Waxing poetic on rebranding, mid sized brewery distribution, and local beer

Discussion in 'Beer Talk' started by SFACRKnight, May 16, 2018.

  1. SFACRKnight

    SFACRKnight Meyvn (1,172) Jan 20, 2012 Colorado
    Beer Trader

    While reading the rebranding jai alai thread I had a sad sort of thought cross my mind. Many mid sized breweries, like cigar city, seem to be expanding their distibution foot print in an attempt to garner more sales. Larger breweries seem to be leaning towards re branding themselves once they have attained market saturation, new belgium comes to mind with voodoo ranger. A couple local Floridians have added that jai alai has been replaced in their refrigerator by other, more contemporary, IPAs. I have had exactly 1 jai alai since cigar city made it to Denver, and if I am craving an old school ipa, I can get Odell ipa that is more fresh, and cheaper than jai alai.

    My question is this, do mid sized breweries honestly think that while their product sits on their shelves locally, that somehow by sending their beer to a new area people are going to buy it simply because it's new to their area? Is this the Achilles heel of craft beer? Odell has maintained their footprint, and stayed pretty contemporary and seem to be faring well. I'm not so sure other breweries are experiencing huge growth and profits from the "let's go huuuuge" mantra that seems so.pervasive with craft beer right now.
     
  2. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    Short answer: Yes

    Sort of.

    The best example of how to do well in craft beer is New Glarus. Make great beer and get a groundswell of support behind you in your home state. If you like, then, and ONLY then, push out into other neighboring states. New Glarus does very well by only selling beer in Wisconsin. No reason why others can't do the same.
     
  3. LeRose

    LeRose Meyvn (1,291) Nov 24, 2011 Massachusetts
    Premium Member

    If other places are like my area, there's always a huge "huzzah...finally we can get XYZ around here" that leads to an initial frenzy of sales. Once the bloom is off the rose, so to speak, we end up with a bunch of dust covered bottles sitting on shelves. Local is pretty strong in my area and customer loyalty seems pretty high in support of the locals (even when they are not very good). There might be an initial uptick in sales which I would think might be hardly noticeable to the mothership wherever they are located. There's all kinds of "foreign" beers/breweries around here sitting on store shelves - Wicked Weed comes to mind right away as they showed up about the same time they sold out. Now that went well...:rolling_eyes: New Belgium, Bell's (soon), and quite a few others have entered the market around here and they all seem to follow the same pattern. Initial excitement then they end up in the bargain bin. The smart store owners seem to ride the tides and keep inventory of the "not from around here" beers to a minimum, sticking with a mix of larger sized regional/national and a predominance of New England brews. The really smart retailers seem to keep a mix of everything - fully understanding the fickle and transitory palates of craft beer drinkers.

    New Glarus is interesting - I always buy one or two of there beers on my frequent trips to Wisconsin and Scream is a definite "must have" when I get off the plane and hit the market. They have a beautiful facility but they also seem to fully understand their limitations. That beer simply would not carry the same cache around here as it does (and fully deserves) on its home turf. I'd think smaller outfits would be better off serving the immediate area well than venturing into uncharted waters. There are plenty of excellent small to mid-sized breweries in this area that seem to be doing just that and they do very well. I'm no "local for the sake of local" advocate and will be the first one to say that there are a lot of small and even mid-sized brewers that put out mediocre beer near me, yet they have a rabid following for whatever reason. Seems to me that this can generate some false assumptions that could prove costly if somebody were to get too big for their britches.
     
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  4. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    “If other places are like my area, there's always a huge "huzzah...finally we can get XYZ around here" that leads to an initial frenzy of sales. Once the bloom is off the rose, so to speak, we end up with a bunch of dust covered bottles sitting on shelves.”

    Yup, that pretty much seems to characterize things in my area (SEPA).

    An example that might be appropriate here is Shorts Brewing. They introduced their beers into the area, there was some initial ‘excitement’ and then….

    Shorts no longer sells their beers here. Another brewery that is no longer here is Summit.

