How Beer Wholesalers Can Use The Ansoff Matrix to Grow Sales

The Ansoff Matrix is a tool that can help you build a sales growth strategy and identify opportunities to increase revenue.

The matrix was originally developed as a device for businesses to think about revenue diversification.

Since then, it has been used as a quick and easy way to build a sales strategy while considering the risks of growth.

The matrix breaks down the drivers of sales growth into these categories:

  1. New markets (accounts)
  2. Existing markets (accounts)
  3. New products
  4. Existing products

The matrix then combines these four categories and assigns a relative amount of risk to each approach.

For example, building a sales strategy to focus on improving market penetration with existing customers and products is low risk.

Whereas, diversifying into new products in a new market comes with a higher risk.

How can you use the Ansoff Matrix to Grow Beer Sales?

Use it to ask strategic questions:

  • How can we sell more of our current products to our existing customer base?
    • Could we do better with e-commerce options? Can we improve our marketing (social media, traditional media, events, etc.)?
  • How could we enter new markets with current products (or add new accounts)?
    • Are there opportunities to acquire brand/territory rights or purchase another distribution business?
  • How could we develop existing products or services?
    • In other words, could we market the products differently, could we provide more sales training, could we hire a specialized sales person?
  • How could we move into new markets with new products (or services)?
    • For example, could you sell non-alcohol products to non-licensed accounts (a new market)?

The Ansoff Matrix is a simple and easy way to think about sales growth strategy and find new ways to increase revenue.

Use the matrix to brainstorm ideas and ask difficult (but profitable) questions.

Yours in Sales Growth,

Kary

P.S. Take advantage of the Spring Special and save 33% off the Beer Business Finance SubscriptionUse Discount Code SPRINGCLEAN at checkout.

Your subscription includes access to the library of online courses, back issues of the Beer Wholesaler Financial Newsletter, webinars, podcasts, tools and resources to help you drive sales and profits in your beer business.

3 Spring Cleaning Tips to Make Your Wholesaler Finances Sparkle

Spring is the perfect time to clean up your wholesaler finances and make ready for the summer selling season.

In this post, we’ll share 3 Spring Cleaning Tips to Make your Finances Sparkle:

  1. Organize your corporate documents: Use the checklist to scrub your important papers
  2. Count your inventory: Borrow the process to keep your inventory records nice and tidy
  3. Review the balance sheet: Download the White Paper and learn how to keep your financial statements squeaky clean

Spring Clean Tip #1: Organize Wholesaler Corporate Docs

If you’re like most wholesalers, you have corporate records stashed everywhere. Some are tacked to the wall, others are in your desk drawer or saved on your laptop.

Corporate records are important because they show that you have the proper licenses, filings and legal standing to operate your wholesaler business.

Corporate records are critical to maintain your ‘corporate’ status and the liability protections this provides.

Examples of corporate records include:

  • Articles of Incorporation
  • Bylaws
  • Stock certificates
  • Stock ledger recording each stock issuance or transfer
  • Minutes of meetings of the directors
  • Corporate seal

If you don’t have the time or patience to locate and organize your corporate records consider hiring an attorney to do it for you. They won’t be cheap, but they will make sure all the necessary docs exist and are properly filled out.

Corporate docs are super important to preserve the ‘corporate veil’ and protect you from liability.

If you plan on borrowing money, banks need to see this information. If you plan on bringing on an investor, or eventually selling, investors / buyers will insist on complete and accurate corporate docs.

If you want to do it yourself, use the Corporate Docs Checklist as a guide to get started. Spring is a great time to locate, organize and clean up those corporate documents.

Spring Clean Tip #2: Count your Inventory

Counting inventory can be difficult, time-consuming and un-productive. But these things only happen when you do it the wrong way.

Use this Inventory Counting Checklist to count the right way.

You’ll find it takes less time and will get you the results you want: accurate inventory on the books. Everyone wins.

Spring is a great time to clean up your inventory. Use the process, and make it count.

Spring Clean Tip #3: Reconcile the Balance Sheet

Your balance sheet reports on your assets, liabilities and equity. It shows what you own, what you owe, and the net worth of your business.

Unfortunately, the balance sheet is often filled with financial mistakes.

Assets may be listed on the balance sheet that don’t exist any longer. Lost kegs anyone? How about that old inventory you haven’t written off yet?

Prepaid expense is another hiding spot for balance sheet errors. Items get booked here and never removed. Prepaid hops or prepaid insurance are common items that get stuck in here.

Need some guidance on how to get started with the balance sheet clean-up? Check out this post and podcast: How to Fix These Common Wholesaler Financial Problems

Wrap Up + Action Items

Spring is the perfect time for a financial clean-up. Start with a purge of your old financial records. Throwing things away feels good.

Use the document retention guide to identify what can be tossed out. Hire a shredding company to do the dirty work.

Next, do a full physical count of your inventory. You wouldn’t dream of delivering inaccurate customer orders, don’t operate your business with incorrect inventory records.

Finish the spring clean-up with a review of your balance sheet. Lots of financial mistakes get stuck here and need to be scrubbed clean.

Warm weather, sunshine, and increased sales are on the way. Now is the perfect time to make ready with a financial spring clean-up.

Yours in Financial Spring Cleaning,

Kary

P.S. Take advantage of the Spring Special and save 33% off the Beer Business Finance Subscription. Use Discount Code SPRINGCLEAN at checkout.

Your subscription includes access to the library of online courses, back issues of the Beer Wholesaler Financial Newsletter, webinars, podcasts, tools and resources to help you drive sales and profits in your beer business.

Future of the Liquor & Spirit Industry: Based on the Integration of the Metaverse

By: Rohan Doodnauth, Co-founder — OpaLink

In late October of 2021, Mark Zuckerberg announced his company’s intention to rebrand from Facebook to Meta and build an immersive platform fueled by augmented and virtual reality (AR/VR). This platform — the Metaverse — will further blur the boundaries between our online digital lives and our more tangible, physical ones. In his 2021 Founder’s Letter, Zuckerberg remarked how the Metaverse “will touch every product we build,” and will allow users to socialize, attend events, create, work, shop, and more in ways that transcend how we think about the internet and digital technology.

  If the past few years have shown the liquor industry anything, it’s that staying on top of emerging technologies and shifts in consumer trends is vital to the success of our brands and businesses. Look at the growth of omnichannel marketing and sales, for example. Between December of 2019 and November of 2020, retail wine sales at multi-outlet stores in the US grew by some 11.4%. For some businesses in the industry, this operational pivot spelled the difference between surviving or closing during the initial stages of the pandemic.

  With these notions in mind, it’s difficult for us not to consider how the Metaverse could impact the liquor industry as a whole. According to Zuckerberg, the Metaverse aims to become a new central hub of e-commerce and consumer activities. As such, brands in the liquor industry will be forced to rethink how its integration into their operations, marketing, and sales will reshape the future of their business, those of their competitors, and even their consumer markets. Furthermore, brands and businesses must possess the capability to remain agile as they integrate more deeply within the Metaverse, and take notice of how this integration might spur shifts throughout the liquor industry.

