The local nature of craft beer has always been one of its most appealing features. Indeed, in the earliest days of the American craft beer movement, all craft beer was local by definition, as pioneering entrepreneurs opened small companies to produce an alternative to the national brands.
Three decades later, a few successful, long-established craft brewers have achieved national scale with their beers. But the bulk of craft brewers have remained relatively small and, consequently, local in their distribution. And, because these businesses have to start small, the newest brewing companies are also local in character.
According to the Brewers Association, the highest rate of growth in the craft beer category is among the microbreweries—companies producing fewer than 15,000 barrels annually. And although their volume on a national scale may be negligible, a local brewer can occupy a very visible position in their home market.
The interest in all things local is such that the retailer’s challenge is not how to fuel the enthusiasm, but how to keep up with and capitalize on it.
Jack Bondon, vice president of Berbiglia Wine and Spirits, oversees nine stores in the greater Kansas City, MO, area. He draws a contrast between new launches from major brewing companies and those from local players. “When larger breweries—InBev or MillerCoors—try something new, they invest in it, they advertise, they push the beer into the market. Whereas, when the local breweries do it, it’s like the beer is pulled into the market by the consumers.”
The attraction, as he sees it, is one part home team loyalty and one part love of novelty—local brewers being the inevitable source of more experimental brews that either are produced in very small volumes or, frankly, fail before they reach a larger market.
“We try to stay up with the local breweries, to figure out the next thing that they’re going to bring to the market,” Bondon explains. “It’s a challenge as a retailer to stay on top of that. But if you fall behind and you’re not carrying the next new thing, the beers become passé and you’re missing sales.”
Building a Close Relationship
What is the best way for retailers to take advantage of the “pull” exerted by local beers? Successful retailers build relationships with breweries that translate into better experiences for customers.
Where the laws allow, in-store tastings are a powerful draw for beer enthusiasts. At Cellar 70, the upscale beverage department in each one of Wisconsin’s Trig’s food stores, the tasting bar is a destination for shoppers. Jeff Tewes, the Cellar 70 manager, often features local breweries at the six outlets. Ale Asylum from Madison was a recent guest brewery. “We had all their varieties with nice point-of-sale explaining them all, and tasting at the bar, and we sold well over 100 cases in a matter of a few weeks,” he says. “We’ve got a reputation as a place you can come and sample.”
Building connections to both brewers and the community, Peco’s Liquor Store in Wilmington, DE, hosts the Great Pumpkin Debate in a nearby state park. The annual event, which benefits a local charity, features hayrides, a bonfire and a competition to crown the year’s best pumpkin beer.
Ed Mulvihill, the great-great grandson of Peco’s founders and the store’s resident craft beer expert, says, “We couldn’t do that without the brewers, because they’re donating product, they’re donating time to come down and cheer on their own beer, and that’s invaluable to us.” And, he adds, “It’s not exclusively local, but local breweries have won every single Great Pumpkin Debate we’ve held.”
In Portland, OR, brewers looking for a venue to launch a new beer often contact Lisa Morrison, the co-owner of renowned bottle shop Belmont Station. “In November, we were lucky enough to have Pelican Brewing choose us as their release place for their Mother of all Storms Barleywine,” Morrison says. Pelican typically hosts their so-called “Mother’s Day,” which draws crowds to their coastal brewery for the beer’s release. “They decided to have their release here in Portland even before their Mother’s Day event,” Morrison says. Pelican presented several vintages of the beer, special glassware and other giveaways.
Participating in the Process
Ed Mulvihill has taken the concept of partnership with a brewery to another level, actually helping to brew a beer with Mispillion River Brewing Company, a year-old brewery in Milford. “We’ve kind of helped them build the brand together,” he says. “They started with draft only, and we were one of their first growler accounts. So we were able to focus on them, and promote their products, and get a little exposure for them up north of their territory.”
Last Thanksgiving, Mulvihill helped brew a one-off seasonal on the brewery’s pilot system, and “it came out awesome.” Of the six sixtels brewed, the brewery kept one and Peco’s took five, selling out by Christmas.