    Not too long ago I had a conversation with the manager of my local Retail Beer Distributor. I asked: “Joe, how do you keep up with all of the new beers (both local and non-local) that come onto the market every day?” He sorta shrugged and said: “Mostly word of mouth, from the Wholesale Distributor sales folks, customers like you,…”. I then asked: “How do you decide which beers to carry?” He just gave me a look and changed the subject.

    In my opinion there are just too many craft beer brands already on the market (in my area). Just a few minutes ago while reading a thread in the Mid-Atlantic forum I read about a new small, local brewery that very recently opened that I had not heard of before. Things right now are crazy!! I suppose some folks may say: this is a good problem to have. But I wonder!?!:thinking_face:

    Cheers!

    @LeRose
     
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  5. beernuts

    beernuts Disciple (312) Jan 23, 2014 Virginia
    Beer Trader

    I think the greatest thing to happen as a result of the increased availability to me of "highly desireable" beers (through distribution, travel, or trading) is the realization that there are very, very few breweries that produce something truly unique or even distinguishable.

    I would always imagine these unattainable beers to be something very special and different, why else would they be so lauded? Then once I try it, I realize that usually its a good to great beer, but nothing outside the realm of what I've had before. Once I experienced this enough to come to expect it, I stopped wasting so much money and effort on aquiring new beers.
     
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  6. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    I've never seen this scenario not play out. Seems like over the past 5 years or so, every new brewery expanding into this market followed it to a T.

    Indeed.

    Something very uncommon in craft beer these days.

    Absolutely.
     
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  7. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    Welcome to beer maturity. :wink:
     
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  8. NeroFiddled

    NeroFiddled Poo-Bah (9,670) Jul 8, 2002 Pennsylvania
    Beer Trader

    Something to keep in mind about expansion is that you're relying on your distributors, most likely people you don't really know, to properly handle and sell your beer - unless you have the money to hire a rep for that area, and hiring a bunch of reps can cost a lot of money. So is it better to have control of your product, or more outlets?
     
  9. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    Needless to say the correct answer here is: "have control of your product".

    If you have inadequate control throughout the supply chain then quality and business issues will ensue.

    Cheers!
     
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  10. stevepat

    stevepat Disciple (357) Mar 12, 2013 California
    Beer Trader

    The increasing prevalence of this scenario is why I think the future growth of craft beer is in taprooms and brewhouses. I live in a county with 140000 people and 7 breweries. 1 of them (the lowest quality in my opinion) has been distributing far and wide for years and their goal seems to be to become a big national player, interestingly they are apparently having their biggest success in asian markets.
    The newest brewery actually came from asia, originally intending to produce beer here to ship back to their asian market, then found so much excitement for their beer here that they have limited distro locally. (they are possibly the best technical brewers around and make styles that were previously not made here)
    All the rest have some distribution of one or a few core beers, have beers on tap locally, or are taproom only. They are all doing quite well it seems. I can't imagine any of them really thriving in any market where they weren't the 'local' option.
    I think this is the only really viable model for the vast majority of breweries going forward
     
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  11. rozzom

    rozzom Crusader (712) Jan 22, 2011 New York
    Beer Trader

    Totally agree. See the same here all the time.

    I am neither a brewer or a business owner, so I’m not speaking from any place of knowledge, but is it also possible that it’s the time scale at play here? Ie a mid-size regional brewery sees the clamoring for its beers in other parts of the country, sets ball in motion to expand there, and 2-3 years later when they’re ready to roll, the demand has gone. If bells had come to NY in 2010 it would have been a jizz-fest. But when they finally did, people didn’t care.

    Maybe I’m giving them too much credit. But either way seems the way to play it these days (unless you want to expand aggressively to catch the eye of a buyer) is to keep things hyper-locally focused.
     
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  12. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    If you look at the amount of breweries that have opened during the "craft beer boom", the number that are small, local, neighborhood breweries that either self-distribute or distribute very little and sell the vast majority of beer out of their location FAR outnumber the larger regional-leaning breweries that are entrenched in the 3-tiered distribution system.

