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New Orthodox Fireside Chat – Distribution

 

Hi folks, Travis here.

If you’ve been following these posts, hopefully, you’ve got the feeling that we try to be transparent about how we do things, beer and otherwise.   The majority of the text below was born in a Facebook thread.  I wanted to answer a question and that answer turned into what you see below.  Once it was all written and sent a few of us decided that we should make sure that the rest of you, if so inclined could read it as well.  It’s been edited for context so that it makes sense outside of a Facebook thread.

Buckle up, it’s a long one:

Beer Lovers,

We’d like to give you the brewery’s perspective on allocation and distribution of M43.

We started selling M43 in Detroit (first Distribution in Late Jan./early Feb. 2017, I think) at 6 stores which we hand picked. They were all independent, FWIW.
We chose them because we had personal relationships with them, and we knew they’d take care of the beer. They sold out of the small amount of M43 we shipped, which I think was 200 cases or so between them, within a few days. That’s pretty common with the first release of a beer that anybody’s spending time talking about, but usually, it doesn’t amount to much, and the hype fades within a few weeks.

The only retailers in GR with whom I had much of a face to face relationship with – and keep in mind that, as of February of 2017, Old Nation had only been distributing for 14 months in total – Were Rishi’s, D.Shulers, Horrocks and Spartan. So, I went to those folks and asked if they’d like to do a GR release of M43 in April. Again, this was in February. Rishi’s, Horrocks and Spartan all put in surprisingly big, ongoing (three months) orders which, though impressive, weren’t beyond our capacity to produce with a fair amount left over.

Before I go any further, let me say that I’ve been brewing professionally long enough (16 years) to know that a brewery can’t count on hype for long and that, even with good beer, one has to cut hay where and when the sun shines in the early days of a brand and hope that said brand or set of brands catches on and carries themselves. There’s not much more you can do in the craft beer climate today without a decent marketing budget which, after making German style lagers for 12 years and opening a large brewery making that kind of beer (which no one seemed to want) I didn’t have. I still don’t. In short, 99.9 times out of 100, when you hear that you made the next Oberon, you didn’t.
But, we sent our distributor’s staff out to ask their accounts if they’d like some M43 and, if so, how much. We had, literally, no idea how many folks would want it and, when those “wish list” numbers came back, we realized that it would be several months before we could serve every customer to the extent that they’d like to be served, even before M43 was really a thing.

I’ll take the blame for not knowing how popular this beer would be. I’ve never been a part of a brand that has blown up like this, and I didn’t predict that the commitments I made to those 3 GR locations would bite us in the ass; but I make it a point to do whatever’s humanly possible to follow through on commitments I make to partner retailers and so had to see these through. We let every rep know that the “asks” we had on April 1 would be the most we could possibly make and that some folks might not get as much as they wanted – and in other cases none at all – based on how quickly we thought we could scale production over the following 3-4 months. Same thing with Detroit, and everywhere else in the state.

For a Craft brewery in their first 18 months of distribution, 500 cases/week is a great deal of beer. We knew we could make about 700 cases/week, with 80-120 1/2 bbl kegs and 60-80 1/6 bbl kegs added to that in April and May, scaling up more with new equipment, staff, and raw materials vendor relationships in June.
Last week, after 3 months of any kind of real distribution of M43, we made 1800 cases, 280 1/2 bbl and 100 1/6bbl for distribution to more than 400 accounts in total. Again, that’s a ton of beer to ship in a week for any but the top 6 or 7 breweries in the state (about 330 bbl/week). We did all that with 2 brewers, 1 cellarman, a mechanic/packaging manager, 3 part time folks to work the canning line and the mobile canning crew – until mid-July when our new, partially automated line comes in. No salespeople, no marketing people, no office people, no PR firm; just my wife, business partner, the aforementioned brewing staff, the restaurant (which my wife runs) staff and myself.

We’re so happy that the New Orthodox series has become popular and we hope that it continues to be enjoyed by as many folks as possible. We are doing, quite literally, everything we can to secure financing for expansion, bring in new brewers and new equipment and scaling production as safely as possible; but hundreds of thousands of dollars in financing don’t come quick based on a hunch that a beer will be popular, and trained brewers are thin on the ground at the moment.
At this point, I’ve got folks who run party stores in South East Michigan who won’t carry Old Nation because they didn’t get as much M43 as they thought they could sell, which seems weird to me in the context of what we’re doing, but generally understandable.

I’ve got a Party Store owner in the GR area who’s been rattling spears and threatening legal action with the MLCC alleging “collusion” between myself and Spartan, which is laughable.

At the end of the day, we know that with a popular brand there will be backlash from consumers and, therefore, retailers if they can’t get the beer. In many cases, there will be such backlash even if they can.

We get it. We’re not perfect and we’re still really small. We’re working harder than we’ve ever worked, collectively, and maneuvering through all of the things a startup with relatively explosive growth has to maneuver through with limited resources and people. All we’re asking is that folks bear with us as we attempt to serve the now thousands of retailers asking for our product and making a case for getting the beer. We’re doing twice as much as we said we could when we committed in March, and we’re holding on. The only other option for us is to do what we did with our newest brands in the series, which is to sell them out of the pub only in the can format.

For some context, we agreed with Spartan that they’d get those new releases in cans every time we released a new brand in the pub, but came to them last month and agreed that it wouldn’t be fair for us to do that, as we couldn’t make enough to fulfill our agreement with Spartan and take care of any independents. They were extremely understanding and cool about it, but we still had to complete the order, so they got M43 in the agreed upon amount at the same time many others did.

Of course, holding releases in our pub only will upset folks who can’t get out to the brewery to grab cans of Boss Tweed or Greenstone but, again, we’re doing our damnedest to be as fair as we can and ramp up production of, particularly, Boss Tweed so that we can serve that new demand in the market along with the extant demand for M43. Thanks for reading and for your support.

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