The dividend for these partnerships can be special access to rare beers when breweries feel retailers are supporting their interests. Central Waters Brewing Company in Amherst, WI, releases a very popular bourbon barrel beer once a year. “I usually get about half their production and the rest of the state gets the other half,” says Cellar 70’s Tewes. “When everyone else is sold out of their couple of cases, I’m sitting here with 150 cases. That goes back to the relationship with the owners of the brewery. They know I can sell their product; they know I want it here.”
How Much is Too Much?
Asked how much space should be devoted to local beer, retailers split between “as much as you can” and “locals that carry their weight receive shelf space.”
Lisa Morrison faces the challenge of exactly what qualifies as “local” beer in Portland, when the city has more breweries—58, with 84 in the Portland metro area—than many states. Belmont Station sets aside space on the shelves and in coolers for Oregon beer, both cans and bottles, and is happy to give locals an opportunity. But it’s simply not possible to promote them all.
“We love to be an incubator for the little baby breweries,” she laughs. “There are some who have really taken off and people love them. With some, it’s ‘You’ve got a lot of promise, but come back and see us when you’ve got things dialed in a little better.’”
Living in a state with far fewer breweries (even though one is craft beer heavyweight Dogfish Head), Mulvihill makes it a point of pride to be comprehensive: “We represent every brewery in Delaware—granted, there are only nine—and we have almost every SKU from every brewery in the state. The more you stock, the more people buy; they’re really into that local aspect.”
On the shelves at Cellar 70, Jeff Tewes organizes all the beers by state. Wisconsin breweries are displayed together, with the two biggest state craft breweries given a separate door each, because “it makes it easy when I run Wisconsin beer sales”—another important element of his local beer program. Tewes has been especially successful since 2011 in using targeted sales and print ads to promote craft beer from all sources, achieving craft sales dollars distribution of over 35%. With Wisconsin-only breweries like New Glarus on Cellar 70’s shelves, a large part of that figure depends on the appeal of local.
Bottled or Poured?
Where they are permitted, growler stations are an increasingly popular feature for top beer retailers. Philosophies differ on how to allocate scarce taps, but local breweries have the edge, since some smaller companies may initially package their beer, or their specialty beers, on draft only. This is the case for three of Delaware’s breweries, ample motivation for Mulvihill to allocate some of his 16 taps to locals. “That’s what people respond to. And for us, saying ‘Hey, you can only get this on draft’—that’s the biggest selling point for the growler bar.”
The building that houses Belmont Station is divided into two: half bottle shop and half beer café. Patrons can buy a draft beer, then shop, or select a single bottle from any of the 1,300 brands in the bottle shop and have it opened to drink in the beer café.
Morrison balances her support of local breweries with the shop’s commitment to beer education, which sometimes means casting as wide of a net as possible when it comes to beer origins. Recently, ten of Belmont’s 23 taps were devoted to local beer, although not all make the growler menu. “We don’t do every single beer in growlers,” Morrison explains, “because some of them are so rare and we want as many people as possible to enjoy them.”
The love of local has inspired some passionate debates among beer geeks. The first issue concerns beer quality. Reluctantly, beer fans agree that local beer does not mean good beer. In fact, beer selections from the local side of the drinks menu are pretty much guaranteed to include more badly-brewed and off-flavored beers than would be found among beers that have survived the step to wider distribution.
However, as every retailer was eager to emphasize, the local category also includes the freshest and most innovative not-yet-discovered beers—and it’s the category that most galvanizes beer lovers. Retailers take a risk boosting local beer, while also being mindful of quality concerns.
The second issue involves that love of the local and obscure. Beer enthusiasts are the most faithful supporters of the newest, scrappiest brewery in their respective communities: without their zeal, most of these new businesses would never get off the ground.
At the same time, there are few beers more prized than a rare beer from someone else’s local brewery, and the pressure is on retailers to deliver beers that are exclusive, remote in origin and easily available—an impossibility. In their support for local breweries, retailers must remember that, as Jeff Tewes puts it, “Every brewery is local somewhere.”
Julie Johnson has been writing about craft beer and the beer business for 20 years.