Rogue Brewery: David v. Goliath…or not?
Rogue is a brewery that’s gone through the effort of branding themselves as a craft brew hero – the David against macro-brewing Goliaths, coming at the market with a fistful of rocks aimed at large-scale distribution. I appreciate what it takes to pursue those goals and since it’s also a great beer product, Westpark has supported Rogue enthusiastically for something close to eight years now.
I recently heard that Rogue’s Dead Guy Ale was available at Costco. That’s right – Costco. Skeptical of this probability, I went to review the evidence myself, finding the rumor in fact true. Later that week I spoke to Jim Klein, vice president for Rogue Brewing, regarding the choice to make Dead Guy available at Costco. Jim and I had a very pleasant and informative conversation (one in which I’m happy to discuss with anyone who wants to stop by the store). Costco pursued them and one defining element of our conversation was this: Costco is a retail operation that deserves the right to sell a beer as much as I do.
I understand and appreciate Jim’s explanation and Rogue’s position, but I also respectfully disagree with their decision. As a merchant of craft brew, I take responsibility for advocating the increased availability of specialty beer for you the consumer. However, considering the challenges outlined below, I assert that a move like Rogue’s undermines the position of smaller craft breweries (which Rogue was at one point) that may not have the same resources at their disposal.
A heady storm is brewing in the beer world these days, one that will have broad ramifications over the next year at least. Prices on grains, hops, and glass are all rising dramatically, which may result in the demise of some smaller and regional brands. This week we’ve seen Great Divide pull out of the state for what I’m guessing are supply issues. The Wall Street Journal has been covering some of these trends on a national and international level. Maybe you’ve caught some of their recent coverage?
So what does this mean for craft beer fans? First and foremost, I imagine prices on all beer formats will continue to climb. We may begin to see more brands disappear because cost issues force closings or hamper a brewery’s ability to meet the growing demand in their newest markets. I’m speculating here, but it’s something beer connoisseurs might want to think about.
Why bring this up now? Well, despite Richmond’s excellent beer status you may have noticed the number of dedicated beer spots in Richmond slowly shrinking. The obstacles are many and the typical rewards ($) are sparse. Trust me when I say that dealing with the supply side of a diverse selection can sometimes be, for lack of a better word, exhausting.
Additionally, the current political climate among specialty distributors and national distributors is tense at best. Squabbling for and the consolidation of brands and import groups has already strained supply and distribution of nationally popular brands. Keep in mind that Virginia is a franchise state, which means only the brand owner has the right to deliver said brand, and if they don’t choose to stock certain products, well…What we see coalescing are the elements of a storm.
What happens when distributors have to choose between housing small batches of experimental or specialty products in exchange for greater pallet space on rapid selling products? The right of the consumers to choose their own product is removed well before they even enter a store.
Back at our local Costco a case of Dead Guy Ale is retailing for $27.99 – I get to buy a case of Dead Guy Ale for $31.95.
Let me say that again – I wouldn’t want to bury the lead here: Costco is retailing a case of Dead Guy Ale for less than I can buy it wholesale.
Product cost is objective and can be obtained almost anywhere; selection invites community – a scenario where purchase also includes interaction, discussion, and factors other than cost. When a community based brand (one that relies on education, grass roots marketing, and an informed consumer base) experiments with the cost driven market strategy, the rewards of easy product movement must be weighed against alienating portions of the community and the weakening of brand identification.
Will this happen with the execution of a one- time event/experiment? I don’t think so, but it also shouldn’t pass silently. While it’s nice to get a great deal, I think the last thing beer connoisseurs want to see is further pressure asserted on the already fragile justification for providing a significant selection beer. When an independent store loses the ability to be specialized there are fewer platforms from which to self-promote successfully. When obstacles arise from both breweries and distribution chains, one has to question the long- term benefits of continuing to offer a specialized selection.
While there certainly is a simple economics story here, a more complicated story of heart is at stake as well. I often joke about selling wine for money and beer for pride, but I have yet to regret serving and being a small part of our local beer community. However, seeing cost-driven distribution coming from a well-supported brewery with an advertised mantra like Rogue’s pushes my buttons.
So it’s with pleasure and a heavy heart that I present to you this beer short called “A Diplomatic Mission.
Disclaimer: Sorry our film is grainy, but the constraints of Youtube required something of a compromise. And let’s face it, I’m no Steven Speilberg. If you have trouble with the link below, visit YouTube and search for “Diplomatic Mission.”
http://www.youtube.com/watch?v=GXgs0P68XVo
We will continue to carry Rogue products. I still believe their product is made with the original mission in mind, and I do understand the need for them to explore their own growth opportunities.
I am pleased to announce the following beers in stock again:
Dogfish Head 120min
Dogfish Head WW Stout
Dogfish Head Olde School Barley
Please note the above beers are very limited, so you should ask for them.
Ommegang Chocolate Indulgence
Sierra Nevada Harvest Ale (some cases were lost at the distributor and good cheer brought them to us)
We’ve also placed our first holiday special order and are hoping (cross, fingers) to take delivery on these items in the next few weeks.
Ridgeway Bad Elf, Very Bad Elf, Seriously Bad Elf, Santa’s Butt
Monchshof Schwarzbier 5L
Bluebird Bitter
Ridgeway Bitter, IPA
De Dolle Oebier, Stille Nacht
Gale’s Prize Old Ale
Hambleton’s Toleration Ale
Harviestoun Bitter & Twisted, Old Engine Oil
JW Lees Moonraker, various harvest ales
Burton Empire IPA
De Glazen Canaster
Sinebrychoff Porter
Berliner Weiss
And say a very long prayer for Fantome
Thanks for reading.
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