Brew Pipeline, a new company focused on revenue innovation in the beer industry, is rolling out an interesting new program this spring, dubbed Guest Brewer, which aims to bring “exclusive beers” from a wide array of U.S. craft brewers to “untapped markets for limited time sales.”
Wait, what? But how?
Basically, Guest Brewer is “a national distribution footprint to pulse one or two brands of a brewery in and out of market for a short term in a narrow target of high craft retail outlets,” president of sales at Brew Pipeline, Ma1ty Ochs, tells CBD.
So far “more than 70 award-winning and highly-rated craft breweries” have shown “interest to participate in the progran1,” per company release. And nine brewers, including regional brewers like Minnesota’s Surly Brewing and California’s Drake’s Brewing, will begin to “pre-sell” a couple of its highly-regarded brands in “six states” this spring. Their goal is to reach 25 states by the end of this year.
THE THINKING BEHIND GUEST BREWER. After poring over loads of scan data and internal distributor data, the heads at Brew Pipeline – Marty, Trip Kloser COO & co-founder (a consultant mostly to A-B distribs), and CEO co founder Steven “Q” Kwapil – have determined when there’s a new brand in town. one with accolades. in particular. it slays in a new market for about nine weeks. then sales start to rapidly decline. We can concur on that.
That got the minds at Brew Pipeline thinking … ‘Why don’t we just create a national footprint where we’ll manage the logistics of getting brands in and out of those markets they’re currently not in, and take advantage of that time period.’
“That’s seemingly what consumers want, the rotation nation that’s been alive and ,•,rell for five-plus years,” Marty, a former sales chief at Ninkasi Brewing, said. Plus, “distributors have a revenue gap and both distributors and brewers don’t really have a good means of managing this.”
So the team at Brew Pipeline “figured out the SKU management logistics to get the brands in and out and to rotate them through with one brand after another.” As Marty tells it, “we look at the spot for Guest Brewers whether that’s on- or off-premise as a placeholder for whatever is coming in behind it. Even though the SKUs are rotational, the brands of Guest Brewer are a solid component in that retailer’s space.”
HOW DOES IT WORK? With Guest Brewer, Brew Pipeline acts as a “master distributor,” Marty said. “We’re no different than what Craft Brew Alliance had done previously with the brands they brought on before they bought them.”
So the breweries who want to participate sign a master distributor agreement, then Guest Brewer has a network of distributors[independents, red, blue, “there is no one network” they’re sticking with] that are technically sub-distributors since they’re assigned distribution. “Just like if we were a brewery, they have exclusive rights to that territory,” Marty said. “So we stay within the threetier system and the brewers tell us again ‘where can you play?’ Cause we can’t go into markets where they already have distribution.”
They then work with the distributors in those untapped markets and the wholesalers start spreading the word to craft cenh·ic retailers to see who wants in on the brands they can bring to market.
“We do this months in advance,” Marty said, and the retailers “can preorder those and we’ll have them assigned to those accounts, so when they show up they get delivered straight to those accounts.”
“A SLOW MOVING AMAZON,” A ROUGH SUM OF HOW IT GOES DOWN. The brewers participating in Guest Brewer aren’t sitting on inventory waiting to sell it, Ma1ty says, they’re brewing it to order.
“Part of our agreement is we only pick up product that’s packaged within 15 days of shipment, so they brew, we pick it up and deliver it straight to that distributor, we do not consolidate orders. The beer then hits the distributor’s dock, and they don’t want it sitting in inventory so it goes straight out to retail.
“So we’re a 90 day process, it’s like a ve1y slow-moving Amazon. We’re brewed to order, it’s a lean mechanism, except for it takes a long time, because beer isn’t made like a hamburger.”
The “schedule” of the participating brands, which is typically two brands in a given market, “is made for four weeks and then if the brand wants to linger around longer they can,” Matty said. “We’ll adjust if the markets want something different, but right now going off of the input we have from all the parties we’re focused on a rotational four-week period.” So two brands this month, another two brands the next month, a different pair in the following, etc.
WHAT HAPPENS AFTERWARDS? Once the Guest Brewer program is done, the participating brewers “are released back in the wild, they’re free, there’s no payment for their franchise rights, we outright release them,” Marty said. The brewer is free to go back to the distributor they worked with during the program and try to strike a partnership in that state, or they can head back to the state and team up with a new distributor, or never return to the state.
In any event, however, they likely won’t be going through the Guest Brewer program again in that state.
“Our mechanism is really just that once,” Marty said. “It might make sense to do it twice, but economically it doesn’t make sense for us to stick around in that relationship anything more than twice. Because we’re another tier. so we actually want them to go do their thing and get married to a distributor full time if that’s what best for them. We have no economic benefit from that it’s just an added value to the relationship in the program.”
IN SUMMARY … Marty concedes “it is hard to define” what they’re doing with their Guest Brewer program, “but basically we’re staying within the bounds of the three-tier system.”
“We’re using the state laws that allow us in and out and meet the requirements of that compliance, we’re handling all the logistics from registration to shipping and then we create a lot of marketing content. We have a full-time communications company, have videographers building content for these brewers, for ourselves, and even for the distributors. And a full time social media manager.”
Marty noted, however, that Guest Brewer “isn’t a mechanism to h-y new things in.” As he tells it, they’re not taking a brewery’s “newest invention” to new markets, they’re taking “established brands that have accolades and extending their reach.” Really, that’s the focus of this program, Marty said, “to extend the reach of these well established, well known brands.”
Much more to come on this new venture, stay tuned. Original Article – Craft Beer Biz Daily