Unique VR Dining Experiences

  Within the Metaverse, customers won’t be confined by geographical distance or other physical limitations in exploring the dining or drink options available to them. Rather, upon entering the Metaverse, they will have the availability and opportunity to talk with chefs, foodies, and beverage makers all around the world in the palms of their hands. This will inevitably create a deeper integration of and connection to other cultures, as customers will be able to connect and chat with anyone anywhere in the world at practically any time, and open the door for businesses to provide them with truly unique dining experiences.

  For instance, imagine logging into the Metaverse and browsing a list of restaurants you wouldn’t normally be available to visit in person. Upon selecting a restaurant, you and your party can enter that restaurant’s virtual space within the Metaverse and begin browsing menus for the dishes or drinks you’d like to have. Once your orders are selected and placed, the restaurant’s e-commerce sales system will automatically register the items ordered and be able to virtually send them to you and the others in your party, even without any of you being physically present. Additionally, this method of sales could be utilized for those guests who may not want to show up in person, but still want to try food or drinks they otherwise wouldn’t be able to.

  This blend of convenience and experience, fueled by the AR/VR technology the Metaverse is founded upon, will grant brands the ability to offer customers a truly personalized, customizable experience. Through integrating their sales platforms into the Metaverse, businesses can not only reach a far larger range of customers directly, but also indirectly by allowing their customers to send meals and drinks to family or friends who cannot be physically present with them.

  Because such integration of businesses’ operations with the Metaverse will allow them to provide each individual customer with a one-of-a-kind dining experience, this will inherently create greater competition between brands. Much like we saw with the rise of omnichannel sales during the pandemic, those brands and businesses which are able to capitalize on such value earlier on will be far better positioned to outperform their competitors. Likewise, as the technological capabilities of the Metaverse continue to evolve, the businesses that are better able to remain agile to those evolutions and pivots will likely be the ones who see the most success from their integration with the Metaverse.

Adapting to a Hybrid World Amidst Growing Competition

  Whenever a new technology or trend emerges that impacts our business, it brings with it new sources of competition. This is simply the nature of business. Liquor and beverage industry brands seeking to integrate with the Metaverse will need to take note of how this hybrid digital space could affect their initiatives and create new competitive advantages both for them and their competitors.

  For example, dining experiences in the Metaverse will likely become a blend of futuristic physical features of restaurants and high-tech interactive technology. Knowing this, one method businesses could use to stand out from the competition is by making customers part of this immersive and interactive dining experience. Perhaps a craft brewery or small distillery might offer customers a VR-led tour of their facilities to learn more about their business, its history, and its available products. Maybe a gastropub offers new customers a coupon for a certain percentage off of their first purchase in the Metaverse, or offer them a redeemable code that customers can use to virtually send food or drinks to others. Because our appearance in the Metaverse will be one not of our physical selves, but instead a VR-generated avatar, another possibility might be for businesses like these to offer a free side dish or drink to customers whose avatars are sporting their brand’s logo on a piece of their avatar’s clothing. These are just a handful of examples of how businesses in the liquor and beverage industry could remain agile in adapting to growing and emerging consumer trends after integrating with the Metaverse.

  As a virtual universe that is speculated to become a converging point of consumer activity and e-commerce, it can be assumed that the AR/VR technology used to explore and interact with others will inevitably expand the possibilities businesses have to innovate. Although there is still much we don’t know about the Metaverse — and likely won’t know about for the better part of a decade, at least — this should not stop businesses from forming strategies to implement once they are more deeply integrated into the Metaverse itself.

Implementing a Metaverse Strategy

  Consider for a moment the ways in which the emergence and subsequent growth of social media platforms have impacted business over the last decade. If your own business was in operations prior to the rise of Facebook, Instagram, TikTok, or other social media platforms, it’s safe to assume that the way your business functioned then is vastly different compared to its current strategies and initiatives. When thinking about how your business can integrate successfully with the Metaverse, it’s likely that there will be similar variances — albeit to different degrees or extents — between its current strategies and those used in a realm driven by AR/VR technology.

  For starters, contemplate the initiatives your business has implemented for its marketing strategy. You might be paying for ads on social media to cast a wider net to rein in a greater amount of potential customers, or targeting existing customers with regular email newsletters to alert them of upcoming events or deals you might have. In the Metaverse, those paid ads might transition from sponsored posts on users’ social media feeds into a virtual brand ambassador traveling throughout different e-commerce sectors in a VR-driven environment to offer exclusive tastings or VIP events. Likewise, your business’s email newsletters could transmute into a kind of exclusive membership program for customers to use solely within the confines of its virtual establishment in the Metaverse.

  As another example, look to your business’s current strategy for handling reservations or private parties for events. When integrating these operations into a fully-virtual space, the tickets or codes used for referring to reservations could become their own kind of non-fungible token or NFT; a digital token representing a reservation. If your business boasts a signature dish or beverage, each sale of this item to a VIP member could come with a transferable NFT that could be redeemed at a later date for additional rewards like a free entree, bottled spirit, or customized apparel for their avatar in the Metaverse. Eventually, it may even be possible for chefs or brewers to mint the dishes or beverages they create as NFTs themselves, offering them greater creative freedom and additional means of providing (and earning) value from niche sectors of consumer markets.

  Each aspect of your business in its current state will need to eventually evolve to integrate with the Metaverse. Whatever that means or looks like will be subjective for each liquor and beverage brand seeking integration with the Metaverse, but nonetheless must be made if you wish to remain relevant and competitive in this next iteration of the digital world.

Final Thoughts

  Regardless of how far off we truly are from integrating our businesses and lives into the Metaverse, its influence has already left a lasting impression on markets and industries the world over. Though selling virtual drinks, beverages, food, or other consumables to customers sounds like a counter-productive initiative better left to the realm of science-fiction, the Metaverse’s projected capacity to blur the lines between our digital lives and physical ones could easily turn this into reality in a matter of years.

  Indeed, the Metaverse is perhaps the most literal representation of a “Brave New World” if there ever is one. The potential for brands integrating their business with this new frontier of virtual reality to experiment with marketing, e-commerce sales, and communication with customers will be essentially limitless. In turning passive consumption into active participation with their brand, the first round of businesses in the liquor and beverage industry to successfully integrate with the Metaverse are bound to set new precedents for the industry’s next generation of innovative technologies and tools.

Tales From the Crypto

By: Raj Tulshan, Founder of Loan Mantra

StillFire Brewing is the first brewery in Georgia to accept cryptocurrency and customers are invited to use Bitcoin as payment for beers and other beverages, as well as, their merchandise, which includes t-shirts, caps, gift cards, and more. The small business decided to accept crypto so customers could use a fast, secure payment method, and the brewery owners appreciate crypto’s benefits, including no third-party involvement or bank fees. StillFire uses CoinBase, a Bitcoin payment processor, to handle the payments. CoinBase offers fast, next day deposits and a low fee – just 1% of transactions, as opposed to 2-4% typically charged by credit card companies. Notably, the brewery has joined more than 30% of U.S. small businesses that now accept cryptocurrency, as this payment method becomes more mainstream and popular.