    I would think that you can open up a brewery that is looking to solely distribute in this day and age, but you'd really need to have your ducks in a row to do so. As it stands, most people that have opened these smaller breweries seem to have the business sense of a sheet of drywall. Not to say that they brew bad beer. Just that they should have taken a couple classes before opening up a small business.
     
  13. SFACRKnight

    SFACRKnight Meyvn (1,172) Jan 20, 2012 Colorado
    Beer Trader

    Wicked weed did the same here, they showed up and were flying off the shelves until the sellout. Interestingly enough Bell's and Jack's Abbey have this thing going here where they do a quarterly drop of a small amount of beer. They seem to be moving all of the product that drops within a week or so. Anything that doesn't move interestingly doesn't show up on a new drop. It seems to be working well for them here instead of a full push in. I quite enjoy hopslam and copper legend making it out here.
     
  14. SFACRKnight

    SFACRKnight Meyvn (1,172) Jan 20, 2012 Colorado
    Beer Trader

    Crooked Stave started CSA distribution and have used it to bring some great beers to Colorado. Funny what a small business can do.
     
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  15. Domingo

    Domingo Poo-Bah (2,196) Apr 23, 2005 Colorado
    Beer Trader

    I think a lot of regional mid-sized breweries owe their success to the fact that they were first to make a certain type of beer in their area. It's not that their [insert random beer style] was truly world class, but that it was fresh and the best option in their city/state/region. Many of them are learning that first hand when they start trying to distro around the country and discover that their IPA is only just as good as like 20 others that are trying to do that same thing. Even if their beers are/were damn good, it's tough to beat freshness and local loyalty.
     
  16. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    LOVE that Chad did this. Not saying that things like this can't be done elsewhere, as there are other examples, but most small craft breweries are MUCH more interested in pimping themselves than they are in helping the industry as a whole thrive.
     
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  17. stevepat

    stevepat Disciple (357) Mar 12, 2013 California
    Beer Trader

    I 100% agree. My guess is that over the next decade we will continue to see lots of new places that are taproom only/self distribute while a few brands will be purchased by large beer conglomerates and expanded to regional/nationwide distribution. It definitely seems like the future of craft beer is small and local.
     
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  18. stevepat

    stevepat Disciple (357) Mar 12, 2013 California
    Beer Trader

    I actually think we are probably headed to a time when there will be 3 broad categories of breweries, the big boys making their spread of light and amber lagers, the big crafty boys with a more diverse core line up as well as an array of seasonals/collabs/etc., and then a huge number of small local brewers that will cater to all sorts of niches.
     
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  19. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    That time that we are headed towards is 5 years ago. :wink:
     
  20. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    Jason, that is an interesting concept. It is almost like a seasonal release sort of a thing. It likely results in some excitement in that XYZ brewery is 'back' and you have the added benefit that you are assured these newly dropped beers are fresh.

    Off the top of my head I can't think of any larger, distributing breweries that do this in my area (SEPA).

    @NeroFiddled @Ranbot @drtth

    Maybe this sort of strategy is a good way to provide customers diversity of choices while ensuring beer freshness on the shelves?

    Cheers!
     
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  21. stevepat

    stevepat Disciple (357) Mar 12, 2013 California
    Beer Trader

    haha truth indeed. I guess I meant more outside of the beer geek world. And really we are probably already there. I suppose what I am really trying to say is that the regular beer drinker will stop thinking of SN, Stone, Fat Tire, Lagunitas, etc. as 'craft beer' and that moniker will be reserved for the little local fellows.
     
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  22. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    Agreed. Yesterday on the radio they were asking callers about which local craft breweries were their favorites. Definite sign of the apocalypse.
     
  23. TongoRad

    TongoRad Poo-Bah (2,376) Jun 3, 2004 New Jersey
    Premium Member Beer Trader

    If you mean we should be getting to a place where there's just Large, National, Regional, and Micro- Breweries, and it's all just 'beer'...please let's do that again! :wink::grin:
     
  24. sharpski

    sharpski Champion (866) Oct 11, 2010 Oregon
    Beer Trader

    Something we're seeing in Oregon too (just took advantage of a Jack's Abbey/Springdale drop this past week), both regional breweries from across the country and smaller breweries from neighboring states with a cult following. It seems to be newer small distributors that focus on this model rather than a project from existing larger distributors. It's got to be more of a hustle to deal in smaller/infrequent volume and probably doesn't scale well, but it's a cool distribution niche.
     
