State brewers share challenges
faced in out-of-state distribution
Oklahoma beer brewers share the challenges they face when selling beer outside state lines.
Tim Schoelen, president of Mustang Brewing Co.
On choosing where to sell:
“We try to be strategic on where and with whom we choose to partner. It's not as simple as just getting a distributor to buy your product. Before you can distribute in another state, you must register with their respective alcohol tax/trade bureau. That can take anywhere from a couple of months to a year. Of course, there is a registration fee. There are also taxes associated with each state. You have to make sure you know the states' distribution laws.”
On developing a strategy:
“Once you can legally sell to a distributor, you then need a go-to-market strategy. How much will freight cost to get your beer to the distributor? Which beers are right for the market? Who are the local and regional competitors? How do you incentivize the distributor to sell your product over others? Every promotional event costs something; whether it be free pint glasses, coasters, posters or travel costs to/from the location. All of that adds up. You can grow yourself out of business pretty quickly if you're not careful.”
Wes Alexander, director of sales and marketing at Marshall Brewing Co.
On picking the right partners:
“We seek wholesalers that recognize and understand the craft beer market and its potential for growth. Further, we seek wholesalers that have the time and capability to grow a brand organically. Craft beer is not sold through billboards, Super Bowl commercials or traditional marketing methods; it takes a more honest approach of hard work and building relationships. ... You would not expect to walk into a new market, put beer on draft or in a package store and expect the consumer to seek it out. The consumer must be educated and informed of the brand to pull through sales.”
On logistics challenges:
“Each market is different in terms of challenges and advantages. Firstly, shipping is expensive. We have had to learn to maximize shipping costs for volume. Starting in a new market, obviously shipments are not large or regular. Other costs include travel and licensing fees. All in all, out-of-state markets are not as profitable. However, the growth in sales and production help spread operational costs and allow us to take advantage of purchasing economies of scale.”
Zach Prichard, president of Choc Beer Co.
On producing enough beer to meet demand:
“Of course it complicates logistics and requires increased production. Those are all fun challenges to solve, though. We are always thinking about being able to supply all our distribution partners. In many ways it has caused us to be cautious. We hope to avoid having to pull out of markets due to inability to fill orders.”