Is A Beer Wholesaler The Right Route For Your Brewery?

In the competitive drinks industry, finding the right distribution model is crucial for success. One option that many businesses consider is partnering with a beer wholesaler. But is this the right route for your brewery? In this article, we will explore the role of a wholesaler in the drinks industry, evaluate the pros and cons of using a wholesaler, and help you make an informed decision for your own business. 

Understanding the Role of a Beer Wholesaler in the Drinks Industry

Before diving into the decision-making process, it is important to understand exactly what a beer wholesaler does, and why they are so important for the drinks industry. 

What is a Beer Wholesaler?

A beer wholesaler is a business that specalises in the distribution of beer. They have established relationships with breweries and retailers, allowing them to efficiently connect the two parties. They will often have extensive networks and logistical capabilities to ensure timely deliveries. 

These wholesalers, in essence, act as a bridge between breweries, which produce the beer, and retailers, who sell it to consumers. This process allows for economies of scale, and without them, the process of getting beer from the brewery to the consumer would be a much more complicated process. 

Key Responsibilities of a Beer Wholesaler

Beer wholesalers have several key responsibilities. They not only handle the physical distribution of beer, but also perform crucial tasks that contribute to the success of their clients. These include:

  • Inventory management: They must arrange their inventory effectively to meet the demands of retailers, whilst ensuring the products stay fresh. This involves keeping track of stock levels, monitoring expiration dates, and replenishing supplies.
  • Route planning: It is important that wholesalers strategise delivery routes in order to optimise efficiency and minimise transportation costs. They will consider factors such as distance, traffic patterns, and delivery windows to ensure that the beer reaches retailers promptly and in the best possible condition. 
  • Marketing and promotion: Wholesalers will often collaborate with retailers to plan and execute marketing campaigns in order to increase sales. They may provide promotional materials, organise tasting events, or offer incentives to retailers to promote specific brands or products.
  • Market insights: Beer wholesalers provide valuable insights for both the breweries and the retailers, helping them to make informed decisions about product offerings and customer preferences. They will analyse data, consumer trends, and competitor activities to identify opportunities and develop strategies to stay ahead in the market.

By taking on these responsibilities, beer wholesalers contribute to the overall growth and success of the beer industry. They ensure that breweries can focus on producing high-quality beer while retailers can access a wide range of products to meet the diverse demands of consumers. 

Evaluating the Pros and Cons of Using a Beer Wholesaler

Now that we understand the role of a beer wholesaler, let’s consider the advantages and potential drawbacks of partnering with one. 

The Benefits of Partnering with a Beer Wholesaler

When it comes to running a successful brewery, expanding market reach is of the utmost importance. By partnering with a wholesaler, your business can gain access to their established relationships with a wide network of retailers. This means that your brews can reach a larger customer base, increasing the potential for sales and brand exposure. 

Efficient distribution is another significant advantage of working with a beer wholesaler, as they have honed their expertise in handling the logistics of distribution, meaning your products will be delivered in a timely and cost-effective manner. From warehousing and transportation, they have the necessary infrastructure to streamline the entire process, saving you valuable time and resources. 

As a brewery owner, you know firsthand how time-consuming administrative tasks can be - they take away from other crucial aspects of your business. By partnering with a wholesaler, you can offload many of these tasks, allowing you to focus on more important things like product development and building customer relationships. 

The key to staying ahead of the competition is having clear insights into the market. Wholesalers can help with this as they have their finger on the pulse of the market, constantly monitoring trends and consumer preferences. Therefore, by partnering with a beer wholesaler, you can invaluable access to these insights, helping to refine your product offerings and competitive positioning. This can be a game-changer for your brewery, allowing you to adapt and cater to the every-changing demands of the market. 

Potential Drawbacks of Using a Wholesaler

Partnering with a wholesaler might seem like a practical move, but there are many drawbacks to consider. 

Mainly, their affinity for your brand often boils down to convenience and profits, which could leave your brand lacking the genuine dedication it deserves. You know how it is - for most brewers, their products are like their own children, and naturally would want everyone to treat them with the same devotion. It's that heartfelt connection that might be missing if you team up with a wholesaler. You'd want a partner to share the same level of enthusiasm and care that you pour into your products, but that might not always be the case with a wholesaler on board. 

Another significant concern is the loss of control over the distribution process. When you rely on a wholesaler, you will have to relinquish some control over pricing and customer relationships. You will also have to trust that your products are being handled and promoted appropriately in line with your brand's reputation. Establishing a clear line of communication with the wholesaler can help to maintain a strong relationship and ensure that your image is upheld.