  25. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    Yeah, I suspect that the coordination/timing aspect could be a hassle.

    I suppose the way it works right now is 'better' for the distributors but it certainly is not 'better' for the consumers (and retailers?). There is just way too much old beer on my retailers shelves. I am not buying those old beers (and apparently not a lot of other consumers either). In the meantime the retailers are stuck with lots of old inventory collecting dust on their shelves.

    The only brewing company's beers that I feel confident aren't old on the shelves are the beers from AB. AB enforces that their partner Wholesale Distributors remove product when they reach their best by dates (110 days for Budweiser).

    Cheers!
     
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  26. LakerLax21

    LakerLax21 Initiate (107) May 16, 2017 New Jersey

    Half Acre is running a similar technique in NJ, although I'm not sure it is their call or the wholesaler's. Quarterly drops of only the beers that sold out, I think it makes a ton of sense as long as you don't get idiot retailers buying too big because it is only available for a short window. In my opinion as a retailer it is NOT the end of the world if you are out of a craft beer and there is no need to buy for more than 2 weeks at a time (unless there is a significant deal level that you need to hit to maintain competitive pricing)
     
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  27. EvenMoreJesus

    EvenMoreJesus Savant (950) Jun 8, 2017 Pennsylvania
    Premium Member

    Been seeing this here, too. I also wonder about the longevity and profitability of such a strategy.
     
  28. Ranbot

    Ranbot Zealot (516) Nov 27, 2006 Pennsylvania

    Jack,
    Two come to mind...But they might not be appropriate analogies to Bells or Jack's Abbey....

    We've discussed before that Jever or their importing distributor does this sort of periodic drop in the SEPA market. I don't know if they do this in other markets; or if creates any hype or fresher product. I don't know if an imported German pilsner is analogous to a mid-sized US craft brewer.

    For at least the last two years The Alchemist has made a small drops of Heady Topper in Philly and NYC markets (maybe Boston too?) that always sell out within a day. The Alchemist doesn't have any problem selling any of their beer in any market though as far as I can tell. Purely speculating here.... maybe they do it to stoke the desire for people to travel to VT for beer? Maybe to relieve pressures from black/gray markets coming from those regions? I don't know, but I suspect their reasons are different from Bells.
     
  29. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    I have heard a few 'opinions' for why their are Alchemist drops. One store owner stated that since there is a 'connection' between John Kimmich (he graduated from Penn State) and PA so he will send some beers for 'events' (e.g., Flyers - Penguins series). These drops kinda suck since they are so small. My local Retail Beer Distributor (Kunda) started selling their last allotment at 11:00 and were completely sold out by 1:00 (and they limited it to one 4-pack per customer). I was in the store later that day to learn these details.

    I suspect that most imported beers have periodic drops due to the logistics of shipping across the Atlantic.

    Cheers!
     
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  30. TongoRad

    TongoRad Poo-Bah (2,376) Jun 3, 2004 New Jersey
    Premium Member Beer Trader

    The last couple of NYC drops have been limited to on-premise sales only, nothing to go. This keeps it around for those who want a taste, but you're pretty much paying bar prices per can.
     
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  31. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    So far I have consumed many cans of Heady Topper and one can of Focal Point. In the last shipment of Alchemist beers to Philly there were cans of Crusher. I would have liked to drink some cans of Crusher but I was a few hours too late to buy them.

    Cheers!
     
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  32. rgordon

    rgordon Champion (809) Apr 26, 2012 North Carolina

    Jack, if I was still in the beer business I would be all about helping locals get beer into the market. I would still be fascinated by English, Belgian, Dutch, and German beers and seek them out. I would always keep an open mind. Stiegl Radler comes to mind.These days I would trim my portfolio, specialize in some international offerings, but commit firmly to local producers that produce real quality beers.
     
