(Nashville, TN) – BountyBev President and Better Beer Guy, Kurt Strickmaker, dishes on the Tennessee beer scene, the nutty local laws with which he has to work and the latest developments with Sierra Nevada and Senate Bill 1224.
1) Give me the Bounty Beverage story in one paragraph.
BountyBev is Tennessee’s American Craft-only distributor and it’s our passion to educate consumers and help them in the discovery of U.S. independent or family-owned breweries. Quality is of the utmost importance to our team and our retail relationships afford greater choice and selection as a result of our commitment to better beer.
2) What brands do you carry?
As true brand builders, we have been blessed with a growing and balanced portfolio mix. From the oldest micro-breweries in PA and WI, we’re lucky to distribute Stoudts and Sprecher in Tennessee. BountyBev represents brands from Oregon to New York including (but not limited to!) Caldera and Butternuts Beer and Ale. We also service our local and regional brewery partners like French Broad, Moerlein, Chattanooga Brewing and Jackalope. Other fantastic and award winning breweries include Fort Collins Brewery, Lucky Bucket, Buckbean, and Ruckus.
3) How do you pitch a craft brewery to come to Tennessee over another state?
The Southeast is the fastest growing Craft market in the U.S. and Nashville specifically is a thriving city. The main reason for these happenings points to us as being slightly behind neighboring states because of the fewer number of breweries and brand offerings. Now is the perfect time for us to strategically partner with the right breweries before the market hits any form of saturation, which is years away. Our consumers are hungry and savvy and therefore support the cause. We operate out of Nashville and service both the Knoxville and Chattanooga markets which in turn builds brands in the music industry, several major universities, and with the outdoor recreational enthusiasts. It is our sole mission and purpose to advance our state and position us as a reputable Craft market leader in the growing Southeastern quadrant.
4) How do you pitch a craft brewery to go with you over one of the bigger TN distributors?
All the big boys want to get into Craft nowadays. I always chuckle at the many blue blazers during the annual Craft Beer Conference while I meet and greet in my flip flops and better beer guy shirt! We’re different; in more ways than one. At BountyBev, we don’t just believe in our suppliers or retail partners. We see the system all the way through and consider the consumer the most important component of our model. If the end-consumer isn’t satisfied, neither is the retailer or brewery. Quality is critical and we clean our draft lines every two weeks.
We build OUR brand (the Better Beer Brigade) using the brands of our supplier partners to engage the consumer in a credible relationship. We utilize social media and other means to create a one to one connection that the large distributors won’t tackle. We tweet, create viral videos, post on BA, and generally go above just delivering and rotating stackers. We’re swift and mighty and operate with little red tape. We are not the Wal Mart of distributors and we don’t want to be anything other than specialists in our category. People thank us for bringing better beer to Tennessee and in turn lean to us for what’s next.
5) Jackalope Brewing is the first new start-up brewery that you’ve added to your portfolio. Who approached who and how did that partnership come about/what did you like about them?
Thankfully we’re in the business of people and as all good things in life go, the stars were aligned on this one. Through a mutual connection named Jack (kind of ironic!) he introduced me to the Jackalope gals a year before they even found a physical brewery location. They are Nashville’s newest entrant and will be brewing on a 15 bbl system and launching draft only. But the coolest thing about them is they are Tennessee’s first female-duo to operate and own a brewery in our home state. Robyn and Bailey are amazing spirits and bring such light to the world around us. I know they’ll do the same with their beer and all while having fun. We are huge advocates for women in this business (insert shout-out to Denise Jones here!) and hope more female brewers expose their brewing talents in the near term.
6) What are some of the more common mistakes that you see young craft brands making in your market or elsewhere?
It’s no secret that a distributor can make or break your brand. The most common mistake a brewery can make is selecting the wrong partner to grow their brands locally. In fact, I know an award winning brewery who selected a distributor without proper due diligence. They awarded their draft beer brands to the entire state and the distributor didn’t even have refrigeration or at the very least, a temperature controlled warehouse. My unsolicited advice, you say? This is a marriage, people! Spend the money and take the time to survey the market. Ask the top 20 Craft or specialty stores both on and off-premise who the best distributor is for the category. Only then can you make a truly confident decision. Also, it wouldn’t hurt to know the distributor’s portfolio so as a brewery you can understand where you will fit in and if there are competing brands that might take the top spot over your own.
