The Sales Rep, a Backyard and The Middle Tier

This is the third edition in a 5 part series on the distribution of craft beer in Northern Colorado. To read the first article, click here, or for a history of distribution, here.

The ability to self-distribute their product is one that Odell Brewing Company holds dear. All bars, restaurants, and liquor stores within 10 miles of the brewery, located at 800 East Lincoln, have their beer delivered to them directly from the brewery by an employee of Odell’s. They call it their “backyard” and they sell more beer here than anywhere else. Outside of the backyard, Odell’s holds distribution contracts with American Eagle Distribution for Northern Colorado and several other distrubutors for the 10 states they reach, allowing them to have a better focus on their biggest accounts.

Most breweries have Sales Represenatives in addition to distributors for every region, such as Left Hand Brewing who distributes through C.R. Goodman, but is represented in Northern Colorado by sales rep Joe Shea. For their backyward, Odell’s combines these positions.I was recently able to sit down with a Sales Representative from Odell’s that is responsible for promotion, sale and distribution in the backyard, Nico Cherubin.  We sat on

Nico setting up at a recent pairing at The Welsh Rabbit Cheese Shop

Nico setting up at a recent pairing at The Welsh Rabbit Cheese Shop

top of kegs, sipping beer while a fork lift moved pallets of kegs from the cooler to a truck waiting in the dock.  Nico gave me an in depth look into his world. A world of beer that doesn’t involve a brew kettle, but a delivery truck.

We started with a tour of Odell’s where we walked right past the brewing equipment and straight to the back of the building. Here Nico pointed out floor to near-ceiling shelves full of posters, coasters, stickers and key chains. “This is where we grab promotional materials, to hang up in liquor stores, provide for bars or give away at events”, he told me. I had walked passed these shelves many times before, but now I stood in awe at the amount of product on the shelves. One of the main responsibilities Nico holds is to promote the beer. This can be everything from setting up displays in liquor stores, to attending beer dinners, tastings and festivals.

Next we headed to the cooler. While promotion is important, the star is the product that he is promoting. Cases of bottles and pallets stacked with kegs stood waiting to be delivered to an account. Nico is responsible for both making the sale, and getting the beer to the account. “The sales rep is the face of the brewery” he says, “our accounts really depend on us to be there for them”.  If a bar runs out of beer on a Saturday afternoon, Nico can have a new keg to them within the hour, something a traditional distributor isn’t as able to easily do.

Odell’s

Lugene rolls off the line and into boxes to be sent to accounts

Lugene rolls off the line and into boxes to be sent to accounts

also provides staff education to their accounts. Nico provides tastings, tours and more to ensure those serving their beer are knowledgeable on both the company and the product. “Educating people really helps the industry as a whole, not just Odells”, claimed Nico. Especially in an area with as many craft beer-related businesses as Northern Colorado, this is key.  He says that his favorite part of his job is doing hand sales at liquor stores. By offering samples, and a “bonus” beer if you purchase a six pack, Nico is educating the consumer.

Without great people like Nico, your favorite Odell’s beer would not get to your local bar or liquor store. While the physical act of moving the beer from one place to another is important, there are so many more aspects to his job. All of which are helping to make Odell’s a successful craft beer brand across the nation.

I have worked with Nico’s in the past on different events around town. His passion and knowledge for the product he sells was contagious. Nico claimed this is because, “it is really something I can get behind, it is easy to sell quality. This is a business of happiness, it’s really special to me”. I could have sat all evening chatting beer, industry and life with Nico, but we ended our chat in the noisy taproom where Odell employees and their families were gathering to listen to the band play. Next time you sip a 5 barrel on the patio of your favorite restaurant, think of the people that helped to get it to your glass.

Upcoming articles

May 23: The $1 million Warehouse

May 30: Rosie the Distributor

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A Brief History of The Middle Tier

This is part 2 of a series on Distribution of Craft Beer in Northern Colorado, to catch up on the first, click here

From 1920-1933 more alcohol was consumed in the US than any other decade previous. However, the production, transport and sale of alcohol was illegal. Prohibition, spurred by the Temperance Movement and the Anti-Saloon movement,  created a vastly different market for alcohol in America than before. In an attempt to prevent the problems that prompted Prohibition in the first place, the 3-tier system was created. The intention of this system was to do 3 things; regulate the production, transportation and sale of alcohol, give these powers to the state to decide, and provide an avenue for state and federal governments to collect revenue.

Before prohibition many bars were owned or controlled by breweries, distributionoldknown as a “tied house”. When fees and taxes were raised in the name of temperance, bars who couldn’t make the cut asked breweries to help foot the bill in exchange for only serving their product.  This created a backlash of price fluctuation  and over consumption as prices dropped. One intention of the three tier system is to prevent this sort of favoritism and allow for a more open and fair  market.  While the intentions are good, there is only so much shelf space and SKU’s (Stock Keeping Unit) available, especially with the boom of craft beer. Distributors such as American Eagle, High Country Beverage and C.R. Goodman are all competing for the same set of tap handles and have more than enough brands to fill them creating a competitive and intense sales environment. If you visit bars in Fort Collins, you will probably find bars who carry more of one companies brands than another.

