Marketplace Sites Brew Up Relationships Between Beer Brands And Suppliers

A good beer needs much more than solid hops and an expert brew master. To bring a beer to market, beer brands have to contend with a host of challenges.

Their product has to be put into a can or a keg, for example. And, of course, beer doesn’t move itself from the brewery to the bar — or the supermarket.

Simply said: Brewers can’t always go it alone. And often times finding the right suppliers with the right expertise can, well, be a challenge.

Ben Morgan-Smith, who is a partner in the United Kingdom-based BrewBroker, knows this all too well. His business partners launched one of the biggest craft beer festivals, Craft Beer Rising – and he is familiar with the craft beer scene.

He knows the pain that beer brands experience in their search for contract brewers. As a result, he helped found BrewBroker, which connects brands with a host of services that are involved in producing a beer.

The marketplace seeks to automate the various tasks that buyers have to complete in order to find the right suppliers. It can connect brands with brewing services, logistics and packaging, among other services.

The Market

Target customers of BrewBroker include brewers that need to produce more product – but don’t have the ability to do so in their existing facilities.

“You’ve got existing breweries that need to scale up production…a brewery that’s basically hit their capacity,” Morgan-Smith told PYMNTS in an interview. “And we’ll farm out the production of their beer.”

In addition, some start-up brands want to produce a beer without having their own brick-and-mortar brewery. As a result, brands are increasingly opting to get their beer produced by a company, Morgan-Smith said.

But not all customers of contract brewers are, in fact, companies. Consumers, too, sometimes want a custom beer for a special event such as a wedding or a birthday – or just because they want to create their own brew.

“We see that there’s a need and…a growing market for consumers to access the kind of brewing capacities and skills to get their own beer made,” Morgan-Smith said.

Regardless of the buyer, it’s not always easily dealing with suppliers. In the trade world, payments can be a major headache. There’s a “mixed bag” of payment systems ranging from debit cards to, yes, checks.

As a result, BrewBroker seeks to institute its own payment system. It wants to put in place an escrow-style payment system that holds payments, and the supplier can draw down at certain production milestones.

Brewing Marketplaces

BrewBroker isn’t the only marketplace system focused on beer brewing. Lupulin Exchange, for example, is an online, international platform through which brewers could buy and sell hops to one another that emerged during a hops shortage in the early 2010s.

The platform aims to help those in need of hops restock and helps those with a hops surplus to sell off the extra for an additional revenue stream. Shane Kunkle, co-founder of the Lupulin Exchange, has said that while the idea was born to help brewers handle the hops scarcity, the market has since rebounded.

Now that the shortage is over, though, the platform continues to connect brewers with surplus hops and those looking to fill a need or experiment with new varieties.

And Brew Export provides another solution: It offers a turnkey service that handles legal, shipping and marketing logistics for U.S. breweries that want to gain exposure abroad.

As with any cross-border endeavor, however, it occasionally runs into roadblocks. As alcohol laws vary by country, Brew Export needs to ensure it fully understands the regulations surrounding labels and taxes for each market.

“[Brazil has] a whole craft beer movement, they love craft beer down there,” Shannon Long, CEO of Brew Export, has said. “I’m friends with tons of people on Facebook down there and I feel awful because at this point I just cannot get beer down to them. It’s a challenging market to enter and alcohol regulations are challenging.”

Future Markets

Back in the U.K., BrewBroker is already seeing demand for its services. Morgan-Smith said he’s seen a lot of interest from brewers in Europe – and New Zealand, too.

In the end, BrewBroker seeks to work on a scale where brewers can expand have their beer made in another country. That way, brewers don’t have to ship their beer around the world.

“The goal is to have a global system that would enable a brand or a brewery to connect with a comparable supplier in another country,” Morgan-Smith said.

Beyond beer, Morgan-Smith said BrewBroker would like to expand to provide services for other beverages. The challenges that the beer industry faces in the U.K. also apply to other industries, after all, Morgan-Smith said.