By now, you’ve no doubt heard the rallying cry for craft brands to capture 20 percent of the overall beer market by 2020, an impressive — yet seemingly attainable — goal for what could still, in many ways, be considered a fledgling industry.
One MillerCoors-aligned beer wholesaler in North Carolina hopes that on its way to 20 percent market share, craft products will account for at least 30 percent of its own overall revenue.
To achieve that goal, and to better slake the unwavering thirst of one the preeminent craft beer markets on the East Coast, Caffey Distributing and Carolina Premium Beverage, a consolidated pair of distributors in the state, jointly launched Craft Central toward the end of 2014.
With 11 employees, Craft Central serves central and western North Carolina, covering major cities such as Charlotte, Greensboro, Winston-Salem, and Asheville. The distributor carries products from New Belgium, Devils Backbone and Atwater Brewing, among others.
Chris Caffey, the president and CEO of Caffey (who also serves as president and partner of Carolina Premium and Craft Central), said that the goal is “to get an understanding about not only craft business, but how the consumer views the distributorship” and find out what type of influence, if any, the distributor would like to wield over the marketplace.
Five months into its first full year, Brewbound caught up with Caffey to talk about the new business, how to best serve the craft market, and how the wholesaler plans to go after “30 by ‘20.”
The following conversation has been condensed for brevity.
Brewbound: How is it different meeting the needs of the craft market as opposed to the overall beer market as a distributor?
Chris Caffey: It’s less of a big box mentality, if you will. We’re not dropping off pallets at Walmart. We’re not dropping off 100 cases. You’re dropping off one or two cases or maybe three or four. If you’re building a display, it might be a 10-case display of something versus a 100-case display of a major domestic. The selling aspect becomes much more specialized.
BB: What are you looking for in a brand to bring in to your portfolio?
CC: I don’t want to sound flippant, but maybe it does. Everybody’s got an IPA, so you’re not out there looking to add every single IPA available to the market. You’re looking for things that maybe set the brewery apart a little bit. We’re looking for that uniqueness, that little bit of sexiness, little bit of difference that the consumer notices.
BB: How do you make that distinction in determining whether a brand is unique or if it’ll just take up space?
CC: That’s probably the toughest part, which is part of why we have started listening more to what the consumer has to say versus looking at a brand and saying, “Oh yeah, we think we can sell that.” It kind of goes back a little to engaging with the consumer and listening a little bit to what they have to say.
BB: How are you doing that?
CC: One of the things we’ll do to help give the consumer a bit more involvement is, so when we introduce a new brand, we’ve identified 40 or so influencers – beer bloggers, there’s a podcast in Charlotte, maybe some key retailers – we’ll send out kits that have new brands prior to introduction.
We’ll introduce the brands, say here’s one for you and maybe one for a friend, and there will be a card they can send back to us and answer a survey about the beta kit. And we can ask them, what did you think about the beers you received? Also, that’s an opportunity for us to ask other questions, what beers are not currently available you’d like to see in North Carolina.
BB: And you don’t do that on the macro side of things?
CC: Not to the extend we’re doing with Craft Central, where we’re soliciting their thoughts on what brands come to market. They actually help us develop our brand portfolio in some respect.
BB: How do you foresee craft’s role evolving as a part of your overall business, including Caffey and Carolina Premium?
CC: When we created Craft Central, we asked ourselves, “If our craft business is up 10 percent now, what impact would we expect to have on the craft business with Craft Central?” We tripled that trend rate. We want to have a 30 percent growth rate on our craft business as a result of Craft Central. Our target is for 30 percent of our revenue to be generated from craft beer by 2020.
BB: How else do you plan to get there?
CC: We haven’t gotten a lot of traction with it yet, but we’re creating our own non-brand identified point of sales material to help educate consumers on what to look for. Educate them a little bit about, “what does an IBU mean and how does that affect the decision [to buy]?” It’s important to use that it’s not brand identified. It’s not an Atwater piece, not a New Belgium piece, not a Devils Backbone piece. It’s just, “hey, let us tell you about craft beer and get you into this craft experience you don’t know a whole lot about.”