What determines where breweries distribute?

There was a time when breweries had a hard time finding distribution out of state. Maybe for some it goes back to that.

And let's not forget shipping costs, not that a lot of beer goes by rail anymore, but if that was possible it might explain some of it.

Additionally, if a brewery could not move enough beer into an area it might not be worth it to open that area up when an easier option was available.

And on that thought, of course it's a good idea to get a foothold in 'beer cities' where you'll also gain notoriety beyond sales.

What about who's willing to pay for it? There's an additional cost when shipping is involved. Could a New York distributor pay more for beer from San Francisco than perhaps one from Delaware? They'd have to charge more, so would the New Yorkers pay for it as compared to those from Delaware?

Another possibility is that they have someone in that area that they trust, to sell it or distribute it, or just check on quality and rotation.

It's an interesting question, and I'm sure there are hundreds of answers, but in the end I think it all comes down to money.

 

Depending what distributor they choose to work with also will impact where they distribute.

 

$$$$$$$$$$$

 

damn beat me to it, all it takes is more $$$$$$$$$$

 

I originally wrote "There was a time when breweries had a hard time finding distribution out of state" (meaning that craft brew was not as big a thing as it is now) and it's only occurred to me just now that with the proliferation of new breweries it's probably just as hard now! Distributors can only handle so many breweries at one time based on their size (you can only fit so many pallets of beer into so many square feet), and they also want to move the product as easily as they can, meaning a big player that's better known will be easier to sell and generate more turnover (sales = profit). I'd assume that breweries are now struggling to get their products into distributors based on craft-brew competition rather than big brewery competition.

 

There are so many variables. Geography is obviously one of the bigger ones. Demand is definitely a factor, with the coasts, Colorado, and Chicago being bigger markets than most of the middle of the country. Some of it is based on legal issues too; certain states have much easier distribution laws and fees than others. A lot of it depends on the distributors as well. A lot of distributors have a footprint in multiple states, so a brewery is more likely to expand to other states where the same distributor that is already carrying their products elsewhere is working.

 

I'm not sure about distribution in general, but I wish limited releases didn't run off allocations. There's not really any other way to do it, but it sucks because it basically means that living in a low population area prevents you from getting any limited releases, even if your area does get that brewery's regular beers.

 

Short answer.....yes

Longer answer.....demand, capacity of the brewery to handle new business in new areas, willingness to partner / pay a distributor to get their beer into other markets outside their own....it has to be a well thought out process or will get ugly pretty fast

It is not as simple as some would assume....breweries have limits, distributors have limits, retailers have limits....it is not all about $$$$$$$$$$

(full disclosure, I have worked for 2 craft breweries over the past few years)

 

I ran a smaller wholesale operation for years and solicited brewers and breweries daily to let me buy beer for thirsty North Carolinians. There were several eras of craft beer growth and several key people here who foresaw what direction beer consumers were likely to go. At first, before the explosion of US craft, then North Carolina craft, it was European beers. Initially, North Carolina was limited by ABV limits, so many big brands remained illegal. With Pop The Cap laws enacted in 2005, North Carolina exploded onto the beer scene in a big way. Most often it was the innovative and forward thinking wholesalers that lead the breweries into new territories.

 

Population is a part of it. That's why you will see expansion to states that may not have a lot of people compared to a market like California.

 

On first reading this article I immediately thought of New Glarus. They're sort of unique, they don't distribute out of state, partly due to quality vs. quantity and partly due to not wanting to deal with out-of-state distribution (I remember reading how they tested taps in Chicago and really didn't like all the nonsense that went along with it).

 

Don't understand why shipping costs to NY. vs Del. would be much different

 

i'm sure there are basic factors involved such as distance, licensing, size of the potential market for the product, etc. After those matters are decided on i'd imagine politics and relationships play a fairly large role, then again i'm a cynic.

 

yes

 

Do not forget taxation. Delaware is known to be a tax "heaven". The USA is like 50 countries when you come down to ABC laws and taxation. Never forget that distance of shipping adds hugely to end cost for any product. Believe me, it's a very difficult process. Not to mention state approvals, etc.

 

Taxes &approvals not withstanding the price to ship to NY vs Del isn't that much different-I think. Both are on the east coast

 

Usually, distributors buy the beer from breweries and it is their beer to send where they please. The brewery will have a say in where it goes, but at the end of the day the distributor owns the beer and decides. Some breweries have more of a say depending on the distributor.

 

Calling Dr. Kidden...