Great Divide decreases distribution reach

Wednesday, Mar 30, 2011 at 9:35 am by PJ Hoberman

Great Divide has been pulling out of some markets over the past 5 months. They were expanding as the demand allowed, and their capacity couldn’t keep up. Rather than stretching past their limits, Great Divide chose to pull out of some markets and focus on what they’re good at: making damn fine beer.

Last night, Dan from Full Pint posted about the pull out, and a BeerNews.org article quickly followed with some more details.

Here’s an official statement from Hanna Laney at Great Divide:

Due to exponential increase in demand for our beers, we have made the difficult decision to pull out of some markets. We have been slowly pulling out of states since November and since then have now left Michigan, Rhode Island, Connecticut, Kentucky, DC, New Mexico and Alaska, statewide. Additionally, we have pulled out of certain territories within states. These partial states include: Minnesota, Illinois, Pennsylvania, New York, and Virginia. In these states, you can still get our beer in the following metro areas: Minneapolis, Chicago, Philadelphia, Pittsburgh, New York City, Rochester, and northern Virginia, respectively. These partial territory pull-outs, aside from Virginia, have been effective since the end of 2010 and are not new. We appreciate the kind words and understanding we have seen from our customers in these areas and appreciate everyone who drinks our beer. We do not relish the decision to shift out out-of-state distribution and we hope to be back in states in the future. However, at this time, we simply do not have the capacity to meet all demand. If you have any questions, please feel free to email Hanna at hannalaney@greatdivide.com.

As the craft beer industry grows, we’re likely to see more instances of bigger breweries pulling out of some markets, as their key markets demand more and more beer. It’s not something people in those emptied markets are going to be happy about, but that does create an opportunity for new breweries as well. What are your thoughts?

About PJ Hoberman

PJ likes beer. A lot. And whiskey. Gin. Wine. Cocktails. Um.. what were we talking about?

Tags: beer, distribution, Great Divide Brewing

http://blahstuff.com Jake

As long as I can get GD beer here in Denver/Boulder, I’m fine with it. ;^)

That said, you’d think this would be an opportunity for them to grow their capacity, staff, and business in general.
This is at least the second story I’ve heard with almost identical details, so I wonder what is driving them toward cutting back on distribution rather than expansion.
- http://denveroffthewagon.com PJ
  
  I think they ARE expanding, but the markets are also increasing demand. Great Divide just entered California in the past year (with SoCal distribution through Stone), and that’s a HUGE market. Even Denver’s market is growing, and they’re expanding just to keep up with that.
  
  Stop by the tap room, it’s never empty. Even on a Monday at 3pm, it’s packed. They’ve lost their parking lot to 300bbl tanks, too.
- Bo
  
  I heard that biggest driver for not growing the business is space. They are building on additions to their downtown facilities but that takes time. When their current expansion is done, they will pretty much be out of space. Because of their downtown location, there’s not a lot of opportunity to increase their footprint. They’ll probably have to open a second location, which sounds good to me; I just hope they keep the downtown location.
Brian

Beats selling out to A-B. Glad that Southern California wasn’t on the axe list.
Todd G

Glad my state wasn’t on the list! The Craft Beer explosion has created many new craft beer drinkers. Fine brews like Great Divide are hard to keep in stock.
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Hanna

The “why don’t they grow more” argument is a common one we have heard. While we continue to grow (4 new tanks in the 8 months I have been here, whoa), that growth is hugely expensive. Often, people think that growth is cheap because we are selling more beer but it’s more of a let’s-get-the-horse-before-the-cart thing, where massive growth requires massive input (i.e. teh moneyz) on the front end. We’re growing, yes, and expanding as fast as our dollars will let us.
Wamic Crailer

I like this girl Hanna. It’s only f-ing money to expand capacity and that grows on trees, right? I respect GD for deciding to take care of the customers they can.
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