It’s the fourth quarter, your team is down by two and you’re next in the shootout. The bases are loaded with two outs and all the pressure is on you to kick a field goal. Your palms are sweaty, mom’s spaghetti, as you chip for birdie with Wilt Chamberneezy guarding the basket. Do you have what it takes when the pressure is on to not pee your pants and win the match?! SPORTS!
I roll my eyes when sports analogies inevitably are used as motivational tactics in spheres like business or religion by typecast success caricatures, but motivation is a theme in this post, so I thought I’d borrow and twist some for our purposes. My mission: help you be informed customers and become active agents of change in American craft beer in 1,500 words or less.
Lets Turn this Team Around
Many of you may have seen the documentary Beer Wars that aims to explain the challenges of small brewers. If you haven’t, Netflix that thang! It helps explain the three-tier system—where (1) breweries sell their beer to distributors (2) distributors sell the beer back to retail accounts (restaurants, bars, grocery stores, etc.) and (3) you purchase directly at retail.
Small breweries lack the distribution resources—owning trucks or staffing delivery teams—to physically get their product to the public, so distribution companies are there to play that part. Because of the three-tier system, breweries sell for a lower price, distributors sell back to accounts to get a margin off the product and then retail accounts mark it up again to make their margin.
The struggle for American craft is that distributors end up controlling much of what the public gets exposed to, and they’re often hamstrung by the wants of the world’s mega breweries and conglomerates. It’s hard to blame distributors; they’re just people trying to do their jobs and their biggest customers/clients happen to be the biggest breweries.
They Were a Whole Lot Better Than We Thought
You may think, “big deal!” but the disparity in size here is astronomical. The big guys—Bud, Miller/Coors, Modelo-Corona, Heineken-USA, Diageo and others—control over 90 percent of the beer business. These companies are not just the name brands you know, but each of those breweries is generally a conglomerate that has countless surrogate brands.
This issue has come to light recently as the Brewers Association issued “Craft vs. Crafty: A Statement from the Brewers Association,” to tell that story. As a consumer it’s important to know that the selections you see in stores are in a large way decided upon by distributors who are serving their biggest clients. It’s not fair to say distributors don’t care, since many, many have championed the cause of craft beer and have done wonders to advance the products we love. It’s just a system that doesn’t do justice to breweries and consumers. Harry Schumacher, publisher of Beer Business Daily, does a great job of further extrapolating this conundrum in his recent All About Beer article: “Change We Can Believe In.”
Things are Looking Oblique
Yes, things look bleak on the surface. Even the largest craft breweries only have around one percent of the share nationally, while small, local and regional brands are forced to fight for space in their own backyards against multi-billion dollar, global brewery groups. Most of these companies employ just a few people and spend their efforts trying to make a product they can stand behind while creating a culture representative of what they believe.
The exciting beers coming from American craft breweries often cost much more to make per-barrel in raw materials and are monitored closely by people as opposed to the machines cranking out mass produced beers at rapid-fire speed. With the system tied up as it is, what are we quality-driven Americans to do?
Defensively, I Think It’s Important for Us to Tackle
That’s where you come in. Having spent over six years in the beer industry—split between a beer distributor and a craft brewery—I’ve come to believe the consumer has the potential to be the biggest driver in this game. Whether breaking my back rotating 40oz malt liquor in a corner store guarded by a pit bull named Carlito, or discussing Belgian beers with a sommelier at Thomas Keller’s Bouchon in Las Vegas, it’s safe to say I’ve seen extremes. In all of these scenarios, the customer has the ability to knock down the first domino to set the right pieces in motion.
When a customer makes a request, retailers respond and make request to distributors. It’s hard to feel like you’re making a difference, but consumer demand chips away at this system in the same positive way it has for 30 years while craft has steadily gained traction. While craft beer as a whole makes up around only six percent of beer sold nationally, in markets with educated consumers, the numbers are much higher.
Portlandia hilariously clowns on the neo-granola-know-it-all-hipsterism of the Rose City, but craft beer has a 40 percent market share in Portland! Educated, proactive consumers in markets like this are privy to the greatest exposure to beer variety in the world. Sounds fun, huh?
If You Come to a Fork in the Road, Take It
What came first the chicken or the egg? Do great beer markets spontaneously appear for people to just show up and enjoy? Or did people work to create great scenes like we see in San Diego, Chicago, Philadelphia and Denver? Breweries, restaurateurs, store owners, journalists and more were all snowballs merging to an avalanche that taste great as it asphyxiates. Joe the Plumber and everyday beer drinkers were snowflakes in that same hoppy snow mass.
Here’s how it works. Next time you’re out at a retail establishment that sells or serves beer, get to know some folks who work there. If you’re a regular, chances are they’ll recognize you. As a customer, tell them about a few craft beers that you really enjoy and let them know you’ll buy them if they start to carry them. If they’re running a good business, they’ll go back to their management and distributors creating some demand. Smart people at distributors who want to make more money respond by changing their lineup to match the wants of their customers.
Get Off the Sidelines and Get Your Butt in the Game
While it’s easy for some people to gawk and say it’s trendy to do such things, making quality and regionally-conscious decisions as a consumer has great benefits for everyone in local and regional economies. Speaking of, it’s hard to imagine something more American than craft breweries these days.
While jobs in many industries are being exported, American craft breweries are small companies, run by folks working ridiculous hours, creating a product of love, for people to enjoy on a person-to-person interface. That may have sounded like a rant from a misguided bourgeois patriot (and craft beer can feel a bit trendy), but consider the information above before taking the normal consumer approach of sarcasm, judgment and apathy.
Craft beer isn’t close to the most important thing in life, and if anybody gets mad at your beer preference they’re probably trying to bottle their farts to sell as perfume. But it’s important to be informed as a consumer and that’s all this is really about: removing the wool from your eyes so as a consumer you can make a clear choice based on all the information.
The clock is winding down. You can feel the hairs on your neck standing up. Choices flash through your mind. A burp reminds you of the Reuben you had for lunch. The eyes of the Amurika are upon you as review the game plan. You repeat the words you’ve heard your coach say so many times before: Don’t cry over spilt milk, before all the chickens hatch, when your panties are in a wad, if you give 110 percent. The words help you make the play you’ve practiced so many times before as you stretch out your arm and buy some craft beer. Now get your butt in the game and make a difference. GO SPORTS!