11 Jul Monon Beverage Brokers Creates New Path for Indiana Beer, Wine & Spirits Sales
by Mark E. Lasbury for Indiana On Tap
Craft beer fans in Indiana are well aware of the strange laws that affect how we enjoy our hobby throughout the Hoosier state. The no Sunday sales, the no cold beer sales at convenience and grocery stores, the fact that kids can’t enter bars. There are strong forces that work to keep some of those laws in place, while other national laws are holdovers from an age long past.
Take for instance the rule about to whom a brewery can sell their beer. The three-tier system was set up in the United States after the repeal of Prohibition, and it has been around ever since. The three-tier system says that producers (brewers, distiller, vintners, or importers) are different than distributors (middle men, basically), and both of these are different than retailers (restaurants, bars, liquor stores, grocery stores, etc.). Tier one sells their product to tier two, and then tier two sells it to those in tier three.
There are exceptions, and every state has their own versions of those exceptions. In Indiana, if a brewery (I will keep most of this discussion to craft beer….because that’s what I love) sells or distributes less than 30,000 barrels of beer per year (the production cap is now 90,000 barrels), then they are eligible to sell it directly to third tier entities, and sell it directly to the public in a taproom or restaurant (Brewers Association). Seems OK, until you realize that the number in Illinois is 465,000 barrels of production means they can self-distribute up to 232,000 barrels – so Indiana still has a ways to go.
The three-tier system has been in place since Prohibition was repealed. Image credit: Florida Beer Wholesalers
Ways to Sell Your Beer. Some breweries don’t sell beer outside their brewery, at least for now (Floyd County Brewing Company, for example). Some breweries only sell beer via self-distribution or a second tier distributor (10-56 Brewing plans on a taproom, but not any too soon). Many breweries make a decent amount of beer (I call that anything over about 1000 barrels) and choose to work with a distributor despite the fact that they could self-distribute with in the state (Brew Link, for example).
And then there are breweries that make a lot of beer and still choose to self-distribute (Taxman produced 4000 barrels last year and predict they will put out more than 6500 barrels in 2017), yet they have in-house representatives that do all their sales and delivery. This represents a significant investment in manpower and time, but many people feel that they are happier with that control over their product. They know it is being treated with respect and that their sales calls will focus on their brand.
Most breweries in Indiana produce less than 1000 barrels a year, and don’t think much about hiring a distributor, but for those who do, they rely on the distributor to sell their product to the retailers (alone or with the help of brewery reps) and then pick up that beer and delivery to those customers in a timely and respectful manner. For example, Sun King Brewing has distributors for the different parts of the state, but also has a number of dedicated sales representatives to get the word out about their beer, find new accounts, and make sure that their current customers are happy.
So this is how it runs in Indiana – you make the beer and you serve the beer. If you want to sell beer to retailers, then you either do it yourself (if you are small enough) or you sell it to a distributor, and they sell it to retailer accounts (with or without your help). Well…. This is the way it used to be in Indiana, for just under a year now there has been a path that brewers can travel through the Hoosier state of beer.
The Monon Beverage Brokers logo shows how close they are to their product roots and Indiana. For the upcoming Ohio expansion, just switch out the Indiana picture for the one that’s round on the ends and hi in the middle. Image credit: Monon Beverage Brokers
A New Path Leads to Monon Beverage Brokers. Some time in early in early 2016, a very tall beer guy and triathlete in Indiana started thinking about new ways that he could bring Indiana craft beer, wine, and spirits to the people. He was a director of operations at a brewery at the time, having previously been a sales manager for Chris Johnson at People’s Brewing Co. and a bartender at The Heorot in Muncie during his days at Ball State.
Late one night, or more accurately, early one morning, Sean Webster was sitting at the rail of a bar. He stared at all those taps from different breweries and he asked the buyer for the bar, “Would you buy more of a certain beer if you knew and liked the stories and the people behind that tap hand?” The answer was an emphatic yes, so Sean continued to mull over an idea in his head.
What if he could represent Indiana brewers and breweries (and distillers and vintners and meaderies) to the retailers in personal way? Heck, he already knew so many of the stories, the people and the products, maybe this was a possible way to impact the industry. Yet, Sean had never owned a business and really didn’t know if there was such a thing as a multiple business representative in alcohol.
Communications with the Alcohol and Tobacco Commission of Indiana started to bring things into focus. Sean explains that similar to John Cusack’s character in the 1989 movie, Say Anything, “I don’t want to sell anything, buy anything, or process anything as a career. I don’t want to sell anything bought or processed, or buy anything sold or processed, or process anything bought, sold, or processed. You know, as a career, I don’t want to do that.” Sean just wants to best represent the producers to the retailers, and then let the three tier system play out as it should to get the beer from the brewery to the bar or store.
The ATC said – OK, that legally makes you a producer, we guess. However, this was a completely new kind of enterprise in Indiana, there were no beverage brokers in Indiana when he proposed this idea, and the few that he could find were not interested in helping him learn how to do it.