  Threes Brewing, with locations in Brooklyn and Long Island, is also accepting cryptocurrency. The pandemic forced them to adjust their business model, which included updating their website and offering beer delivery direct to consumers. People were excited to buy the brews online and asked the brewery owners to start accepting PayPal. The owners decided to go one step further, offering a cryptocurrency option, as well, which was easy to integrate with their Shopify. Like StillFire, Threes Brewing uses CoinBase as their payment processor.

  Cryptocurrency is a digital medium of exchange that relies on peer-to-peer blockchain technology. It’s decentralized, meaning no central bank or government regulates or backs crypto. Buyers transfer funds directly to sellers without the third parties traditionally used to process payments. And people store their crypto through an encrypted wallet and are the only ones with a key to unlock it.

  Part of the appeal of crypto stems from the surge in credit card fraud that was accelerated by the pandemic. In 2020, the dollar volume of attempted fraudulent transactions rose 35% in April 2020 vs. April 2019, and, sadly, small businesses are often the targets. In contrast, crypto is considered to be a secure form of payment, with merchant protection, lower transaction fees, and other benefits.

  Increasingly, small businesses are accepting cryptocurrency. It’s innovative and trendy, attracts customers and prospects who use crypto, offers more e-commerce opportunities for beer retailers, and can reduce fraud.  And companies like Shopify and Square make it easy to accept crypto. Square even has a crypto team to support development. But is crypto right for your business?

When determining whether to go crypto, consider the following pros and cons.

Pros:

•    It offers lower transaction fees than credit cards. As StillFire and Threes discovered, there’s a lower transaction fee when using crypto vs. credit cards. While each credit card transaction costs a company 2-4% of the total transaction, crypto reduces these costs to less than 1% of each transaction. Over time, these seemingly small fees can amount to a substantial savings.

•    It provides another loan option for businesses. Small businesses often need to take out loans, especially during these disruptive post-pandemic times. Some business owners – especially those with large amounts of cryptocurrency – are opting for a crypto loan, where you pledge an asset (in this case, your cryptocurrency) to secure financing. Crypto loans often come with a host of benefits, including low interest rates, same-day funding, and no credit check.

•    You’ll get your money faster. Tired of waiting several working days for a bank transfer to clear? Crypto is much faster and can be processed almost immediately. Small businesses that need and want their money faster will appreciate this perk.

•    It’s more secure than credit cards. Crypto-

      currency is considered more secure than credit and debit card payments since crypto doesn’t need third-party verification, as these other payment types do. When someone pays with cryptocurrency, their data isn’t stored in a centralized hub, where breaches commonly occur. Instead, their information is stored in their own secure crypto wallet – and they’re the only one with the key to unlock it.

•    Crypto offers some merchant protection. Crypto, with its decentralized set up, protects merchants from fraudulent chargebacks. Transactions are final because no third party can reverse charges, as is the case with credit card purchases. As crypto regulation continues to evolve, there may be more merchant protections introduced in the future, especially as crypto becomes more mainstream and accepted by more small businesses.

•    It opens up more e-commerce opportunities. As Threes discovered, customers want a fast, easy, secure way to shop online. Now, they are selling to people in more than 30 states, accepting crypto as well as PayPal to give their customers purchasing options. Threes was able to expand their audience, moving beyond their New York customer base to sell beer and merch on a bigger, more national, scale.

•    It’s another option for customers. Accepting cryptocurrency offers customers additional ways to pay and provides them with extra protection and security for their transactions.

While cryptocurrency offers a variety of benefits, there are also some risks associated with it, and small businesses should be aware.

Cons:

•    Customers might not be ready for it. Since this type of currency is still relatively new, many people still don’t understand or trust it. Crypto might not be appealing to tech-averse or risk-adverse customers. Using crypto also requires some effort, as customers would need to set up their own digital wallet and learn how to buy with this type of currency.

•    There may be technical barriers for business owners. While Shopify and Square make it easy to add a crypto purchasing option, if a small business doesn’t use those platforms, it might be a bit trickier. Businesses need to set up a digital wallet on a digital currency exchange to accept crypto, which some people find difficult, especially if they aren’t particularly tech-savvy. Also, since cryptocurrency is an ever-evolving, information-dense space with a steep learning curve, it can be an overwhelming option for some business owners. It is volatile and unpredictable.

•    Digital currency is volatile and unpredictable, so if you’re a risk-adverse business owner, this might be too much drama for you. Keep in mind that Bitcoin was first valued in pennies in 2009 but rose to more than $65,000 per coin in February 2021. That’s obviously a huge range! Using a merchant service company, like BitPay or Coinbase, helps protect small businesses against price volatility by immediately exchanging digital currency for its current cash value. Be sure to do your homework, carefully researching cryptocurrency to decide if it’s right for your business (and your personality type!).

•    It’s not completely safe from cybersecurity threats. Crypto reduces the risks associated with credit card fraud, but it’s not completely safe from cybersecurity threats or breaches. There’s no proven way to completely prevent cybercriminals from accessing users’ crypto wallets, and crypto isn’t backed or insured.  Some cryptocurrency companies are working to reduce the risks of security breaches by fully insuring losses, but insurance doesn’t currently cover personal accounts, so you’re still responsible for securing your personal wallet. But if a crypto company like Coinbase is breached, your funds would be protected.

•    There’s uncertainty around crypto regulations. The regulations around cryptocurrency will likely continue to change and evolve over time, which means business owners will have to follow – and adapt to – these changing rules. Since cryptocurrencies are relatively new, the government is still looking at regulations and rules about things like reporting gains and paying proper taxes on crypto transactions.

•    It doesn’t cover basic business expenses. Businesses typically can’t use crypto to cover operating expenses, such as rent and payroll, so they’d need to convert payments to cover these monthly costs.

  Some breweries have adopted cryptocurrency and are proud to be early adopters of this technology.  Others are sticking to the tried-and-true cash and credit payment options. There are pros and cons to crypto, so give it some thought before deciding whether to accept this form of payment. Also, consider your personality and whether you’re willing to learn about crypto – and accept that it’s volatile – before finalizing your decision.

About the Author

  Neeraj (Raj) Tulshan is the founder and managing member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative, and transparent platform. Clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human—even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company designed to serve small and medium businesses with offices in New Jersey, Charleston, SC and New York. At Loan Mantra your success is our success.  This means that our attention, purpose, and intention are all focused on you, our client.  We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully, and service your account actively through one of three locations in the US.  We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or Manicure.

 Let us help you today! Connect with us at www.loanmantra.com or call us at 1.855.700.BLUE (2583)

Best Practices for Writing Your Wholesaler Job Descriptions

By: Kary Shumway, Craft Brewery Financial Training

Recruiting, hiring and retaining good employees is a challenging task. However, with a clearly written job description the task gets easier.

The purpose of a job description is to clearly define what needs to be done, and clearly define the type of person you need to do it.

A well-written job description will include a short overview of the position, bullet points of tasks to be done, and a listing of important qualifications. In essence, the job description should describe the job.

