Dear Client:

There’s a robust Reddit thread on craft beers shipping both in and out-of-state, a medium which seems especially in demand for both brewers and consumers as the crisis hampers regular channels. 

After perusing some of the options – sites like Tavour offer to ship brands from almost all 50 states that are otherwise not widely available to consumers — we wondered, is such widespread beer shipping legal? 

The Reddit thread serves as a repository for, it stressed, “legal channels” to sell and ship beer direct. And there were many brewers listed that ship within the state of California, for example, which is indeed legal. 

But the comments revealed other brewers shipping “to 37 states,” a prospect we could have a hard time believing is totally kosher. Indeed, one brewer has told us in recent weeks that despite prohibitions in their state against direct shipping, “a few have gone ahead to begin shipping and [delivering] illegally under the circumstances.” 

And so we asked around about the letter of the law, and what may be changing in these times (as many special COVID-time directives have taken hold in some localities). 

One industry lawyer tells CBD that beer shipping is legal in maybe a bit more than a handful of states, but that more widespread cross-state shipping could likely run afoul of the law. Then, too, the costs of shipping are high, and going higher.

We also asked the Brewers Association about the letter of the law and direct shipping. Specifically, we asked: “Apps like Craftshack and Tavour make me scratch my head, as it seems they ship beer across many state lines, which I thought was illegal? Or am I misinformed?”

BA chief Bob Pease wrote back: 

“Like most laws governing the distribution of alcohol, the answer varies from state to state, and local laws can come into play as well.  Some states allow brewers to ship directly to beer drinkers across state lines, but many don’t.  We believe that this will change, just as it has for wine shipping. Already this year the Kentucky legislature passed a law that puts beer on an equal footing with wine and spirits when it comes to DTC sales and delivery.

“And particularly as a result of new rules necessitated by the COVID-19 pandemic, a larger number of states now allow brewers to deliver beer within the state.  We think these changes will remain critical for a long time, as ‘the new normal’ keeps beer drinkers away from restaurants, bars, brewpubs, and taprooms. Beer drinkers will continue to enjoy beer, so we need new ways for breweries without the scale to attract major distributors or get chain store authorizations to get to market.

“Finally, some on-line services utilize local retailers to fulfill customers’ orders.  In those cases, the business may look like a national delivery service, but in reality they leverage the ability of retailers in most states to ship directly to LDA beer drinkers’ homes.”

We’ll be covering the evolution of DTC as it unfolds. 

NUMBER OF CRAFT ITEMS SELLING IS DOWN DOUBLE DIGITS IN COVID ERA

Those who’ve been reading CBD and BBD in the last few weeks know that larger pack sizes and trusted brands are seeing a major sales boost in the COVID era. Of course, that comes at the expense of some long tail brands. 

Nielsen quantified just how many such smaller brands are being “dropped” in the COVID shopping period, which they’re marking as the 6 weeks to 4/11. 

While the number of wine and spirits items selling (compared to pre-COVID time periods) has stayed relatively consistent, that’s not true for beer. “The total number of beer/FMB/cider items selling declined by -8.3% compared to those same 6 weeks last year. That was a drop in 1,900+ items selling across the category,” per VP bev alc practice, Danelle Kosmal. 

And most of those items are craft items — specifically, “long tail” craft. Among the top 20 craft brewers (ranked by their sales in Nielsen), “there were only 28 fewer items sold compared to last year.”

Meanwhile, “the remaining segment of craft had a decline in 1,621 UPCs, down a total of nearly 12% compared to that same time period last year. Independent, or BA-defined craft is a similar story, with a decline by -11.3% in the number of items selling in off premise channels.”  

Until tomorrow,

Jenn, Jordan, and Harry 

“Unfortunately sometimes one can’t do what one thinks is right without making someone else unhappy.” – W. Somerset Maugham

———- Sell Day Calendar ———-

Today’s Sell Day: 13

Sell days this month: 22

Sell days this month last year: 22

This month ends on a: Thurs.

This month last year ended on a: Tues.

YTD sell days Over/Under:  +1