Battle Brewing over Craft Beer and Spirits DistributionThere is a battle brewing that pits producers of craft beer and spirits against distributors and bar owners. Brewers and distillers usually work in partnership with their distributors and retailers, of course. But they also compete against them when they open tasting rooms and sell directly to consumers.

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Distributors do not like being cut out of the action, nor do bar owners. So both sides are stepping up their lobbying efforts to influence alcohol beverage laws in many states. Let’s look at some of the factors that are in play.

Tap rooms driving growth

The once-explosive growth in craft beer sales is slowing, according to the Beer Institute, while tap rooms account for the biggest area of growth. Craft beer volumes increased 1.6% in 2017, the slowest growth in at least 10 years. That modest increase was driven entirely by direct sales, usually through tasting rooms and brew pubs. Direct sales grew 24.2%, accounting for one in 12 craft beers sold in the United States.

Craft breweries like selling directly to consumers because the brewers control the product’s freshness and do not have to fight for shelf space in stores. Tasting rooms also allow brewers to build their brand through the visitor’s experience. In addition, there is some evidence that breweries with taprooms grow more quickly that those that do not offer a space for people to taste their beers.

Craft distilling is following beer’s trend. The craft distilling industry has more than tripled since 2007, according to the American Craft Spirits Association. Craft distilleries now operate in all 50 states, with many offering tours, tastings, and on-premise sales. Recently, craft breweries including Dogfish Head (Delaware), Rogue (Oregon), Ballast Point (California), and Cisco (Massachusetts) have begun distilling spirits as well. Then there are hybrid brewery/distilleries, including Maplewood (Illinois), Ranger Creek (Texas), and Warfield (Idaho).

Tapping into trends

Approximately 9% of U.S. bar traffic now moves through brewery taprooms and brewpubs, according to data from MillerCoors cited in the Wall Street Journal. In San Diego and Denver, it is 35%. The appeal of tasting rooms taps into trending customer preferences, including:

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Laura Remington

Laura Remington

Laura Remington is a writer and editor at Dimensional Insight. Her many years as a journalist took her from Capitol Hill to California's vineyards to glacier trekking in New Zealand. She graduated from Brown University.
Laura Remington