Let’s Stop Worrying About SKUs, At Least For Now

I heard this a lot at the recent Craft Brewers Conference in San Francisco, and now brewing industry consultant extraordinaire Bump Williams has sounded the alarm, via Harry Schuhmacher and Uncle Jack Curtin. The worry is that, with over 1,700 breweries extant in the United States and some 500 or so in the works, distributors and retailers will be overwhelmed with brands seeking shelf space. Surf on over to Jack’s blog for the details.

There are two problems with Bump’s worries. First, as Mike Hiller notes in the comments section, a large number of these breweries are either non-distributing or micro-distributing entities, meaning their brands aren’t about to show anywhere beyond about a 30 mile radius of the brewery. For the time being, at least.

Secondly, look at what’s growing in sales — craft — and what’s not — major label beers. Now look at the amount of shelf and floor space typically devoted in an average store to craft — little — and major label beers — lots. So, any beer retailer who sees the writing on the wall is going to gradually suck space away from not other craft brands, but the big boys, in order to make shelf and floor space for new arrivals. It’s simple economics and something I think most retailers now understand.

As for the distributors who must now deal with these new SKUs, well, tough. That’s the price they pay for raking the profits off beer sales.

This might all change in the future, as all the numbers involved continue to grow and the big breweries fight back, but for now, at least, I don’t see there being a problem. Talk to me about this in five years or so.

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