Sightlines — Craft Beer Sets Sail on Corporate Cruise Line

Nate Micklos

THE GIST 
A new cruise focused on craft beer and music, called the “Lebrewski”, is set to sail in March 2016. The four-night cruise sponsored by the American Homebrewers Association and The Brewing Network will feature representatives from a variety of craft beer powerhouses including Lagunitas, Stone, Boulder Beer, and Cigar City. This is a new development that builds off Cigar City's previous exclusive agreement to distribute their beer on all Florida-based Carnival cruises.
 
WHY IT MATTERS
It's indicative of a larger, growing trend that will continue to shape the industry. Companies at the scale of Lagunitas and Stone wanting to continue their impressive annual growth numbers will need to seek big volume opportunities. While this cruise initiative alone won’t make a significant impact on their annual volume target, it does signal craft beer’s continued movement into the mainstream public eye.

We expect to see major craft brands increasingly make appearances at chain restaurants, airports, new international markets, and everywhere in between. The challenge for those brands is to stay culturally relevant at the local level while simultaneously spending resources to expand into the national mainstream. That’s no easy feat.

It also creates a potential conflict among the sales and distributor networks, as distribution decisions become increasingly scrutinized. Most craft breweries face supply constraints that often limit their ability to meet demand (this has caused certain breweries to pull back their distribution footprint to focus on their local/regional market, or to avoid expansion into new territories in the first place). Cigar City faced this challenge in 2014 when they agreed to offer their beers on Carnival cruise lines. In a world with limited supply, it's imperative that breweries and distributors strategically evaluate and prioritize the most important channels and territories to make their beer available to the public. The "right" answer will vary from brewery to brewery.
Nate Micklos