It’s been a busy couple of weeks for me. I shadowed a distributor rep and a beer buyer in Chicago to understand a day-in-the-life of each side of the bar. I saw a lot of what I expected (the grind and the fun stuff), but I also saw a lot of interactions and challenges that I never could've imagined. And that’s what it’s like when you see the truth of anyone’s job that close up, really. It's also one of the things I love about producing GBH—going that extra step, waiting around those extra few minutes, asking that lingering question.
But the big question lingering in my GBH in Residence story from the beer buyer’s perspective with the Longman & Eagle crew was something the bar manager, Phil Olson, brought up. In addition to the complexity of curating a list, rotating stock, adapting to a menu, and dealing with so many distributor and brewery reps, is the issue of pay-to-play. And Olson has a contrarian—in some ways, you might even say “progressive”—view on the whole thing. It’s not every day you get a bar manager asking you to sit down and listen to his pay-to-play stories. It’s almost taboo, in fact. But here we were, an hour before his first reps started filing in the door with samples, hitting "record." It's a Critical Drinking interview if ever there was one.
It probably goes without saying, but just in case: Phil is his own man, and these are his views. They don't necessarily reflect those of Longman & Eagle or its partners.
So you saw the GBH in Residence piece with the distributor ride-along and it seemed to spark some thoughts in you, mainly that I should see this from the other side. What were some of the more memorable parts of that story that stood out to you as needing another side to the story of how beer is sold?
In the sense of training and hiring, yeah. Everyone's trying to acquire as many craft brands in their portfolio as possible. Clearly there’s a fight over Boulevard, and is CBS [Chicago Beverage System, a “Miller house”] going to order any more Boulevard before it all switches over to Lakeshore [the “Bud house”]. Obviously they understand quality brands that they need to have in their book, and they’re willing to fight over them. But it's’ more the people on the streets, and where to put the right people, and changing their routes, and who has what accounts in order to make sure the right people are at the right accounts who are going to do the steps that the Windy reps have always been able to do — and that’s cater a presentation or a sales call to understanding what’s going to work best for that bar at that moment. No matter what rep we’ve had from Windy City, they’ve always done really good at looking at our menu and saying, “I think this fills a gap for you, or I think this is a better version of something you're already doing well with.” Catering their sales call like that and not just bringing in anything.
I think the other guys are catching up to that, and we have really well-educated, well-trained, smart sales reps from most of the distributors who can make those educated decisions of what makes sense to bring in but can also hold back and say, “This doesn’t fit for you.” They can be honest and forthright and do what’s best. I also think pay-to-play is talked about a lot.
Yeah, you said you’d spill the beans on pay-to-play! What does it mean to you to “spill the beans”?
I think pay-to-play is so gray. It’s so blurry. Even for a distributor like Windy City to say, “We don’t pay to play.” I think they’re wrong. I think they do! I think they do it differently. You posted a photo of Matt Modica in somebody’s keg room changing couplers and maintaining their stuff. Shouldn’t that bar owner have to pay Dapper Tap or Steuver & Sons or whoever to do that maintenance work? And now you have a rep doing that for free. [Editor’s note: we inquired about this in a follow-up, and the coupler equipment in question is actually owned by Windy City, not the bar. While Phil’s specific example is inaccurate, his point is more broadly about the gray area of “service.”] If the letter of the law is distributors can’t provide something of value to the account, well, that’s what he’s doing. Now do I think he shouldn’t go down there and do that? Absolutely not. I absolutely think he should!
I think one of the best relationships we have here is with a specific distributor rep. It’s a relationship—he’s a Glunz rep—we’re literally fighting to maintain because [he's] one of the best sales reps. You ask anybody in the industry if they know John Lindemann—they love him. They’ll say he’s one of the best. We did an event with Marz Brewing, a tap takeover. One of our faucets went down, we needed a washer or something. He happened to be nearby, I texted him, and he came by and fixed the line for another brewery’s event that had nothing to do with him because he understands the relationship we have. Brands are fleeing Glunz, trying to make sure I still have orders from him and then Old Milwaukee—turns out he never legally had the right to sell it to us. So our biggest brand, our bestselling beer, all of a sudden I’m not supposed to order it from him.
