How US craft brewers can get discounts to fight big beer on price
US craft brewers can access hop and production discounts following a deal between Yakima Chief Hops and Dorchester Brewing Company (DBco).
The partnership, which is a newly-styled deal that has been described as an industry-first, has been set up to help give small and growing breweries across the US every chance to fight back against big macro beer.
Speaking exclusively about the deal, Boston-based contract brewing facility DBco’s CEO Matt Malloy told the drinks business: “Price and quality are by far the two most important factors for beer being successful on shelves. Small craft breweries are never going to be able to compete with macro producers purely on price, so it’s crucial to really focus on quality, while also finding savings and economies of scale where they can.”
Hinting that the deal could change things for craft breweries who have all of the skillset and yet previously few advantages when it came to price bartering, Malloy explained how the partnership would also have a knock on effect on the price of beer, since craft could position itself more competitively too.
Competitive pricing on hops, combined with the jointly-offered production discounts means that breweries working with DBco through this Yakima Chief Hops partnership can save big on costs and increase their margin to support their business in a highly-competitive environment.
Yakima Chief Hops, and DBco share the same mission that small craft breweries should have access to the highest quality brewing ingredients and equipment/facilities as the “bigger guys” and have outlined how this deal is essentially “in order to level the playing field” and not only give these small craft breweries access Yakima Chief Hops at competitive contracted rates but also DBco’s state-of-the-art facility and equipment, including its QA/QC and lab. This means small breweries can now appreciate similar margins to breweries producing 300bbls or more.
Malloy told db: “This partnership delivers the quality, variety, and creativity that is foundational to craft beer, while also allowing small breweries to price their offerings more competitively to price-conscious consumers.”
He added: “We are excited to team up with Yakima Chief Hops because of their industry reputation for excellence, and we found a natural synergy in working towards the same shared passion and mission of supporting small and growing craft breweries by lowering costs while increasing quality. With interest rates up, many breweries are turning to outsourced production instead of new equipment or facility investments for larger production SKUs, allowing them to focus on selling and marketing of their brand vs producing volumes of beer. By taking advantage of this partnership and contract brewing at our state-of-the-art facility, breweries can continue to scale and grow during this unstable economy, without the exposure, risk, and interest rates of facility projects. Ultimately, this partnership is about supporting the entire ecosystem of craft beer: quality for brewers and consumers, and pricing to increase margins so that craft breweries can sustain and invest in their business.”
In addition to competitive pricing on hop sourcing, DBco and Yakima Chief Hops are offering contract brewing discounts of US$150 off 30bbl, US$400 off 60bbl and US $1000 discounts off 120bbl production amounts through 2023. To qualify, breweries must be a new customer to DBco, and the production credit excludes production in the months June and July when the facility is at peak capacity.