Why America’s Brewers and Distributors are Butting Heads…
Recently I had the great opportunity to meet with the president of a large California craft brew, import beer, and beverage distribution company. I had a wonderful conversation about the difficulties for small microbrewers trying to get in a distributor catalog. The president informed me that the greatest difficulty is getting the brewer to come up with a marketing investment.
You see, in order for him to pick them up for a trial the brewer has to be willing to take on some promotion costs for initial distribution to the distributor’s existing customers. The brewer can’t expect the retailers to pick up the product when it has a higher price than products that are known to sell. The brewer must make the opportunity attractive to the retailer.
Now it seems reasonable enough but the President informed me that most microbrews just aren’t willing to take the risk and invest in themselves. Now this seems unreasonable considering the growth that many brewers would like to achieve.
What I decided to do then was discuss the different ways that would make the cost less considerable for the brewers or less risky. He and I both came to the conclusion that a Co Op of smaller brewers from a similar distribution area or with close distribution centers would be able to work together. Selling six packs of six brewer’s beer would require 1/6 of the investment cost for product. Also, the consumers would be more likely to buy a selection of microbrews. The goal is that the consumer would back asking for particular brews and the retailer would then make normal orders on individual brands. Of course, this would require a marketing investment by the brewers.
That’s the best situation the brewers are going to get though. They cannot expect to be picked up without a marketing cost. There are costs involved with any new beverage; there either must be demos or promotions to stimulate a trial, obviously. Thus, the brewers either need to make a commitment to growth or remain happy with their limited sales and slow growth of fame.
The only other way brewers make a name for their brand is through competition or media coverage from the many beer forums and blogs. The problem is that doesn’t help them reach the wide audience they would like, the ones who buy frequently but don’t personage the bevy of beer communities. So brewers need to either work more closely, give up larger investments or encourage a business to focus on the craft brew industry either on the distributor or retail level.
