In Oregon, if a distribution company is sold or merges with another wholesaler, then all existing agreements between brewer and distributor are instantly dissolved. That’s what happened last fall when Columbia Distributing of Portland merged with Hood Beverage of Portland and Gold River Distributing of Medford. The new entity, operating as Columbia Distributing, now stands as the most formidable wholesaler of beer and wine in the region, making it one of the largest in the country.
But from the supplier’s perspective, especially that of the smaller brewer, is bigger necessarily better? Some small craft brewers had to wonder whether they would get adequate support in a mega house that carries so many heavy-hitting brands, including Coors, Miller, Heineken and Guinness, as well as some of the bigger craft breweries, including Sierra Nevada and Deschutes.
“I had to weigh, am I going to get any focus at all?” says Jim Mills, founder and brewmaster of Caldera Brewing in Ashland, OR. The first craft brewery in Oregon to can its own beer, Caldera previously was distributed by Hood Beverage. This year, Mills is on tap to roll out a modest 3,000 barrels. Compare that to the over 200,000 barrels a year produced by Deschutes. Mill asked himself, “Are they going to continue to promote my beer? Am I going to continue to grow my brand, being the smallest brewery in that new book?”
After months of deliberation, Mills made the decision to go with Columbia. He says that the transparency of Columbia’s new reporting mechanism was a persuasive factor. “I can see what I have in stock, I’ll see what they sold that week and I can adjust my orders accordingly. It’s really positive.”
While Mills anguished over his options before finally reaching a decision, Columbia CEO Greg Christiansen says the overall attrition rate was actually quite low. Some 97 percent of suppliers granted approvals to go with the new Columbia.
“There were some small craft brands that felt that we were too big and that it wasn’t a good fit and they moved to a smaller distributor,” concedes Christiansen. “But we retained a very successful number of suppliers.”
Among the holdouts that chose to sign on with another distributor were Anderson Valley of California and Roots Organic Brewing in Portland.
“We were with Columbia for two and a half years,” says Jason McAdam, Roots’ co-owner and brewer. “Our growth was on the rise and we were investing a lot of money in our brewery, and then sales dropped off. We felt that we were getting lost in their book.”