Earlier this week, Green Flash Brewing announced a “handshake agreement” with St-Feuillien whereby the Belgium-based brewery would produce, bottle and ship West Coast IPA for broader distribution throughout Europe.
In an interview with Brewbound, Green Flash co-founder Mike Hinkley said he wasn’t exactly sure how to define the new partnership.
“They are making the beer, selling the beer and essentially paying us a royalty,” he said. “They are buying all of the raw materials, producing the beer, shipping it to customers and collecting receivables.”
On paper, the nuances of the arrangement might seem complicated, but Hinkley said it only took two hours for the Green Flash and St-Feuillien to hash out details of the unique hybrid contract brewing and licensing agreement.
Nevertheless, selling American craft beer in Europe presents plenty of challenges for the American-based suppliers, Hinkley said.
“In the U.S., we have a lot more control over distribution and more interaction with our wholesalers,” he said. “In Europe, the beer leaves the dock and the distributor takes it from there. There isn’t much reporting back. There isn’t much interaction after the sale.”
That can make it more difficult to manage sell-through, individual account velocity and product quality, Hinkley said.
“The relationships seem to be more invoice-to-invoice versus long-term in the way they are structured,” he said. “We didn’t set them up that way and, as best as possible, we picked the distributor that was most interested in building our brand.”
Actually brewing the beer in Belgium, however, will give Green Flash one clear advantage over other U.S. craft brewers currently importing their beers to Europe: Freshness.
“We make very hoppy, West Coast style ales,” said Hinkley. “Those beers are best on the first day and deteriorate slowly from there. The sooner you can get those to the customer, the better. There is no faster route than what we are doing.”
Additionally, by brewing its beer at St-Feuillien, Green Flash will be able to deliver beer to any town in Belgium within two days of it being packaged, ensuring freshness.
And, by cutting importers out of the distribution chain, Green Flash will also be able offer its beer at a lower cost to drinkers.
“It seems to me that we are going to be properly priced, super fresh and available on draft,” Hinkley said. “All of the pieces are in place for us to build a nice market for ourselves.”
Green Flash said it expects to sell between 1,500 – 2,000 barrels of beer, in Europe, during its first year. The company also plans to hire a full-time employee next January.
“We recognize that Europe as a very large potential market,” he said. “When people in Europe experience their first big double IPA, we want to be there.”