In this post, we’ll review Best Practices for writing your beer wholesaler job descriptions, present the One Thing that should be in your job description (but probably isn’t), and provide a road map for putting the job description into practice.

Best Practice #1: Get it in writing

At its most basic, the job description should be in writing and given to the employee (or job candidate).

Sounds obvious, but I’ve seen many employees hired and many employees who worked for years without a formal job description.

Sometimes we are in a hurry to hire someone and neglect to write up a job description. Other times, we just take it for granted that the employee knows what to do in the position and everything will work out fine.

Regardless, one simple basic best practice is to get the job description down on paper and get it in the hands of the employee.

Best Practice #2: Follow a Job Description Structure

The website BetterTeam.com defines job descriptions this way:

A job description is an internal document that clearly states the essential job requirements, job duties, job responsibilities, and skills required to perform a specific role.

The document itself can be one page, or several pages, depending on what’s needed to outline the necessary requirements and skills.

A typical job description will use the following structure:

  1. Short narrative overview
    • Give the candidate a feel for the position. What can they expect? What do you expect from them?
  2. Bullet point list of tasks, responsibilities
    • List only what is important and meaningful. Use the ‘other duties as assigned’ to cover the rest
  3. Qualifications you want from the candidate
    • List specialized skills, knowledge, or education
  4. Specific job requirements
    • If there will be travel away from home, working nights or weekends, spell it out so there’s no hard feelings later

These are the standard sections of a job description. In total, they provide a good overview of what the job is about and what is expected of the employee.

Next post we’ll look at the One Thing that must be in your job description (but probably isn’t).

P.S. Get 50+ template beer wholesaler job descriptions, job postings and compensation planning models in the 2022 Beer Wholesaler Job Descriptions Course. This resource is included with your Subscription to Beer Business Finance.

Is it Time to Franchise?

By: Raj Tulshan, Founder of Loan Mantra

The Casual Pint, a craft beer shop and bar, opened its first location in 2011 and their first franchise two years later. Since then, they’ve steadily expanded. Now, they have 20 franchises in eight states, and have found the franchise model to be lucrative for their business – and a great way to grow their brand.

  Part of the Casual Pint’s success is a combination of a solid concept with the right set of circumstances to succeed. First, they have a stable infrastructure in place that can be replicated in other locations.  They also provided all necessary resources to their franchisees, including market research, architectural design, and marketing and sales materials. They’ve ensured that the owner of each franchise was heavily involved in their communities, a model they’ve implemented from their very first shop. Additionally, each location promotes themselves as a community gathering place that provides exceptional beer, and the business is thriving.

  Franchising, like The Casual Pint, can work really well. Consider these stats:

●   90% of franchisees enjoy operating their

      business.

●   88% enjoy being part of their organization.

●   85% feel positive about their affiliation with their franchisor.

●   80% feel their franchisor operates with a high level of honesty.

●   78% would recommend their franchise brand to others.

●   73%, given the option, would do it all over again.

  Independently owned businesses looking to grow can explore whether franchising would be a good solution for their unique situation. Here are some things to consider before you decide whether to franchise:

  Are you ready to sell your brand concept? To be successful, you’ll need more than just a savvy business concept. Before you franchise, determine whether you can clearly explain what your brand is, what it does, and its unique value proposition. Remember: you’ll need to be able to clearly articulate your brand and your vision to key audiences, including investors and potential franchisees, to entice them to get involved.

  Do you have a solid structure in place? Your franchisees will need to replicate your business model and operational structure for marketing, sales, technology, etc.  So, you’ll need to have strong systems and processes in place before diving into franchising. Expect to hand over ready-made “toolkits” for your franchisees to use in their day-to-day operations. Allow plenty of time to develop these concepts, plans, and materials.

  Can your business be replicated? Is there a market for your business elsewhere? Could someone else run another location as well as you do? For a company to thrive as a franchise, it must be replicable. The Casual Pint found success as a community-focused meet-up space with amazing beer, and it didn’t matter if the community was in Tennessee or Arizona. The concept translated well in different locations, and can continue to grow and thrive anywhere.

  Are you ready to scale your passion? Are you ready to teach and manage others on a larger scale? Are you comfortable stepping back from the daily operations and focusing more on franchise management? For example, if you’re a craft beer maker, once you decide to franchise, you’re no longer going to be hands-on with beer brewing.  You’ll be focused on running a franchise to sell your beer, and teaching other people how to brew it, sell it, market it, etc. You’ll also be helping your franchisees get set up with real estate, construction, hiring staff, etc. Are you ready to scale your passion, overseeing several others in a new and amplified managerial role?

  Are you ready to build a dream team of outside experts? It’s essential to consider hiring knowledgeable professionals to help you through the entire process of developing your franchise model, preparing the necessary documents, and navigating the finances, including securing loans. You’ll need to hire financial professionals who specialize in accounting, loans and assisting business start-ups, as well as, specialized franchise attorneys to assist in the drafting of your paperwork. 

  Are you ready to invest in the business’s future? Expect to invest personally in the venture, which may require a business loan. Also, you may need to recruit investing partners to help manage the expenses. Anticipate a variety of costs, including brand development, experts’ fees, legal fees, and outreach to potential franchisees. You’ll need significant capital to launch your franchises, so think about how you will raise the necessary cash.  Many people choose to divest a 40IK, start with personal savings or take loans from family to start their first franchise. Others seek out investors, small business loans and  lines of credit.

  Have you researched funding? There are several different ways to fund a franchise. Seeking out an experienced loan advisor that you can trust can save you time and money. For example,  Loan Mantra has relationships with all types of franchise lenders, so even if you don’t know the exact kind of funding you need, we can help you determine the right loan package. Anecdotally, bankers and financial experts notice significant cycles to franchise funding. In January, more franchisers will seek equipment loans; whereas in the summer months, specifically July & August, they often seek more inventory-based loans (e.g. a cyclical  inventory such as football jerseys to sell in a bar or other seasonal products).   Regardless of season, 7a loans are always a significant source product for franchise funding. Most franchise lenders will attempt to use a 7a product first, followed by direct equipment company loans, followed by loans given by manufacturers. The franchisor will usually have a set deal with an equipment company and negotiate those terms out front.

  What will attract franchisees to buy into your concept? Be the brand that you represent. Personally meet with potential owners and attend area trade shows. Be easy to do business with. Streamline your business processes. Loan Mantra’s franchisors are able to house all of their franchise contracts, financing applications, and associated documents online through the BLUE platform, allowing their franchisees to complete everything online, without having to meet in person or send by snail-mail. The way you do business tells others something about you. Working through an antiquated analog system may tell them you’re antiquated, whereas using today’s tech tools will tell them you’re ready for the future.

  If you’ve considered most of these points this may be the time to franchise your passion!

About the Author

  Neeraj (Raj) Tulshan is the Founder and Managing Member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative and transparent platform.

  After graduating from Ithaca College in Finance, Tulshan began his banking career at Merrill Lynch in New York City. He spent more than a decade in the Currencies, Commodities and Investments Group where he also worked with global asset-backed securities, structured products and principal investments. There, he also originated and underwrote deals valuated over $100 million and structured finance transactions.

