The Ins and Outs of Adding New Territories

Building a philosophy on new territory growth is vital, and it can start as early as installing the first piece of equipment or before the first brew was created.

Before starting his brewery in 2012, Zak Koga of Karben4 expected to see the overall beer market push toward national and then retract back to regional in the grand scheme.

“I think we are starting to see that focus on regional relevance and I think that brands being super-regional at most is the most sustainable state for a sustained craft beer market,” he said. “There simply is not enough room for 2,000 breweries to be nationwide and the legacy of beer is that it is unique from place to place.”

Based in Madison, Wisconsin, Karben4 just recently expanded into all of Wisconsin, with plans to stay at that level to make sure they can service its local markets appropriately.

“We have taken a deliberate stance on organically growing into new markets,” said Koga, one of the brewery’s co-founders. “We have artificially restricted our growth over our short five year history to make sure that any given market is already requesting our beer before we enter the market.”

That strategy has seen the brewery move from 675 barrels in 2013 to more than 10,000 in 2017.

Jerry Gnagy of Kentucky’s Against The Grain Brewery said he’s always wanted beer to be distributed to places he would want to go and having fellow breweries in the area of a market that the brewery is researching to enter to be able to work with on collaborations and get insight into that area.

“With all the craziness in the beer market over the last 10 years, I feel more confident in growing slowly and organically in 15 different markets than pushing beer hard into two or three and having to rely other people to hard sell it,” said Nagy, who a co-founder of the brewery.

Against The Grain looks at breweries that are in the area, what other distributed brands there are on shelves and along with looking at how those breweries move product and the longevity of the brands to help guide what the Louisville-based brewery does for future market growth.

“In person is the best way to both get a feel for what the new market is like but more importantly to establish a good relationship with your importer or distributor,” he said. “That relationship is extremely important.”

In Salem, Virginia, Parkway Brewing recently made a new venture into Ohio as its third state to add product to after adding North Carolina as its first outpost.

Sam Sadovnic, the Lead Brewer for Parkway, said that discussions began with a distributor who asked about the brewery coming into the area.

“He had a friend that loved the beer and they thought we would do well in Ohio,” Sadovnic said. “They came to us and showed what they could do for us. We thought it would be a good fit.”

Parkway officials wanted to see how the distributor would focus on the brewery’s products along with what else is in their portfolio and how the distributor would work with the brewery.

“Quality is a first consideration,” Sadovnic said. “Storing the product, working it through their inventory. We wanted to see them excited about the product and how they worked with their reps.”

Gnagy chose areas mostly by those importers or distributors who have continually asked for Against The Grain products and also have similar brands in their portfolio.

“If we can make something work, we will usually find a way to do it,” he said.

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