NO NEW BELGIUM IN NEW YORK?

On occasion, the Aleheads will have off-line conversations that end up being worthy of posting on our venerable blog. Well…maybe “worthy” is a strong word. But it’s a beautiful summer Saturday and we’re all too damn hot to come up with new content today. Instead, here’s a discussion we had yesterday about why Magnus can’t find a sixer of Fat Tire at his local package store:

On Fri, Jul 23, 2010 at 11:59 AM, Sir Magnus Skullsplitter wrote:

Can someone explain this?

http://ny.eater.com/archives/2010/07/sorry_new_york_no_fat_tire_for_you.php

Why do some breweries insist on refusing to ship to the most populated part of the country?  Do they actively hate money?  I’m honestly confused about this.  Why is there not a single bar in NYC with Russian River on tap?  And now New Belgium is adamantly refusing to sell beer to a bar in NYC?  What gives?

On Fri, Jul 23, 2010 at 1:42 PM, Dr. Ripped Van Drinkale, III wrote:

Not that I have all the details on this, but it appears that the author of the post you linked to has been extremely misinformed.  Breweries, by law, aren’t allowed to sell beer directly to a retail outlet on their own. Something to do with taxes, lots more to do with shipping, even more to do with laws that I don’t understand.  At the end of the day EVERY beer that you drink in a bar will be brought to said bar from a distributor.  Now, throw all this out the window if the brewery actually has a distribution license to ship their own beer (locally).  I worked sales for a brewery in MA and they shipped all their own beer because they had the licensing to do so (Also had an import license so we brought in a ton of beer from Europe).  They could only ship in MA though as anything that crossed state lines had to go through that state’s taxation system and distribution channels.  They chose to work with 2 distributors in CT and 1 in RI to get further distribution, but that’s extremely costly and the relationship is very difficult to manage without having local teams in place.

New Belgium chooses not to use Northeast distribution, it’s just always been that way.  It’s not really that they’re refusing to ship their beer, it’s simply a matter of volume/cost/distance and many other details that go into national distribution.  If they don’t have a distributor willing to send a truck out to Fort Collins, pick up the beer, and drive it 2/3 of the way across the country to sit in a warehouse then it’s not going to happen.  One thing they could do is get a company like Goose Island or Saranac and contract their beer to them for further distribution.  Those two breweries brew a shit-ton of beer for other people (Goose used to brew all of Otter Creek’s beer for the Midwest).  I can’t imagine a brewery of New Belgium’s character is going to contract out their beer though.

And, I’m done.

On Fri, Jul 23, 2010 at 2:47 PM, Sir Magnus Skullsplitter wrote:

I understand all of that, I guess I’m just confused as to why you can get Fat Tire in, say, Pittsburgh but not in NYC.  Not from a “is it legal” perspective but purely from a business perspective.  I understand why I can’t get, say, Sweetwater, but New Belgium is a relatively large brewery that does distribute all over the country.  Just seems like it would be worth the extra cost to gain access to the most heavily populated market.

Then again, I don’t run a brewery.  Yet.

On Fri, Jul 23, 2010 at 3:49 PM, Brother Barley McHops wrote:

The most heavily populated market…but also a market with fierce competition and some of the most ungainly taxation laws in the country. A lot of West Coast breweries prefer not selling on the East Coast because of major obstacles in gaining market share. There are just so many damn breweries up and down the East Coast and because the geography is so compact, the borders are relatively fluid in terms of regional brews (think Dogfish Head, Brooklyn, and Sam…everyone up and down the 95 corridor drinks those brews).

During a tour of Sweetwater with regular Aleheads reader Abba’s Brew last weekend, the guide actually talked to us about distribution concerns. One MAJOR issue is that good craft brewers don’t pasteurize their beers. This means that unless the brew has a high enough ABV, it will spoil fairly rapidly. The Sweetwater girl said that after 60 days from bottling, their beer would be noticeably less flavorful, and after 90 days, it would taste like Heineken (her words). Now obviously shipping beer from Colorado to NYC would not take 60 days, but the farther afield you go, the less “quality” time the beer has on the shelf. Furthermore, Sweetwater is a fairly large regional brewery (about 60,000 BBLs a year) and they’re always brewing at max levels and selling out their capacity just by distributing in the area (‘Bama, Florida, Georgia, Tennessee). Bumping up capacity is an enormous expense. That’s why a lot of breweries stay at the 10-15,000 BBL a year capacity for so long (and even when they expand, it’s generally to the 30K-60K range).

So yes, Fat Tire would probably do very well selling in NYC. But they’re already at capacity NOT selling there and increasing their capacity in any meaningful way is probably an expense they’re not willing to take on yet. Add to that the stigma in the craft brewing world of growing “too big” (look at the way Sam Adams is looked down upon by most Aleheads), and it may be awhile before you see La Folie in your neighborhood bodega.

