Wednesday, March 23, 2011

The Dogfish Example or Supply and Demand

A little over a week ago I was surprised to hear through @fledgelingbrewer that Dogfish Head Brewing was going to be pulling distribution to five states. Of course my first thought was “Oh please not California” and thankfully the golden state has been left in the distribution zone, for now. My immediate second thought was of course to question why this was happening. The show Brew Masters has brought the brand to the homes of thousands of people who previously may not have heard of this beer, and being in a retail setting during it's first few weeks I saw first hand the lightening speed at which these beers were flying off the shelves. During the Beer Bloggers Conference I was lucky enough to meet Mariah Calagione and hear about the company first hand, and it truly is a small down to earth family owned business. The mere idea alone of such a small company producing beers for so many states and export is mind blowing even looking at my own local breweries such as North Coast Brewing Co. and The Bruery. In the last year craft beer consumption has increased by 11% challenging these tiny little powerhouses to be pushed to the max to produce a top quality product for a growing demographic.

In a Blogfish post by Sam Calagione himself, Dogfish Head has decided to discontinue export in 2011, distribution to five states and limit some distribution to other states. The demand for their beer has become so huge that there's no way to provide a quality product with the resources they have at the volume that is being demanded of them at the moment. I think that what they did was a fantastic step for craft beer as an industry. I feel that this announcement brought to light the true spirit and soul of craft beer: Quality over Quantity. They want their business to be fun, they want the freedom to experiment, and they want to please their customers before they've been spread too thin to do any of the three!

If you don't already understand the three-tier system of beer sales let me quickly break it down for you:Your local brewery makes the beer and sells it to the distributor. The distributor ships and sell the beer to the retailer who in turn sells the beer to you the consumer. We've all heard the term “shit rolls down hill” and in this case distributors wants to sell the beer that's selling the fastest and are breathing down the backs of microbreweries nation wide. Today, craft beer geeks are fervidly hunting down the next, biggest, baddest beer. This constant search (as we saw with Pliny the Younger) can get blown out of proportion by the consumers causing things like selling beers that are unsuitable for aging over the internet, etc, etc.

My point here is simple: slow and steady wins the race. Beer is a craft, an art where the brewer creates a beautiful beverage out of pure ingredients and unsuspecting yeast-creatures. Beer is not to be rushed but waited patiently for. If you want a certain beer go to the brewery and get it. Visit the town, tour the brewery. Don't get me wrong I understand that a brewery is a business and there are simple and natural responses to this issue including perhaps and perhaps inevitable increase in prices, however I feel that the demand for craft beer is perhaps so inelastic that such a move would truly not make difference. Compared to wine, beer has an enormous amount of headroom in price. The perceived barrier that wine may have had in price and status has been broken and the demand that we are seeing right now proves that. Beer is not the new wine--Beer is a classic beverage that be damned if it's not on the menu with plenty to chose from. I think it's safe to say that craft beer is here to stay, and my trust is with people like the Calagione family who put quality and satisfaction first because they are secure in their market and their product. Brava!


Love the article. Too bad beer is not conducive to being presented along the lines of a wine tasting bar. It would be really nice to be able to have a small bar area that dispenses different beers only for tasting. The fact that the best taste comes from kegs alone would cause a logistical nightmare.

If there was an argument that kegs produce a better flavor I don't see how there would be any logistical issue. But do you not go to breweries and taste from a keg? Just like you go to wineries and taste from a barrel?

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