three tier poll!

[v2comp]

I know this probably exists somewhere already, but I couldnt find it and had a question that I would like to pose.
I read somewhere not long ago that one of the primary reasons that craft breweries thrive out west is directly related to their having eliminated the three tier system of distribution in favor of self distribution.


if a state eliminates the three tier system of distribution in favor of self distribution, will the change have a positive impact on the number of breweries and beer related industries in the state?

[pghcraftbeer]

In Pennsylvania you have the option to either self distribute or go with a wholesaler.

[South County]

Yeah here in PA you can self-distro, however its a pretty competitive market and most breweries utilize them. There quite a few breweries here as well. The problem is that distribution is a business within itself. Granted your giving up control but your also not incurring the cost, the distros out here do a good job overall and continue to improve.

[viking]

if a state eliminates the three tier system of distribution in favor of self distribution, will the change have a positive impact on the number of breweries and beer related industries in the state?

Wi is not 3teir but the disty are pushing very, very hard to make it so. MN is strict 3tier.

The answer to this questions is a resounding "maybe"

On the one hand, small breweries NEED the ability to go it alone because there are plenty of distributors out there that are worse than useless; they are evil. There are many good ones too. If you are restricted to having one, then, in general any given area only has three. You get restricted and suppressed simply because there is no way a small brewery can command the attention of the sales force who is looking at 200 other beers to sell too.

OTOH (and this is the tricky bit) if you have NO restrictions on this, neither does Miller-Coors or AB or any of the other first or second tier breweries. This means that places like Costco and Wallyworld will buy directly from the brewery instead of a distributor. These big brands are the ones that actually allow the trucks on the road and the disty makes money on the craft. If Wallyworld takes out the big stuff (they will be selling beer for less than anyone else can buy it for wholesale), the distributors then couldn't afford to run trucks (at least up here in less populated land). The mom and pop store would go under because they, too, have a baseline that comes form the big brands and you would see beer essentially sold only in Wallyworld or Costco who doesn't give a rats ass about you and I.

So the answer to this question is a love hate relationship. The only way out of it is a partial 3teir setup where small breweries can do their own thing and larger ones have to move through the system.

That or state liquor stores that have to carry everything.

[burcher]

Virginia is 3 tier and we suffer for it due to our small size and rural locale. The existing distributors don't really know much about draft beer much less craft beer. They have little incentive to deal with us due to our small size (100 bbl/year rate year 1, shooting for 500 year 2). As we grow this will likely change, but growth would be much easier at this size if we could self distribute. For me, I prefer using a distributor if the service is adequate i.e., efforts are made to keep beer cold and kegs are delivered to accounts when needed.

[william.heinric]

Dist

Iowa is a three tier for out of state brewers and importers, optional self-distro for native. The basic moral of the story is that self is a great way to get started in this state, and then the distributors will grab you before you have to show that you are a long-term success. Think "indie-rock" scene. Grab 'em before somebody else does and what not. It kicks ass for the brewers, but up to this point the distributors have been burned by crappy micros.

The houses are still snatching up breweries, though...

Cheers,
Bill

Just a post-script: Please no more state-run liquor anything. We just got rid of that for beer, and the thought of going back to it makes me sick.
WORST...DISTRO...EVER.

[Brewtopian]

Not sure what your source means by Western brewers prospering due to lack of the 3 tier system. Yes brewers in the West can self distribute so long as they don't surpass a set volume limit but most of the breweries in the NW that have any distribution outside of their immediate metro areas have signed with a distributor. The cost associated with self distribution are just to great not to rely on an established distributor.

I'm a resident of a NW state that has the weakest craft beer scene in the region. The reason I believe for our weakness and the strength of neighboring UT, MT, OR and WA is not distribution but is our lack of a strong and vocal brewers guild and the lack of enough independent markets ie. C stores and supermarkets to stock package craft beer. Idaho does not have a brewers guild so each of our brewers treats the others as competitors and enemies and our market is dominated by 1 or 2 national chain stores that don't understand craft beer. This has limited our craft beer growth substantially.

On the other hand you look at OR or MT both of which have similar populations and demographics to ID yet both have vibrant thriving craft beer scenes. The difference is both have strong and active brewers guilds and both have large independent markets. The result is you can walk into a C store in the middle of nowhere and buy a sixer of great regional craft beer where in ID you can only get Bud/Miller-Coors or maybe Fat Tire.

[SRB]

.....
Idaho does not have a brewers guild so each of our brewers treats the others as competitors and enemies......

Brewtopian you are in contact with all of Idahos breweries so I know you may very well be privy to information that I am not. (see guild comments below ) I wont/cannot speak for the other Idaho brewers but just to be clear Salmon River Brewery does not consider our other Idaho brewers our enemies. I do know that the Boise brewerys have had pouring events when each brewer pours their beers at their contemporary's establishment.
I think you do make a good point about guilds. I look forward to the day that we have a guild in this state. A formal forum to discuss how we can work together would be a solid move. However I am unsure why the formation of one would eliminate competition. I believe Idaho brewers can have healthy and productive competition that in many ways can increase collectively our very limited wealth. I guess this is where I say I am too busy to head the push for an Idaho guild up. FYI Brewtopian I have Cherry Christmas Ale and Buzz Buzz Coffee Porter ready when you are! Ill call you.

I only have the experience of a startup brew pub that exists in a state that allows self distribution. But from what I have experienced our ability to do that has been indispensable. Our 3 to 5 year model was and is brewpub (7bbl) with ideas to expand to light distribution with a moderate facility expansion.(15bbl). We currently barely break even when we sell our kegs to outside accounts. Essentially it has been a business card for accounts and folks who try our brew. To pay dist. companies 28 to 30% to distribute our beers would have cost us money and more than our little brewery could support. Plus with a pub we have all of the costs and headaches/time associated there. Fortunately with our 2 year anniversary upon us we have caged the wild animal that is our restaurant, getting a hold of our out a whack costs and we are mostly done with the major reinvestment of meager profits we put back into the pub instead of the brewery.

As has been mentioned I ask , would these dist. companies deliver the passion and energy that we do when selling our own beer? Unlikely. We were able to get out there and deliver our passion and smiling faces with the beer. Critical.
Interestingly, If we are able to pull off our expansion we will very likely use one of the dist. co. Because as we know it truly is a different business model. With all of the associated start up costs and overhead. We will be able to focus on pouring beer at retailers joints, beer dinners, outside events and other marketing stuff instead of rolling kegs, cleaning lines and tracking invoices. And they will have sales folks out there working for us. And we can piggy back and make sure that the story and passion are included even if we have to do it ourselves from time to time. I must say it sure felt good when our very small 15 account draft network caught the eyes of the distributors having them call on us and not the other way around.

Abolish 3 tier.

[Laughing Dog]

OK Idaho Brewers
I will be in Boise the 16-19 of Feb if you are all really interested in a Guild come Meet me in Boise I know we all dont have time but if we work together we can do this
I am doing marketing in Boise this trip so my days can be free lets put a plan together

Fred
Laughing Dog Brewing

[Brewtopian]

I propose we have a Idaho Brewers summit at my place while Fred's in town. i will reach out to all the brewers here in town as well as the guys in McCall to see if we can arrange this. Fred, is there a day that's better than another while you're here?