To Better Serve Small Brands, Massachusetts Beverage Alliance Launches ‘Homegrown Distribution’

Massachusetts Beverage Alliance (MBA) today announced the official launch of Homegrown Distribution, a boutique wholesaler focused on overlooked craft brands not currently getting enough attention from a network of five pre-existing wholesale partners across the state.

As an offshoot of MBA, Homegrown Distribution will assume statewide sales and delivery responsibilities for brands such as Brewmaster Jack, Grimm, Captain Lawrence, Slumbrew, Lone Pine, Foley Brothers, King’s Highway Fine Cider and Vermont Craft Mead as well as companies with limited Bay State distribution, including 3 Stars, Almanac, Brauhaus Riegele, Coronado Brewing Company, DC Brau, Jackie O’S, J. Wakefield, Modern Times, Une Annee and Upland Brewing Co.

“It gives us a lot more control over some of these brands that we made commitments to in the market,” Homegrown general manager Brian Murphy told Brewbound. “We thought our people could give those brands the little extra attention that they needed.”

MBA’s five members — Atlas Distributing, Burke Distributing, Colonial Wholesale Beverage, Commercial Distributing and Merrimack Valley Distributing — will relinquish sales and operational responsibilities for the above-mentioned brands beginning October 1, Murphy said. However, the brands will remain locked into their current distribution agreements, effectively making Homegrown a subcontracted wholesaler that will manage both the sales and delivery of the smaller brands.

Meanwhile, MBA, which launched in September 2011 and operates a 40,000 sq. ft. warehouse in Bellingham, Mass., will continue to manage a remaining portfolio of brands that includes Boulevard Brewing Co., Baxter Brewing, Castle Island Brewing, Rhinegeist, Revolution Brewing, Two Roads Brewing, and Notch Brewing, among others, via its network.

As part to the arrangement, about 1,300 SKUs were transferred to Homegrown, which will operate as a DBA (doing business as) of MBA. Although those brands account for a little more than half of MBA’s total SKUs, they make up less than 3 percent of MBA’s total volume.

“The amount of SKUs that they had for the volume that they were doing is very, very labor intensive for a big company,” Homegrown director of sales Keith O’Hara added. “But for a small company like us with a lot of experience, it’s something that we’re used to. They also come with a higher average price as well, which helps make it worthwhile for us.”

About a year-and-a-half ago, Murphy and O’Hara worked out an agreement with MBA member Burke Distributing to take over sales and delivery responsibilities in Boston for several brands that weren’t receiving share of mind in Burke’s portfolio.

“That year-and-a-half was kind of a test for us, in Boston first, to prove to ownership that it works,” Murphy said. “We’ve had some really good success in reversing trends of the current portfolio by about 80 percent. I think collectively those brands were down about 50 percent.”

From left: O’Hara and Murphy

After reversing those trends, Murphy and O’Hara asked the rest of the board if they could take the initiative statewide, and they received unanimous approval.

“The board sees it as a way to prove that they can adapt in some ways to a changing landscape and offer these breweries more of what they were looking for,” O’Hara told Brewbound.

According to Murphy, Homegrown’s brands could account for 10 to 15 percent of MBA’s total revenue in 2019, and the company is targeting first-year sales of 80,000 cases based on its existing portfolio. He added that the company could soon add more brands to its 100 percent cold-chain distribution service.

“I think financially it makes a lot of sense for the board to do it because it keeps these brands in the network, it keeps them in the state,” Murphy said. “It’s allowing these brands to flourish and a model that’s needed for emerging brewers.”

The vision for Homegrown is to be similar to a “subscription model,” offering products to a select number of retailers, O’Hara said. He added the plan is to “go deep” instead of wide with its “selective, tight, local” Northeastern portfolio of brands with “traditional go-to-market plans that big distributors use” while supplementing those with offerings from across the country and import brands.

O’Hara added that sought after offerings will be given to accounts that can quickly sell through them, rather than allocating them to every retailer. He compared the strategy to breweries’ self-distribution model.

Murphy told Brewbound that Homegrown has also established a limited liability company (LLC) in order to begin operating in Rhode Island, pending a licensing approval meeting on October 11.

The nascent company is also in the early stages of planning to distribute CBD products in Massachusetts. Murphy believes that the company can provide a route to market for CBD products, and said it presents a “pretty big opportunity” for Homegrown to expand into an emerging category.

“I’m not sure what it’s going to look like, but it is coming,” he said. “We are still in the early stages of figuring out how it will work within Homegrown and the MBA. We’re not going to sell beer that’s infused with CBD, but we’ll look at other types of items that can be compliments to people drinking craft beer or any type of alcoholic beverage.”

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