So I’m arguing with Pabst right now on the corporate level to change whatever territories need changing so I can continue to order from him, or I’m just not going to buy it. Because I owe him that business, right? He’s been there for us so much that we need to be here for him. That’s the distributor-rep account relationship that is crucial.
I think even a house like Glunz, who brands are fleeing for a reason, they were in the dark ages up until recently, they get that. And I think Windy City gets that, and the other distributors are playing catch up and figuring out how to put the right people in the right places. There’s cutting a check or taking somebody to a suite at the Cubs game in order to secure certain tap lines. Then there’s certain levels of support and relationship-based stuff.
At the same time I think the opponents of pay-to-play, or the people who look at it as this hard-and-fast rule don't necessarily take into account the really thin margins that bars and restaurant have to live in. I don’t have much off-premise or retail experience, I couldn’t speak to their margins. But I know the razor-thin margins mean that if you want to expand your tap lines, you want to open a bar and build a walk-in cooler, and put 12 tap lines in because that’s what you think you need—that adds up. So if some distributor shows up and says, “Hey I’ve got a check for you if you buy half those tap lines from us,” it’s really hard to say no to that. I think there’s this idea that it’s these nefarious big distributors and breweries twisting their moustaches saying, “I’m going to dominate this world because I have the money to pay to play.” When really, if you boil it down to individual account, it’s more just finding ways—that couple extra bucks here and there—that really can give you a bit more runway. Start-up costs are crazy.
Sounds like it might have something to do with increasing the number of points of distribution available at all. I know that’s part of the pressure in the system right now. Where else can the beer go?
So if somebody is trying to open a bar, that looks like another point of distribution and it’s in that distributor’s best interest to make that thing successful.
Right. When I say “spill the beans,” what I wanted was to present a contrarian view of this idea that account owners or managers or buyers are looking to make quick bucks. And there are those. There’s always going to be people like that, but I think the vast majority of people are just looking for a little bit more runway. If somebody can come in and offer a few bucks to help stretch their dollars out, why wouldn’t they at least consider it?
For Longman & Eagle, was that runway helpful?
In what way? Where did it give you guys a buffer or an edge? Where did that runway happen?
Without getting too specific, because I don’t want to put anybody on blast, we expanded our tap selection about two years ago and we asked for a little help to do it. The help wasn’t a crazy amount, it wasn’t insurmountable. But we worked out a deal where we were able to purchase beers. We were very deliberate with it, and what it allowed us to do was off-set the cost of that expansion.
Understand that expansion—our draft versus bottle beer sales, just like most bars—the percentages are ridiculous. You’re doing probably 75% of your beer sales off the tap versus 25% in package. We understood that in order to increase our profitability—which we weren’t doing very well with at the time—we needed to be able to offer more draft offerings and at a better price. We worked out deals with a certain distributor where we devoted some of our space to that distributor for a set amount of time. It wasn’t ongoing. It was “by this date our obligation on their end is done.” No volume-based incentive. When this keg kicks we order the next keg from the same person. There was no, “You owe us this many kegs or this much in package.” We worked to find the right distributor partner who actually had a portfolio that still fit our concept and menu, and wasn’t somebody where it was just all of a sudden, “Longman & Eagle has Bud Light Lime on draft!” We didn’t make those kind of decisions. We made sure this still fit us. We weren’t sacrificing a quality product just for a couple of bucks.
I’m actually the most proud of our beer menu than I’ve probably been since I took over four or five years ago. We figured out a lot of things along the way, but consumer habits have changed in the way they look for beer. People aren’t as loyal. They want to know what’s new. You have to rotate to stay competitive and constantly be offering something new. You also need your standards. Not necessarily standard breweries or products, but standard styles. You need to be able to offer that variety, and that freed me up. I kind of think I have the perfect amount of tap lines right now.
