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Craft Beer Distribution: Quality, Consistency and Why Distribute

In any industry that is showing exponential growth, it is absolutely critical that you carefully plan and execute your business strategy in order to maximize your success. There is too much competition that will capitalize on your mistakes and use your errors as their growth opportunity.


The craft beer industry is no different, and although craft brewers get along quite well on the brewing level and support each other, the distribution tier is where push comes to shove. As a craft brewer, you need to learn as much as you can, plan as much as you can, and carefully execute each step to prepare for distribution. Set yourself up for success.


First, take a good hard look at the products that you are brewing. Making one good beer is not enough. You need to have developed a product line that is outstanding. When pitching your brewery to anyone, including a distributor, you need to lead with quality. Take the time to bring your beers to events, community functions, to brewing competitions, places where there are knowledgeable people to taste and offer their feedback. Dial it in; make sure there are no off-flavors or problems with carbonation and packaging.


Next, brew that same product many, many times. The consistency from batch to batch needs to be absolute, because the end customer wants to enjoy the same beer over and over again without fail. If you are brewing specialty products, you still need to consistently maintain your high standards of quality from batch to batch with no issues in production. Distributors will lose confidence in your products quickly if this consistency is not maintained, and distributors without confidence do not sell much beer.


Once you are sure that your quality and consistency are solid, consider self-distribution if it is allowed legally in your area. Self-distributing is a good idea for many reasons, such as:

 

  1. You & your staff will always be the best sales team for your own brand. It’s your dream, your passion, and you know your products better than anyone else ever will.
     

  2. Your community is invested in your success. They know you personally, work with and live with your friends and family, understand your dream, and are benefitting from the jobs that you have created with your small business.
     

  3. Brand recognition has to begin somewhere, and having recognition and sales established before you search for a distributor helps to show the quality of your brand.
     

  4. You get 100% of the profit margin! Price your products at the price you would like to see on the shelf, at the same price point as those brands that you respect and would like to compete with. Never undercut your competition. Keep the quality image and build your financial strength.
     

  5. Test your products’ quality and consistency in the market where you can easily fix mistakes. Test out new products. Tweak recipes. Do it all with the people who know and love you before you branch out to those who don’t.
     

  6. Learn what it’s like to be a distributor, even on a small scale. Look at the market from a distribution perspective, and think about what it would be like to do this on a large scale. The more you understand about the distribution mission, the better partner you will be able to be when you have a distributor handling your brand.


If and when you decide to self-distribute, set yourself specific goals or situations that would necessitate the transition from self-distributing to finding a distribution partner. It is wise to determine how much time, energy, expense, staffing, trucks, etc. you are willing to invest in advance. Once you hit this pre-determined level, you can consider continuing to self-distribute in a specific area or getting out of it altogether.

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Contributing Author

Laura Lodge                           Owner/Author, Distribution Insight

               

As the author of Distribution Insight for the Craft Brewer, Laura shares her experience with distribution on the Western Slope of Colorado for the benefit of brewers everywhere.  A veteran of the craft beer industry, she is also the Owner of Customized Craft Beer Programs, designing events, resort retail programs, and educational programs based on craft beer.

Start A Brewery: Distribution

The explosion of new craft breweries, distilleries and wineries over the past several decades has been a benefit to local economies, curious consumers, and to the craft entrepreneurs themselves. However, for every craft brand that “makes it big” (insert your meaning of “big” here), there are many other, equally hard-working craft brand owners who struggle to scale, and still, many more that simply fail. While we cannot address every solution for a craft brand’s business woes, we do want to take time in this article to focus on a few, simple rules and suggestions for working with your distributor partners.

First, for many craft beverage brands, the journey to growth begins with self-distribution. A few cases in the trunk of the car, and off you go to sell your first run/vintage/barrel of your hard-spent time and resources. This process works for a time, but soon your trunk grows too small, your responsibilities grow too numerous, and your customers and consumers are demanding larger quantities. Kudos, you have begun to scale your brand.

