NBWA Chairman on evolving beer distribution: ‘It’s still about building brands’

Travis Markstein, president of Markstein Beverage Co. in San Marcos, Calif., assumed the position of 2015-2016 chairman of the Board of Directors for the National Beer Wholesalers Association (NBWA) at the association’s 78th Annual Convention and Trade Show at Caesars Palace in Las Vegas. As chairman, Markstein will help guide the association as it advocates for licensed, independent beer distributors and educates elected officials, regulators, media and the public about the value of beer distributors and America’s effective system of state-based alcohol regulation.

Markstein referenced his great-grandfather Albert Markstein, Sr.’s start in the beer distribution business, selling wooden cases of bottled beer for a local brewery from a horse and wagon in 1919 and later his grandfather and father’s role in the business following Prohibition.

He noted that, today, “The business is more complicated in many ways, but it is also very similar to the business in my grandfather’s time. It’s still about building brands. And not just one brand but a portfolio of brands that give us scale and our customers the variety they demand. And it’s still about partnerships. Solid partnerships with brewers and retailers. And it’s still about our uniquely American system. A system that serves consumers, retailers, wholesalers and brewers extremely well.”

Markstein added, “If small brewers think the three-tier system is a roadblock to their success, they’ve been misinformed. Go craft a new potato chip or a new soda product and see how difficult it is to get distribution and access to those unregulated markets. It’s nearly impossible.”

“There is a huge value in local distributors selling brands locally one tap at a time,” he said. “We may be more efficient and more sophisticated, but we are still the local experts with the local relationships and we still aggressively invest that expertise into building brands.”

President of Gretz Beer Co. and NBWA Political Action Committee Chairman Mike Gretz led a panel discussion with leaders from five brewers and importers that partner with independent beer distributors across the country. Participants included Ronald den Elzen, president and CEO of Heineken USA; Ken Grossman, founder of Sierra Nevada Brewing Co.; Bill Hackett, president of Constellation Brands Beer Division; Gavin Hattersley, CEO of MillerCoors LLC; and João Castro Neves, zone president North America for Anheuser-Busch InBev.

The brewery industry leaders discussed the many changes taking place in the beer industry, including: global consolidation’s impact on the American beer business; domestic acquisitions and private equity trends; the expansion of breweries owning distribution and its impact on the independent three-tier system; and future trends that will shape the industry.

The panel emphasized the value of the three-tier, independent beer distribution system in the United States, along with the importance of industry partnerships.

Grossman discussed the expansion of brewery ownership of distribution and described the needs of small brewers and access to market, saying, “A viable, independent three-tier system is crucial to our success and, I think, many of our peers’ success. There are concerns as we see branches being purchased in areas that don’t have a lot of options for brewers to get to market.”

Ronald den Elzen also voiced support for independent distribution, saying that Heineken USA wouldn’t be as successful without the three-tier system. He contrasted America’s open market with Europe, where he said there is hardly any space for small, new brands and no space for independent distributor.