The risk of doing nothing is the greatest risk of all….

My first four and a half years in the beer business were spent on delivery trucks, first as a helper, then as a salesman, and finally as a route supervisor.  Remember, during this time beer was sold DSD and both the salesmen and helpers were paid with a base and commission established on what they sold.  Commission rates varied from three cents with Coors, to 10 cents with Falstaff.  We all loved those hundred case drops.

Since these were commission based sales jobs, the driver’s biggest concerns ranged from losing accounts to the company adding new routes.  Most distributors had only one or two brands, and when one brand started to grow, distributors started looking into adding additional routes.  Once that decision was made, the distributor took accounts from other routes to make up the new route.  No sales person ever wanted to lose accounts, especially good ones, but every single time that I saw a route added, sales trends increased over the old trends.  Even the salesmen who lost accounts saw their overall sales increase as they were able to focus more on their existing accounts.

Likewise, when a distributor who had a brand that was declining cut a route, the opposite happened.  At first it would take a while, but soon, the decline of the brand accelerated and sometimes the decline off-sets the expenses gained as a result of the lay-off.  No one won in that case.

Breweries, not unlike distributors, go through periods of down turns and pear back with cuts and lay-offs.  The personification of this type of business action, with the exception of going out of business, was when InBev took over AB and the resulting thousands of employees who either retired or were laid off.

Recently, MillerCoors announced that they would begin lay-offs affecting about 200 sales and marketing people.  In addition, numerous production workers would be also losing their positions at the same time.  Since 2008, both ABI and MC have lost millions of barrels in sales.  Some of that lost volume is attributed to the recession and tax increases, however, the question should be, how much of that lost volume comes from the reduction in talent?

Those employees who lost their positions were highly trained and educated.  In the case of ABI, many of those who left were long time employees with over 20 years with the brewery.  While cutting out these salaries and expenses may look good on the company’s income statement, there will be, and is, a negative effect to sales.  No company can lose that type of experience and not have its overall performance negatively affected.

So the question is what is happening to all this available beer talent?  Many of these highly experienced beer people are finding new careers in crafts and small importers.  Once a craft brewery is established, there becomes a time when it must get to the next level in its life cycle.  The brewery needs experienced beer talent and thanks to both MC and ABI, the talent is available.

The challenge for the crafts is just how to maintain its culture, yet be able to grow and obtain the talent it needs.  Established breweries such as Sierra Nevada and New Belgium have learned to do this, others such as Founders are just figuring it out.  Those professionals from ABI and MC who are joining these companies bring experience and valuable relationship skills to the craft culture and the industry is seeing the results.  Craft volumes are flying.

The craft industry should thank MC and ABI, as those two breweries must believe that the risk of doing nothing is the greatest risk of all!