Providing the logistics for the fast-paced and ever-changing craft beer industry is not for the faint of heart, but thankfully the sector is up to the task, explains Robert Smith, vice president of sales and marketing at TNG.

As everyone who is reading this magazine knows, the craft beer Industry is one of the best industries for developing innovative products to cover off every possible segment of consumers. 

In order for the industry to do this, there must be many different types of people focused on developing highly customized beers, and then developing a just as customized marketing approach, to properly fill the need of all the different niche segments.  As almost any brewer can attest, this takes an immense amount of effort and focus to achieve.

The challenge with the nature of the industry described above is there is also the messy business of getting the beer to the consumer across a very large geographical area.  It is impossible to do this cost effectively and maintain frequent enough delivery schedules to not lose sales – unless you have significant density. However no craft brewery has enough density beyond perhaps their local town/area to have a good business model for wide scale distribution.

As a result almost every brewery has one or more logistics partner(s). The trick is finding someone that gives excellent service at a very good price and that brewers feel are a real partner with helping them grow their business.  Now across Canada there are several companies that fill this need for brewers – however at varying success levels.

Brewer, meet logistics partner

From talking with different brewers, the key common things that almost all of them are looking for in their logistics partner are:

·    Strong service culture

·    Professional organization that will represent their brand well

·    At least weekly delivery schedule that consistently executes at high level of quality

·    Competitive prices

·    Manageable payment terms

·    Motivated to grow sales

·    Fairly straight forward charges that they can effectively manage

In terms of a logistics partner for a craft brewery, there are really three groups that have emerged as options: 1) Mass Brewers such as BDL in Western Canada; 2) Established Provincial Liquor and Wine Distributors often one in every province such as the LCBO in Ontario; and 3) Professional Logistics Organization that focuses on Craft Beer.  There are many other general carriers moving beer across the country, but these organizations are just moving beer from a brewery to a warehouse.  The three groups we have highlighted deliver the beer to the retail locations.

Although the first two groups do offer very good delivery prices, for most of the brewers the Brewers Journal talked to, they do have some misgivings about these players covering off any of their other points.  However it should be noted that some of the largest craft brewers are currently using these players for servicing their non licensee business.

In regards to the last group, there seems to be three companies that have emerged as the leaders: Direct Tap that operates solely in BC; Cold Haus that operates solely in Ontario; and TNG (has some different logistics brands across the province, Prologix in Ontario and Acculogix in Western Canada) that is a North American wide logistics company but only has their beer division operating in Ontario and Atlantic Canada at this point. 

There are other players in this space but none come close to handling the amount of brewers and geographic area these three majors cover.  All three of these majors are making significant investments to expand their logistics capabilities with beer and all seem to be growing quickly.

The Brewers Journal had the chance to tour through TNG/Prologix 100,000 square foot beer warehouse recently and one could immediately see the significant number of craft breweries they perform services for.  In this article are a few pictures from their operations.

Over the next few years it will be interesting to see how the logistics network continues to develop for craft brewers.  All signs are, that more services and better data sharing will quickly be coming on board to help the craft brewers better manage their business.  As we were touring TNG’s facility they were testing new hand-held devices they are rolling out to their drivers, so brewers can view their Proof of Delivery immediately after the delivery.

This is the first article where the Brewers Journal has taken a bit of a dive into the logistics world of craft brewers.  We have come to realize, providing the logistics for the fast paced ever changing craft beer industry is not for the faint of heart.  Thankfully our industry has grown to a size, that professional logistics organizations are now focused on servicing our brewer’s needs.