Rare Beers, Distributors and You...Things You Should Know

It’s 5:30 in the morning, and I’m awake and working. I’ve actually been awake for half an hour, trying to convince myself that this time I’ll be able to fall back asleep for another hour and half until the kids wake me up. We’ve been here and done this before, and after thirty minutes of going over the to-do list in my head and becoming very clear about what I want to say, I’m up, coffee cup in hand and computer in my lap. I’ve got a few things on my minds, so settle in.

 

Do you know who chooses what craft beer you drink? You probably think it’s you, but you’re wrong. Maybe it’s the store or bar owner, who makes the decision what to sell in their store, but that is only a very small part of the choice.  You might even think that it is the brewery who decides, based on what they decide to brew in the way of core and seasonal offerings, but the truth is that they have very little to do with what beer is available to drink, and even less to do with where and when you drink it. In the vast majority of the US, the distributors are actually pulling the strings on what beers you drink and when you drink them.

 

In all honesty, most craft brewers, myself included, have a love/hate relationship with distributors. On one hand, they get our beer to market, have expended a ton of money on logistics and locations, and are incredible partners… sometimes. On the other hand, it is terribly frustrating to try and sell a product that by law has to go through a middle-man to get to the consumer, especially when alcoholic beverages are the only major industry that state and federal governments have continued to require the use of such an archaic system. This system is not what’s on my mind currently though. Instead, I’m focused on what beers you get to drink, and why.

 

One point of data can be an outlier, two a trend, and three or more points of data form a group. Recently, I have had four people, working for three different distributors in different networks (AB and Miller/Coors) say almost the exact same words to me. I was discussing a limited release seasonal beer, and the response to me was that they were only going to take limited beers if they were pre-sold to accounts. In other words, they would not even pick up the beer from our brewery unless they had commitments from bars and stores to buy all of the beer. Some amount of pre-sales for limited releases are not a new thing, but insistence on only pre-sales, all in the same month from three different groups of people tells me that they are following a playbook.

 

It didn’t take me long to connect the dots. The National Beer Wholesalers (NBWA) Convention was October 11-14 in Las Vegas. The convention hosts the owners and upper level management of the beer distributors from all networks. This insistence on pre-sales began after the NBWA gathering. Clearly this was a topic of discussion or some type of presentation at their gathering, and a strategy was decided upon. They are controlling what beers we bring to market, and therefore what beers you drink, but why?

 

Is it because they want to make sure that you get the best, freshest beer all the time? The answer is “clearly not” if they won’t even pick up the beer from the brewery while it is fresh, letting it linger while they attempt to pre-sell it. Is it because there are so many rare beers in the craft beer universe these days and someone needs to control them? This might be a possibility, but anyone who studies the industry knows that the consumers desire variety and reward rarity.

 

Though it sounds terribly cynical to say it, I have always believed that you have to follow the money to get to the truth in business, and in this case the money points in one very obvious direction. It is much easier and cheaper for distributors to only sell core beers. Every time a new rare beer comes out, they have to educate their sales force on the beer, answer a ton of questions, and deal with the inevitable angry accounts who either didn’t get the beer, didn’t get enough of it, or in the case of grocery and large chain stores, got too much of it and try and force the distributors to buy it back. I was in my local Publix almost two weeks after the recent Bourbon County stout release, and the shelf was a mess, over two cases of bottles were still on the shelf, and I knew that this was killing our chances of getting our special bottle releases into the stores. It is not just the macro-owned breweries like Goose Island, but also mid-sized and small breweries whose specialty bottles may have taken a while to sell or caused a headache at the distribution level in the past.

 


The truths at work here are these. The distributors know that consumers want variety and rarity, but they only want to make them available to you if they sell easily, quickly, and without a lot of special effort or training. They want the beer in and out of their warehouses as quickly as possible, and with good reason, because that is where their profitability lies, but there is an unforeseen side effect to the pre-sale strategy. Pre-sales will only work for beers and breweries who are already known, and will greatly hamper the innovation in the industry’s future by locking out small or unknown breweries and beers.


Drunken Monk is our most rare beer, and also our most popular. When we release it in our tasting room, we have our biggest crowds, and have had people drive from hours away and spend the night just to get it. Yet, currently there are ten cases of bottles sitting in our brewery, like a dude sitting at home who can’t find any friends to go drink with, because the distributors insist on only buying them if they are pre-sold and we are small, new, and will not get pre-sales unless the distributors take a chance on us. They’re not taking chances, because chances aren’t always profitable.


The truth is, it is not profitable for the distributors to spend their time training and educating staff and making room for a rare beer when they can’t guarantee rapid sales with no headaches. The money trail says that you only get the chance at drinking that beer if they decide that it is worth taking a chance on, so you tell me how much choice you have.

Robbie Carelli1 Comment