Another potential drawback of using a beer wholesaler would be reduced profit margins. Wholesalers typically take a percentage of the sales price as compensation for their services, and while this is justified, it is essential that you carefully evaluate the financial implications of this before entering into a partnership. Conducting a thorough cost-benefit analysis will help you determine if the potential increase in sales and market reach justifies the reduction in profit margins. 

Furthermore, you may need to consider the reputation of the wholesaler. As a brewery, your brand perception is vital for success in the drinks industry. Partnering with a wholesaler whose reputation is questionable can have a negative impact on your brand. Therefore, we would recommend conducting thorough research in order to choose a reputable wholesaler with a proven track record of reliability, professionalism, and ethical business practices. 

Making the Decision: Is a Beer Wholesaler Right for You?

Now that we have weighed the pros and cons, it’s time to assess whether a beer wholesaler is the right route for your brewery. 

Key Questions to Ask Before Choosing a Wholesaler

These are just a few questions to ask yourself before deciding whether partnering with a wholesaler is right for your business:  

  1. Do you have the resources and expertise to handle distribution in-house? Managing the distribution of your brews can be a complex and time-consuming process. It requires a dedicated team with the necessary knowledge and experience to handle the logistics, inventory management, and order fulfilment. If your business lacks in this area, then partnering with a wholesaler might be an ideal option for you. 
  2. Are you looking to expand into new markets? If your business goal is to rapidly enter new markets to reach a wider customer base, working with a wholesaler can provide you with the necessary infrastructure to make this possible.  
  3. Are you willing to relinquish control over the distribution process? While this can help to free up your time and resources to focus on other aspects of your business, it’s important to consider whether you are comfortable entrusting this responsibility to a third-party. 
  4. Does your business model allow for wholesaler’s commission fees? It is crucial that you assess whether your business can accommodate the additional costs that come with working with a wholesaler. 

Steps to Take When Choosing a Beer Wholesaler

If you have decided that a beer wholesaler is the right choice for your brewery, here are some steps that can help you throughout the selection process: 

Researching Potential Wholesalers

A good place to start is by researching available wholesalers in your area. Consider factors such as their reputation, track record, network size, and the brands they already work with. 

Take the time to reach out to other breweries and businesses to gather recommendations and insights. They may be able to provide you with valuable information about the wholesaler’s they work with, allowing you to make a more informed decision. 

Negotiating Terms and Conditions

Once you have identified a potential wholesaler, you will need to engage in negotiations to determine pricing, delivery schedules, and contractual obligations. Finding a wholesaler who can offer competitive pricing that aligns with your budget is crucial for success. 

Remember to pay close attention to details such as minimum order quantities, payment terms, and any additional services or benefits that the wholesaler can offer. It’s important that your agreement aligns with your business objectives and provides a win-win situation for both parties. 

Alternatives to Using a Beer Wholesaler in the Drinks Industry

On the other hand, if partnering with a wholesaler doesn’t seem like the right fit for your business, there are alternative distribution models worth exploring. These include direct-to-consumer sales, creating your own distribution network, or working with us at Tap’in. 

Direct-to-consumer distribution can give you more control over the customer experience and allow you to build closer relationships with your target audience. By cutting out the middleman, you can retain a larger portion of your profits, and have more flexibility in pricing and marketing strategies. 

Creating your own distribution network can be a challenging endeavour, but it can also provide you with greater control and ability to tailor the distribution process to your businesses specific needs. This approach requires careful planning, investment in infrastructure, and the development of strong relationships with retailers and other distributors. 

Work with Tap’in - The Operations Team of Your Dreams

When your brewery inevitably starts to grow, scaling your operations is essential. This is where Tap’in comes in - a 3PL service provider that can help expand your distribution network, manage your inventory and fulfilment processes, and reduce costs associated with in-house logistics management.

How Do We Differ From a Beer Wholesaler?

We give you complete freedom to expand your reach and range, meaning there is no limit to your brewery's success. Plus you have total control of your sales and full visibility of the logistics operation - you are the one in the driver’s seat (until our team needs to deliver your stock to your chosen venues, of course). We pride ourselves on running the most efficient and effective logistics operation, combining market leading logistics software with industry-leading minds, to ensure that your business gets the best service possible. 

So, if you are interested in partnering with brewery logistics experts who can help optimise your operations and facilitate business growth, then reach out to our team today!