Acquiring and Maintaining Overseas Distribution

Overseas distribution with a delicate product like craft beer is never easy because ​as a brewery, you want to avoid delays, but you also want to keep the price reasonable.
​In December 2018, Cigar City entered the United Kingdom for the first time with its products. Meanwhile, North Coast has seen about 7-8 percent of its brands head overseas​ to places such as Sweden, China and South Korea. And Reuben’s Brews ships both to the East and West, heading to both Japan and England from its Seattle headquarters.
​For ​Cigar City​‘s Jesse Kercheval​, who is the ​International Business Development Manager​ for the brewery, ​it starts with a desire to supply beer to passionate Cigar City fans around the world who can’t travel to Tampa as often as they would like, but still want to enjoy the beers and have them taste true to brand.
“Our overseas fan base is mostly comprised of expat Americans living overseas, international visitors who have spent some time in the US for work or study, and globe-trotting travelers who got to know us and our beers at our brewery taproom or a beer festival,” Kercheval sad. “On the flip side, if we don’t establish proper distribution through a partner who will handle our beers correctly, there are always gray market traders willing to ship our beers unauthorized at gouging prices and often terrible quality.
“We’re all very international people ourselves who love to travel, so what better way to mix business with pleasure?”
Kercheval​ said the brewery luckily has several years of experience exporting from the US, and ​teaming with ​James Clay ​Importers ​​in the UK — which ​has even more experience importing into the UK​ — helped get Cigar City​‘s ​venture off to a smooth start.
​“​CANarchy also has a distinct advantage as a distribution platform,” Kercheval​ said. Although each of the breweries in ​the collective is ​an ​independent, ​they do work together to provide an attractive portfolio of beers to create consolidated shipments.
​“​That means that we’re shipping smaller quantities of beer from Oskar Blues Brewery and Cigar City Brewing more often, keeping the beers fresh​,” he said.​
Logistics are hard around seasonals​, said Reuben’s Brews owner Adam Robbings.
“Even if it’s a ​three-month seasonal​,​ you might be out of season due to a ​six-week shipping window,” he said​. ​“​We must be very tight with those, and only send something that is at the start of its season.​“​
In general, ensuring a cold chain of distribution is critical, he added, noting that you’ll have a few weeks before it even hits shelves.
Robbings added that breweries looking to send overseas must also work with the distributor partner for the eventuality that some beer is delayed or ends up in the market past ​a date ​they don’t want it sold.
​“​We still care deeply about the quality of our beer, and want the consumer to get the best beer possible, even if it is a continent away​,” Robbings said​. ​“​So in the eventuality that the beer is out of its prime, we will work with the distributor to ease the financial burden for each other.​“​
There is also an issue of the marketplace. Robbings said the beer that travels the best might not be what buyers and consumers are wanting.
“Everyone wants fresh American hoppy IPAs, but these often are the most time- and temperature-sensitive beers to ship,” he said. “So being very sure of your timing and cold chain when it comes to overseas distribution is critical, and you have to plan wisely.
“It is of no use to anyone — not us, not the consumer — to ship our best IPAs only to have them arrive in less than perfect shape.”
North Coast Senior Vice President Doug Moody ​thinks the demand for craft beer worldwide is continuing to grow. The brewery’s export game really unfolded after its Russian Imperial Stout, Old Rasputin, won a gold medal in Sweden. Since then, the brewery has expanded its international territories to a few European nations along with several “closer” to it in Asia.
“I think as palates change and people are trying new and different things, I think the American craft beer market [over there] is ripe,” he said. “I would’ve never guessed that in a market like South Korea would my number one beer I would sell there would be Old Rasputin.
“A lot of people think of it as a winter beer but South Koreans drink as much in July as they do in January. So I think they’re passionate people and when they like something they they go after it.
“That’s kind of what has been good for us about that market, a lot of our other export markets as well.”
Moody said marketing their product over there is much different. The sustainability story that can be important to Americans isn’t as successful over there and Moody said North Coast relies on their distribution partners to know how to sell the beer properly.
​“​We’ve got certain dollar amounts per case that we allocate to their marketing of our products and we basically kind of stay out of their way,” he said. “We don’t try to dictate the terms that they do that in.
“It’s still more about just getting those consumers who have that discretionary income to drink really great beer from the US.”
Robbings — who was born in England and wanted to be able to have his parents go to a store and buy his beer — said marketing the Reuben’s Brews name is tough work.
“How do people know about your brand in another country, when you’re thousands of miles away,” he asked. “It’s an advantage for us that as a family we visit the UK every year, and we work in a few tap takeovers, and even manage to do some collaborations with friends.
“That can help get our name out while we are there. We haven’t had the opportunity to do much outreach in the Japanese market. Yet.”
Kercheval​ noted that the US beer scene has been inspired by UK breweries for years, so to be able to ship ​their beers back their direction is an honor.
​“​The UK beer market is one of the most competitive in the world for a number of reasons including sophisticated consumers, infrastructure to keep the beer tasting right, very high-quality local brews, and access to beer from around the world​,” he said​. ​“​James Clay has been flourishing in this market for 40 years and they have built a sterling reputation through consistency and good old hard work.​“
Getting to the point of picking who to work with can mean building relationships and having the trust you need to see your product cared for.​
​“We wanted to get to know the folks before we started working with them on any kind of a larger basis​,” Moody said​. ​“​If you have a problem with somebody on the other side of the world there’s not a lot you can do about it. And getting to know people and again having a relationship that you feel comfortable with I think can make those waters a little bit easier to navigate and that’s how we have tried to do it.”
​Robbings said he looks for honesty and consistency, along with a dash of fire in the belly.
“Our beers are distributed far and wide so while we still get our best customer feedback across the taproom bar, we rely on transparency and dead honest feedback from distributors to learn what our accounts and drinkers want more or less of,” he said. “Overseas we’re an import brand so we rely on the honesty of our local distribution partner that much more.
“Consistency is the foundation of it all. It takes a lot of capital and deliberate hard work to supply an entire country with fresh craft beer.”

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