What are the Keys to Developing Territory Expansion?

Creating that new relationship farther away from your brewery to establish a new fan base and create more sales for your brand in a new market can always be a different experience

Migration Brewing has expanded its regional distribution reach to Idaho recently. The Portland, Oregon-based brewery entered a partnership with Scout Distributing to bring its beers to the state of Idaho. It is the latest addition to the company’s west coast distribution network which also includes Oregon, Washington, and Colorado.

Contiguous territory expansion is important, Migration told Brewer Mag.

“All suppliers are dealing with increased freight cost for sure,” the company wrote in an email. “Already developed wholesaler partnerships if available make it easier.”

Of course, everyone wants to be in a house that has full market coverage with consideration to chain support and deeper market penetration. The Migration staff said to look at market IRI data to see Craft share acceptance, beyond National Craft, and pricing elasticity to insure profitability to meet Margin needs, which includes covering freight, tax, and COGs.

READ MORE: ​The Ways Lakewood Has Built Back its State-Wide Distribution​ Strategy

“When entering new markets, we approach with a total team first, then determining a balanced ROI approach for the specific market needs,” they said.

Also in Portland, Ecliptic opened a new market in Q1 of 2023 as it partnered with Arizona Beer and Cider Company (ABC) to launch Arizona as a territory in mid-February.

John Harris, Ecliptic’s owner and Brewmaster, explained in a release that Arizona Beer and Cider reached out to them directly to join the beer portfolio, which is owned by the founders of Two Brothers Brewing.

“We look at markets outside of our core NW area as seed markets,” he told Brewer. “We hope to grow to a good level of business, but we will start slow and help support the markets as we can.

“We definitely look to see where we fit into the distributor’s existing book of brands. This has been a good strategy for us. For example, we have grown our Colorado presence to where we now have a brewery rep in the market.”

Having capacity both present (for Migration, 75% is utilized) to maximize a current build-out is important to profitability, the Migration team shared, and with the ability to expand the build-in of its current facility.

When Holidaily targets a new market for growth Hannah Perkins said they look at a few things.

“We look at the gluten-free market share, craft beer market share, and the percentage of chain business in conjunction with territory population,” she said. “Some of the key components in internal discussion in terms of logistics are forecasting needs for production, weighing potential new market output, and freight availability and costs.

“We aspire to develop a great relationship with wholesalers to show distributors how we can add value to their overall portfolio and how we can impact their gross profits.” 

Photo courtesy Migration Brewing

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