How many do you have?
Sixteen. Eight of those are almost never going to change stylistically. Four will always be hop-driven. Three will be kinda Lager, lighter, Pilsner-esque styles. And one is always a Stout—typically something bourbon barrel-aged to tie in to our whole whiskey concept. Everything else? It changes. Right now, I have four sours on because it’s summertime. People want sour beer. It’s great! It works. I’m now able to offer cool, weird sour beers at a decent price because I have these four hoppy lines that are pretty well profitable and always going to pull through. It took a little help getting up to those 16 lines, working with products I can stand behind, and working out the kinks of that system. There were some kinks. You pointed out once before that we had too many rotators. We weren’t listing on the menu what we were carrying. We learned those lessons. We’ve adjusted the format of our menu. We have our lines numbered now. People know what to expect: lines 1-4 are always going to be hop-forward. If you’re a Pale Ale guy, the server can say, “You should check out lines 1-4 on the draft list.”
Economically speaking, does 16 do something for you in terms of volume or a velocity standpoint that you couldn’t get out of eight?
I think so. Those four hop-driven lines, as much as we didn’t have any IPAs on draft two years ago and got that pushback from our guests—I don’t want to think I'm cowering to consumers, but I also listen and heard. And if consumers still really want more IPAs, well, then I can put four IPAs on draft that are going to pull through at volume and be profitable. If I have four very profitable lines that are moving and enough of my volume is going through those four lines then I can offer something like a spontaneously fermented fruit beer made by Mikkeller that’s an absurd keg cost—just because. But I can offer it under $10 for 8oz instead of at $15 like at other bars.
So you’re blending margins essentially.
Yeah, exactly. Those four lines pay for me to have fun with another line and expose guests to something cool that we really like. The staff gets really excited about that because they can actually talk to people about it and not feel like they’re up-selling or ripping someone off on eight ounces of beer. It allows us to really offer a great variety, great quality product without “Less filling! Great taste!” [laughs]—sacrificing any sort of quality.
We’re not just throwing up any old IPA that’s profitable. We could throw up Lagunitas IPA and make bank on those lines, but we don’t. Because there’s so many great IPAs made right here in Chicago, and obviously that is, too, now. But we’re doing a lot with Maplewood. A lot with Pipeworks. A lot with these little self-distro guys because we can, and we can have fun. We still do crazy volume of Half Acre.
It sounds like that expansion, in general, loosened it all up in a lot of different directions and gave you options.
Every line didn’t need to be so profit-driven because you just didn’t have the room. I can have eight lines that are very profit-driven and that frees up that middle section of the tap list to play.
What’s the ballpark cost to expand from eight to 16 lines at a bar like this?
I think it cost us, just based on the type of equipment we wanted, and we lumped it into some other work that we were doing—we expanded our walk-in cooler, just in general, so it was the perfect moment. I think it cost us $2,500.
I’ve gotta imagine other distributors noticed.
I don’t know if they did.
No? That there was an expansion and then a lot of the lines seemed to go to one distributor?
I think that was part of the deal we worked out. We got lucky. They only made us commit to half of those, so no one really noticed. One of the advantages to that was finding a distribution partner who had beers we could get behind and not have to justify. I think that’s when people get worried.
So it didn’t look like a weird switch.
Exactly. No, it wasn’t like, “Why do you have Miller Lite on tap all of a sudden?” I did downtown buying. I did a corporate Irish pub. We paid to play. People paid us to play. We had Coors Lite, Miller Lite, Bud Light, and Bud Heavy at any one moment. Always had those. We always had Guinness, Smithwick's, and Harp on tap all the time. We did it. I’ve done what we did here—very small, deliberate offsetting of costs—but I also did large-scale, pay for the whole system.
That is the whole revenue scheme. It’s not about offsetting costs.
