every one<\/span> of these retailers.\u00a0 That alone is not a little thing\u2026 in fact in is an incredible thing.<\/p>\nOne could make a strong argument that you should pay distributors directly for the opportunity to reach these eyes and ears\u2026 that\u2019s not going to happen so let\u2019s look at how you do pay them\u2026 by providing good margins to them.\u00a0 But here\u2019s the rub\u2026 they only get these margins if your product sells.<\/p>\n
Let\u2019s assume you bring a margin of $10 per case to the distributor\u2026 what is your sales potential?\u00a0 If they sell 1,000 cases in a year, they earn a whopping $10,000.\u00a0 But that\u2019s gross dollars\u2026 what about all the overhead?\u00a0 What about the sales rep\u2019s salary?\u00a0 What about the driver\u2019s salary?\u00a0 What about the merchandiser\u2019s salary?\u00a0 And speaking of merchandisers, again in chain-driven markets, the off-premise retailers don\u2019t refill the shelves, that\u2019s the job of the distributor.\u00a0 If you self-distribute do you think you can be in these accounts 4 \u2013 14 times per week filling the shelves?\u00a0\u00a0 What about the distributor\u2019s\u00a0 profit after all these costs?\u00a0 The distributor brings a hell of a lot to the table to build your brand for the chance to make a whopping $10,000 before any expenses.\u00a0 And how many of your brands will sell 1,000 cases in a year in an average market?\u00a0 They get the chance to make a few thousand dollars and you get the chance for them to build your brand into a powerhouse (or even a little pony) which you can then sell to ABI or MillerCoors for retirement money.\u00a0 You expect a lot from a distributor.<\/p>\n
In on-premise accounts who cleans the draft lines?\u00a0 They don\u2019t magically clean themselves\u2026 and when the bartender pulls your tap handle and a chunk of stuff which closely resembles horse snot (yes I know horse snot) comes shooting out, do you think this might affect the person who just ordered your succulent brew?\u00a0 You only get one chance to lose a customer.<\/p>\n
Do you have the staff for on-premise nights high-lighting your products?\u00a0 Do you have the staff to hang your merchandise (if you bring any to the table in the first place)?<\/p>\n
And what of old beer?\u00a0 Who takes care of that?\u00a0 And when a distributor eats the cost of old beer, they are eating the full cost of it, not just their margin.\u00a0 One case of old beer eats up the profits from at least 4 cases of beer\u2026 leveraging but in the wrong direction.<\/p>\n
On a side note, speaking of old beer\u2026 all you craft brewers had better start paying a little bit more attention to the quality of your product.\u00a0 I was recently in a major liquor store here in Colorado (not a chain market) and was listening to a sales rep talk to the store manager about various craft beers he was trying to sell.\u00a0 The sales rep noted a craft brew on the cold shelf which was a 2009 product!\u00a0 How many old six packs are out there?\u00a0 How many bombers are WAY past their prime?\u00a0\u00a0 I\u2019ll repeat what I said above; you only get one chance to lose a customer.\u00a0 I realize there is a fine line between pushing distribution and generating a lot of old beer but I see a storm a-coming on this front.<\/p>\n
Now some of this is simply the result of the category being so hot\u2026 and with soooo many new entrants each fighting for a very limited share of mouth.\u00a0 Many craft beer- focused retailers have far too much space devoted to craft beers\u2026 it is simply not possible to keep it all fresh.\u00a0 They don\u2019t really care since they just want the foot traffic\u2026 those eyes and ears\u2026 and competitive forces drive them to have every craft brew out there.\u00a0\u00a0 The same liquor store I just discussed has doors and doors and doors of craft beers (that\u2019s great)\u2026 more than triple what they have for larger domestic brews\u2026 but even just filling the cold shelves probably is more beer than their traffic can keep fresh.\u00a0 Just the pack-out of these cold shelves is around 5 cases.\u00a0 Don\u2019t even get me started about bombers.\u00a0 Do the math\u2026 how many brands do you have?\u00a0 In how many packages?\u00a0 What type of turns do you need to keep the product fresh?\u00a0 In many situations it simply doesn\u2019t work.\u00a0 And ultimately the retailer doesn\u2019t care because the distributor will be forced to eat this old product, whether this is legal or not it will happen.\u00a0 That\u2019s the real world.<\/p>\n
I strongly recommend craft brewers work more with their distributors to ensure product freshness (one of the many values of beer distributors).\u00a0 The good name of your products depends on it.<\/p>\n
How\u2019s that for a long winded rant?\u00a0 Craft brewers and craft beer drinkers\u2026 this is an exciting time and one with tremendous opportunities.\u00a0 Don\u2019t try to change the rules which have allowed you to come into existence.\u00a0 Don\u2019t underestimate the value your distributors bring to the table.\u00a0 Definitely don\u2019t underestimate the value of the three-tier system.<\/p>\n
Is it sometimes difficult to change distributors?\u00a0 Sure.\u00a0 Remember they are the ones probably building your brands\u2026 they aren\u2019t putting in that effort to make a couple extra thousand dollars in a year.\u00a0 They want to reap the short- and long-term rewards of their efforts too.\u00a0 Can you blame them?<\/p>\n
The beer industry, all tiers, is a great industry.\u00a0 Rather than working to change the rules for your short-term advantage, instead work to make and help sell the best beer you possibly can.<\/p>\n
And lastly a business plug – I don\u2019t do this stuff for free \ud83d\ude09<\/p>\n
My strategic partner, Steve Cook, has extensive business development experience in helping suppliers bring their product to market and addressing all of the issues I discussed above (and many more).\u00a0 If you are a craft brewer and would like or need a business partner to help you take your business to the next level, give me a call or email and let\u2019s talk about how we can use our expertise to help your beers be the ones that survive and prosper.\u00a0 Trust me, it is worth the time and effort\u2026 and yes the $$ too.<\/p>\n
How\u2019s that\u2026 first I piss you off then try to sell you something\u2026 such is life until \u201cAll Hail the Conlin\u201d\u00a0 \ud83d\ude09<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":2,"featured_media":16943,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[363,392,376],"yoast_head":"\n
A Distribution Consultants Take On You, Me & The People Who Brew The Beer We Love<\/title>\n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n