By benjamin Lee
Once the independent brewers successfully craft their own unique beers, the next challenge is to get it on the market. The brewers become licensed as distributors and send out business representatives to convince retailers to carry their product. This creates a relationship between the retailers and distributors.
The Anthill Pub at the University of California, Irvine, for example, is a retailer that maintains connections with multiple distributors. According to Assistant Manager Matt Allen, “We establish good relationships with the distributors. They call once or twice a week to make sure we are doing okay with the beer. They let us know if they have any new stuff. Stuff like that.
Because independent brewing is becoming a larger industry in Southern California, more and more brewers are approaching retailers every day. According to Matt Allen, “We have sales representatives from brewing companies come in a couple times a week I would say and try to sell some of their beers. Sometimes we get their beers, sometimes we don’t.”
There are different factors that determine whether or not the retailer will accept a new distributor. Obviously taste is a leading factor. Another would be the location of the distributor; whether or not it is worth it to have kegs delivered from a far brewery is up to the retailers. According to Matt, popularity plays a huge factor. There have been cases at the Anthill Pub where a delicious craft beer appealed to the staff but was still rejected. Most customers grow accustomed to certain beers that must remain in stock which then takes up room and forces the retailers to reject any new beers. The Anthill Pub, however, tries to be open to new distributors as much as possible. “Usually we are willing to try a keg of something as a test run. If it does well, then we will continue getting it or explore more of the beers that they have. If we don’t like it or it doesn’t sell well, we are always open to selling their beer in the future.”
When the craft beer is in the retailer’s stock, it becomes their property and they have their own discretion on setting the price for their customers. At Bradley’s Fine Wines and Spirits, the most expensive for a single bottle of craft beer could be around $40 to $50. At Hi-Time Wine Cellars in Costa Mesa, California, a 6-pack of craft beer could go up to $10, $11, or $12 compared to $6 for domestic. No matter what price the retailer sets the craft beer at, it will generally be more expensive than domestic beers.
The price for the retailers to obtain the beer from the brewers is generally consistent. According to Matt Allen of the Anthill Pub and Mark Weslar, Vice President of Marketing for the Karl Strauss Brewing Company, craft beers are generally sold to retailers for $155 per keg. According to Weslar, a typical keg of domestic beer such as Coors Light can average around $50-$80. It varies with different brands. “Craft beer is more expensive for the retailer to carry," Weslar stated, "but they could also get more revenue from the consumer because it is better beer.”
In the retailer-distributor relationship, the retailer is able to succeed because they usually sell a variety of craft beers. However, from the distributor’s side of the relationship, they need to expand their business as much as they can. Although the Karl Strauss Brewing Company has grown successful over the years, they still work hard to get retailers to carry their product. “We have about 3500 outlets in California,” stated Weslar, “and only eight brewery restaurants. So 3492 of the retailers are not even our own restaurants.” The majority of their revenue comes from their chains while the generic retailers carry hundreds of other craft beers other than Karl Strauss. “So yeah, we get up every day trying to take care of the points of distribution we actually have and try to get more. We want more retailers to have our beer so consumers have access to it almost within arm’s reach. That’s the idea.”
The retailers and the distributors must maintain an efficient relationship in order to thrive. Retailers need distributors to supply them and please the demands of the customers while distributors need the retailers to sell their product and their company name. A healthy interaction between the two will result in smooth business.
The Anthill Pub at the University of California, Irvine, for example, is a retailer that maintains connections with multiple distributors. According to Assistant Manager Matt Allen, “We establish good relationships with the distributors. They call once or twice a week to make sure we are doing okay with the beer. They let us know if they have any new stuff. Stuff like that.
Because independent brewing is becoming a larger industry in Southern California, more and more brewers are approaching retailers every day. According to Matt Allen, “We have sales representatives from brewing companies come in a couple times a week I would say and try to sell some of their beers. Sometimes we get their beers, sometimes we don’t.”
There are different factors that determine whether or not the retailer will accept a new distributor. Obviously taste is a leading factor. Another would be the location of the distributor; whether or not it is worth it to have kegs delivered from a far brewery is up to the retailers. According to Matt, popularity plays a huge factor. There have been cases at the Anthill Pub where a delicious craft beer appealed to the staff but was still rejected. Most customers grow accustomed to certain beers that must remain in stock which then takes up room and forces the retailers to reject any new beers. The Anthill Pub, however, tries to be open to new distributors as much as possible. “Usually we are willing to try a keg of something as a test run. If it does well, then we will continue getting it or explore more of the beers that they have. If we don’t like it or it doesn’t sell well, we are always open to selling their beer in the future.”
When the craft beer is in the retailer’s stock, it becomes their property and they have their own discretion on setting the price for their customers. At Bradley’s Fine Wines and Spirits, the most expensive for a single bottle of craft beer could be around $40 to $50. At Hi-Time Wine Cellars in Costa Mesa, California, a 6-pack of craft beer could go up to $10, $11, or $12 compared to $6 for domestic. No matter what price the retailer sets the craft beer at, it will generally be more expensive than domestic beers.
The price for the retailers to obtain the beer from the brewers is generally consistent. According to Matt Allen of the Anthill Pub and Mark Weslar, Vice President of Marketing for the Karl Strauss Brewing Company, craft beers are generally sold to retailers for $155 per keg. According to Weslar, a typical keg of domestic beer such as Coors Light can average around $50-$80. It varies with different brands. “Craft beer is more expensive for the retailer to carry," Weslar stated, "but they could also get more revenue from the consumer because it is better beer.”
In the retailer-distributor relationship, the retailer is able to succeed because they usually sell a variety of craft beers. However, from the distributor’s side of the relationship, they need to expand their business as much as they can. Although the Karl Strauss Brewing Company has grown successful over the years, they still work hard to get retailers to carry their product. “We have about 3500 outlets in California,” stated Weslar, “and only eight brewery restaurants. So 3492 of the retailers are not even our own restaurants.” The majority of their revenue comes from their chains while the generic retailers carry hundreds of other craft beers other than Karl Strauss. “So yeah, we get up every day trying to take care of the points of distribution we actually have and try to get more. We want more retailers to have our beer so consumers have access to it almost within arm’s reach. That’s the idea.”
The retailers and the distributors must maintain an efficient relationship in order to thrive. Retailers need distributors to supply them and please the demands of the customers while distributors need the retailers to sell their product and their company name. A healthy interaction between the two will result in smooth business.