  When the market crashed in 2008, Raj saw a significant opportunity to fix the fractured lending ecosystem. Soon thereafter, he sought after and completed an MBA from the Said School at Oxford University and began developing Loan Mantra. His goal was to remove the silos that exist between lender and borrower using secure financial technology. Though Tulshan continues to be iterative with his fintech, meeting current demands of both market and borrower, his professional mission and good- natured approach with clients remain the same. In this, Loan Mantra displays its founder’s proud partnership between best-in-class fintech and top-marks human experts. Time-and-again, clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human —even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company designed to serve small and medium businesses with offices in New Jersey, South Carolina and New York. At Loan Mantra your success is our success. This means that our attention, purpose, and intention are all focused on you, our client.  We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully, and service your account actively through one of three locations in the US.  We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or QSR, let us help you today. Connect with us at www.loanmantra.com, 1.855.700.BLUE (2583).

“SHOW ME THE MONEY”

After Friends and Family, Where Do I Get Growth Capital?

By: Quinton Jay

Like most entrepreneurs, founders and owners of smaller craft breweries and distilleries often find themselves having to wear many hats. You need to be aware of your internal operations and external logistical factors in your business’s supply chain, as well as understand how to best market and sell your brand’s products.

  Arguably one of the most important hats you will have to wear that is not obvious is the one that reads “finance.” Without having a finger on the pulse of your business’s finances, you’re setting yourself up for inevitable failure. Running out of cash is the number 1 killer of businesses within the first two years.

  When your finances start leaning towards the red, or you know your business requires an additional injection of capital to grow successfully, it can be easy to feel frustrated and discouraged. But this is simply another part of business; you can’t expect to reap the benefits without having to face and overcome the hurdles and challenges you’re bound to encounter.

  If you — like many other small business owners — were able to obtain at least a portion of your original capital through friends, family, or other investors, this may not be a possibility further down the road. This is where that “finance” hat comes into play once more. In order to emerge from uncertainty with a brewery or distillery that is ready to continue growing, you as a founder or owner are required to find alternative means of raising funds, especially if your overarching aim or goal is to land an eventual, profitable exit. But where do you start?

  Here are some ways that you can use as means of obtaining additional growth capital for your small brewery or distillery business when reaching back out to friends and family is no longer an option.

Understand the Realm of Private Equity Investments

  As the Managing Director of Bacchus Consulting Group and its capital management fund, I have more than twenty years of experience managing, consulting for, and investing in more than a handful of small, independently-owned brewery and distillery businesses. I have helped dozens of businesses in the industry understand their options when it comes to raising growth capital through VC investments, the separate stages of fundraising, and the impact that each fundraising option has on those businesses.

Private Equity Funding

  When the time comes to look into raising growth capital for your small brewery or distillery business, the most prominent option you will run into is private equity (PE). To put it simply, PE involves investing in companies using capital that has been sourced from individual or institutional investors, as opposed to investing in companies using capital sourced from public equity markets like the NASDAQ or New York Stock Exchange.

  For the sake of insight, the general thesis of any PE investment is three-fold. A PE investment is made to: firstly, purchase a company (or portion of a company) using significant leverage and a minimal amount of equity; secondly, utilize the industry expertise and synergies of the PE investor(s) in order to maximize the growth and efficiency of the acquisition or investment made, and; thirdly, to sell that acquisition in an approximate period of 3-7 years based on the company’s improved metrics and lowered levels of debt.

  A common misconception with PE funding is that giving away equity in return for capital is “free,” but this could not be further from the truth. Selling equity for capital is simply a means of delaying payment. With PE funding, there’s no true cap on what you can give away in return for the growth capital you want or need. If you believe in your business, you’re better off acquiring debt rather than selling a portion of your equity. When you give away equity, you’re giving away infinite returns in perpetuity.

Alternative Lenders (Non-Bank Financing)

  Some sources of alternative financing include:

●    Merchant Cash Advances (e.g., Quickbooks capital, Shopify capital, AMEX Merchant Finance, etc.);

●    2nd Lien Lenders (similar to a 2nd lien on a home mortgage)  and;

●    Unitraunche Lenders: a hybrid lending model that combines multiple different loans — sometimes from multiple lending parties — into one, with a blended interest rate that tends to average those of the lowest and highest rates of the individual loans lent.

  As their name states, these are each an alternative form of financing available for businesses looking for access to growth capital. However, these forms of financing for businesses tend to be riskier on the part of the lender, hence why they charge more for these sources of growth capital.

Traditional Lenders (Bank Financing)

  Financing for growth capital through bank loans is another available option for small businesses. This avenue tends to come with lower interest rates than most sources of alternative financing but is usually much more difficult to acquire.

  Financing can also be done through debt, rather than its equity, but again: if your small brewery or distillery business is already deep in debt, it may not be the most beneficial option available to you. Although, when acquiring bank debt, or any debt instrument (as opposed to equity via PE financing), there’s always a cap on how much you can pay for the use of those funds received.

Finding the Right Investor for Your Brewery or Distillery Business

  Regardless of which financing option you choose to go with when searching for additional growth capital, the most important factor to keep in mind is to find the specific investor, fund, or lending institution that compliments your business and its goals. If your aim is to grow your brewery or distillery into a business that can be acquired by a larger parent company in a multi-million dollar deal, then PE financing is likely your best option. Similarly, if your business has a higher amount of debt, finding an investor that can provide you with acceptable terms for a second lien may be the avenue you wish to pursue.

  Whatever type of growth capital investment you wish to see for your business, be sure to ask yourself questions regarding the synergies your investor has with your business. Some examples of these might include:

●   Does this investor have good chemistry with me and my core leadership team?

●   Does the investor have a willingness to help and mentor me and my team on how to best successfully grow our business in line with our goals?

●   Does this investor believe in me, my team, and our ideas for our business?

●   Do they have relevant experience and connections we can utilize for additional investment opportunities now and/or in the future?

●   Does this investor have the domain and expertise — along with the capital — necessary to help carry our business forward through periods of growth we want to achieve?

  If your answer to any one of these questions falls into the realm of anything other than “yes,” then chances are high that they are not the right investor to bestow you and your business with growth capital. Additionally, if you or your core team are not ready or willing to accept mentorship from an investor, then don’t waste their time (or yours) trying to receive an injection of capital for growth solely for the sake of having more cash to fuel your business’s runway. Too many businesses — even smaller breweries and distilleries — land themselves in hot water this way. Don’t become one of them.

Showing What Investors Want to See in Your Business

  Before any investor, fund, or firm will agree to make an investment of growth capital in your business, they are going to scrutinize your business from every perceivable angle. Throughout their vetting process, you can (and should) expect any potential investor to analyze no less than the following aspects of your company:

●   Business Model: How does your brewery or distillery make money? What are your key business metrics such as revenue and gross margin, operating profit, and EBITDA? Is your current model scalable or does it need to be reworked if your business wishes to continue growing?

