https://www.brewbound.com/news/brewery-taprooms-thrive-industry-stakeholders-voice-concerns
Some interesting trends there. I’ve been noticing that restaurants are prioritizing local craft beer over national brands. They’ll have Bud light, Miller Lite, and 1-2 local craft beers. Or a Blue Moon or Shock Top. I think the big craft breweries will just have to contend with much lower growth than they’re probably used to.
The three tier system was created to benefit consumers, but in my opinion it is only benefitting the distributors at this point. We are having similar pushback from distributor lobby in Maryland that has resulted in mystery bills being sponsored for rolling back taproom hours.
http://www.baltimoresun.com/news/maryland/politics/bs-md-beer-bills-debate-20180221-story.html
Earlier this year, Applebees around here did an exclusive pouring rights deal with a local brewery for one of their beers – a blood orange IPA, just the sort of thing the big crafts and “crafty” arms of BMC are heavily oriented towards these days. Local wins on at least one tap.
https://ohio.com/akron/news/local/akrons-thirsty-dog-strikes-deal-with-applebees-locations-in-neo
Distributors could add value if breweries weren’t required to use one and if breweries weren’t contractually locked in sole source agreements (a by product of being small not law.)
Lots of industries use a distributor model because the sales and marketing function can be more efficient that way. Many smaller breweries want to work with another company with existing relationships with retailers and with the infrastructure to deliver the beer to those retailers.
The 3-tier system, as setup, limits competition and can strangle some breweries. That’s the real problem.
Give the brewery the option to distribute on their own, if they want to, and stop distributors from forcing long term sole source contracts. Then the distributors will have to work (compete) to keep the business.
PS. Not preaching at you. Just clarifying that distributors don’t have to completely go away.
PPS. I hate changing laws to stop competition. A bill limiting tap room hours is BS.
^^^^^
The 3 tier system was, in my understanding, initially a response to problems with breweries owning taverns, an issue the Brits have only started to address this century. Here in town, pre-Prohibition, there were several breweries, 2 really big, which owned a lot of taverns. Independent tavern owners couldn’t compete on costs, and so banded together to start their own joint brewery, the only solution to hand. After prohibition and the institution of the modern system severing brewing and retailing, the companies now forced to choose between brewing and property ownership ultimately opted for the latter. Same thing happened in Britain to a large degree. The distributor was presumed to be a necessary equalizer between (big) brewer and (little) tavern owner. But both brewers and retailers exist on a wide variety of scales now. A system designed to protect the little guy (suspend cynicism and just stipulate this this for now) no longer clearly does so. It is not obvious at all that 3 tiers are better for anyone, including the consumer, than 2 tiers, as Tommy suggests. But I can see that some small as well as large brewers might prefer not to have to go door knocking on their own. I’m with Tommy, choice is what’s needed. If distributors provided a sought-after service, rather than receiving what amounts to a privateer’s letters of marque, everybody could do well.
3 tier is another one of those ideas that was so great it had to be mandatory.
I’ve read the three tier system was left to the states upon the repeal of Prohibition and varies widely. Some states own the whole system, some own parts, others have a pure commercial system, and in Washington the three tier system is not even mandatory though they basically still use it regardless of not being required to.
This is just my town but, local distribution is big here. You can go to almost any restaurant and or chain and get one breweries IPA. Some restaurants don’t even have domestic beer here, well, because, they want you to experience the best of Flagstaff. Our breweries beer is everywhere in town and when people come up from Phoenix they are like, we love your beer but it’s hard to find in the valley. Some of our breweries are also like, why distribute at all when we make more money selling beer in town. They sell beer and it’s more of a you want it come and get it, you’ll never find it anywhere else.
This model supports localism and our economy. We keep a big portion of local money in town, and we bring in a big chuck of outside cash into our flow of business.
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Totally.agree. Distributors do add value, but in many cases it seems their lobbying power has grown way too large.
This is the model I like. Makes 3-tier laws meaningless, yields better beer (distributor/distribution don’t take care of beer like the brewer does), and supports local.
You like, come and get it!