The repeal of prohibition left most regulatory decisions up to the states. These included self-distribution, franchise laws and even regulations on the ability to provide incentives. Each and every state is different. Most Southern states including Alabama, Georgia and Florida do not allow breweries to self distribute. In California breweries can not only self distribute their own brands, but also others as well by owning a distributor. This is known as vertical integration. Here in Colorado, breweries must hold a wholesaler’s license but are able to self distribute their products. Brewpubs (who also hold a retailers license) are limited to distributing less than 300,000 a year, but no regulation exists for those without a retailer license. Colorado also allows vertical integration.

Colorado breweries are not subject to strict franchise laws, either. Some states, once a brewery and a-b-loading-trucksdistributor enter into an agreement, the brewery is “married” to that distributor. This means that the brewery cannot fire their distributor without just cause, and possibly even a hearing by a regulatory board. If there is just cause, such as a distributor neglecting a brand, a brewery can choose another distribution company. But this is a long and hard process, promting breweries to be very careful about their first choice of distributor. While the franchise laws are lax, Colorado is subject to an “at-rest law”, meaning that the beer must “rest” at a distributor between the supplier and the retailer, which slows down the process of distribution.

Distributors are usually the ones who collect the most taxes than any other branch of the 3-tier system. Currently in Colorado, according to The Northern Colorado Business Report, distributors in Colorado contribute $215 million in taxes. An additional $124 million is paid in alcohol excise taxes. Colorado has one of the lowest levels of excise tax, a law that hasn’t been changed since the 70′s. Also since the 70′s the number of distributors in the US has decreased from 4,699 to less than 2,000. While brands and SKUs are multiplying, distributors are consolidating. This is forcing the distributors that are still around to adapt to the rapidly growing and changing market, creating a whole new way of doing business.

Be sure to check out the next edition in the series to learn more on distribution in Northern Colorado 

May 16:  The Brewery and the Sales Guy

May 23:  The $1million Warehouse Upgrade

May 30:  Rosie the Distributor

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The Middle Tier of Craft Beer, A Series

This article was originally published in the May 2013 issue of Scene Magazine. You can find Scene Magazine on news stands and in local businesses all over Northern Colorado beginning the 1st of each month. 

Next time you take a sip of beer, think of the people who made it possible for that beer to be in your glass. Two people that come to mind first are the brewer and the bartender. The brewer, who spent hours turning the grain, water, hops and yeast into beer. As well as the person who poured the beer for you, the bartender, are your first sources. However, the missing, and often not spoken of link, is the distributor. If it was not for them, you would be missing a very important and integral part of how the beer gets from brewery to your mouth. The distributor is the one who makes it possible for the beer to get from the brewery and to the bar or liquor store

First, a little history, when the Prohibition Act was repealed in 1933, a 3 tier system was established in an attempt to ensure fair practices among beer producers and to raise more taxes. Prior to IMG951051prohibition, a brewery would often ‘sponsor’ bars, providing them with incentives to only serve their products. Post prohibition, if a brewer wanted to bring his product to the market outside of his taproom he needed to have someone else, a distributor, involved. The distributor is the middle man between the brewer, bars, restaurants and liquor stores that sell his product.

Here in Colorado we have more lienant laws than most states. Brewers can choose to self distribute, and most small breweries take this route. They are allowed to load up their pick up truck, and haul kegs and cases to and from bars, restaurants and liquor stores as they choose. Many breweries have staff members whose main responsibilities are the distribution and sale of their product.

Whether working for a brewery, or a distributor, the person who sells the beer becomes the face of that brand and an important part of the beer community. When you attend a beer dinner or a tap take over at your favorite watering hole, they are the ones telling you about the beer and handing out free key chains. Because of this, a breweries decision of how to distribute their beer is an important one.

As the number of craft breweries grows in Colorado, so does the number of small producers who choose to AElogouse an outside distribution company. American Eagle Distribution Company created a separate division, Gold Seal, to help distribute craft products, including those from Odell Brewing Company, Grimm Brothers Brewhouse and Funkwerks to Northern Colorado area retailers.

The changing nature of craft beer is also changing how distribution companies operate. Five years ago, American Eagle Distribution was responsible for just over 250 different brands. Now, they have over 1,200 and are gaining more each day. This has required the company to complete a million dollar renovation for their facility. In return, they were forced to create a new system that organizes, tracks and distributes their product.

The process of getting beer from brewery to glass is a complicated one with many players and many stories. This article is the beginning of a 5 part series on the distribution of craft beer. Check back in every Thursday for a new edition of The Middle Tier of Craft Beer, including interviews with distributors and sales representatives, an exclusive tour of the American Eagle Warehouse and more.

