The second part of the sentence is the key one. They are really trying to control their brand. Pliny’s special qualities come from the small batches and freshness of the beers. Even getting it here, it was generally three weeks old. Stone is embarking on a similar path with their Enjoy by series as it is hitting almost all of their markets next week. They were even cautious and they are on a much bigger scale than RR.
The other thing is cost. Pliny is $5 a bottle. Whether or not that is expensive depends on your perspective. Part of the allure of Pliny, Heady, HF, Dark Lord, Kate etc is that they are hard to get. If Pliny ended up in every market, as a year round, they would be forced to get it into 6 packs at a much cheaper cost.
Personally, if they are going to do anything, I’d like to see them kick up the production on some of the seasonals. Make the Younger a month long, keep things like Hopfather on tap for more than 10 days, etc.
That said – I think we are in a craft bubble out (much like bourbon) and there is going to be a pretty significant shake-out in the relative near-term. I’d hate to see someone great like RRBC chase a few extra bucks and ultimately end up worse off.
And @Rick – couldn’t disagree more that Chicago isn’t a CB hotspot. While perhaps Chicago proper isn’t overloaded like say San Diego is, as a west coaster – it is imperative to have a Chicago trading partner. They get Bell’s, 3 Floyds, Goose Island, Founders, etc – which are world class brewers and reference point beers for those interested.
Interesting. I’ve never understood the limitations on self-distribution. I wouldn’t want to try and self-distribute 7,500 BBLs of beer. Perhaps the distributors just need to do a better job of serving their customers, or need a little more competition. In Oregon we, as well, have a self-distribution limit (5,000 BBLs/year). I don’t think that anyone in Oregon over about 1,000 BBLs/year self-distributes. The way the laws work in Oregon, you can get licensed as a brewery, but everyone gets licensed as a Brewpub, whether you’re operating one or not, because it gives you a lot more flexibility in running your business. I could see where a Brewpub owner would want the same ability to sell as the production breweries. With as many breweries as there are in Oregon, a number of specialty distributors have started up to handle only craft beer, and franchise rules are weak enough to allow a brewer to fire a poor distributor. Everything from the sales and distribution standpoint is set up to allow an Oregon brewer to compete with anyone. We even have mobile bottling companies that will come out and bottle for you. This leads to a lot of variety on store shelves, and frankly, a lot of jobs in the industry here.
The hard work in self-distribution is in the bottle deliveries. While the big bottle shops will keep your beer stocked on the shelf (and may even recommend it), the bigger grocery stores expect you the keep the store shelves stocked (out of back-stock you’ve previously delivered) every week. Kegs are relatively easy, both from a delivery standpoint (just drop it off and pick up a check and the empty), and from the standpoint that you don’t need as many kegs if you’re self-distributing (kegs cost about $135 each). I suspect that if we used a distributor we would need to double our keg inventory. With a distributor, figure that you need roughly one physical keg for every 5 kegs you deliver throughout the year. So selling 5,000 BBLs requires 2,000 kegs versus 1,000 kegs if you were self-distributed.
Personally, I would worry about building an expansion on the back of one beer, especially one where the true demand isn’t really known. If they would be building the expansion just to make Pliny, why don’t you just contract brew it? There are two problems with this. First, there aren’t any hops out there to buy. Pliny needs a lot of the “grapefruit” family of hops (Cascade, Centennial, etc), and the 2012 harvest is totally spoken for already, and full production from hops plants can take two years. Second, in the words of Alan Sprints (Hair of the Dog Owner/Brewer), no one is as anal about a beer as the original brewer. Frankly, the contracted beer would very likely not be as good as what Russian River can make in their brewery, and I suspect the Cilurzos’ wouldn’t put up with that.
All your points are valid – which is why I doubt they will expand. My guess is they want to get some of the investors out – a la Bell’s. Will be something to watch – but so long as my Pliny stays fresh & available, I’ll be fine.
Freshness is the antithesis of the national distribution system for beer. When we taste even Oregon beers, we usually find that about 15% of the beers are bad due to handling problems - skunky, old, etc. This is part of the reason why I’m concerned about expanding our distribution outside of Oregon, and I’m sure is something that the Cilurzos’ are thinking about too.
I like what Stone is doing with it’s Drink By series. The beers are great and guaranteed to be within the recommended window. I hope it takes off and allows others to follow.
It looks like there are 14 Breweries in Austin. That’s really good for the Midwest, and I bet they come close to the market penetration that the West Region has a a whole (18%), much better than the region overall penetration of 7%. On the other hand, little Bend, Oregon (population 90,000) has 9 Breweries, with another opening by summer. Portland, of course has more Breweries than any other city in the world (somewhere around 60 or 70, depending on how you count). In both of these cities, the craft beer market penetration is over 50%. When it comes to craft beer, we have a different definition of “huge”. I had some visiting brewers from Austin stop by about a month ago. They were astounded by the PDX beer scene.
Ah yeah, that’s pretty intense. Central Texas is making up for the rest of the state, Houston and Dallas (with Deep Ellum as an exception) are producing lots of mediocre, if not bad, beer.
When I was in Denver last summer visiting my brother I noticed a lot of restaurants/bars brewing their own beer. But the “house” beers I tried were weak. I think that’s something Chicagoans are going to find out as the craft-beer phenomenon continues to grow here. Not every new brewery is going to be as good as (e.g.) Pipeworks (let alone Three Floyds).
what is “market penetration”, and what website can one look at to see these figures for different cities? Interesting stuff (if only I understood what it all means!)
Brian, by market penetration, I mean market share. I like the term penetration because we are taking market away from the big three, who obviously have a huge percentage of the market nationwide. As far as market numbers, as I said, I bet in San Antonio, craft beer has a market share of around 18%. I have no inside knowledge, just a hunch. 18% is really good, and we were very proud to be there 7 or 8 years ago. In Portland, craft beer sales garnered over half the market for the first time in 2012, and the first time this has been the case in a major city in the craft era of brewing. This information came from a talk by the head of the Oregon Brewers Guild.
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