Why a Craft Beer Alliance?
Why A Purchasing Alliance in The Craft Beer Industry
A cooperative (also known as a co-op) is an autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled business. A purchasing cooperative is a type of cooperative, often made up of businesses, who have agreed to aggregate demand to get lower prices from selected suppliers.
How Membership Helps You Compete
Independent entrepreneurs are the cornerstone of the American economy. The cooperative model is a proven way to help independent businesses stay strong and independent. In fact, there are over 29,000 cooperatives currently operating in the United States with over 350,000 members. That’s because the co-op model works. It has been proven many times in many other industries. Its power is often greatest in industries faced with increased competition and consolidation. If you would like to learn more about cooperatives and how they help improve the world we live in visit Cooperatives for a Better World or their YouTube channel.
Why a Craft Beer Cooperative
The craft beer industry is a remarkable American success story. But despite its incredible continued growth, a lot of brewers – big and small – see significant changes in the competitive landscape. Here are some direct quotes from some of the brewers who first supported the Independent Brewers Alliance.
“There’s lot of private equity money sniffing around out there – Wall Street guys who don’t give a crap about beer.”
— Maryland Brewer
“It’s a way different world…everything is harder to get…from cans to credit.”
— Texas Brewer
“There’s just so many brewers out there, all competing for mind share, materials, shelf space and tap handles.”
— Pennsylvania Brewer
“Beer drinkers are all about what’s new, so it’s harder to stay on the shelves and in bars and restaurants.”
— Maryland Brewer
“I just read a story about the industry headlined ‘The Status Quo is Over.’ I agree. It’s much more competitive…way harder to stand out in the crowd.
— Montana Brewer
“With AB and Miller coming in from the top and 1,800 new guys in the pipeline, something’s got to give.”
— Maryland Brewer
So What’s Going On?
The industry press is full of stories. The mass market breweries have been hedging their bets, moving deeper into craft space, buying up craft brands, running their own and trying to incentivize distributors to restrict craft sales. AB InBev has acquired SABMiller. Regional craft breweries are responding, banding together through mergers, buyouts and private equity deals. And still at anyone time there are about 1,000 new craft breweries in the works who will only increase competition. In fact, in 2017 the BA had the total brewery count at over 6,300, reporting that 997 breweries opened that year, and that a record number closed (165), more than double the number in 2016.
Competing in a Changing Landscape
So how can an independent brewery increase stay competitive? Well, you can’t just count on making great beer anymore. You have to have a great business plan too. And part of that plan could be – should be joining the purchasing alliance. This gives members many of the same benefits of consolidation – scale, time savings, access to shared resources and consolidated buying power – but with one key difference: you don’t have to sell out. You stay 100% independent.
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