Nearly seven months after its launch, Brew Pipeline’s Guest Brewer program has expanded into 34 states, exceeding its initial goal of attaining distribution of reaching half the country before the year’s end.
Guest Brewer, one of six offerings from “direct-access platform” Brew Pipeline, pairs select craft brewers’ products with wholesalers in markets where they currently are not distributed.
“We open up reach to these built brands outside of their home markets for very short pulses,” Brew Pipeline president of sales Marty Ochs said speaking to Brewbound. “For retailers, they get a chance to offer their customers something they generally don’t have access to.”
Brew Pipeline was founded earlier this year by Trip Kloser and Steven Kwapil, who tapped Ochs to lead sales. Before starting a craft beer consulting business in 2013, Ochs has had sales leadership roles at Ninkasi and Oskar Blues.
Each month, Ochs curates a list of beers for the 47 distributors participating in the program to order. Distributors collect orders from their accounts during a month-long pre-sell period. Participating brewers then brew what’s ordered.
“We are not pulling from inventory; this is the freshest possible beer,” Ochs said. “We go from the brewer’s dock directly to the distributor’s dock.”
In addition to ensuring freshness, collecting pre-orders has the additional benefit of nearly guaranteeing the product will sell through, Ochs said.
“There’s not a retailer out there that’s like ‘Hey, I’ve got a 50 case stack of Surly,’” he said. “We’re trying to keep it as low as possible, so it’s gone, so there’s that kind of hype and so the brand doesn’t look like it gets stale on shelves.”
Brew Pipeline acts as a master distributor and only collaborates with wholesalers whose territories include their entire state or who have alliances with other distributors that cover all markets in the state. What ensues is a risk-free trial month for both brewers and wholesalers. Four months after the beer ships, its rights are released and returned to its brewer.
“Everybody does rotational brands; we do it on a national scale. That makes us bigger, but not unique,” Ochs said. “What’s unique is we’re flat out releasing these brands and giving these rights back to the brewery.”
So far, 30 brewers have used the program to get 77 brands into markets they do not reach regularly. For Minneapolis-based Surly Brewing, participating in Guest Brewer has amounted to 1,250 barrels sold and nearly $500,000 in revenue, vice president of sales Bob Repp told Brewbound.
“For regional breweries like ourselves, it’s getting harder and harder to find growth out there right now. The craft industry is kind of flattening out around 3% or 4% growth,” Repp said. “It’s the self distributed brands, the brewpubs and the own-premise — that’s what’s driving that 4%, where regional and national breweries are really, really scrapping hard to stay flat. This has been a good shot in the arm for us to the bottom line.”
Surly is currently available in 11 states, mostly in the Midwest, and has used Guest Brewer to explore coastal markets including New York, New Jersey, Massachusetts, Delawre, Rhode Island, Maine, New Hampshire, Connecticut, Washington, Oregon, and northern California. For its Guest Brewer stints, Surly has offered up two of its best-known IPAs, Furious and Todd the Axe Man.
“It gives me an opportunity to see how our brand can perform in markets that we’re currently not in, so that we can make an educated decision on whether it’s going to be a good long-term move or something that was a short-term drop,” Repp said.
After several successful Guest Brewer rotations in Massachusetts with Atlantic Beverage Distributors, Repp said his company is considering entering the Bay State in 2020 or 2021.
Surly’s beers have also sold well in Pennsylvania, where Galli Beer Corporation in Pittsburgh has been participating in Guest Brewer since May.
“We’ve had some really big brands, such as Surly, that people then go pretty crazy for, then we’ve got some brands that aren’t really well known that people are a little more hesitant on,” Galli chain account manager Chad Kordes said speaking to Brewbound. “Our bigger accounts are jumping on board because it’s something new. It just feeds into ‘Rotation Nation.’”
Distributors face a minimum of one pallet per order for packaged beer or two pallets for stacked kegs, which Kordes said sometimes exceeds the pre-sell orders his team collects.
“There have been instances where we have to work a little harder and actually go out and sell it rather than just pre-sell it,” Kordes said.
Still, the program has been an overall boon for Galli, whose portfolio includes Pabst as its only national brand and a host of smaller craft labels.
“Most accounts don’t have loyalty to any brand anymore. It’s just the nature that we live in and that’s exactly why we feel that this program was a really good fit for us,” Kordes said.
Smaller brewers have also found success with the program, like Turlock, California-based Dust Bowl Brewing, who has used Guest Brewer to distribute its Therapist Imperial IPA and Confused Therapist Hazy Imperial IPA.
“We have capacity to grow, but we don’t have the bandwidth to have distribution and sales staff nationwide,” Dust Bowl director of sales and marketing Marc Jalbert wrote in an email to Brewbound. “Brew Pipeline is a great option for us to reach new markets with relatively minimal effort or financial investment.”
Jalbert said the Therapist brand’s two styles were selected because they sell well outside Dust Bowl’s home market.
“We see the most potential in this beer as a national brand,” Jalbert said.
While Dust Bowl hasn’t secured any permanent placements in new markets through the program yet, Ochs said Guest Brewer has led to five such “marriages.” Once a brewer secures distribution through a wholesaler in a new state, they’re eliminated from Guest Brewer’s offering for that market.
“We’re going to lose that brewer in that market, but that’s the point of the program,” Ochs said. “We’ve got 7,800 breweries in America. We’re gonna find plenty of well-known brands to put through our process.”