Some stuff that I find myself repeating often as a buyer in Chicago is that it’s so relationship-based and personal that some of the relationships that I’ve built in that downtown corporate Irish pub—some of my sales reps are now managers of distributors I work with here.
It’s really funny to see that evolution and how even the guys that came in with a handful of Cubs tickets now get it, and are now understanding that that doesn’t get them as far as it used to. The consumers are dictating where buyers need to focus their energy and pay-to-play has evolved into a different model. Of course, there are still people who want the Cubs tickets or Lollapalooza tickets or what have you. But, for instance, Logan Liquors right down the street. Tiny bodega-style corner liquor store—nothing to rave about, but they’ve adapted. I have sales reps here who tell me that if they make a sale here they can walk down the street and say, “Hey, Longman just picked this up.” And they’ll take it. It works because they understand that we work better together. They can make money when we have something here because somebody’s going to go down there and want to take it home with them. They’re not as worried about their volume deals or how many Cubs tickets they’ll get if they take a pallet of something. They want to carry quality products. They started a Twitter account to feature what craft beer is on now.
You said you think pay-to-play has evolved from being this explicit thing you want into this other thing. How would you characterize it now? What are the more nuanced, evolved, almost...less gross...more relationship-driven aspects?
I think it’s always been relationship-driven, but the relationships have changed. It’s about access now, I guess. Look at Bourbon County Stout. The local distributor for Goose has a trump card. They have a card in their back pocket, the same way Breakthru sells Pappy Van Winkle. They have a trump card. They can make you have certain cocktail placement in order to make sure you get the Pappy when it comes around. Lakeshore can do the same thing with Goose. “You haven’t had any draft presence of Goose all year. Why should you get BCS?” Consumers are demanding certain products. Accounts need to have those products on the shelves or on taps to please their consumers. In certain moments they need to beg their distributor for those products. It’s almost like the relationship has gone flip-flop to the point where instead of a distributor having to walk in and say, “I need four kegs of whatever this month, can you feature it as beer of the month, I’ll walk you in two kegs through the back if you just buy four. Do me this favor.” It’s now almost the opposite where an account says, “I want BCS. What do I have to do to get it?
Back to what it’s evolved to: you talked a lot in that ride-along piece about everyone asking for Zombie Dust. The Three Floyds move from Glunz to Windy City shook everything up. I went from essentially getting the same amount of Floyds every week to just not getting any—in a week. No warning, nothing. What I did get the prices went up on. There were a lot of strange issues with it.
What were the factors, you think?
Glunz was under-charging. Glunz was not charging enough in order to keep their relationships happy because Glunz was still begging people to take in a bunch of its portfolio and using Floyds as that leverage. Windy City was like, “We’re doing standard margins on this. I'm sorry if your price jumped by $10/case. I can’t explain that. I don't know what they were charging. This is just it.” [editor's note: we followed up on this, and at the time of transition from Glunz to Windy City, we're told that Three Floyds themselves raised their prices].
The access also became much harder. They didn’t have the allocation system worked out beforepi they picked them up. All of a sudden the rep could get us more each week. Well, great! Because we got our delivery on Wednesday and we sold out by Saturday of package. Draft we could maintain, then all of a sudden we weren’t getting any package and draft wasn’t as consistent. What happened at the same time was other breweries caught up to Floyds and what they were doing. Floyds wasn’t the only great Citra hop Pale Ale in the market anymore. They weren’t dominating in the same way they used to, so it got to the point where we took it off. Now we pick it up when we can and when we want. It changed the way Floyds was. I almost chuckle at the people still begging for Zombie Dust. If you're still begging for Zombie Dust you’re two years too late. You gotta change the game. We’ve all moved on.
What are some examples of what you brought in to replace that, at least in profile? What are some other things that have gotten a chance now without that Floyds handle?
I think our relationship with Half Acre has blossomed even more so because of it. We always loved Half Acre and had them on tap, but the fact their production increased at the same time that we were having trouble getting Floyds—so, cool. We can’t get Gumballhead, but have you heard of Akari Shogun?
