25 July 2011

First in a Series: If I Owned a Brewery

[This is the first in a series of posts about how I would run my brewery. I am not a business major, nor do I play one on TV, so I could be completely full of shit.  Please feel free to comment and let me know exactly how stupid I am.]

I like the idea of a local brewery. The closest one to my house is Real Ale Brewing in Blanco, and I can find most of their package lineup in the stores around town.  I can find them on tap in a couple of places, but their special barrel ages series never makes it out here.  And that's understandable I suppose. This place isn't a hotbed of barrel age enthusiasts.

The original owner of the brewery picked Blanco as his location so he could concentrate on San Antonio and Austin as his main markets, and he worked those markets for years. Recently, Ben E. Keith Distributing Company picked up Real Ale for statewide distribution, but Real Ale still self-distributes here.

It's a good distribution model, and a historic one as well. Most Texas breweries, especially those before Prohibition, serviced the local area only. Kosmos Spoetzel, of Spoetzel Brewing Company in Shiner, had a 75 mile distribution limit. It wasn't until the 1960s that Shiner made it to Austin, and was embraced by the local counterculture. When I was at the University of Texas, that was the beer of choice, and as UT graduates have spread across the country, so has Shiner beer.

Lately, however, Shiner beer hasn't been as ubiquitous around here as it has in the past. Back in 2009, Shiner announced their Mesquite smoked beer, Smokehouse, would be released on June 1. By the time I left for NHC in Oakland on the 9th, it still hadn't made it here. I did, however, find a 10 case display in Albuquerque on the 10th. It was the last week in June before Smokehouse arrived in my town, just an hour from Austin. In otherwords, for three weeks you could not buy Shiner Smokehouse anywhere between Austin and Albuquerque!

Similarly, it is impossible to find Ranger Creek, Rahr and Sons, Austin Beerworks, (512) Brewing, Independence Brewing, Circle Brewing, Thirsty Planet Brewing, Live Oak Brewing, and Southern Star Brewing here in either bottles or kegs, but most of them have taps in San Antonio, Dallas, and Fort Worth. (Jester King Brewing does distribute here, and I just saw them in the local HEB megamarket. Ben E. Keith brings us Saint Arnold beer. Three or four of the breweries are distributed in other states.  A couple of them are only distributed in Austin, and I'm okay with that, as you'll see below.)

I saw Southern Star Buried Hatchet Stout in San Diego and Tucson, for crying out loud!

I realize that a small start up brewery can't afford to self-distribute to every small town in Texas. They have to have trucks and employees, and the state does everything it can to prevent small breweries from growing.  And even if you get a distributor, it doesn't mean that the beer will get on every shelf in the area, or even one shelf in the area.  The distributor can buy the rights to that beer and never sell a drop; just to keep anyone else from getting the rights and cutting into the sales of the light lager produced by their main Multinational licensor.

So if I owned a brewery here's what I'd do:

I would be in every mom and pop store in town.  I would be in every local chain in town.  (State and National chains almost always require a meeting at corporate headquarters to decide whether or not to carry the product.  What Texas brewery can afford to fly out to Bentonville just to try to get into Wal-Mart? Yes, you might get into the regional HQ of a large chain, but if the HQ isn't in my town, forget it!  They can come to me and beg me to sell to them.)  I'd be in every bar in town.  Once that was done, I'd move to the next town, then the next.  Depending on the location, I'd have a 70-150 mile distribution range.  You want a bottle of my GABF winning beer and you live 300 miles away?  You gonna have to come to me.  And I wouldn't cross a state line.  Who needs the expense of multiple label approvals?

Unrealistic?

Almost certainly!  That's how regional powerhouses like Lone Star and Pearl Breweries worked it, and they are both gone, sold to Pabst, a company without a brewery.  But it works wonderfully well for New Glarus Brewing Company.

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posted by Jeff Holt at 12:04

2 Comments:

Blogger Dean Brundage said...

We see a similar monoculture of beer in Bryan/College Station. The big four craft breweries are here: St Arnold, Real Ale, Southern Star and Shiner. However none of the Austin breweries distribute to Aggieland and I'm not sure why, but I suspect that the distributors have something to do with it.

Up in Waco (of all places) there is a bar that carries a solid line of Texas craft beers. The owner takes personal responsibility for bringing good beer to the town.

10:17 AM  
Blogger Jeffrey said...

My theory is that there isn't an Interstate to Aggieland. Waco is on the Interstate. And Waco is on the way to DFW. . .

10:27 AM  

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