Is Green Flash Brewing’s Pullback Craft Beer’s Future?

On Monday Green Flash Brewing  announced plans to pull its distribution from 33 states a move that has the industry buzzing.

And if you think their decision doesn’t signal a profound change in how some of craft beer’s larger players will be positioning themselves in 2018, you’re kidding yourself.

What with more breweries online than ever before, and craft beer’s seemingly unstoppable double-digit growth having slowed to 6 percent, news of Green Flash Brewing’s contraction (which also included the loss of 33 workers in production, operations, sales, marketing and administration positions) resonates.

And unfortunately we expect to see more actions like this in 2018, especially among the nation’s larger craft brewers.

Clearly the era of large craft breweries seeking to strengthen their national position through huge distribution networks is fading…

We also have probably seen an end to craft beer majors upscaling their reach, by building additional brewing hubs as Sierra Nevada, Oskar Blues, New Belgium, Stone Brewing and Deschutes all have, unless the current dynamics change.

Big distribution networks have been undermined of late by the craft beer community’s growing embrace of  local craft beer artisans who are doing exciting things on a much smaller (and some might argue) manageable scale. And the old industry models based on huge multi-state distribution networks are beginning to look archaic.

“We were doing pretty well close to the breweries, and in some strategic markets we had some strongholds, but we had a lot of territory that was in pretty steady decline,” said co-founder Mike Hinkley to Brewbound. “Rather than to continue to fight that battle, we took the resources from out there and brought ’em all into a smaller territory—as much as we could, anyway.”

Green Flash is currently brewing at both their headquarters in San Diego and a newer East Coast facility in Virginia Beach. And with this retrenchment each brewery will concentrate their efforts on their own ‘closer in’ regions.

As things stand now, The San Diego brewery will ship beer to Arizona, California, Colorado, Hawaii, Nebraska, Nevada, Texas, and Utah…And their Virginia Beach operation will address Delaware, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee and Virginia.

Obviously this strategy was conceived to streamline the company’s overall operations with an emphasis on efficiency and getting the freshest beer possible to their consumers in a timely manner.

By concentrating their sales and marketing efforts in a more focused geographic footprint Green Flash, (who also took on Alpine Beer in 2014) hope to accelerate their sales, increase their inventory turnover, in a manner that they hope will result in more than 90% of their products arriving on same day that it is shipped.

In spite of Green Flash Brewing’s significant pull-back, plans to open the Green Flash Brewhouse & Eatery in Lincoln, Nebraska in the first quarter of 2018 do remain in place. And that much smaller brewing operation will serve as a hub for the state of Nebraska.

So welcome to 2018 beer lovers…And we suggest that everybody keep their seatbelts fastened.

Because if Green Flash’s moves this week tell us anything…it’s that things could get increasingly dicey for the craft beer industry this year.