Future Posts

May 9: The History of Distribution

May 16: The Brewery and the Sales Guy

May 23:  The $1 Warehouse Upgrade

May 30: Rosie the Distributor

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MyHandleBar Knows How to Show a Lady a Good Time

If you have never seen the MyHandleBar 16-person bike cruising around Old Town, then you may be living under a rock. Or maybe you just don’t drink as much as I do. Regardless, the MyHandleBar is a great addition to a day of sipping beers with great people.

Photos courtesy of JulieannaD Photography

Photos courtesy of JulieannaD Photography

Recently, MyHandleBar contacted me about doing a promo ride with them. All I had to do was fill the bike and have fun, how could I pass that up!

Invented by 2 Dutch brothers, this bike is the real deal from the Netherlands. According to MyHandleBar, the idea for the bike was, “started in a pub, was spurred on by a friendly wager and was literally sketched out on a bar napkin.” It is outfitted with a tap handle and a place to store a keg, but because of state liquor laws no drinking is allowed on the bike. It is just as fun to ride around and support other local businesses, so I don’t think we are missing out on anything with that one.

We had a great weather for our ride, despite having 22 inches of snow on the ground the day previous. The bike is said to seat 16, but I think our amount of 14 was perfect.  It was an awesome group of people who showed up to ride including some Beer Bettys, members of the Liquid Poets Society and Beer Lovers of Fort Collins, lots of new faces of Napa followers and even one of my favorite mom’s whom I nanny for. After we signed our waivers, and got our wrist bands

Photos courtesy of JulieannaD Photography

Photos courtesy of JulieannaD Photography

that are good for deals at participating bars, we were off!

Our tour guide, Rachael, was fantastic! She was very enthusiastic and energetic. It really takes a fun personality to make MyHandleBar even better than it already is and Rachael certainly had it! Surprisingly, this was her first ever tour. I never would have known if she didn’t tell me, it seemed like it was her second nature.

We had to do a loop around the block before heading to our first stop, Tap and Handle, because of the position of the parking lot and we got to be THOSE people. Slowing down traffic to 5 mph in a construction zone while we smiled and waved like we were in our own parade. Most people played along, honking and waving back. A few even ran out of shops to

Photos courtesy of JulieannaD Photography

Photos courtesy of JulieannaD Photography

quickly take a picture as we rode by, slowly. I was in much better shape last year when I participated in the Feasting Fort Collins promo ride, and it showed. We were a bunch of beer obsessed people  in fake paper beards trying to pedal a near 2000lbs bike, it wasn’t too pretty.

Most of us snagged a Sierra Nevada beer at Tap and Handle as they still had a few left from the 57 tap takeover the week before. It was even nice enough to sit on the patio, as some of us did. I had a great conversation with Cody and his girlfriend Devon about their favorite beers and how they are enjoying living in Fort Collins being recent transplants before we had to jump back on the bike for the next stop. It is always fun to have new faces along for experiences like this, and I am always so grateful that I am able to share them.

We

Photos courtesy of JulieannaD Photography

Photos courtesy of JulieannaD Photography

pedaled on to The Blind Pig, the newest addition to the Fort Collins bar scene. The staff here is great, and the owners always treat me like family when I come in with hugs all around. I broke with tradition and ordered a mixed drink instead of a beer. Gasp. Bartender Janay whipped me up a Rock Coconut Mojito, a mojito with a spin of coconut rum and fresh watermelon. Its the watermelon that gets me, I love the freshness it brings to the drink. Plus, it was much easier to sip out of straw with my beard than from a pint glass.

The only downside to the ride is that is goes by too fast! Luckily, Rachael was awesome enough to give us an extra 30 minutes. We took advantage of it and headed to The Forge Publick House where Loveland Alework’s American Raspberry Sour was on tap

Yes we do! Or 3! Photos courtesy of JulieannaD Photography

Yes we do! Or 3! Photos courtesy of JulieannaD Photography

alongside a couple of City Star Brewing beers. After we sipped our last suds, we ran back to the bike to make it in time to ride back to Pateros Creek Brewing Company, where the bike is stored in the parking lot while not in use. The MyHandleBar is a great option next time you have a celebration, guests in town, or just need something fun to do on a nice afternoon. Book your ride soon, they fill up quick!

Find more of Julieanna’s amazing photos from the ride, here.

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My Bike was Stolen! Now Im Sad

Im going to utilize all my resources, so also posting this on here. My sweet baby was stolen last night from outside of Choice City Butcher and Deli while I was inside enjoying a beer to celebrate a successful sold out class. She is pretty feisty, is white and silver with hot pink handle bars (the handle bar tape was custom ordered, and I have never seen another bike with this color). I sold my car last June in an attempt to go a year without a car, so she is my only mode of transportation. Yup, true Colorado style. Keep a look out if you see it! Bonus beers if you you see it being ridden around town and you tackle that a-hole off the bike. stolenbike

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