DIY Distribution: The Pros and Cons of Self-Distributing Craft Beer in Florida
Self-Distribution in Florida has been high on the legislative agenda for years in the beer industry and we have compared the Pros and Cons of what that could mean to local independent breweries in the future.
Self-distribution of craft beer in Florida could have a number of benefits for breweries, including:
Increased Profit Margins: By self-distributing, breweries can cut out the middleman and keep a larger share of the profits from their beer sales. This can help increase the overall profitability of the business.
Greater Control: With self-distribution, breweries have greater control over how their beer is marketed and sold. They can choose which retailers to work with and how their beer is presented on store shelves, which can help build brand recognition and loyalty.
More Flexibility: Self-distribution can be more flexible than working with a third-party distributor. Breweries can adjust their delivery schedules and quantities based on demand, and can more easily introduce new or limited-release beers to the market.
Stronger Relationships: By working directly with retailers, breweries can build stronger relationships with their customers. This can help foster loyalty and encourage retailers to promote the brewery's products more aggressively.
Regulatory Benefits: In Florida, self-distributing breweries are exempt from certain regulations that apply to third-party distributors, which can help reduce costs and streamline operations.
While there are several benefits to self-distribution in craft beer in Florida, there are also a number of potential downsides to consider, including:
Higher Costs: Self-distribution can be expensive, as it requires breweries to purchase and maintain their own delivery vehicles and equipment, as well as hire and train their own delivery and sales teams. This can result in higher upfront and ongoing costs compared to working with a third-party distributor.
Limited Reach: Self-distribution can limit a brewery's reach and ability to expand to new markets. This is especially true for breweries that lack the resources or infrastructure to cover a wide area. Third-party distributors may have a wider network of contacts and established relationships with retailers and bars that can help a brewery reach a wider audience.
Increased Administrative Burden: Self-distribution requires breweries to handle all aspects of the sales and distribution process, including compliance with state and federal regulations, invoicing, and inventory management. This can be time-consuming and add to the administrative burden for the brewery's staff.
Risk of Overextending: Self-distribution can be risky if a brewery attempts to grow too quickly or overextends itself. If a brewery is not able to meet demand or effectively manage inventory, it could result in lost sales and damage to the brewery's reputation.
Limited Time for Brewing: Self-distribution can take time and resources away from a brewery's core business of brewing beer. This can be especially challenging for small or growing breweries that have limited staff and resources.
Retailer Confusion: Currently there are a handful of craft distributors in the Tampa Bay area and some national/regional breweries with sales reps talking to retail accounts. With self-distribution, the amount of sales reps seeking new placements and handles could create a headache for the retail buyers by having to juggle so many sales reps and companies. It could potentially harm the growth of smaller brands and independent micro distributors such as Altered Craft.
Overall, self-distribution could become a viable option for some craft breweries in Florida, but it's important to weigh the potential downsides against the benefits before deciding whether to pursue this strategy should legislation get passed.