On Beer, Brewing and Distribution
 
What is old is new again.
 
Beer is old.
Now is the year 2017 and beer has been around for some 10,000 years. The modern beer business has grown more complicated than ever. Iconic breweries such as Schlitz, Anheuser-Busch, Miller, Pabst, Stroh’s, Rolling Rock, and more have been purchased, consolidated, vanished or are but shadows of their former selves. The majority of beer sold globally is dominated by the top 5 breweries. On average, global market share of the top five breweries in the top 30 beer drinking countries is 84%, with the exception of Germany (40%) and Italy (70%). In the USA, the worlds largest brewing group, Anheuser Busch Inbev (ABI), has a 45% market share but sources over 70% of it's total sales outside of the USA. The imported Mexican portfolio of beer brands, particularly the Modelo portfolio, are taking or growing share across almost all categories in the United States. ABI, a Belgian/Brazilian consortium, Molson Coors, the largest of the family brewer groups, and Heineken, another family brewing dynasty, like smaller Carlsberg and Japan's Asahi and others represent the competing business of big beer playing out on the global chessboard. 
 
The large multi-national brewers are very good at what they do. It is difficult to make good beer consistently, especially on a global scale. Unlike wine vintages, beer must taste the same each time it is brewed. Tended by the vintner, nature provides the magnificent juice of the grape for wine making. Comparatively, the brewmaster must make the juice for brewing beer. Scale that globally and one cannot help but be impressed by the skill of the largest suppliers. 
 
Decades after the end of Prohibition, just like before, saw the growth of small local and regional breweries, also known as the Craft Brewing Renaissance. It started with the purchase of a brewery in San Francisco, the Anchor brewery, by a true Renaissance man, Fritz Maytag. Another seminal moment occurred when Jack McAuliffe launched the New Albion Brewery also in California. The growth in craft beer volume and the number of breweries has continued unabated up until today, when saturation in mature markets and sku proliferation has caused a slowdown in growth.
 
Beer is Good
 
Craft brewers are risk takers, often spearheading investment in neighborhood economic revivals. Craft breweries epitomize local independence promoting variety through stylistic diversity and testing the limits of creativity and bold flavors. The emergence of craft breweries in the U.S.A. has and continues to take share from the giants but also brings unique "double-edged sword" issues such as sku proliferation and challenges inherent in small scale operations. The unqualified success of the craft beer phenomenon has recently garnered the attention of the professional investment community, private and otherwise, and has entered into uncharted territory as the giant breweries bolster their margins and seek more presence in this profitable segment of the beer industry. While on the surface this may not be a problem and indeed facilitates continued investment capital, access to markets and growth, it is estimated that ABI is now the second largest "craft brewer" in the USA via their acquired brands. ABI has made it as clear as "XYZ" that they are hell bent on being a disrupter to the craft industry. The Craft Brewers Association has recently designed and is deploying a logo to be used by it's member breweries to designate authentic craft beer. 
 
The Craft Beer renaissance pays homage to the “old world masters” while offering a “new world” bold vision of what beer can be and do. As with wine but with even more complex capabilities, beer speaks the the international language of food. As with older beer and food cultures like Belgium, the U.K, Germany and others, in the United States, beer and food have moved well beyond the standard “pub grub” and have taken a well deserved place at the tables in restaurants. Professional Chefs and talented cooks in homes across the world have discovered just how well beer pairs and cooks with food. Craft beer's success in the USA has bolstered a global craft beer renaissance that has stoked the flames of creativity opening new frontiers in the world of beer. 
Beer Distributors - Brewery Midwives
Brand Builders, Access to Market, Quality, Stability, Service, Investment
With so many moving pieces, the beer distributor, the second tier in the three-tiered US alcohol system, has been a critical partner in the success of the beer industry in the USA. This is easily demonstrated by a typical craft brewery's story. A group of passionate beer loving friends that are good at home brewing, as is evidenced by their friends demand for their beer, decide to make it a business. Armed with a great story, plenty of passion but no budget to speak of, often with no experience in the business end of the industry, and little to no initial investment in quality control, it is the distributor that is on the front lines at retail helping breweries get their stories out, get on the shelf, stay fresh and handle the varying needs of the retailers. Distributors like AlaBev have the experience to vet suppliers and brands and have earned the credibility and capability to place risk worthy beer on the shelf or tap, often next to giant multi-national brands. This is extremely powerful and advantageous for all manufactures, especially the smaller suppliers.
 
There are many reasons the Distributor is a value added partner in the 3 tier alcohol distribution system. As one retailer simply put it:
 
"I don't want to see 50 pick-up trucks jockeying for position at my back door to send me beer. I would rather see a distributor."
 
The beer distributor parlays experience and credibility with portfolio to help communicate and build the brands. If the liquid is good and the story resonates with the consumer, success is not far away. As a DSD (Direct Store Delivery) distributor, ours is the best way to ensure total market coverage of perishable products that are difficult to deliver. Value added services such as merchandising, draft system installation, educational and sales training, timely service, local relationships and vetting the winners from the others is some of what a beer distributor does. 
 
Brands are frequently sold between breweries, investors, brokers and importers. This would have an extremely disruptive effect at retail by potentially causing out of stock situations, etc., confusing the all important consumer were it not for the local beer distributor. Beer distributors provide stability in a turbulent market. 
Beer is fun. 
 
Cheers and Good Health!
AlaBev
211 Citation Court
Birmingham, AL 35209
(205) 942-9403
TheCellar@AlaBev.com