You may have heard the news, Columbia Distributing is growing its distribution of non-alcoholic beverages, according to a BevNet article posted on Monday, and we have some thoughts about it.
A little backstory, Iron Horse Brewery has partnered with a different Columbia Distributing since way back when to distribute our beer in a loveable pocket of Washington called Wenatchee. They were one of our first distributors, and in the early days Greg and Ross used to drive the kegs over to their warehouse.
You can read the whole article here, but in short they:
- Are now expanding their portfolio of non-alcoholic beverages to include brands that make kombucha, sparkling water and coconut water.
- Recently purchased assets from Marine View Beverage (who has distributed our beer), which adds 8 million more cases to their business. WOWSERS.
- Will continue working with IHB to distribute the zero-award winning #1 selling 22 oz bottle in WA state, also known as Irish Death
What does this distributor buyout mean for Iron Horse Brewery? What do we think about Columbia developing its non-alcoholic portfolio? Check out what Greg, Dane and Ross had to say below.
Our thoughts on the article:
“As the beverage industry continues to be hyper-competitive, wholesalers work to find ways to be more effective and certainly more efficient. When a wholesaler stops at a retail outlet, it has to be producing a certain percentage of revenue per stop to warrant its costs. In turn, beer wholesalers are now carrying a wide range of high margin NA (non-alcoholic) products or consumer goods in addition to the beer to increase that revenue per retail outlet. This has been a trade practice for as long as I have been in the industry. One would argue that the salesperson doesn’t have the time to sell additional items outside of the primary portfolio but the reality is the wholesaler needs the diversity.” — Dane
“I am frequently awed by the scale and sophistication that these large entities are able to achieve. At least in theory. If they are really able to take data from all categories to help inform what is going to work next; that is a powerful tool.” — Greg
“One thing I’m interested to see is if cross promotion between non-alcoholic and alcoholic beverages starts to pop up in both on and off premise. The industry already has some of this, but will a more defined strategy take shape? From this, are there non-alcoholic brands that would make sense to team up with? I don’t see the mixer option for our beers (partly because Tyson would kill us), but what about something like beer plus hangover cure (ie: kombucha) or beer cocktail recipes that need non-alcoholic ingredients added?” –Ross
Our thoughts about Columbia Distributing branching into the non-alcoholic market:
“Adding NA makes a lot of sense and I’m not really sure why more beer wholesalers don’t have larger NA portfolios. As a brewer, I certainly prefer the focus to be on beer but from the perspective of what is best for the business, it would be hard to argue that limiting what you put on the trucks makes a whole lot of sense.” — Greg
“I think that beer is the biggest factor affecting beer sales performance. With the massive proliferation of breweries in the last 10 years, there are already many barriers to getting the attention you would like as a supplier to a wholesaler. NA threatens to make that worse but I would argue that it is a marginal deterioration unlike the sea change that has occurred with brewery numbers in the U.S. going from around 1,200 in 2007 to over 5,000, or whatever it is, today.” — still Greg
“As Dane said this isn’t a new thing. Regarding Columbia, I am interested to see how far they take it in terms of number of acquired brands and if there is a thought down the road of squaring off with the big two cola suppliers.” — Ross
Our thoughts on non-alcoholic beer:
“NA beer seems to me like dry humping, I’m not going to turn it down if the real deal is unavailable but it just leaves out an important part of the joy. Is it good business, maybe, but that’s not my main focus.” — Greg
“As for the non-alcoholic beer, I think the craft beer industry has greatly underserved this segment. Currently the macro beer producers own the segment (Cutters, O’Doul’s, Clausthaler, etc…) and I see a large opportunity for craft. Seems like it would be a high margin brand and why wouldn’t someone thirst for a NA brand with flavor?” — Dane
“If it’s something that we can make well and is different from the non-alcoholic beer/crap that is out now, why not look into it. I’m still more interested in a FMB (flavored malt beverage) option like IHB hard craft soda.”
— Ross
How does Columbia’s purchase of MVB affect Iron Horse Brewery?
“Ooh, that’s a big question to which all the answers won’t be in for months if not years. MVB represents our largest wholesaler. For the time being we are just going to keep our heads down and get the work done for St. Paddy’s day, which is the official holiday of Irish Death.” — Greg
“As Greg said, share of mind is concerning, as well as how this affects the effectiveness of their merchandising.” — Ross
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