It is usually at this point that the idea of having a distributor begins to appear; and usually, if you have been successful growing your brand locally, distributors have noticed you and have offered their services. While we will discuss the specific strategies around distributor selection in a future article, let us assume that you have picked your distributor, you are shipping to his warehouse, and you will probably be thinking that your distribution worries have been resolved. Not so fast.  Instead of it being just you who is working with local retail and  

Start A Brewery: Distribution

Preparing for distribution is critical to maximizing a successful distribution partnership. In previous Distribution articles we covered the importance of creating a compelling identity – or brand – for your brewery. In the last issue we started working through financing the business expansion necessary for distribution, beginning with scaling up production and package design. Once you have your arms around these internal expenses, prepare to reach outside of the brewery to the new territory.


How will you get your beer to other areas? Taking the time at this point to look at transportation will allow you to speak knowledgably with your potential distributors about cost efficiency. Review trucking, and reach out beyond to possible coordination using other methods of transportation, such as railroad. Look to see if there are transportation hubs in your area, and perhaps talk to fellow local brewers to find out if there are already coordinated transportation efforts going on that you could join. 


Move your thoughts to your future initial territory. How are you going to support this area from a personnel standpoint? There are two basic ways to provide support: a new sales position based in the new territory, and assigning this coverage to an existing staff member. Either approach requires additional expenses with regard to travel, training, and time.
Both a new employee and an existing staff member with an additional territory will need time to train. A new position 

Start A Brewery: Distribution

Scott Rosenbaum, Ah So Insights

Whether you’re a potential employee or supplier, here are the qualities you should look for.


No one wants to end up with a dud. No one wants to settle for less than they believe they’re worth. This is true in business as in love. Sadly, too many employees and suppliers settle for what suffices rather than what satisfies when it comes to business relationships. The issue doesn’t stem from the lack of longing on the part of the job candidate or prospective supplier. Problems arise in the search for “the one” when we mistake our own desire to be accepted for attractiveness.


Like I’ve said before:
The best importer or distributor isn’t always the first one that wants you.


It is not just a matter of whether they like you; you must like them as well. Don’t let fear, doubt, and uncertainty rob you of your agency. This isn’t a middle school crush. Like in romance, it pays to be selective, especially if one knows what to look for. Here are some of the “hidden” qualities and important considerations that reveal more about an importer or distributor than just their charm:

(1)  Your success with that partner is independent of any one relationship. You should not be reliant on only one contact. You’ll need many cheerleaders as well as auxiliary supporters should that key contact leave the company.

Start A Brewery: Distribution

J0e Karcz & Andy Mansinne, Brand Elixir Partnership

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Establishing an effective distributor strategy is a combination of your growth strategies and the opportunities that new markets may provide your brand. It is safe to assume that in today’s competitive and crowded craft beverage sector, market expansion is vital to sustaining young brands’ growth; appointing distributors in new markets is a critical component of a growth strategy; and being able to effectively determine why and where to scale your brand will greatly impact your long-term success, in terms of both volume and value.


This brief article will look at a few of the distributor management strategies that we at Brand Elixir Partnership see as most important to consider when looking at the growth of your branded business through appointed distribution networks.


The Building Blocks of Distributor Management Strategy


There are many schools of thought on why and how to select and partner with distributors. In our combined four decades of working with distributors, we have found the following elements to be most important when determining the strategic path of one’s craft brand:

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Start A Brewery: Meet Our Contributors
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  • Create your company

  • Find your location

  • Conceptualize your brand

  • Secure/raise financing

  • Build your brewery

  • Establish vendor relationships

  • Brew beer

  • Staff as needed

  • Create financial systems

  • Establish standard operating procedures

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  • Reevaluate everything

  • Sell more beer

  • Strategically plan

  • Go back to PLAN

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