Tuesday, January 21, 2014

Not Enough Beer To Go Around?

 So you're absolutely perplexed as to why it's so hard to get that elusive single batch or limited edition beer at your favorite bottle shop. Maybe you've even had to wait hours in line, at the crack of dawn, in the freezing cold, only to get to the front of the line and find out that store was sold out. 

 Retailer's all across the country are faced with the challenge of just how to secure these prized beers for their customers. What makes it more frustrating for them is in states like California, where it is illegal for beer distributors to "allocate" beer products, large chain retailers seem to get more than their fair share, often times completely shutting out the small guy. These larger grocery and liquor chains have ordering systems which allow them to electronically send their order directly to the distributor, thus allowing them access to everything in the distributors portfolio. And yes, that can include limited edition beers as well. But let's not get ahead of ourselves. This story isn't as simple as you may think.

 Although the Macro brewer's are the bread and butter for the distributor they have little control over where the independent craft brewer's beer goes. The Big Boy's have "Chain Account Managers." who specifically call on large grocery chains, box stores and liquor chains. Their main concern is the distribution of their "core brands" i.e. Bud, Bud Light, Miller Lite, Coors Light etc. They only influence the distribution and sale of their own craft brands such as Shock Top, Blue Moon, Red Hook, Goose Island etc.

 Larger craft breweries such as Dogfish Head, Rogue, Stone, SweetWater, Boulder Beer and such, may also have Chain Managers, but they as well only influence distribution of their own product. A lot of smaller breweries don't have chain people. For Craft Chain Managers, most of their time is spent making sure they merely have their product on the shelf or are being featured in the weekly ad. They deal directly with the buyers for the chain stores, usually focusing on distribution and placements of their flagship brands. Limited edition and single batch beers rarely are a topic of discussion at this level unless it's a key liquor chain.

Some of the supply issues can be tied to distribution practices. Some can be associated with how much of the beer is actually produced and how much the brewery releases to its distributors So, here's kinda how it works....
Craft brewers sign distribution agreements with local area distributors. These brewers require the distributor to provide the brewery with a projected number of cases of a specific beer they wish to purchase. This number is based on the number of cases the distributor believes they can sell over certain period of time. The Brand Manager for the distributor handles all these projections, for all the brewers flavors. The brewer collects all these forecasts, from each distributor, so they know "about" how much beer to produce. Brewers also hold distributors to the fire to actually purchase their forecasted quantities.

 All quantities received at the distributor are always based on what the brewery calls the "yield". This is the actual volume of beer that was generated during the brewing process. Yes it can very from batch to batch. If the yield was smaller than what the brewery anticipated then the brewery may cut the forecasted number of cases shipped to the distributor. This normally is not an issue with flagship flavors, but can be a major factor when it comes to limited ed., single batch and seasonal beers. The distributors Brand Manager is at the center of decisions made on which and how many cases are made available to retailers. Then it's the distributors sales force who actually places the order for the customer. The Brand Manager also works in conjunction with the distributors Sales Managers and, if they have, their Craft Brand Sales Managers to determine which accounts are eligible to receive the brewers limited ed. and single batch beers.

 Okay, how do you determine eligibility? Well this lies in the customers business relationship with both the distributor and brewer. If a customer is loyal to both parties, meaning they regularly carry all the brewers "focus" flavors; always has that brewery's beer on tap; has a history of purchasing a large number of cases from that brewer each year; and additional has worked with the distributor on features and promotions, then yes they will be top-of-mind to get prized beers.

 Lastly, the distributor is solely responsible for what are called "depletions". The brewery does not take back beer. If the distributor has a surplus of unsold product, they are likely to sell it to higher volume retailers who can move it quickly. 

 This may not seem like a fair system, but it's what we all have to deal with, as a result of the growing popularity of Craft Beer. Some states are not as restricted as others, making the availability of limited and single batch beers more accessible. Some smaller retailers and bottle shops have taken the position that if they can't get enough of these beers to satisfy at least a portion of their consumers, then they'd rather get nothing at all and avoid any negative backlash. 

 We'd like to hear your comments and stories on what you have gone through to get limited edition beers. Was it easy or difficult? Did you get shut out? You can use the comment box below.