Growing by shrinking? By now you have seen some small breweries (ok, craft breweries. True name but sounds pretentious) back out of some markets to meet local demand. I’m referencing Avery, Flying Dog, Dogfish Head, Allagash & more. Some breweries like Left Hand Brewing are not shipping all the brands to markets they are currently in in order to meet demands in others. This makes perfect sense. Small breweries are small businesses, and just because there is a demand for your product, doesn’t mean you can afford an expansion.
Washington Post Business makes a great point about this. This trend in beer is rising. While it sometimes occurs much to the chagrin of the drinker, it’s a good situation for the brewery. Distant markets are expensive to reach, and can ignore the local market. Flying Dog Brewing announced it was leaving 13 states in June, leaving Flying Dog in 33 states. Apparently more are on the way.
Flying Dog Chief Exec Jim Caruso wants to sell up to 70% of the brewery’s beer IN Maryland, DC, Virginia within 3 years. (Caruso says theres demand for it.) This is possible without an expansion by pulling out of more markets. The region already buys 50% of the beer annually. Anymore state pullouts might not last too long though. Caruso is mulling over an expansion in the neighborhood of 3-5x the current size. [WashingtonPost]
