The name Bevana has popped up in several brewery partnership announcements over the last couple of years. The Newton, North Carolina-based company has partnered mostly with companies in the southeastern U.S., recently striking a sales and distribution agreement with Atlanta’s Orpheus Brewing to keep the brand alive at retail as founder Jason Pellett winds down the production brewery and taproom later this month.
Deciphering what Bevana does isn’t easy. Aaron Gore, Bevana senior director of business development, admitted that the platform has been “willfully vague” in the past about its services because “we’re the only people in the beverage industry, to my knowledge, doing anything like this.”
Gore has heard Bevana described as a contract brewer, a distributor and an acquisition company.
“Really, it’s none of the above, and in some ways, very similar to all of the above,” he explained.
The truth is Bevana works with two types of clients:
- Full-service partnerships, with Bevana taking over management of sales and distribution relationships while shifting the scalable brands to its network of co-packers.
- Affiliate partnerships, in which Bevana builds its clients’ e-commerce sales platforms for sales in 42 states and Washington, D.C. The set up is “in full compliance,” Gore added.
In either scenario, Bevana does not take an ownership stake in any of the businesses it works with.
How The Full-Service Partnerships Work
The bulk of Bevana’s business – around 95% – is its full-service partnerships, Gore said. He explained that those clients typically are struggling with one of three constraints:
- Capacity – unable to brew enough to meet demand;
- Capital – not enough money to invest in making more product or expanding reach;
- An inability to manage wholesalers and distribution.
For full-service partners, Bevana pays “for everything, start to finish,” taking on “all the financial” and “inventory risks,” Gore said. In exchange, the partner brands enter a revenue sharing model in which the brands make a percentage of sales.
“Basically we’re consolidating everything along the supply chain, paying for every ounce of it [and it] doesn’t cost our partners a dime,” he said. “We pay to produce it, warehouse everything centrally, we run our own freight. We’ve got everything, from tractor trailers, down to box trucks, down to runner vans, and everything in between.”
The arrangement frees its brewery partners to focus on innovation and marketing, Gore said.
“We are big believers that innovation is going to come from this diffuse network of small manufacturers,” he said. “They’ll come up with the next hazy IPA, they’ll come up with the next fruited sour. You just got to give them the space to work.”
Bevana also arranges production for scaled brands, with a network of co-packers, many of whom are “legacy” breweries with excess capacity to fill. Bevana buys up the excess brewing capacity for its multiple partner brands.
This is all part of Bevana’s “asset-light” model, Gore explained, noting that 40% of the brewing capacity in the U.S. is “completely slack at any given time.”
Much of Bevana’s distribution footprint was built from the network built by D9 Brewing Company in the southeastern U.S. Bevana’s footprint has grown north to New York City and all the way south to Florida and west to Louisiana. The more partners Bevana gains in a geography, the more influence it gains with its wholesaler and retailers.
“We start small, we start with local heroes and then we go ahead and start moving in the more successful brands from out of market and really start building from there,” Gore said.
The partners Bevana has found the most success with so far have pre-developed distribution but it’s become “a costly distraction” for those breweries, and those looking to invest in more profitable areas of the business, such as setting up taprooms.
“[Taprooms are] very expensive to get going, but it’s no secret to anybody in the industry that they’re also your biggest margin capture once they are running,” Gore said. “So if we can help these companies redirect the funds they would otherwise be spending on cost of sales, that usually winds up being the area where we provide the most utility.
“It’s not so much about us rocketing them to the moon like a Firestone Walker or a Sierra Nevada; we’re past that era of the industry,” he continued. “But if we can show them solid incremental growth, and redirect their dollars toward the ventures that are the most directly profitable for them, that winds up being the best-of-both-worlds thing where the distro pushes people to the taproom and the taproom pushes people to distro.”
Bevana can comfortably manage around 45 partners under its existing model, Gore said. By the end of 2023, he expects the company will be partnered with 30 full-service partners.
As the company expands westward, he believes they can take on more than 160 brands across the beverage spectrum. He added that the company can take on a pretty unlimited number of affiliate partners for e-commerce sales. Currently, there are four affiliates: Hi-Wire Brewing, Heist Brewing, Wise Man Brewing and Incendiary Brewing.
Bevana’s full-service partners include Bay Cannon Beer Company, Big Boss Brewing, Champion Brewing, Crafted, D9 Brewing, Native Ceuticals, New Sarum Brewing, Orpheus, Pursuit Ales, Reason Beer, Side Hustle Brews & Spirits, Tranquilo, The Unknown Brewing Company, and UpDog Kombucha.