When Does Self-Distribution Make Sense?

Brewery owners looking to sell their beer outside of their own taprooms find self-distribution makes the most sense in some situations. 

That’s where Oakshire Brewing landed late in 2022, when it began self-distributing its beers in the Seattle metro area — the method they used when they started as a small brewery in Eugene, Oregon in 2006.

Multiple points contributed to Oakshire deciding self-distribution in Seattle as it expanded into Washington state made the most sense.

For one, the number of breweries in the US has multiplied by four since Oakshire began making beer. 

“When we opened in 2006, there were about 1,600 breweries in the US, and now there are about 6,500 — depending on how they’re counted,” Marketing Director Hannah Child wrote in an email to Brewer Magazine. “So there are many more breweries delivering fresher beer through self-distribution and three-tier distribution. It is an exciting time to be a beer drinker or a retailer, and a very interesting time to be a brewer.” 

Also, the volume of certain beers the brewery had begun producing turned the tables in favor of simplifying distribution.

“In 2020, we began canning significantly more small batch pilot beers than we ever had before. Sometimes, only 10 or 20 cases would be sent to our distributor, with the remainder sold through our taprooms,” Child said.

This amount of volume doesn’t always make sense for a large wholesaler, and it doesn’t always make sense for a brewer from a margin standpoint, she added. 

“A beer built to sell directly through our taprooms may not have the margin opportunity for both wholesalers and retailers if that same beer were sold through the three-tier system,” Child said. “With our increase in exciting pilot beers, customers and retailers were requesting more of them, but they didn’t always work for our wholesaler. We were excited by the prospect of delivering options like our smoothie sour ales directly to retailers.”

It was a trade-off. Because of logistics, Oakshire was initially only going to be able to hit the Seattle area. 

“That meant trading those sales for the sales of our core beers in far-reaching parts of the state until we were able to add routes,” she said.

Oakshire’s investments it made in self-distribution included a new truck with expanded weight capacity. 

It invested in compliance and administrative processes but utilized existing staff for marketing, sales, and deliveries. Chris “Alty” Althouse, Oakshire co-founder and Operations Director, will spearhead Oakshire’s Self-Distribution Operations. 

Oakshire will expand to a second monthly route in 2023 to serve retailers throughout Western Washington. Routes to Central and Eastern Washington will be added to meet demand.

“We’ve had to spend time connecting to our Seattle accounts, and re-introducing them to Oakshire,” Child said. “The second monthly route may trigger an additional hire.”

Child said companies deciding to self-distribute should focus on the needs of the retailers, who know their beers and their customers. 

“The real opportunity in self-distribution, aside from capturing a bit more margin (subsequently spent on delivery costs) and delivering fresher beer, is to connect directly with retailers,” Child said. “They have the pulse of their markets, and the information they can share about their customers’ preferences, other brewers and their beers, and your own beer, is pure gold.

“Specialty retailers are the lifeblood of the craft beer business and the ability to connect directly with them while delivering your beer is invaluable.”

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