The Three Tier System of Beer Distribution

You’re sitting with a few friends on an early Friday evening having a well-deserved beer. While most of them reminisce over the creation and consumption of this delicious beverage, your mind wanders to how did it get here?

The logistics behind beer transportation is complicated: It’s heavy, it can spoil, and it comes in multiple methods of packaging. Lester Jones, VP Analytics and Chief Economist at National Beer Wholesalers Association, gives the points about pints.

Join us as we discuss:

• The unexpected way Covid disrupted beer supply
• How the NBWA looks out for brewers
• Training truck drivers into real superheroes

The unexpected way Covid disrupted beer supply

In the United States, the alcoholic beverage industry has separate tiers of business activity:

• Brewers and importers:These are the people that make, import, and market the beer.
• Beer distributors: This group buys the beer from the brewers and importers. Taking ownership of the beer, they then need to turn that beer back into cash.
• Retailers: Bars and other places where beer is sold to the general public.

Here, we focus on the distributors — those tasked with getting the beer into the hands of retailers everywhere. But with so many different local and state rules about the sale of alcohol, it’s far from an easy process.

“We know that different states have very different views, perspectives, policies, and ideas on how alcohol should be sold and consumed. Think of going to Salt Lake City and going into New Orleans in the same week. And how your experience with alcohol would play out,” Lester explains.

With so many ordinances, keeping track of each one takes a significant amount of time. This is where advocates come in:

1. Health and Human Services
2. Department of Education
3. Department of Agriculture
4. Department of Transportation
5. Department of Treasury

“We advocate for distributors, mainly at a federal level. We have a federal affairs team, a communications team, an industry affairs team, and we all work together to keep an eye out on what policies are coming up that may influence our members.” — Lester Jones

Focus on what you excel at for better emergency response

With all the different levels, why not just have the brewers distribute their own beer? Simply put, not every brewer has the expertise to distribute equal to their brewing ability. It makes more sense, then, for brewers to focus on brewing and distributors to focus on distributing — That way when disasters like the COVID-19 pandemic take place, everyone is in their correct position to pivot as quickly as possible.

Because the pandemic began just before March Madness and St. Patrick’s Day, on-premise bars found themselves stuck with a substantial amount of beer they couldn’t sell.

All of a sudden, distributors were tasked with collecting the beer back, something they weren’t used to doing. While it’s manageable to bring heavy kegs down into the basements of on-premise bars, it’s another challenge all-together to bring them back up.

How the NBWA looks out for brewers

Beyond the challenges of the pandemic, distributing beer in the best of times can be a challenge:

• Dealing with moving heavy kegs properly
• Knowing how to operate different equipment
• Keeping the beer from spoiling

To help distributors stay up to date on everything they need to know when it comes to moving beer, the National Beer Wholesalers Association (NBWA) has online courses you can take on their website nbwa.org.

Lester says, “We have lots of programs and services that include training videos that are well received amongst our members that do everything from hand truck safety, to handling a keg, to dealing with everything logistically when it comes to moving beer around.”

Training truck drivers into real superheroes

Beyond their operations training, the NBWA is taking their truck drivers’ training one step further — helping them look out for any suspicious activity linked to human trafficking.

Seeing a lot of other industries make an effort, Lester and NBWA knew they could do their part as well:

“They’re learning how to identify the signs of human trafficking and how someone may behave if they’re in that circumstance.” — Lester Jones

With thousands of beer distributors, the number of eyes looking out for this kind of behavior is substantially more.

A key takeaway

The logistics of beer is much more than a brewer shipping out their beer to retail. It takes a complicated network of distributors doing what they do best.

Looking out for state and local policies, making efforts to end human trafficking, and sometimes reversing their process in emergencies like COVID, there’s no lack of impressiveness for the NBWA.

Connect with Lester at https://www.linkedin.com/in/lester-jones-nbwa/

Keep connected with us by subscribing on Apple Podcasts, Spotify, or anywhere you get podcasts. Find all the episodes here.