Beer is one of the most popular beverages in the US. In the past decade, the craft beer revolution has drastically changed the beer market. A growing number of independent breweries have opened in recent years (see more information on how to start a brewery), and they’ve expanded the variety of beers on the market. Beer distributors have adapted to the increased demand for craft beers by partnering with nano and micro breweries. Although well-established beer brands still hold the biggest market share, the craft sector is expanding significantly. In this post, we’ll share more about the different types of businesses that partner with wholesale beer distributors. We’ll also explain the main factors to consider when searching for a reliable supplier in the beer niche market.
Key takeaway: Beer distributors are companies that purchase in bulk from craft breweries and well-established beer manufacturers. They sell to restaurants, bars, stadiums, and various other businesses. In most states, beer moves through a three-tier system: brewers sell to licensed distributors, and distributors sell to licensed retailers like bars, restaurants, and stores. Some states let smaller breweries self-distribute up to a set volume.
How Beer Distribution Works: The Three-Tier System Explained
After Prohibition ended in 1933, the 21st Amendment gave each state the power to regulate alcohol. Most states set up a three-tier system that separates the business into producers, distributors, and retailers. Brewers sell to licensed distributors, distributors sell to licensed retailers, and retailers — bars, restaurants, and stores — sell to consumers.
For bars and restaurants, this has a few practical effects:
- You usually can’t buy straight from the brewery. Unless your state allows a brewery to self-distribute, beer has to come through a licensed distributor.
- Each brand comes from one distributor in your area. Distributors hold exclusive territories, so if you want a specific beer, you have to buy it from the distributor that carries it locally.
- Pricing and credit follow state rules. Some states require distributors to post prices and charge every retailer the same, and many limit how long you can take to pay.
- Freebies are limited. Tied-house rules restrict what distributors can give retailers, from equipment to marketing support.
The rules differ significantly from state to state, so your state’s alcohol beverage control agency is the best source for specifics.
What Businesses Partner with Beer Distributors
There are two main categories of businesses that partner with beer wholesalers: buyers and manufacturers. There are different types of beer producers on the market. Let’s briefly examine them.
- Breweries. This is the biggest category of beer manufacturers on the market. It includes both craft beer microbreweries and large producers of well-established beer brands. Some breweries specialize in contract brewing for other brands as well.
- Brewpubs. This business model combines brewing and selling beer with offering dishes.
- Taprooms. They are very similar to brewpubs. However, taprooms have a limited food menu that consists primarily of snacks and shareables.
Businesses That Buy Bulk Beer
- Food service businesses. From large hotels and resorts to small businesses in the restaurant industry, various food service companies purchase beer in bulk. Some bars and pubs might focus on specific types of craft beer. On the other hand, hotels might order only popular beer brands.
- Retailers. Grocery stores, convenience stores, specialized liquor stores, and various other retailers partner with beer distributors who offer different brands and beer varieties.
- Event venues and organizers. This category includes catering businesses, mobile bars, festival organizers, and other event planners. Stadiums, halls, and other venues that host large crowds also might partner with beer distributors. Typically, these venues offer only one or a few beer brands.
How to Choose a Wholesale Beer Distributor
When picking a beer supplier, the first thing to consider is your business needs. For example, some businesses might need a wide variety of beers and other products like branded glass coasters, bottle openers, or other restaurant merchandise. Other businesses might be limited to a single beer brand.
Beer distributors can also help restaurant managers with marketing materials, draft beer equipment, restaurant training programs for waiters and bartenders, and more. Some distributors and breweries also offer other services such as contract manufacturing, inventory management (vendor-managed inventory), and beer menu engineering. Federal and state tied-house rules limit what distributors can give retailers, so the equipment and services available vary by state.
Beer can be used as part of a restaurant’s marketing. That’s why it’s important to partner with distributors who are knowledgeable about the latest trends in the beer industry. This will allow you to stay ahead of the competition and can help your restaurant’s customer acquisition efforts.
Naturally, factors such as minimum order quantities (MOQ), distributor reputation, delivery frequency, volume capacity, and reliability are also important.
What to Ask a Beer Distributor Before You Sign On
- Which brands do you carry in my area? Distributors usually hold exclusive territories for each brand, so the beers you want determine which distributors you’ll work with.
- What are your delivery days and order cutoffs? Draft-heavy bars may need deliveries more than once a week.
- How do keg deposits and returns work? Ask about deposit amounts, how empties are picked up, and how credits appear on invoices.