7) My understanding of Title 57 is that a brewery is allowed to self-distribute in Tennessee but only within its own county. In general, do you think that a brewery should be allowed to self-distribute to wherever it wants?
We believe in a marketplace where consumers dictate available offerings and Tennessee is growing wildly in Craft. I’m sure most distributors would not agree with me, but I believe small brewers should be allowed to self-distribute wherever it makes sense for THEIR business. I’m a realist and understand a small brewer deserves to control their brand from the get-go and make as much margin as possible to reinvest in their business. But again, as a realist, it only makes sense to partner with the RIGHT distributor so the brewer can focus on their core competency; brewing. Distribution is controlled chaos and can detract from the most vital aspects of a small brewery’s business.
8- Does TN have a lock-in rule between breweries and distributors or are breweries able to leave if not happy with a distributor?
We are a franchise state but BountyBev is different. We truly want to bring a fresh perspective to the second tier and demonstrate the integrity of our country’s strong distribution system. Too often I’ve seen ‘squatters’ on brands, ‘land-grabbers’ if you will. We believe that if a brewery chooses to partner with a distributor and they aren’t getting the job done, they should be able to easily find a partner who can. If we are ever in a situation where our supplier partners aren’t happy with our performance we will gladly let them choose an alternative partner with fair compensation. We exist to add-value to the American beer business and limiting its growth by tying down brands just so another distributor can’t represent a particular brewery is criminal.
9) How does the law (and the taxes) work with any beer over 5% alc. by weight being considered either a wine or a spirit?
Well let me first say that Tennessee does not have an income tax. But we do have some of the highest wholesale taxes in the country. I pay 17% of the actual wholesale price to the local city where that beer is sold and delivered. For instance, if BountyBev sells a keg for $100 to a licensed permit holder in Franklin, TN, I would cut a check to the City of Franklin for $17 the following month. Ouchie, as that comes right off the top!
We also have an interesting law where BountyBev can only sell beer up to 5% by weight (roughly 6.3% by volume). Therefore, in order to best serve our supplier’s brand portfolios we had to form a second company, BonusBev. With the addition of Bonus, we can now sell beer over 6.4% abv but they operate as two totally separate companies. Bonus leases space from Bounty in the warehouse even. In fact, we are required to separate all high and low-alc beer in our warehouse with a fence and we do the same on our trucks. Apparently, the big and little beer tend to fight at night or cross pollinate when no one’s watching. Oh, and it’s interesting to note that the TN Alcoholic Beverage Commission treats big beer as a distilled spirit and the TN Department of Revenue treats it as wine! We’ll get there one day…
10) What are your thoughts on all the talk around SB 1224 and Sierra Nevada considering Tennessee as a possible location for its east headquarters?
We discovered last Thursday that a bill had been passed in the House allowing only 3 permits in all of TN to brew beer over 5% by weight. Our position is that we felt it was anti-competitive, unfair, self-serving, and monopolistic. I’m proud to say that over 400 emails and letters were sent to the Governor and many people contacted their Senators as this bill would soon be proposed and voted on Tuesday (today). This legislation had taken everyone by surprise but now, as I write this, the bill has been referred back to committee. Although this bill had some harmful language which would limit small business in the Tennessee brewing industry, there are some very positive strides being taken in this legislation.
The bill proposes treating high alcohol beer (over 5% by weight) as BEER (novel concept) whereas now it’s treated as a spirit (yet it’s not distilled and it’s a naturally occurring fermentable malt beverage…of moderation!).
The speculation that surrounded this bill was that Sierra Nevada Brewing Company is considering building a facility in East TN which would be AMAZING for us and our craft beer culture. I simply want the following on the record and I speak on behalf of the craft beer community: We hope and pray that SNBC will have the ability to brew beer over 5% by weight and will select our state to form a working relationship, all while giving small brewers the same ability to purchase a license of equal stature. SNBC is a true pioneer in craft and we as Tennessee residents can’t fathom the good that would come out of them selecting a site to do business in our State.
Thanks, Kurt.
You can follow the tribes and tribulations of Kurt and Bounty Beverage on both Facebook, Twitter and Youtube. For the recently-started Bonus Beverage side of the business, here is a fresh link for the new Twitter account.