●   The Team: Does your business’s core team (including you) possess the knowledge, skills, and ability to carry the company through periods of growth? If not, which employee(s) need to be let go and replaced? Is the team able to collectively address and resolve issues?

●   Structure and Governance: How is your company structured and led? Is there transparency and accountability across its departments? Does your business have a succession and/or key man insurance plan in place? If so, what does it look like?

●   Exit Plan: Does your company have an exit strategy in place? If not, then why not? If so, what does this plan look like, and is it reasonably sound?

  All of these factors will play a vital role in your business’s ability to land growth capital. From my own experience as an investor/financier, I am looking for specific reasons not to invest in or finance a company; anyone can fall in love with thier own deals and each deal must stand on its own merits. This means that you, as the founder or owner of your business, will need to know both your company and its market viability inside and out if you wish to gain an investment of capital necessary to grow it in a way that meets your goals.

  If you are able to show investors and financiers that you are credible and trustworthy, that your business has shown the capacity to make sales of quality products and grow from its revenue and profits to date, and that it has the potential to continue growing in its existing market or into new markets, then your chances of landing an investment of capital required for growth are much higher.

GETTING CRAFTY: How the Beverage Industry Can Secure Business Funding

By: Raj Tulshan, Founder of Loan Mantra

According to the Independent Craft Brewers Association, the Craft Brewing Industry was responsible for over 400,000 jobs and contributed $62.1 billion to the U.S. economy last year.  As with other industry segments like restaurants and retail, COVID-19 had a devastating impact on sales.  Craft beer retail sales decreased 22%, to $22.2 billion, and now accounts for just under 24% of the $94 billion U.S. beer market (previously $116 billion)*.

  At the same time, craft brewers and brewpubs may have found themselves left out of the American Rescue Plan, which offered $100 million in grants for eligible organizations during the COVID–19 pandemic. And for those companies that could take advantage of government programs like the  PPP (Paycheck Protection Program), records indicate that more than half of the funding proposed to help smaller shops and owners, actually went to larger corporations.

  When it comes to funding your business, you have many financing options. If you’ve decided that borrowing money from a lender needs to be a part of your funding plan, there are many things you can do to increase your chances of getting the best possible loan, including different kinds of research, some careful planning, or actions you can take. 43% of small businesses applied for a loan last year, and only 48% of those small businesses get their financing needs met.

  Banks lent over $644 billion to small businesses in 2019, but lending slowed in the wake of the pandemic in 2020. With lenders feeling more optimistic in 2021, there will be more options for small businesses looking to rebound. For businesses still struggling after more than a year of unprecedented disruption due to the COVID-19 pandemic and working tirelessly to recover, not all hope is lost. Consider the case of  Trubble Brewing Company.  Trubble Brewing received loans to expand from one location to three in the Ft. Wayne, Indiana area just before the pandemic began in 2019.  From 2019 through today, the company enjoys huge success.  

  To best position you to apply for a loan, there are some steps you can take, from figuring out if you can qualify to prepping all the documents you’ll need. Here are some tips to think about when financing:

  Research loan products: Understanding the type of loan that are available is critical. Applying for a loan, when what is actually needed is a line of credit, will slow down the process and possibly end in a loan denial. Experts from Loan Mantra can help you pinpoint exactly what type of funding is needed and help guide businesses through the application process step-by-step.

  Structure the deal:  Working with an expert can help you structure the loan so that your approval is fast and successful.  For instance, know what specific things associated with the business that a lender will grant you funding for and structure the loan accordingly.  For instance, borrowing money for expansion, real estate, machinery and buildings may be very amenable for a lender.

  Make a name:  Now is not the time to scale back marketing efforts or forget to update the website.  Market your craft brew, register a website domain address and update your online profiles. Get a professional logo.  Be active on social media and online.  Stake your claim in the industry and make the craft beer name stand out.  Register with search engines and on multiple platforms so that banks and other lending institutions can find and get a feel for the company.

  Realize it takes time:  One of the biggest factors in determining whether a loan is approved or not is the length of time a brewery has been in business.  Lenders want to know if a business has stability and the longevity to keep up with the business in the near and long term so that their funds will be re-paid.  In addition, the ability to provide receipts and prove profitability are very important even if a business is fairly new.  The lender is determining if a company has credibility – does a business invoice and collect payments on time, maintain records and conduct its processes in a professional manner.   

  Organize and compile your documents:  Applying for a loan requires financial transparency, so make sure your financial, accounting and tax records are accurate, organized, and updated. You’ll likely be required to submit numerous documents, including three years of business and personal tax returns, a loan application that permits a personal credit report for all owners, business debt schedule (BDS), personal financial statement (PFS), interim financials, AR and AP aging reports, entity documents, and purchase agreements. Organizing and compiling these items ahead of time makes the process much easier and less stressful. The Loan Mantra portal allows you to upload and securely store your financial documents so you’re prepared to apply for funding as you prefer.

  Maintain credit worthiness: Pay your bills on time, have the best credit possible, and know your credit score. Avoid foreclosures, bankruptcies, and late payments. While different lenders have different credit requirements, good credit is important regardless of the loan you’re pursuing. Lenders often require a credit report that can mildly impact your credit, knocking a few points off your credit score each time you pull the information.  Therefore, applying for too many loans simultaneously may undermine your credit score, so start by applying for a loan that you have the best chance for securing. Loan Mantra’s financial technology, BLUE (borrower lender underwriting environment), uses decision-tree logic, meaning it can help you determine the best loan product for your needs. Also, Loan Mantra experts can help you determine the most prudent options for financing–from a conventional loan to MCA–based on your borrowing needs.

  Be prepared:  Now is not the time to scale back marketing efforts or forget to update the website.  Market your craft brew, register a website domain address and update your online profiles. Get a professional logo.  Be active on social media and online.  Stake your claim in the industry and make the craft beer name stand out.  Register with search engines and on multiple platforms so that banks and other lending institutions can find and get a feel for the company.

  Sustain and remain:  What part of the brewery: growing, product, mechanism, process, water usage, energy consumption, etc. is sustainable?  Does the brand resonate with the community and do you know the future goals for sustainability in the areas where the business is located?  This can make a direct impact both now and in the future.

  Keep records safe:  Providing and producing documents for the loan process can be time consuming and frustrating for both borrower and lender alike.  Working with companies that have an online portal to streamline this process to keep this information safe and secure for use anytime can save time, headaches and money.  Fortunately, Loan Mantra offers this service that is free to all business owners.  Simply upload your documents to a secure portal at loanmantra.com.  You don’t even have to be a client or customer to use the service.  

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About the Author

  Neeraj (Raj) Tulshan is the Founder and Managing Member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative and transparent platform.

  After graduating from Ithaca College in Finance, Tulshan began his banking career at Merrill Lynch in New York City. He spent more than a decade in the Currencies, Commodities and Investments Group where he also worked with global asset-backed securities, structured products and principal investments. Here, he also originated and underwrote deals valuated near $25 million and structured Series A and B financing.

