The buzz at the recent National Beer Wholesalers Association’s (NBWA) convention was all about the boom in the number of breweries. And it’s no wonder. The U.S. recently passed the 4,000 brewery milestone and is expecting increasing growth way into the future, according to The Brewer’s Association.
The association recently reported that its database of breweries is approaching the historical high of 4,131, which was set in 1873. Perhaps most impressive is that they predict there will be more active breweries in the U.S. by early 2016 than ever before in the nation’s history. Even now that breweries are opening at the rate of nearly two a day (factoring in closings), the nation is still not close to saturation.
This resurgence in the popularity of beer offers plenty of new opportunities not only for brewers, but for distributors and wholesalers who are flexible enough to work with a large number of SKUs: The association also reported that 75 percent of 21+ adults now live within 10 miles of a local brewery – meaning that these businesses tend to be smaller and there are more of them.
The trend is reminiscent of years past when breweries were largely local and operated as a neighborhood bar or restaurant. And its effect on local, regional and national economies is huge: The association reported that craft breweries added $55.7 billion to the U.S. economy last year and provided 424,000 jobs.
It’s clearly a very good time to be in the craft beer business, but what does this trend mean for beer wholesalers and distributors?
Many tell me that choosing among the vast variety of craft breweries for partners is part strategy and part luck. They all seem to come with the right products for the new American beer culture that thrives on the concept of individual taste and variety. They also all seem to have the right business plans. So in the end, distributors take a gamble on which ones are most likely to win the popularity contest with consumers locally, regionally and nationally.
Taking this gamble on a number of brewery businesses requires distributors and wholesalers to prepare for more skus and the resulting added pressure on their supply chains and fleets. This often means they need to preserve capital while making investments in infrastructure vital to their success – like automation systems that are the keys to managing inventory challenges.
At Ryder, we partner with both wholesalers and distributors. We provide them with a fleet management strategy that helps them reduce risk, manage uncertainty, and improve productivity. Our solutions allow them to focus on their core competencies and take advantage of a great time to be in the craft beer business.
In Ryder’s 80-year history, the company has served a wide variety of customers – from small businesses to Fortune 500 companies, including over 4,000 food and beverage customers. We admittedly have a soft spot for the beer industry: One of our first clients – signed in 1938 – was Champagne Velvet beer.
The big question for beer distributors and wholesalers now is: How fast can you get drinks from brewing to consumers’ tables? When they ask me to help them with that, I’m always confident that Ryder can do it faster, smarter and ever better.
Authored by Andre Labrie
Andre Labrie is Director of National Accounts for Ryder System. He has been with the company for 22 years, specializing in total cost of fleet operations and professional fleet strategies. Mr. Labrie is a Board Member of the Maine Motor Transport Association and a member of Ryder’s Roundtable – a select group of top performing company executives.
