When Suppliers Morph into Retailers

When I started as an alcohol regulator, Oregon had many small wineries producing good wine—some of which was world class. But most wineries were very small and sometimes had difficulty “getting their product to market.” These wineries felt they needed to develop a market before a distributor would be interested in partnering, and/or they feared getting lost in the portfolio of larger wine and spirit distributors. One method they pursued was selling their products at local festivals.

Some of these festivals got out of control. It turned out that wineries were inexperienced and unskilled in responsible serving practices. Attendees got intoxicated after having too many “tastes” and minors were served.

Eventually, we developed rules for festivals that included limits on servings and the size of a “taste”, requirements for server training and other responsibility measures. As a result, these events became less of a problem.

Responsible retailing of alcohol is exceptionally important. We rely on our retail licensees to prevent sales to minors and intoxicated persons. This takes skill in observation, judging age, checking ID, knowing the signs of intoxication, and handling very delicate situations.

But now we face another situation where suppliers are entering the retail business, sometimes without the training or skills needed for good retailing. Today, we have over 6,000 breweries, the majority of which are small microbreweries or brew pubs. They may perceive similar challenges “getting their product to market,” or have developed a business model selling their product direct to consumers from a tap room. It is not uncommon for these tap rooms to become full-fledged restaurants and entertainment venues. Rather than have some people come in and taste the product for possible future sale, their model entails large numbers of customers drinking substantial amounts of product.

Read the rest of the Healthy Alcohol Marketplace newsletter here.

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