The Ithaca Beer Company_ A Case Study of the Application of the M.pdf

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10 - statistics/facts. 11 T. Goldammer, The Brewer’s Handbook (Centreville, VA: Apex Publish- ers, 2008). ubiquitous, and these companies gain attention by sponsor- ing a wide range of events, including Major League Baseball games and even presidential debates. 12 The marketing budgets of AB InBev and MillerCoors exceed the value of most craft breweries. As just one example of this marketing strength, in 2010, AB InBev spent more than $1 billion to make Bud Light the official sponsor of NFL for six years. 13 DISTRIBUTION Another key challenge for craft breweries is access to distribution channels, which are dominated by the major companies. 14 Although distributors are, by federal law, separate companies from the brewers, many have exclusivity agreements. Under the current system the producers must sell their product to distributors, who sell their product to retailers, who then sell to consumers. As the craft seg- ment continues to grow, thirty-one states have revised these post-Prohibition laws to permit small breweries to distribute directly to retailers. However, the National Beer Wholesalers Association (NBWA), which represents more than 2,850 beer distributors in the U.S., is itself a powerful force in regulatory politics and has taken a rather aggressive stance in strength- ening the three-tier distribution system. With many distributors not available due to exclusivity agreements, the space in remaining distributors’ trucks is at a premium. In large part, the products carried on distribution trucks depend on which products the retailers choose to sell. So a small brewer that doesn’t have access to the large-scale distribution channels must go door-to-door to encourage distributors to carry its product. Even so, the major players have so many brands that their products take up much of the space on even the nonexclusive distribution trucks. So with a limited number of distribution trucks operating in each region, craft brewers must battle for the remaining space left on these trucks in order to get their product to the consumer. SHELF SPACE Just as brewers must fight for space in a truck, so they must fight for retailers’ shelf space. If a craft brewery does manage to get its product picked up by the distributors, the next challenge is getting and keeping their product on the shelves at retail outlets. The large brewers have a strong influence on how their products are placed at retail outlets, thus, giving their products the best visibility and promoting sales. Fortu- nately, some retailers understand craft beer’s popularity and reserve a section of the store for these beers. Unfortunately, as we describe next, some of that space also is occupied by the major players.
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  • Spring '14
  • Dr.SeanStanley
  • Brewing, Brewery, Microbrewery

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