Beer Distribution: The Challenges faced by Craft Breweries

Increasing distribution channels for wholesale breweries is a rewarding venture. However, implementation and strategic planning are key to achieve success.

Craft beer has been commanding increasingly more space in Lower Mainland liquor stores, establishing its presence as a staple. The extensive variety of beers are priced at a premium due to the artisanal quality of the products, despite which, sales are consistently growing. This is in part to the increase in per capita expenditure on alcohol in 2017, which is expected to further increase in 2018. When consumers have high disposable income, demand for alcohol will ultimately increase and consumers have turned to premium, high margin goods which will directly benefit craft beer market sales to all of their distribution channels.

Many will ask which distribution channel is the most effective for craft beer, and the answer is that each channel poses a significant opportunity to push sales to the next level. Licensed alcohol retailer locations represent 43.6% of the industry’s total sales, with sales to wholesalers and restaurants commanding 27.9% and 26.6% respectively. In addition to this, the number of adults aged 20-37 (primary craft beer consumers) is projected to increase in 2018 providing a greater potential client base to experience the many types of craft beer.

The next question many will ask is: with such an extensive variety of craft beers, how does a craft brewery choose what to produce? There are many answers to this question, but it is good to produce a variety of beers to expand the product portfolio. One product we recommend each brewer produce, however, is Indian Pale Ales or IPA’s. IPA’s are synonymous with the term ‘craft beer’ and with IPA’s making up 25% of total craft beer production, any type of IPA is a great first option to start distributing.