And then I think Pipeworks. Pipeworks got that same kind of, “Oh, you got Pipeworks” kind of scarcity rep. As their production increased and their consistency got better, I think Ninja v. Unicorn tastes better now than it ever has because their consistency is so much better. They’re able to let their yeast work efficiently, able to control the temperature better. Ninja v. Unicorn is one of our bestselling drafts.
You've also collaborated with those guys a lot. To go back to something you talked about before, trading something of value, making a collaboration beer with a brewery and then having access to that over any other account, both from an actual product and a marketing standpoint, seems like that would qualify as something of substantial value if we’re talking about black and white pay-to-play.
And that’s something almost every brewery has done at some point.
Yeah, that’s why I think it’s just so fuzzy and gray. I think you’re right. I don’t want to put the Pipeworks guys on blast, but I remember when we did Grit & Grain [the Goose Island BCS documentary that GBH creative directed — we filmed a chapter about bourbon at Longman & Eagle with Phil] and we couldn’t put “Phil Olson of Longman & Eagle” in the piece because of pay-to-play rules. Is that paying for advertising for the bar? Well, we did this beer with Pipeworks. It had our logo and their logo. That label ended up in DRAFT Magazine, Imbibe, and in so much national press. And I know they didn’t pay for that press, so I think, legally, they’re off the hook. It was just press about cocktail-themed beers, but that benefited both of us greatly. [editor's note: Olson has since clarified that no discounts were offered or accepted as part of the collaboration and that Pipeworks charged full price for all of the beer.]
Beer isn’t even the focus of this place, even though it’s probably a significant part of the revenue. But whisky, spirits, cocktails—those are huge here. Those industries operate fundamentally differently when it comes to sales and pay-to-play. Paint a picture for the beer-centrist of what the larger side of alcohol looks like when it comes to the blurry lines of pay-to-play in that regard.
Craft cocktails have become just cocktails. The same way I say craft beer is now just beer. Your uncle who always drank Miller Lite now asks about the best IPA on tap. It’s fine, it’s awesome, it’s better for everyone. Cocktails are the same way. Even Olive Garden has a craft cocktail menu. Now the hustle is the distributor has a craft cocktail specialist who can come in and say, “You don’t know a lot about cocktails but you know you need a cocktail menu right? Let me work with you. We can work out a menu together.” You can open a menu and all those base spirits for those cocktails come from that distributor because they’ve now provided you that service and worked out a deal. Now all your cocktails are based around their products. And there’s cash on the table for that, too.
Buying cocktail placements—that happens in a number of different ways. Whether it’s straight cash or discounts. There is such a thing as cocktail-specific pricing. If I have a spirit in a cocktail, I get a price break. It’s been going on in wine for generations. Wine-by-the-glass pricing versus by-the-bottle pricing. If it’s featured as a wine-by-the-glass, you get a better case price. Same thing.
There’s also sponsorships and partnership agreements that last a year. If you do this many cases, you get this much money back. It’s all over the place. It’s not talked about nearly as much in the beer world because I think craft beer consumers have always had this passion for authenticity and knowing the producer and seeking quality over everything else. Spirits consumers haven’t quite gotten to that point yet. They’re getting there. You’re seeing truth in labeling things come out. Seeing people understanding that not every “craft” bourbon is made by the person who put their name on the bottle. People take notice of that, but it’s not hitting that local conversation yet. Your everyday consumer typically can walk into a bar and say, “Look, all the tap handles kind of come from the same place, I wonder what’s going on here.” But if they open the cocktail menu do they know that all those spirits come from the same place? I don’t know if they do. But, yeah, it’s just as prevalent in spirits, if not more so, as it is in beer.
In beer, the conversation is happening and has for the past 10 years. I remember when I first met Tracy and Doug of Metropolitan, and that’s how I was introduced to Windy City. I was still at the corporate Irish pub, and I asked if I could focus on more local stuff, and they [my bosses] were down with it. “Let’s make sure we have this much of the list dedicated to our profitable arrangements, and you can have this much of the menu to play with.”
