With limited exceptions, all brewers in the United States are required to sell
their beers to independent wholesalers, who then sell the beers to retailers.
We are the only independent craft brewer in the U.S. to have established a wholly-aligned
distribution network through our partnership with A-B. This partnership provides
us national distribution, which results in both an effective distribution presence
in each market and administrative efficiencies. Our beers are available for sale
directly to consumers in draft, cans and bottles at restaurants, bars and liquor
stores, as well as in cans and bottles at supermarkets, warehouse clubs, convenience
stores and drug stores. We sell beer directly to consumers at our brew pubs and
breweries.
Our products are distributed in all 50 states, pursuant to a master distributor
agreement with A-B that allows us access to A-B’s national distribution
network. For additional information regarding our relationship with A-B. Management
believes that our competitors in the craft beer segment generally negotiate
distribution relationships separately with wholesalers in each locality and,
as a result, typically distribute through a variety of wholesalers representing
differing national beer brands with uncoordinated territorial boundaries.
In addition to leveraging our owned brew pubs and retail locations, we promote
our products through a national sales and marketing network that includes, but
is not limited to, i) creating and executing a range of advertising programs;
ii) training and educating wholesalers and retailers about our products; and
iii) promoting our name, product offerings, brands, and experimental beers at
local festivals, venues and pubs.
We advertise and promote our products through an assortment of media, including
television, radio, billboard, print and social media, including Facebook, Twitter
and Instagram, in key markets and by participating in cooperative programs with
our wholesalers whereby our spending is matched by the distributor. We believe
that the financial commitment by the distributor helps align the distributor’s
interests with ours, and the distributor’s knowledge of the local market
results in an advertising and promotion program that is targeted in a manner
that will best promote our products.
Our breweries also play a significant role in increasing consumer awareness
of our products and enhancing our image as a craft brewer. Thousands of visitors
per year take tours at our breweries and all of our production breweries have
a retail restaurant or pub where our products are served. In addition, several
of the breweries have meeting rooms that the public can rent for business meetings,
parties and holiday events, and that we use to entertain and educate wholesalers,
retailers and the media about our products. At our pubs, we sell various items
of apparel and other merchandise bearing our trademarks, which creates further
awareness of our beers and reinforces our brand image. To further promote retail
canned and bottled product sales, and in response to local competitive conditions,
we regularly recommend that wholesalers offer discounts to retailers in most
of our markets.