The craft beer business in Memphis is in the midst of a major shake-up, one that may make lovers of hand-crafted Belgian beers, stouts and IPAs a bit nervous. After more than a decade as Memphis’ craft distribution pioneer, Southwestern Distributing recently sold its beer business to the Hand Family Companies. As a result, Budweiser of Memphis, which is owned by the Hand family, has taken over Southwestern’s craft portfolio, including Stone Brewing Co., Sierra Nevada Brewing Co., Rogue Ales, Yazoo Brewing Co., Abita Brewing Co., Red Brick Brewing Co and Memphis’ Ghost River Brewing Co. Those brands join Budweiser of Memphis’ existing craft brands, from New Belgium Brewing to Magic Hat Brewing Company to Blackstone Brewery, as well as domestic brands like Budweiser and Bud Light. So what’s going to happen to all those beers from Southwestern’s portfolio? How will Budweiser of Memphis balance its craft brands with its mass-produced Anheuser-Busch products? Austin Sawyer, import, craft and specialty brand manager for Budweiser of Memphis, has heard all those questions, and he says Mid-South craft beer drinkers should not fret. He sat down at the Downtown Flying Saucer with FuzzyBrew to talk about the craft beer transition in Memphis and to share some of Budweiser of Memphis’ big plans.
Give us the back story behind the sale of Southwestern’s beer business to the Hand Family Companies and what has transpired in the last few weeks.
Georgia Crown purchased United Liquors a couple of years ago, and then they came in and bought the liquor division of Southwestern. At that time … the beer side became available. Obviously they’ve got a great portfolio. They’ve done a great job establishing those craft brands. They came in in the 90s, really before the market was ready for craft, and they did great things with it and really got it going. We got our first venture into craft at the Budweiser wholesaler five years ago with New Belgium … and it really opened our eyes up to what that movement was. Ever since then we’ve picked up breweries such as Magic Hat, Yuengling … We started going after some other players. We started hunting the breweries across the country. … We got Blackstone Brewery out of Nashville. Those guys produce some great liquid. We really like what they’re doing, so we got them on board.
When the Southwestern beer portion became available, our owner J.R. Hand was obviously very in tune to what is going on with the craft beer movement. He was very excited about the opportunity, and here we are now. He purchased that beer division of the company, and we moved forward with it. From there, three weeks ago we merged their low-gravity brands in house, sold under Budweiser of Memphis. And (for) all the high-gravity, we opened up a new company called West Tennessee Beverage, which is a subsidiary of Budweiser of Memphis servicing all the liquor stores and bars and restaurants with high-alcohol licenses. Just beers at this point. We’re servicing Shelby County and Memphis with all low- and high-gravity brands and we’ll be servicing Jackson, Tipton and Dyer counties with high-gravity brands.
How long have you been with the company?
I’ve been the craft manager here at Budweiser of Memphis for two years now. I took it over right when the Hands took over the company. It was a new position that they added because of how excited they were with the craft beer movement and wanted to get involved. We’ve got a great team over there…and when we absorbed the Southwestern brands, obviously our portfolio quadrupled. … When you’re selling against these brands for years, you see what works and you’re so envious of those things. Now we’re like, ‘All right, how do we take what they did and build on that as a stronger and more efficient organization?’ … Opening up this liquor store division is definitely interesting. I know all the liquor stores in Memphis that have spoken with us are overly excited about the fact that we’re just selling high-alcohol beer. The beer consumer in Memphis is so thirsty for what’s new, and the rare stuff, and these great breweries, and with this new portfolio, we can offer that.
Here’s the question that all the beer nerds in Memphis want to know — how are you going to balance the sale of craft beer versus Anheuser-Busch products?
At the end of the day, I’m never going to sit here and tell you I’m going to forget about Bud Light. At the end of the day, we’re in the South and it’s the No. 1 domestic beer brand in the market. It’s what pays the bills. But at the same time, I realize and the ownership group realizes that craft beer … isn’t a fad. This is what’s here to stay. … Everybody in our company has bought into the craft beer movement.
Do you think the shelf space for craft beer across Memphis will be increasing?