I emailed them based on the back of the label of Dynamo. They came in with James Miller from Windy City and we did a “meet the brewer” night. No one showed up for it because traders downtown don’t care. [laughs] But we started something and started working together to the point that I think that account has a really good craft beer program. I like to pat myself on the back a little for starting the conversation at that account.
When I met them I remember Stone launched in Chicago, and said they were partnering with their distributor because they don’t pay to play. Then Tracy got quoted a lot for that same reason, and I remember really understanding the conversation was shifting. Oh, people are aware of this now? When someone comes in with Cubs tickets and offers to take the entire staff to a suite, I have to make sure no one’s listening. Back then it was so commonplace you didn’t have to worry about getting caught. All of a sudden coasters had to show up on an invoice. Distributors started to take notice.
Nobody’s talking about it in spirits, so that conversation isn’t changing yet. But because it’s happening in beer, no one comes to Longman & Eagle and proposes some sort of pay-to-play arrangement or talking about discounts. We barely talk about that in beer.
It sounds like for the expansion of the tap lines that was something you proposed—and for $2,500. That doesn’t seem like a lot of money worth seeking out, but is it? In the context of the bar?
Yeah, I think so. I can’t get into too many numbers without breaking confidentiality, but the margins are slim in any bar. Industry standards of profit margin on a full-service restaurant aren’t great. That little extra can go a long way.
Do you think the line for what pay-to-play should cover, legally speaking, should be moved? And where should it be moved to? What is beyond the pale, where does it actually have a negative impact vs. something reasonable in your opinion?
That’s a really tough question. I honestly don't know.
Do you think pay to play is damaging, first of all?
I think it can be. It isn’t in every case. That’s the tricky part. That was one of the reasons I wanted to talk about pay-to-play. It’s easy to look at it as damaging, but there are moments when it helps get a really great thing going. I can’t speak to any of them and it didn't help get us going, but there are places that probably wouldn’t have opened if somebody didn’t help them get their draft system going.
Do you think it’s outdated? That the context has shifted? Do you think it was always kind of silly?
I don’t think it was silly. You've been to Europe a number of times. You go to a bar in Germany, for example. That bar was financed directly by a brewery. When we went to Germany when Astra launched in Chicago, they took a few of us to Germany. I was baffled. They don’t even call it pay-to-play. It’s not a thing. Breweries act as two things. They make beer, but they’re also a lending institution financing the opening of new bars. They put up the money for them to open the bar, and then they carry only their products for the existence of the bar. That’s mind-boggling to me.
There are moments when, absolutely, it becomes questionable. At the same time, what’s the difference between that and a taproom that’s not necessary located at the production brewery? If a brewery located in the suburbs wants to open a taproom in the city, what’s the difference? Is there one?
Those laws seem like they’re being changed right now to support smaller craft brewers, but as long as it’s legal for them it has to be legal for everybody. That’s what I mean when I ask if the context is shifting. In your example, that seems to support a good thing. However, it seems like it would open the door to that pendulum swinging again, perhaps extremely, towards only having bars that are sustained by breweries and no longer having independent bars with a variety of taps. How far can that pendulum swing is the question.
Let’s imagine a suburban brewery opens a bar right next to Longman & Eagle. They could eat your lunch if they have a cool enough place with great enough beer. Suddenly your independence and diversity of tap handles doesn’t give you a competitive advantage anymore, but what they’re doing is legal. And what you’re doing is legal, but you’re at a disadvantage.
But that’s the free market, isn’t it? That’s what we’re all here to do. So I’d have to adapt or change what we’re doing to ensure we’re competitive. If all of a sudden I can’t compete on tap beer, then how do I compete? What do I do differently? I still don’t know where to draw the line, because there are moments when it is nefarious and gross, like you said. When it supports a project like one of our favorite suburban breweries getting a cool taproom in the city then, yeah, I want to go to that taproom.