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  33. Ranbot

    Ranbot Zealot (516) Nov 27, 2006 Pennsylvania

    I think some Heady in PA made it to the higher profile craft bars/restaurants, but for the most part PA distributors kept most of it for themselves to sell. Considering bar mark-ups it's not necessarily a bad thing for consumers that distributors sell most of it.

    Sounds like my local distributor too. I don't bother those drops, because I get Heady fairly regularly when I visit my folks in VT. I might be spoiled, but at least I'm one less person trying to get a share of those drops.
     
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  34. SFACRKnight

    SFACRKnight Meyvn (1,172) Jan 20, 2012 Colorado
    Beer Trader

    From what I have seen here locally people still get excited for these small drops. Half acre shows up during GABF season also. Sun king as well and the products move quickly. Surly dropped here permanently and there seems to be little to no movement now that they have been here for a few months.
     
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  35. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    Do you think that periodic drops (e.g., quarterly drops) is the right solution? Or do you think that the status quo (i.e., continuous distribution) is the way to go?

    Cheers!
     
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  36. SFACRKnight

    SFACRKnight Meyvn (1,172) Jan 20, 2012 Colorado
    Beer Trader

    If something is here to stay I find myself saying "I can get that beer next week, let me grab this one off or special beer that may be gone by tomorrow " most of the time. My buying habits may not follow the national standard, so my perspective may be completely off base.
     
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  37. Junior

    Junior Disciple (376) May 23, 2015 Michigan
    Beer Trader

    As a consumer, I prefer periodic drops. I find that continuous distribution does not work well for my tastes. I realize that it may be more difficult to manage logistically but it seems like it would be offset by alleviating issues with stale product.

    Lately, almost all of my beer purchases have been direct from the brewery, seasonal releases, imports, or freshly distributed local releases. I am pretty sure that Two Hearted is the only beer that sees widespread continuous distribution (including Michigan) that I have purchased in the last 6 months.**

    I have a hard time finding fresh stuff from the likes of Sierra Nevada, Lagunitas, Stone, Ballast Point, and Deschutes. I have pretty much stopped looking to purchase their beers (I stopped buying Ballast Point and Lagunitas for other reasons). I am sure others feel the same about Founders and Bell's in their markets. There are similar issues with some regional and Michigan distro only breweries. I would be much more likely to purchase some of these beers if there was a high likelihood of finding something reasonably fresh.

    I doubt we will see the end of continuous distribution anytime soon.

    ** - I decided not to count the 6 pack of Founders Solid Gold that I bought during the first week or two it was being distributed.
     
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  38. HorseheadsHophead

    HorseheadsHophead Meyvn (1,366) Sep 15, 2014 New York

    I have to agree with @EvenMoreJesus here. I think successful breweries should focus on their regional markets instead of expanding too far and spreading too thin. It almost killed Green Flash, and it almost killed Smuttynose. I fear for the fate of Stone, Cigar City, and others as well.
     
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  39. JackHorzempa

    JackHorzempa Poo-Bah (3,568) Dec 15, 2005 Pennsylvania
    Premium Member

    I was thinking along the same lines. Perhaps the periodic drop distribution model can mitigated the old beer on retailer shelves problem.
    Me too!. I am personally a fan of Sierra Nevada beers but over the past few years I have basically only been purchasing their seasonal/special releases since their year round beers tend to be old.
    I suspect you are correct here. It would seem that lots of old beer on my local beer retailers' shelves is the 'norm'.:slight_frown:

    Cheers!
     
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  40. SFACRKnight

    SFACRKnight Meyvn (1,172) Jan 20, 2012 Colorado
    Beer Trader

    Seems to be the same issues here Jack. Went in to the local bottle shoo and saw a Paulaner mixed 6 pack, when I looked at the date it was already a year past the best buy date, and that's a year past the bottling date. No thanks. The same seems to be happening with non local big distro brewers like Deschutes and Sierra Nevada. New Belgium always flies off the shelf herw.
     
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