It’s Dear “Abbey” week on Y&H. Foodie Tim Carman is on vacation, leaving us beer bloggers (plus special guest Greg Engert of ChurchKey) to write exclusively about beer. In this “ask-the-beer-bloggers” post, we turn to a question about beer distribution from reader Dave H., who asks:
I’d be curious to see a write up regarding distribution channels and why, while we’re seeing an uptick in beers from out of the immediate area (Great Lakes, Bells, Founders), there are still some great breweries (Long Trail, New Belgium, etc) that we simply can’t get around here. Is it a shipping/supply issue on the brewery side or are there laws/costs associated with the DC metro area that make it prohibitive?
Well, Dave, this question gets asked a lot. There are some places where state laws and taxes play a part, but not here. Rather, in D.C. the issues are those of supply and quality control:
Supply – Breweries can only make as much beer as their equipment, available ingredients, and manpower will allow. So assuming a brewery is actively trying to produce as much beer as they can (which is not always the case), even if brewers are working around the clock they can only brew a particular amount in a givenperiod of time. Most breweries don’t want to get into a situation where they cannot fill orders. The choice of where to distribute, then, is based on a calculation of how much beer a brewery can produce and sell to meet existing demand.
Quality Control – Breweries often try to have representatives in a region who can see how new accounts are treating their product. If kegs or bottles are mishandled, or draft lines are not cleaned, it can affect the taste of the beer when it gets to your glass. It’s obviously not worth the fuss involved with expanding to a new market if your product does not meet your expectations (translated: tastes like crap) by the time it gets to the end consumer. If a brewery can’t field enough reps to hit all their regions and accounts (or hire an outside firm to do this) they are likely to decide to wait to distribute there.
Price – The expense of shipping beer over far distances causes the price to go up. If a brewery wants their beer to remain within a certain affordable range compared to other beers sold in the area but can’t make the numbers work after shipping, they are not as likely to distribute there.
Environment – Many craft breweries like Great Lakes, Stone, and Sierra Nevada and countless others are doing incredible things when it comes to sustainability and environmentally-friendly practices. Shipping large amounts of beer long distances is undesirable to such Earth-minded folk in terms of waste, energy consumption, pollution, and anything else you can think of. For this reason, many of the more conscientious companies focus on selling locally or regionally.
Risk – It is obviously an expensive investment to make and ship beer without a guarantee that it will do well in a new market. Most craft breweries don’t have the time, money, or interest to do research in advance, so they tend to let markets grow organically—usually by expanding distribution steadily across the map.
Kim Jordan of New Belgium summed up the sentiment in a comment to the audience at this year’s Lupulin ReunuLess panel and tasting at the Brickskeller (just before she promised that D.C. would be the next market to see New Belgium beer):
Eventually you have to figure out as a brewery, “What are we doing here?” You can’t just go “Those people like us and those people like us” and be wherever. We’ve got a little more strategy now. Actually, we’re not doing anything but holding on by our fingernails in 2010. I have a couple of co-workers here who may shoot me later, but I’m thinking the next market we are going into will be this one [D.C.]. At my guess it may be 2011 but we are at capacity. It’s an expensive business to fund as all of us up here know.
Any other reasons a brewery may decide not to distribute somewhere? Brewers and other industry folk, speak up.
Photo by seattleye used under a Creative Commons license
The beer bloggers who have taken over Y&H will be responding to readers’ questions all week. If you have a good one, email it to thelagerheads@gmail.com.