I think there’s some substantial cognitive dissonance in the whole thing. When people hear pay-to-play, they think a very specific scenario of someone writing a check. But if the laws are changing to allow a brewery to have taproom licenses separate from the brewery, that is a tied house. That’s the definition of a tied house, which is what the laws are supposed to protect against, except that we all sort of want that kind of tied house, s the laws are changing. The same people who are looking for that freedom under the licenses to have their own tied houses—because the revenue is there and the margins are huge—are the same people fighting against pay-to-play in a lot of cases.
Absolutely. I’m almost to a point where I think the entire three-tier system is antiquated. It was brought about post-Prohibition to put the power in the States’ hands and to break up the syndicate of the few producers who were left after Prohibition. It’s almost 100 years old. How do we change it? How do we adapt?
This whole fight I’m having about Old Milwaukee is only because technically he wasn’t supposed to sell Milwaukee south of Belmont Ave. Belmont is less than 10 blocks away. And no exceptions can be made. I’ve asked. It’s absurd, and it’s an antiquated map that was drawn when Schlitz was still independent from Pabst, and technically Old Milwaukee was a Schlitz brand and Pabst had its own brads. So I can buy Pabst brands from Glunz, but I can’t buy Schlitz brands from Glunz even though now they’re all owned by Pabst. It’s absurd! It’s archaic.
I think what I'm getting at is a lot of people associate a moral clause with the pay-to-play laws when really it was supposed to be a practical application of laws to help diversify an industry. As that industry evolves and changes, those laws can adapt with it to support the kind of beer industry that the majority of consumers want—without getting into the moral clauses that are associated with it.
It’s like anything. In a court of law, how do you convict someone of bribery? It’s evidence-based. This person gave this person money so that they use their influence to favor this other person. We have a definition. Is somebody helping a start-up bar or restaurant or taproom—is that defined as bribery? Depends on how far we go with it. I think there’s a scale that needs to be involved. What is the influence that they’re getting in order to do that? How much are they putting in? Was this a reasonable expectation, or was this an unreasonable bribe? It’s tough. People want yes and no. They want black and white, and to say, “All of this is bad.” But it’s not, in my opinion.
It’s easy to say the remnants of pay-to-play are still so commonplace. For example, Windy City doesn’t pay to play, but it doesn’t mean their breweries don’t. Without putting anybody on blast, we went to a craft brewery that expanded into the Midwest market with a large production facility. I had a last-minute cancellation for our holiday party plans once they realized how massive our staff was. So I reached out to this brewery and within a few days notice they set up an entire private room for us. We didn't pay a cent. We drank beer all day. While we were inside, they loaded up our school bus full of cases so we could take the rest for our party. How’s that not pay-to-play? It absolutely is the definition. They’re distributed through Windy City. [Editor’s note: we inquired further about this scenario, and it's unclear if this situation would technically be considered pay-to-play, or fall under the right of the brewery to entertain its customers. It’d depend on intent and context, and anything traded for the value.]
There are now more brewery reps on the street than ever before. Has that increased the likeliness of pay-to-play?
No. Well, yes and no. That’s one of the aspects of spirits, right? A lot of spirit companies are owned by larger parent groups that have, within that ownership group, a vast variety of spirits. That ownership group can come in outside of the distributor and work out some unpublished deals and pricing to make sure that their cocktail placement and volume is maintained. That’s pretty common. Brewery reps don’t often do the same thing, but also can work out those access deals, like, “If you can commit to make sure we always have some sort of draft presence, when it comes time for this allocated release, this special release, we’ll make sure you’re in line for two barrels.”
That’s what I’ve seen happening the most often is brewery reps making promises that the distributor then has to fulfill.
Yeah, that’s tough. I always make sure there’s a CC on that email. I always forward those emails. I’ll go to the distributor rep and ask, “Did you talk to so and so at blah blah blah?” “Who’s that?” “Oh great, here we go… He promised me this, this, and this. Can you make sure we get…” It happens all the time.