Need another example of just how crowded the craft landscape has become, and how brewery entrepreneurs are trying to creatively navigate through a consolidating middle tier?
Over the last 18 months, Shmaltz Brewing Company — a Jewish-themed brand sold via 40 wholesalers in 35 states — has quietly been reworking its distribution network in more than a half-dozen markets across the U.S.
The company’s most recent transition, in Massachusetts, saw Shmaltz distribution rights sold by Atlantic Importing to Horizon Beverage, which is part of the Revolution Beverage Group network of family-owned distributorships.
Shmaltz has made a number of similar moves in places like Arizona (from Crescent Crown to Arizona Beer & Cider), Florida (from Brown Distributing to Cavalier Distributing), Missouri (from Major Brands to Artisans Cellar Distributing), Georgia (now with Liberator Distributing), Louisiana (from Crescent Crown to International Wine & Spirits, Inc.) and New York City (from Manhattan Beer to Sarene Craft Beer Distributors) in recent months, founder Jeremy Cowan told Brewbound.
Those changes are being made, in part, to achieve greater mindshare from distributors, Cowan said.
“The beer world has changed so much, so quickly, and wholesalers are changing less quickly than the market is changing,” he said. “So it makes it hard for us to compete if we’re not the right fit for a wholesaler. It is hard to stay relevant and vibrant within their own sales force.”
In markets such as Louisiana, Arizona and Missouri, Cowan said he wanted to move the brand away from larger wholesale operations who weren’t as focused on selling a niche product like Shmaltz.
“I want to sell more beer,” he said. “That’s it. It’s very simple.”
In other markets, like Massachusetts and Florida, the goal was simply to work with a different partner, Cowan said.
“For us, it’s not a one-size-fits-all universe,” he said. “In most markets, we’re sticking with the guys who got us here over the past 20 years. We’re just trying to grow our brand in an incredibly saturated craft-beer market.
“Nobody wants to sit around in relationships that aren’t working,” he added.
In some cases, in order to break out of his previous distribution contracts, the new wholesaler has been required to purchase the Shmaltz distribution rights for fair market value. In other cases, Cowan said he’s been able to convince wholesalers to let him go for no cost by explaining how their own businesses would benefit from a switch.
“I’m giving back warehouse space for other brands and freeing up their sales people,” he said.
And across the board, Cowan said the changes he’s made have had a positive impact on sales. He noted moves in New York — which now accounts for 50 percent of total sales — and Georgia, as areas where sales have accelerated since switching wholesalers.