  When the market crashed in 2008, Raj saw a significant opportunity to fix the fractured lending ecosystem. Soon thereafter, he sought after and completed an MBA from the Said School at Oxford University and began developing Loan Mantra. His goal was to remove the silos that exist between lender and borrower using secure financial technology. Though Tulshan continues to be iterative with his fintech, meeting current demands of both market and borrower, his professional mission and good- natured approach with clients remain the same. In this, Loan Mantra displays its founder ’s proud partnership between best-in-class fintech and top-marks human experts. Time-and-again, clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human —even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company designed to serve small and medium businesses with offices in New Jersey, Charleston, SC and New York. At Loan Mantra your success is our success.  This means that our attention, purpose, and intention are all focused on you, our client.  We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully, and service your account actively through one of three locations in the US.  We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or Manicure, let us help you today.

Connect with us at…www.loanmantra.com or 1.855.700.BLUE (2583)

BREWERY AS A BUSINESS: Important Points to Consider

By: Jess Perkins

As an experienced brewery owner or manager, you will agree that starting a brewery is easy; running one is not. There are many different things to consider and plan for when running a brewery, and many of those things only become immediately apparent once you are running a brewery. This article will discuss the major issues that any brewery needs to consider. They are not all equally important; some may even be seen as trivial, but each case has been a stumbling block for at least one brewery in the past.

Staffing

  Employees of a brewery are so crucial to the success or failure of a brewery. There are several points to consider when hiring employees for your brewery. You will want people who are motivated, responsible, professional, and of course, good at their job.

  It’s important to remember that if you have a small number of employees, you must compromise on at least one of these positions because there aren’t enough people out there with the skills of a great brewer, accountant, salesperson, and bar-tender all rolled into one. It’s not unusual for a brewery to have several business partners who take on different business roles, but this leaves some positions understaffed or unfilled.

  An important point to consider when hiring is that not all employees want to work full-time hours. You need to be able to offer flexible schedules and part-time positions as well as full-time ones. Employee scheduling and planning for business needs/periods throughout the year is a difficult skill and something that requires good time management.

  Employee training is crucial in the brewing business. It is expensive and time-consuming to train new employees, so you want to ensure that the person you hire will be successful. You don’t generally find people willing to work for free, so training costs do fall on the brewery. The more money you invest in your employees, the better they will perform their jobs — it’s as simple as that.

Labor Laws

  It would be wise to familiarize yourself with labor laws in your geographical location, country, and even state/province (if applicable). The U.S., for example, has very different laws in each state, resulting in a complex web of labor laws that can be difficult to navigate through. There are also different laws for different types of employees, e.g., full-time vs. part-time or salaried vs. hourly.

 Breweries that hire non-exempt employees (i.e., those who get overtime pay) should become familiar with the Fair Labor Standards Act (FLSA), which outlines the rules and regulations relative to paying overtime, minimum wage, and child labor.

  Breweries that hire exempt employees (i.e., those who do not get overtime pay) should become familiar with the Internal Revenue Service’s guidelines of what qualifies an employee for “exempt” status. For example, managers may be eligible as exempt under some circumstances, but it is wise to consult with a tax professional if you are unsure.

Pricing

  There are many different ways to price your beer. There is a powerful perception in the craft brewing industry that all breweries sell their product for “too cheap,” and part of the job of a brewery is to educate consumers on what good beer costs. In fact, some brewers go as far as saying that if you can’t afford their beer, you probably can’t afford craft beer.

  There are many factors to consider when deciding on a price for your product, not the least of which is competing in your market. Price too high and no one will buy your beer, price too low and you may lose money or have to discount the beer very frequently to move it off the shelf — another challenge altogether.

  In addition to that, you have to take into account other factors such as overheads costs (keg size, pour size). You should also understand the difference between pricing off-premise and on-premise bottles and cans. At Untappd, there’s a beer pricing guide that is worth a read for future reference.

  Regardless of how you price your beer, it is a fact that the craft brewing industry is a volume or “spread” business. Very few breweries make money, but those that sell beer to enough people make a decent income at a good spread. If you look at the National Brewers Association’s list of the top 50 craft breweries in the U.S., it becomes apparent that volume is king. Very few of these breweries make significant profits, but they are still thriving because the spread between their production costs and retail prices is greater than most other beer manufacturers.

Branding

  Branding is an essential aspect of running a brewery that includes everything from your logo and beer labels to where you sell your beer. It also involves how you market, advertise and promote yourself. An excellent way to think about it is the total image or “face” of your business. Breweries also have to think about consistency in their branding across multiple locations.

  There is a lot of money and effort involved in making sure that all your beers, logos, labels, and promotional materials are consistent from location to location. If you own more than one brewery, it is almost impossible to create a consistent image between them.

  Craft brewing is an industry that has been growing exponentially for several years. While it is a great time to open a brewery, staying relevant and growing your business can be equally challenging. Many challenges have come along with the current craft beer explosion, not the least of which is keeping up with demand. It’s no secret that many breweries find themselves struggling to meet the demand for their product.

Taxes

  Breweries have a general misconception that they don’t have to pay taxes on top of the price increases they charge for their beers when in fact, they do. You can avoid paying taxes somehow, but it is not advisable, and the penalties are severe if you don’t follow proper procedures by filing quarterly estimated tax returns.

  Brewers must also pay close attention to the Alcohol and Tobacco Tax and Trade Bureau (TTB).

  Once a brewery has sold its first keg of beer, it will need to get Brewer’s Notice required for breweries to sell beer. The TTB also requires brewers who produce more than 100,000 barrels per year to file an annual report and pay a fee.

Tax rebates for breweries are rare, but there are some. The primary way breweries can reduce their taxes is through tax credits usually applied to capital expenditures or new equipment. These credits are offered by the federal government yearly, and every brewery should apply for them.

Competition

  Brewery owners should always think about how they can differentiate themselves from other breweries in their local market. The more you know about the competition, the easier it is to compete with them. You will need to consider your price points, your unique selling proposition, and what makes your brewery stand out from others. To do this, you’ll want to collect as much information as you can about your competition. It doesn’t end there. Once you have a large enough customer base, you’ll notice that many of them will want to know how your beer is made, especially if they are true connoisseurs.  

  Brewery owners should also be aware of what their competitors are doing and what the market will bear. You have to know when to compete with other breweries and when you should let them fight amongst themselves while you keep your focus on growing your customer base. Brewery owners who are too aggressive in competing against other breweries may alienate customers and create bad press for their company.

Growth and Expansion

  Growth is vital for breweries, but it shouldn’t be the only focus. You need to think about how you can grow your brand and maintain your current customer base while still maintaining product quality and consistency and avoiding the depletion of raw materials as much as possible. Successful brewery owners know that growth is not always good and that some microbreweries have been forced to close their doors because they grew too fast.