Without a doubt. I will say that’s where our company excels throughout the years, on execution and brand roll-outs. And that’s why we’ve picked up some of the juggernauts over the years such as New Belgium and Yuengling. They go with a high-execution company. I think if you look at what Sierra Nevada has done in this market, it’s very underdeveloped at this point. … I don’t think at the end of the day it’s going to come from cutting domestic. Not everybody knows what works in this market. Our guys are very good at identifying what works with the right accounts. … One of the hottest items in grocery right now is a ‘pick six,’ create your own six-pack. I think a lot of convenience stores are going to go toward that. And that’s going to offer consumers a lot more craft sampling opportunities. … I think you’re going to see more expansion of ‘single serve,’ the big bombers. Core brand six-packs I think have a lot of room to grow. Between Abita, Rogue, Stone, Victory, Ghost River and Yazoo, I think those are all pretty well seeded in grocery, but I think (there’s room for expansion) in convenience stores.
Will Budweiser of Memphis be getting rid of any of the beers from the Southwestern portfolio?
Not at all, and that’s been a big concern from a lot of consumers. … In the craft beer world today, I have my go-to beers … but I’m all about trying what’s new and what’s hot. … I think you see more style loyalists now a-days. There’s not much brand loyalty in the craft beer world, and that’s why it’s great to have the diverse portfolio that we do. … People have those niche beers they love. We’re not killing them, we’re keeping them around. People are going to realize that we’re doing things the right way.
I know there are people that have reservations about us taking over all these brands, but I think over the last few weeks that we’ve shown people that we’re committed to keeping up with Southwestern’s local service and really trying to exceed all those goals and continue to bring cool beer events to the city.
We’re still under way in the transition, we’re less than a month in and we announced that we’re going to host Memphis Beer Week. With all the trials and tribulations going on in house, we have a full fledged marketing plan put together … with how we’re going to launch Memphis Beer Week. We’re committed to bringing cool stuff to the city.
Does Budweiser of Memphis have plans to bring in regional brands that are not available in Memphis now, such as SweetWater Brewing Company, Back Forty Beer Co. and Good People Brewing Company?
Oh, 100 percent. Some of those I can talk about, some I can’t. There’s still competition to get those. You still have to do your pitch like you’re a car salesman and try to get the best breweries in. But we feel like we have a strong craft beer culture built in our house. It’s pretty apparent when you visit us, our warehouse, listen in on the sales meetings, and craft is dominant in terms of what we’re talking about. … As more breweries grow, we’re definitely interested in bringing anything regional here.
How do you feel about a local start-up company like High Cotton Brewing that will likely self distribute?
Our stance as a company … is that’s great. Obviously it’s competition for Ghost River, but the best competition you have is friendly competition. The guys at High Cotton are doing the same thing we’re trying to do. They’re trying to expand the beer culture in this city. Everybody knows local, regional craft is hot right now. If you’ve got some good beers and know what you’re doing like those guys, and you’ve got the desire and dream to start a brewery, more power to you. … I hope those guys make it….. We’re not going to go out and say, ‘Hey, don’t put their beer on.’ We know it’s Memphis and you’re going to carry Memphis beer, but we have the No. 1 Memphis beer right now, and we plan on keeping it that way for sure. We’re not going to openly invite to give up our (tap) handles, but I want those guys to succeed.
Ghost River is producing consistent, quality craft (beer) and really correlates well with the local consumer. … As they expand and add new tanks at the brewery, obviously what Memphis is clamoring for right now is another flavor in bottles. … Obviously that’s going to be their next opportunity for huge growth. Their seasonal draft business is great. … It’s one of the fastest selling drafts around. We’re doing three pick-ups a week from Ghost River. … Memphians support Memphis things.
Can you give me an idea about new products craft beer drinkers in Memphis can expect to see in the upcoming year?
Not a chance! I wish I could! There’s some great ones coming. There’s some good commitments in line. People will be very excited about what’s coming in 2013, but I can’t expand more than that.
How about Goose Island, which has been bought by Anheuser Busch and is supposed to be coming to all 50 states soon?
Goose Island is coming Nov. 26. Two brands, draft only — the IPA and the Honker’s Ale. Hopefully, the high-alcohol stuff will follow in 2013.
What do you think about the sale of Southwestern Distributing’s beer business? And what beer brands would you like to see come to Memphis? Leave a comment below.