The Oregon Beverage Collective and GoSelfDistro and Model Craft Beer’s Newest Trend: Collectivization
Oregon breweries made two big and related announcements while I was out of the country. First, from The New School:
“With rapidly shrinking options for craft breweries, cideries, and alcohol beverage suppliers seeking distribution for their product a new self-distribution collective is taking shape in Oregon.… To fight this increasingly threatening trend Adam Milne has launched the Go Self Distro collective in Oregon with aspirations to take the concept nationwide.”
And second, from Bend’s KTVZ:
“The family that owns Cascade Lakes Brewing Co. has purchased the Crux Fermentation Project, part of a newly announced coalition of five Central Oregon craft breweries, to be called the Oregon Beverage Collective aimed at helping all of the familiar brands thrive.” The other three companies are Silver Moon, GoodLife, and Tumalo Cider.
Breweries are into year six of the time of troubles, one that began with Covid and is now marked by a contracting market. These two announcements point to what seems like a growing consensus on a strategy for these times: collectivize. What’s interesting here is that it’s happening among smaller breweries.
Both of these items flesh out the new way of thinking. The Oregon Beverage Collective (OBC) is an interesting case because it involves both a merger and something more collaborative. In the former arrangement, the Rhine family, owners of Cascade Lakes, will buy out Paul Evers and Larry Sidor, acquiring Crux. (As a legal matter, the two remain separate breweries owned by the Rhines.) The larger OBC is a separate entity comprised of the five companies.
While four of the five entities will remain separate companies, they’re collectivizing certain shared redundancies, like production. Andy Rhine explained this to KTVZ (Bend): “Almost all brewing will be transitioning to Crux Fermentation Project’s facility. What’s important to emphasize is that each brand will continue to create its own distinct beers — the recipes, styles, and personalities aren’t changing. We’re simply bringing production into a shared, state‑of‑the‑art space.”
The new management is keeping the details close to their chests as they launch the project, but Rhine mentioned how a collective can save money on bulk purchases and gain efficiency on the wholesale side.
All of this makes a ton of sense. Brewing is a capital-intense business. Buying a brewhouse, cellar, and packaging line, paying people to manage them, and paying rent/mortgage on the space is really expensive. If a brewery is making a special kind of bespoke beer—like De Garde or local Bend favorites Funk Fauna—a separate facility makes sense. But it’s kind of mad, with all the excess capacity in the industry, to buy a small, inefficient manufacturing facility (ie, a brewery) that makes standard styles of ales and lagers most systems can handle when you could go down the street and brew on a bigger, better system.
A lot has changed for small breweries over the decades. Breweries used to be exotic operations. Customers were magnetized by them. They expressed a romance that was key to developing a “craft” consciousness in the beer industry. And, decades ago, if you wanted to make a thousand barrels of beer a year, you needed a brewery to do it because there wasn’t another option.
This all changed, by my reckoning, when brewery taprooms started severing these important connections in the minds of consumers, who inevitably paid more attention to the beer itself than where it was made. There often wasn’t a brewery onsite, and anyway, with dozens of them scattered around a city, physical breweries weren’t that romantic anymore. Starting around the middle teens, “brewery” meant anywhere you could go to buy a company’s beer. The taproom was the key, not the attached brewhouse.
A decade ago, the OBC announcement might have stirred some resentment. Can GoodLife and Silver Moon really call themselves a brewery if Crux is making their beer?? Redditors would have had opinions. Today, literally nobody cares. The companies are using a shared brewing system, and … so what?
Distribution is a whole different kettle of fish, and I plan to commit an act of actual journalism on GoSelfDistro, so stay tuned. But to tie it into our theme today, it also represents a case of how banding together with your competitors, even in a loose association, may make a lot of sense. For very small breweries, distribution is a hard subject. Breweries lose around a third of their margin if they sell wholesale to a distributor. But self-distributing isn’t without its difficulties. It’s like opening a brewpub—you’re really running two totally separate kinds of businesses. Going on sales calls to retailers, managing ordering and inventory, and using your own vehicles to deliver beer has nothing to do with making it.
Yet there’s a numbers issue here. Most cities have dozens of breweries and a small handful of distributors. For little breweries, it can be hard to get your beer noticed in a wholesaler’s portfolio that may represent hundreds of different brands and god knows how many individual products.
GoSelfDistro is a tech hack for solving one of the difficulties in self-distribution. It creates a central database for retailers who want to order beer. With GoSelfDistro, the website can’t help with inventory management or do the actual deliveries, but it can do one specific thing: connect retailers directly to breweries. There are many wrinkles in the system I don’t yet understand, but the logic is obvious. (Certainly to breweries: when Old Town Brewing’s Adam Milne announced the launch to The New School, it listed four breweries. Yesterday it was 16. Today it’s 19.)
Collectivization isn’t new—a number of mid-sized breweries have been experimenting with this model for years. But seeing it happen on a small scale does seem new, and I expect we’ll see lots more of this to come. It’s an important development to bookmark and watch.