Craft Brewery Success Calls for New Distribution Solutions

Meagan Douglas
Tue, Dec 15, 2015
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Craft beers need to find ways to deliver products to new consumers.

Many microbreweries are now major success stories. Craft beer companies usually begin as small businesses serving local areas, but national consumer demand for artisan products increased in recent years. In 2014, craft beer saw a 17.6 percent growth in sales volume, according to the Brewers Association. Craft beer sold for export realized a 36 percent increase.

As craft breweries succeed they often expand into new territories. Growth means the businesses have to find new methods of distribution. Prioritizing supply chain management helps craft beer companies keep up with competition and profit from trends and innovations.

Craft Beer Distribution Obstacles
As more consumers turn to smaller beer companies to provide craft products, major corporations could lose out on sales. The New York Times shared numbers from Brewers Association surveys that demonstrated artisan breweries' massive success. Craft beers represented 2.4 percent of all beer sales in the U.S. in 2004. Ten years later, craft products make up 11 percent of the market.

Recent actions taken by major beer corporations may indicate their desire to limit the availability of craft products and cut off future competition. Fortune magazine reported two of the most successful beer producers in the global market, SABMiller and Anheuser-Busch InBev, recently partnered. The new conglomerate will sell one-third of total worldwide beer products and control 70 percent of the beer market in the U.S.

Not only does the new partnership control a vast amount of the merchandise available to consumers, but the conglomerate's interest in buying distributors prevents smaller companies from supplying certain territories. Local Minnesota news source MinnPost said craft breweries and certain state legislatures predict the actions of SABMiller and Anheuser-Busch InBev may raise antitrust concerns.

As smaller beer companies wait to hear if government officials will prevent major corporations from interfering with craft distribution, local breweries have to address other concerns when expanding into new regions. Some small companies can't afford the high shipping costs of moving products cross country. Other issues stem from a lack of familiarity with tax codes and competitors in certain areas.

New Distribution Strategies
Some breweries overcome distribution obstacles by partnering with other companies. Many organizations have exchanges in place so they recommend each other's products. Local festivals allow breweries from all around the country to introduce their products to new audiences. Entrepreneur said the sense of community among smaller brewers helps craft beer stay competitive against larger corporations.

Supply chain management needs tools to leverage the information provided by partners or local contacts when an organization plans expansion. If a beer producer uses automated data collection solutions to oversee current operations it can make plans based on available resources. A flexible system allows companies to integrate information about new markets into projections.

Growing companies need automated data collection systems that can centralize information from current warehouse management, delivery routines, state tax codes, consumer feedback and business plans. The RFgen white paper "8 Signs You Need an Automated Data Collection Solution" said an increase in consumers, products or territories will always demand an increase in business resources. Companies should invest in automated data collection devices that are convenient and fast enough to keep up with success.

Using efficient automated data collection routines provides instant results. As soon as craft beer companies start servicing new territories, consistent reports of activities demonstrate success or need for different strategies. Beverage Daily, a beverage product blog, said some craft breweries try innovative new ideas to get their recipes to consumers. Some companies partner with home brewing equipment businesses so customers can make the beverage themselves. The craft beer company just has to distribute the ingredients.

Complete organization visibility provided by flexible data collection solutions allows a company to try new markets, distribution paths and products. Innovation and expansion is less risky when companies know instantly what works and what doesn't.

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