Craft Beer Direct to Consumer (DTC) — It’s Really a Thing

Ann Case
Ann Case
Oct 23, 2018 · 3 min read

Do you have a love affair with a brew that’s outside your drive zone? Let’s say you live in Tustin, your all-time favorite craft is in San Diego. Drive all that way? Eh? Maybe you also have a local favorite, but time is tight. All you want is some tasty brews at the pad for an upcoming get together. That is why we started Bevv. Right now California ABC authorizes licensed retailers to sell their product direct:

Under the ABC Act, only California-licensed retailers, winegrowers and beer manufacturers are authorized to make direct sales of their packaged alcoholic beverages to adult consumers in this state. The Department has determined as a matter of policy that it is permissible for those licensees to solicit and accept purchase orders for their alcoholic beverage products from consumers by direct mail, telephone, or on-line computer. Regardless of how orders for alcoholic beverages are processed and fulfilled, licensees must comply with all applicable laws and rules, which include storage, delivery and record keeping requirements. (Sections 23357, 23358, 23393 and 23394 B&P)
https://www.abc.ca.gov/FORMS/ABC409.pdf

We at Bevv want more — and so should the craft brewers and all the craft beer hounds alike. Really, all you need to do is look how things went down for the wine industry.

In 2005 a Supreme Court Decision, Granholm v. Heald, lead to many states reexamining laws related to DTC shipments of wine. The re-examination in California lead the ABC to issue a policy allowing wineries to ship directly to consumer, as did many other states. (site: https://www.abc.ca.gov/trade/SB-118.pdf)

This was the result:

In three years — BAM! $2.6 million in direct shipment. What happened the next year was unprecedented; From 2.6 million to 1.35 BILLION! What?!? That is a 519 times increase (is that even real?!?). The most recent data has DTC wine shipping at $2.69 billion, just wow. The winies? winos? Wine drinkers… got to drink their favorite varietal and vintners were able to get the product to them. Most important, THE PRODUCERS kept more of the profits.

Seems wine and beer aren’t the only folks hot on the DTC trend. Nike, one of the largest retailers is doubling down on direct sales. Market Realist reports Nike is focusing on direct to consumer sales channel to grow their business by 250% in the next five years. They forecast direct to consumer sales to reach $16 billion by 2020. The reasons why are the same reason craft brew has to act for direct to consumer sales. The benefits? Better profit margins, control over consumer experience, ability to retain customer loyalty.

Some wineries depend on DTC for all sales apart from in-house tasting. According to the Ship Compliant / Sovos report wineries with volume at 5–50,000 cases accounted for 46% of all DTC shipments.

While wineries that have distributorships claim:

“Distributors are our partners, and they’re out promoting our wines, But if we get on a great restaurant wine list and a customer then can’t find the wine in their local market, they’ll go directly to my website and order from me.”

Conversely, the small producers, which account for the majority of winery bonds, similar to craft brew and cider, find it difficult to get in the distribution chain at all. Internet sales can become the magic bullet.

This is the little sales message part. But really, it is a win-win. With Bevv, we are lobbying to change law in the area of direct shipping for craft brews. Meanwhile, we take into consideration current law and provide the technology layer to allow brewers to make legally compliant, DTC sales.

Beer lovers get the beer they love. Brewers get the lowest cost sales channel available outside of tap room sales. If you’re a brewer, get in touch. If you’re a beer hound, let your favorite brewer know about Bevv.

Craft Brew Report

Craft Beer and Cider Industry News

Ann Case

Written by

Ann Case

Craft Brew Report

Craft Beer and Cider Industry News

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