Quantcast

The Business of Beer: Why Would You Want To Send Your Beer To Singapore?

Alex Fossi, October 31, 2013 -   

Most craft brewers in the U.S. don't give a lot of thought to shipping their beer overseas. The vast majority of American breweries are small brewpubs or microbreweries. For them, the concept of shipping beer outside the brewery at all might seem outlandish. They might bring a keg or six over for a tap takeover at a local bar, sure, but most of these are not breweries that will be regularly distributing beer throughout even a local market. Those microbreweries who are distributing are generally limited to a few major cities--after all, why expand distribution when you're not producing enough to satisfy local demand?

That's not to say that shipping beer abroad isn't an option for any brewery, of course. According to the Brewers Association, there were 2347 craft breweries operating in the U.S. in 2012. Of those, just 97 qualified as "regional craft breweries", which are breweries that produce between 15,000 and 6,000,000 barrels of beer annually. These are the breweries who can legitimately consider shipping their beer overseas. You have to produce enough beer that there's reason to try and expand the audience. 

When these "regional" breweries look around to see where they should expand distribution, there's one country that must jump out at them as a logical target. It's nearby. It has the 12th highest rate of beer consumption per capita. It also has one of the largest populations in the world, so that "per capita" includes a whole hell of a lot of capitas. On top of all that, it's a country that has traditions, weekly events, and even national holidays devoted to the consumption of beer. I'm talking, of course, about the United States.  Okay, so you could ship beer abroad, but why? Why would any brewer in the U.S. decide to expand distribution anywhere else, when you have a captive, thirsty audience in your backyard? We have 300 million people drinking 50 billion pints of beer a year right here at home. Really, why venture further? 

The obvious answer is that we have approximately a crapton of breweries operating here in the U.S. We've mentioned the "craft beer bubble" on this site previously. It's pretty simple: there are tons of beer drinkers here, but also tons of breweries. Expanding into a new U.S. state isn't as simple as driving a truck over and dropping off a bunch of beer. You're competing with all the other breweries who had the same idea as you, and no matter how unique and amazing your beer is, it's tough to force your way into an already saturated market. Hence, you might look abroad; instead of marketing your beer to people that already know and love other craft beers, you send it somewhere where the population hasn't been exposed to craft beer.

Rogue Brewing is way out in front here. All the way back in 1994 (which might as well be the Paleozoic Era as far as American craft beer is concerned), Rogue began distributing beer to Japan, complete with unique label art and beer names written in Kanji characters. Why? As Rogue's founder put it, "We're not run by either profit or logic." Rogue was (relatively) tiny at the time, producing just 10,000 barrels of beer per year, so this certainly seems like a decision lacking in both logic and profit. However, they were at the forefront of a movement that would begin to create a shift in international attitudes towards American beer.  

Stone Brewing was another early entrant into the international market. I'll let Stone's co-founder Greg Koch explain the value of bringing American craft beer to the international market, because this anecdote about Italians trying Stone beers for the first time is easily my favorite story about bringing beer abroad:

“It was Italians’—and really, Europeans’—first exposure to American craft beer.  And of course, Italians are all about taste, and they loved it. Little did I realize, Arrogant Bastard—as in Arrogant Bastard Ale, of course—was something completely understood in Italian. They would look at the bottle of Arrogant Bastard on the table and go, ‘Aahhh, Arrogunt Bostard!’ And they wanted to try that and they just loved it."

Arrogunt Bostard!  Awesome. I'll be calling it that from now on.  Credit for that quote goes to Patrick Dooley -- his story linked in the paragraph above is well worth a full read. In any case, the point is that by the year 2000 or so, demand for U.S. craft beer abroad was growing, and breweries like Rogue and Stone were taking advantage of being the first ones on the scene.

Of course, the situation is a bit different now. It's one thing to have your beer pleasantly surprise someone who expected American beer to be bubbly yellow water. It's quite another to enter the market when other American craft beers have been available internationally for a while (though it should be noted that total shipments of U.S. craft beer abroad are still just 190,000 barrels per year, or about 1.4% of all U.S. craft beer -- we have a footprint abroad, but it's a small one so far).

Deschutes Brewery is one brewery that just recently started shipping their beer overseas, despite the fact that they ship to less than half the states in the U.S. at present. According to Deschutes CEO Gary Fish, this was never in their plan. In fact, he thought the whole idea of international distribution was "silly".  What changed his mind? 

Well, they found out that an unknown Deschutes distributor had gone rogue (not to be confused with Rogue) and had started shipping Deschutes beer over to Singapore without permission. Unfortunately, by the time each unauthorized shipment arrived, it was well past the date it should have been consumed by; on top of that, without any control over the shipping process, Deschutes had no way to monitor the quality, as beer can easily be damaged in transit without proper care. As a result, Deschutes decided they needed to start shipping it over themselves to protect their reputation. Someone who has a bad beer likely isn't going to consider whether it was improperly shipped -- they'll just assume it's the fault of the brewing company.

Luckily for Deschutes, there was already a company that specialized in distribution to Singapore: Beerstyle Distribution. Their other clients included several American craft breweries (among them: none other than Stone and Rogue). Fifteen years ago, setting up international distribution agreements for craft beer was uncharted territory; now, early adopters have created a roadmap that other breweries can follow. It wasn't quite as simple as 1, 2, 3, but it didn't take long before they had pallets of approved, full-quality Deschutes beer headed to Singapore.

The answer to the titular question of this piece, then, seems to be simple enough: there's demand for craft beer abroad, breweries want to make sure that foreign drinkers are getting the best product they can provide, and it's not nearly as difficult as it used to be to get the beer over there. Of course, none of this matters without the demand, and that's certainly not lacking. After all, if distributors are willing to sneak unauthorized shipments of craft beer into foreign countries, there's clearly a market there, and it's a much less saturated market than we have here in the U.S.

I have a friend who lives in the small town of Barnesville, Ohio, over an hour from any major city. The biggest bar in his hometown shares a storefront with the local grocery store. At this bar, the beer options are simple: Bud Lite or Bud regular. Despite the limited options at the bar, he can find a good selection of Bell's, Dogfish Head, and Stone beers at the aforementioned grocery store. It's nearly impossible to find a spot in the U.S. that lacks access to at least a few solid craft beers.

Contrast that with what's available to the typical beer drinker in Singapore, and the idea of a craft brewery shipping beer across the Pacific Ocean starts to make a little more sense. With these new markets opening up to good American beer, maybe the "craft beer bubble" isn't such an issue after all. The large breweries of today can thank breweries like Stone and Rogue for testing the water and starting a market for American craft beer abroad; I can't help but think that American breweries will have a growing presence in the international beer market going forward.  In the future, Italians will have access to a lot more than just Arrogunt Bostard.

You can find Alex on Twitter @AlexanderFossi.

comments powered by Disqus