  Brewery owners should think about the total market for craft beer and how it is evolving, not just your little bubble of sales. They need to be aware of what the current trends are and stay ahead of them. As new breweries pop up, you’ll want to ensure that your brand is strong enough to stay relevant in your local craft beer scene. Making sure that you are always ahead of the curve will help your brewery grow and look forward into the future rather than behind at all of the things you used to do

  Brewery owners and managers can’t just rest on their laurels and expect success to keep coming. They have to engage in the marketplace actively and stay ahead of trends or be one step behind them. You also need to try new things that you think will work despite what your competition is doing. Most importantly: never lose sight of your goals and vision and stay consistent with it. No plan will be perfect, but that shouldn’t stop you from trying your best to get there.

Assessing the State of Craft and Specialty Beer Distribution Post-Covid

By: Becky Garrison

According to the Brewers Association, overall U.S. beer volume sales were down 3% in 2020, while craft brewer volume sales declined 9%, lowering small and independent brewers’ share of the U.S. beer market by volume to 12.3%. Retail dollar sales of craft decreased 22% to $22.2 billion and now account for just under 24% of the $94 billion U.S. beer market (previously $116 billion).

  According to their analysis, the primary reason for this overall sales decline was the shift in beer volume from bars and restaurants to packaged sales. Given this shift, how did craft beer distribution change during this ongoing global pandemic?

Half Time Beverage

  Half Time Beverage features over 4,000 craft beers and ciders from over 800 breweries across 50 countries. They sell via two New York based retail stores and their online business, a convenience that helped them during the worst of the pandemic.

  “The fact that we were able to deliver the best in craft beer to people’s doorsteps result-ed in an increased amount of purchases from both existing and new customers who ordered from Half Time during Covid,” said Jason Daniels, Half Time Beverage’s Chief Operating Officer.

  During Covid, Half Time had less availability in terms of seasonal releases such as Pumpkin Beer. “We had a lot of challenges in getting seasonal products this year as craft beer manufacturers are focused on making and distributing their core product releases,” Daniels said.

  Moving forward, Daniels does not foresee any changes to their marketing strategies, adding that Covid changed buying behaviors, specifically with a significant increase in online shopping. “We anticipate this will continue as things open up. The high availability of online goods and shopping amplified everyone’s ability to shop in different ways successfully.”

Tavour

  Tavour, a Seattle-based craft beer distributor, gets its beers directly from craft breweries. Once these products arrive at their facility in Washington State, they market and ship them to their members across the United States.

  During Covid, they implemented major safety modifications, including creating social distancing measures and increased sanitation for workers and the beers they distribute.

  Throughout the pandemic, Tavour ended up increasing its sales threefold. They attribute this growth to their SEO status increasing significantly, leading the company to be listed in the top five searches for craft beer delivery.

  They also observed that since people could not attend breweries or beer festivals in person, they were looking for new ways to try craft beer. Tavour filled this need with accurate tasting notes for all their offerings, capitalizing on their bevy of product samples and quality taste testers. These notes enabled their customers to have a better idea of what they were buying, even though they could not sample the beers themselves.

  While Tavour does not have any firm dates regarding when in-person events can happen again, they hope to resume them in 2022. Currently, they are working to help put on the Barrel and Flow Festival, a Pittsburgh-based celebration of black arts and artists.

Localized Craft Beer Distribution

  As the owner and sole proprietor of Packmule Beverage, Brian Balland buys from breweries that self distribute in Washington State and Oregon and then sells these beers directly to consumers. He delivers the orders to select breweries throughout Washington State, where customers can then go pick them up.

  He developed this niche, direct-to-consumer service for Pacific Northwest craft beer aficionados who want to sample beers from smaller breweries that only have these offerings available at their brewery but are too remote for them to visit on a regular basis. 

  Initially, Balland began this service by working with brewers within his circle. Later he expanded to include requests from customers for specific breweries.

  While he launched Packmule in September 2020, Balland conceived of this service pre-Covid. However, he said, “Covid made it easier to try new things and made consumers a little more malleable to trying new ideas rather than doing things the old way.”

  Since launching this service, Balland estimated he has pivoted twenty times, trying to figure out what will work best for the consumer. Moving forward, Balland plans to con-tinue offering Packmule’s services for consumers in the Seattle and Portland area.

DIY Beer Distribution

  Given that both owners of StormBreaker Brewing in Portland, Oregon, have experience working for a distributor or a logistics company, they chose to apply these skills in assessing how to distribute their award-winning craft beer during the global pandemic. After researching the cost benefits of various distribution models, they concluded that a self-distribution model worked best for them. So, they launched their self delivery ser-vice on March 17, 2020, right after Oregon issued a stay-at-home order, forcing bars and restaurants to close statewide.

  StormBreaker already had an active website for customers to order their beer and mer-chandise online, so they did not incur many logistical issues when launching their delivery service. They set up the ordering platform, and within days they were delivering to customers’ homes and establishments that remained open.

  According to co-founder Dan Malech, “The biggest advantage we have is complete con-trol of our product from inception to delivery. We have an amazing range of flexibility of what we sell, where we sell and when we sell.”

  This DIY model allowed them to deliver beer to their customers with very little notice. Malech cites an example where, during a bad snow and ice storm, the brewpubs around town that remained open were running out of beer. No one else was delivering.

  “We received a ton of calls, hopped in our vehicles, and made many new and lasting customers. I mean, we’re called StormBreaker!”

  While StormBreaker’s beers can be found in retail and grocery stores such as Whole Foods, New Seasons, Market of Choice and most regional bottle shops, some retailers won’t work with them. Also, they cannot approach certain parts of the United States without a distributor.

  “There were too many advantages to self distribution for a company of our size to ig-nore,” Malech said.

  Currently, Stormbreaker has dedicated staff to fulfill and deliver their online orders Mondays through Saturdays. They offer home delivery to the Greater Portland area, with their sales team doing periodic drops to Bend, Oregon and Seattle, Washington. Also, they can ship beers via UPS to those states that permit online sales. For all other out-of-state and greater Oregon sales, they partner with Bevv, Packmule, Drizzly and Tavour, which allows them to have a larger reach both regionally and throughout the country.

Merchant du Vin: Specialty Beer Importer

  Seattle based Merchant du Vin noticed that the distribution of their specialty beers increased in retail stores due to more consumers drinking beers at home during the pandemic, causing their overall sales to increase.

  On the other hand, bar and restaurants sales decreased when these establishments were closed due to Covid-19 restrictions. For example, Orval Trappist Ale is one of the most popular imported specialty beers Merchant du Vin represents in the U.S. While this beer is available in select stores, the bulk of its sales come from bars and restaurants that carry a small but carefully curated craft beer list.

  In addition, with the closing of on premise sales, there were huge losses of keg sales across the U.S. According to Craig Hartinger, Merchant du Vin’s marketing manager, “We actually fared better than some suppliers, but there were hundreds of kegs that we couldn’t sell.”

  Merchant du Vin also lost their ability for their beer representatives to present beers in person to potential outlets, as well as opportunities for in-person consumer tastings. “It took a while to get our online meetings up to speed,” Hartinger said.

  When regions open up, Merchant du Vin plans on continuing their online connections, resuming in person visits and reducing their keg options. Once events can be held in-person, they plan on exhibiting their wares as applicable, such as their Samuel Smith ciders, which they featured at Seattle Ciderfest pre-Covid.