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 Joining the IBA 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 both brewers and industry experts on the state of the industry.
“We had many significant cost increases this year (freight, labor, rent, utilities, etc) and much lower tasting room/distribution sales due to over-saturation of the brewery market…”
— San Diego Brewer, Forbes
“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 fully believe the craft beer industry is cannibalizing itself, and that impacts spry upstarts, as well.”
— Tara Nurin – Industry Writer, Forbes
So What’s Going On?
The industry press is full of stories. Sales are slowing for some craft breweries. The mass market breweries have been hedging their bets, moving deeper into craft space, buying up craft brands, running their own. Regional craft breweries are responding, banding together through mergers, buyouts and private equity deals. Sales growth is slowing (4.6% in the first half of 2019), way down from the double digits of just a few years ago. And still the breweries and taprooms keep coming. In fact, by mid-year 2019 the BA had the total brewery count at almost 7,500 with an estimated 2,500 to 3,000 new ones in the pipeline. All of which will increase competition for tap handles, shelf space and craft brew lovers’ loyalty while limiting everyone’s potential to grow.
Competing in a Changing Landscape
So how can an independent brewery 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 IBA. You can drop the money you save to your bottom line, or invest it in the programs that help you grow and stay strong. And do it all while staying 100% independent.
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