That being said, I’m still absolutely infuriated that I can’t buy Oskar Blues here. They sell it in Atlanta…which is 100 miles farther East from Lyons, Colorado AND the brewer grew up in ‘Bama! WTF!

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6 comments

  1. Magnus Skullsplitter · · Reply

    I still think it shows a lack of confidence in the beer. It is a highly competitive market, but good beer sells. A keg of Fat Tire would go as fast as a keg of Dale’s (which has started popping up all over NYC) or Goose Island. Give me my Fat Tire!

  2. Sweeney · · Reply

    That is strange indeed. I’m lukewarm on Fat Tire. Something, I’ll happily drink if offered, but wouldprobably not by myself. Ranger IPA on the other hand is quite good and all of they’re small batch collaborative offerings (collaborating with smaller brweries like Elysian in Seattle) have been AWESOME. This all particularly amusing, because fat tire is one of the cheaper 24-pack offerings at Costco and you can find it at practically every grocery store and convenience store in W. Washington.

  3. To be blunt, Fat Tire blows. That’s a strong statement, but the truth of the matter is that it’s a pedestrian beer that keeps the lights on and appeals to anyone even mildly interested in branching out beyond their Coors Light. The fact that most people refer to the brewery as Fat Tire makes me want to engage my fists of rage (Okay, I’m more of an open-palmed slap guy but still). New Belgium is an incredible brewery and they produce award winning beers. Fat Tire doesn’t even fall in their top 10.

    If you want to understand my rant, try working in a beer store in MA and going through this conversation a few times a week:

    Customer: “Hi, I just came back from 2 weeks in Vail, can I have 2 cases of Fat Tire?” (Keep in mind that this woman will inevitably be clothed in a White North Face vest with Patagonia scarf stuffed down the front)
    Me: “Sorry lady, you can’t get Fat Tire here”
    Customer: “Well, you should just order from them, Fat Tire is the best brewery”
    Me: “Yeah, I know, I enjoy New Belgium’s beer too but they just don’t ship out here”
    Customer: “Huh?”
    Me: “Sorry lady, you can’t get Fat Tire here”
    Customer: “Oh, OK, I’ll go check down the street then”

    And………Scene.

  4. What’s interesting to me is that in the industry (not that I’m in the industry, mind you), New Belgium is best known for creating faithful representations of classic Belgian styles. They have an excellent Dubbel and Tripel, for example (and some fairly questionable lambics and wild ales).

    But to everyone else, their reputation is so closely intertwined with their popular, drinkable, but extremely bland American amber ale, that most people simply refer to them as the “Fat Tire Brewery”.

    Of course, selling out a little bit to “keep the lights on” as Doc says is standard operating procedure in the industry. Makes you appreciate a brewery like Allagash even more (sorry Doc) since their flagship (White) truly represents the kinds of beer they make.

  5. Sierra is known for their Pale Ale, Rogue for the Dead Guy, Harpoon for their IPA. I think if you look at each of those breweries you’ll see that their flagship opens up doors for them to brew more interesting styles. Brand awareness is extremely important in the craft industry and anything a brewery can do to keep their name fresh in people’s minds will pay dividends.

    It’s the same deal with New Belgium. Their La Folie Flanders Red is one of, if not the best example of the style outside of Belgium. If you go into any bar in the Midwest and Rockies though, chances are the only tap handle you’ll see from New Belgium will be Fat Tire or if you’re lucky the Ranger IPA (Excellent beer as Sweeney points out). I’m OK with them producing a bland beer in mass quantities at low margins if it allows them to experiment a bit and utilize their exceptional brewing techniques. If there’s a tap handle showing Fat Tire, maybe that bar will have a couple of rare offerings from New Belgium sitting in the fridge.

  6. What up, all? I couldn’t help but join the discussion (although late). I work for New Belgium Brewing. I’m what we call a Beer Ranger. The most simple explanation to all this is that our Fort Collins Brewery is completely maxed-out. The distribution is another story but we’re lucky enough that distributors WANT our beer. Quality assurance is the other issue. QA standards have to be met before we’ll agree to sell to another state (something we’ve been huge on since day one). Our company goal is to be a national brewer (capable of shipping to all lower 48) within 10 years. We, however, will NOT contract brew. One of our core values since day one was/is Environmental Stewardship. We lead the industry in producing world-class beer the most environmentally friendly way possible. If others brewed our beer, we would lose that connection. Currently, we’re in 26 states. East coast is next. On the down-low, we should have brewery number two out there within the next 5 years. If you have questions, fire away on our New Belgium facebook page or “like” the New Belgium Texas page and I’ll respond personally.

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