- What are your payment terms? Many states limit how much credit beer distributors can extend, so terms are often shorter than for food.
- What service do you provide? Draft line cleaning, tap handles, and menu support vary by distributor and by state law.
- How do I place orders? A rep visit, phone, or online ordering — and whether you can see pricing and order history yourself.
Beer Suppliers VS Breweries VS Broadline Distributors
There are three categories of beer distribution: local suppliers that specialize in beer and other spirits, broadline distributors, and breweries. Let’s examine the main differences between them.
- Breweries. They produce different types of beer and focus on B2B sales to distribute. Business owners might choose to partner directly with breweries instead of ordering in bulk from suppliers. However, that has limitations as breweries typically offer only the beer varieties they manufacture.
- Broadliners. They are one of the integral parts of the food and beverage industry. Broadline distributors typically offer products in all categories. However, partnering with them is suitable primarily for medium and large businesses as they offer less flexibility in terms of minimum order quantities and delivery frequency.
- Specialized beer distributors. These companies partner with various craft and mass-produced beer breweries. Some wholesalers also partner with winemakers, spirits manufacturers, and producers of non-alcoholic beverages. They are the right choice for businesses of any size. Due to their comprehensive knowledge of beers and other drinks, specialized beer distributors can help the management of restaurants in various ways.
Managing Beer From Multiple Distributors
Because brands are assigned to distributors by territory, a bar with 20 beers on tap might buy from three or four different beer distributors — plus separate wine, spirits, and food suppliers. Each has its own rep, delivery schedule, and invoices. Keeping that organized means counting beer inventory by distributor, tracking keg and case par levels, and watching freshness dates so older product sells first. See BlueCart’s food and beverage inventory software.
When a Beer Distributor Relationship Isn’t Working
Because brands are tied to territories, you can’t simply move a beer to a different distributor. But you do have options when service slips:
- Raise it with the sales rep and their manager first. Missed deliveries, frequent out-of-stocks, and stale product are problems distributors want to fix before they lose an account.
- Track the issues. A simple log of late deliveries, shorted items, and out-of-code beer makes the conversation concrete.
- Change brands, not distributors. If a distributor can’t deliver reliably, replacing its brands on your tap list with similar beers from another distributor shifts your volume.
- Add a specialty distributor. Smaller craft-focused distributors often provide more attention and more unusual brands than large houses.
Frequently Asked Questions about Beer Distributors
Below are the answers to frequently asked questions regarding beer distributors and their operations.
What Are the Biggest Beer Distributors in the US?
Reyes Beverage Group is the largest beer distributor in the US. Other large distributors include Silver Eagle Distributors, Ben E. Keith, and Columbia Distributing in the Pacific Northwest. Anheuser-Busch is the country’s largest brewer, not a distributor; its beers reach bars and stores mainly through independent distributors.
How to Become a Beer Distributor?
You’ll need brewery partners, storage and delivery capacity, and the right licenses — a federal basic permit from the TTB plus state wholesale licenses. Our guide to craft beer distributors walks through the full process, and how to get a wholesale license covers the licensing basics.
What Is the Beer Supply Chain?
The beer supply chain includes the different stages in transforming grains and other raw ingredients into beer offered by food service businesses or on grocery store shelves. Here are the main stages of the beer supply chain:
- The main raw ingredients for beer brewing are water, different varieties of hops, yeast, and different types of grains;
- The raw ingredients then go through a few processes, like malting and brewing. The result is freshly brewed beer;
- Once it’s done, the beer needs to be packaged in kegs, cans, or other packaging solutions;
- The packaged beverage is then distributed to retailers, eateries, and other businesses that serve customers or sell beer.
Can a Bar Buy Beer Directly From a Brewery?
Only where state law allows. Some states let small breweries self-distribute up to a set volume; elsewhere, bars and restaurants must buy through a licensed distributor.
Why Can’t I Get a Certain Beer From My Distributor?
Each brand is assigned to one distributor per territory. If your usual distributor doesn’t carry a beer, it’s either distributed by a different company in your area or not distributed in your state at all — the brewery can usually tell you which.
BlueCart: Where Beer Distributors Can Find New Customers
BlueCart’s Endless Aisle connects distributors with more than 48,000 transacting restaurants and foodservice businesses that use it to find suppliers and order. That helps beverage distributors grow their wholesale sales, while digital ordering, standing orders, and BlueCart Pay make day-to-day operations more efficient. Restaurants and bars use BlueCart’s wholesale ordering software to order from all their suppliers in one place. Schedule a demo to see how it works for your distribution business.