmare.
Everyone can always use more cool exposure at big events. Big games at Gillette, Phish concerts at Fenway, the Travellers golf tourney in CT, etc. If you get to introduce your product to people who've maybe only ever heard of it before, at a prestigious event, most brands would pay big dollars for that type of exposure.
the pru thing is interesting. You’re definitely right that it isn’t busy, but I think it’s more about how understated it is. I would be surprised if a proper Boston or Cambridge TH location didn’t do as good or better than Trillium Fort Point, but I can also see why they don’t view that as worth the investment at this point in time.