OK, so Sean is taller and hasn’t ever been a professional hit man (Gross Pointe Blank), but how often do you get to quote a John Cusack movie when writing about craft beer? Photo credit: indiewire.com
Therefore, it fell on Sean to create Monon Beverage Brokers from scratch – and he did, through sheer hard work and people skills. On the other end, the ATC is also interested in how this works and where it goes. They probably are giving him a bit more attention than they would some other more known kind of entity. watched him closely to see how things go. Such is the lot of innovator – people are either suspicious, pessimistic, or looking to copy what you’re doing. You always know you’re on the right track when someone disdains or tries to steal your idea.
The proper permits were obtained, and Monon Beverage Brokers was a possible business. Now all he needed were clients that would trust him to get their vision, their philosophy, and their love of their product in front of potential customers. Sean sent hundreds of snail mail letters out to potential client distillers, brewers, mead makers, and those who could help Sean further develop his idea. It was at this point that Moonlight Meadery entered the picture.
First Year Explosion. Located in Londonderry, NH, Moonlight Meadery has been producing award winning meads and ciders for several years. Moonlight sells their products in Indiana through Starlight Distributors (the same people who handle Jolly Pumpkin, Evil Twin, and Prairie Artisan Ales for Indiana), but they still wanted a bit more personal, statewide coverage. Yes, Sean could do that for them – and he has. Michael Fairbrother, co-owner of Moonlight told me, “Trying to grow a brand is difficult, and trying to do it with a beverage most consumers haven’t heard about is impossible, without someone in the market. We chose Monon Beverage Brokers because Sean was passionate, and knew about my meads. Working with Monon Beverage Brokers has been a fantastic experience for us, we get the market representation we so desperately need, and working with Sean has been nothing short of fantastic, as he understands the market, and represents my meads and ciders like any of my employees or I would.”
As the facilitator that brings producers and retailers together, Monon’s efforts can be seen directly in increased sales to retailers. The harder thing for Sean and his clients to track are the indirect effects of his zealous advocacy for his clients. Let’s say that Monon arranges a tap takeover at a local bar for his client, later in the week, sales of that client’s beer rise at an adjacent package store. How do measure whether the earlier event had an effect on sales? You can’t, but Sean has seen it happen more than once. Monon’s presence from the beginning with a client does seem to have an effect.
Monon Beverage Brokers also handles clients for products not fermented or distilled. Hoosier Mama Cocktail Mixes, opened in 2010 in Brownsburg, has some of the highest award winning mixes in the business. Image credit: Hoosier Mama
Soon after Moonlight Meadery came on board, other accounts began to roll in, including Danny Boy and Scarlet Lane. The confidence that Eilise and Nick Servies at Scarlet Lane put in Sean went along way to procuring additional clients. Nick is convinced that their confidence in Sean is well placed, “Sean has created a unique way for us as a small business to maintain direct contact with our customers and our distributor partners. As we continue to expand, services like Sean are vital to maintain a pulse with the field and to help us organize our distributor relationships and logistics. Sean also does an excellent job with scheduling events and representing Scarlet Lane during tasting nights and festivals. He has done a great job with communicating to our distributors the needs of our customers and opportunities. “
Now a dozen distillers, brewers, and other craft producers have hired Sean to present their products to the world, including Arcadia Ales in Kalamazoo, MI. The growth was so strong that Sean brought on Scott Hardwick to service the Indiana brewery clients. He still makes calls and talks to bar and package store buyers, but Sean can now concentrate more on growing the business – but not to the detriment of Monon’s values and philosophy. Sean wants to deal with producers who love their craft, produce it ethical, and have the community in mind when they make their decisions and deal with individuals. Sean figures that he sees a phone call from a client and isn’t genuinely happy to answer it, then something is wrong.
As a result, Sean has turned down potential clients just because he knew they didn’t have compatible visions of how things should play out in this industry. Sean sees himself as a facilitator, bringing drinkers to good products by putting like-minded retailers and producers together. He is even open to having self-distributing clients, they would be even more connected to their strategies and values – he just hasn’t yet found a self-distributing client who fits well with Monon. Luckily, Sean is over the moon happy with his current clients, and now he is ready to expand.
Ohio And Beyond. Monon Beverage Brokers, Indiana is about to have a brother – Monon Beverage Brokers, Ohio. Sean recently started advertising for a teammate to introduce Monon clients to Ohio. Many of his clients are interested in moving beyond the borders of Indiana, and if they have someone they trust to communicate their values to Indiana, why not let them work in other states as well?
There is a lot of craft beer in Ohio, not to mention a ton of wineries and significantly more craft distilleries than in Indiana. There is a rich vein to be mined there for the right Monon candidate. Image credit: Brewers Association
Once again, this is a new kind of enterprise; no one has a multiple states so it has to be felt out as it goes. He is currently in talks with the alcohol powers of Ohio as to how this might take form. Sean says the primary focus of the Ohio arm of Monon (whether as a separate company or not) will be for current clients to expand their reach. But he and his colleagues will also be looking to acquire more clients for Ohio to Ohio sales or Ohio to Indiana sales.
Some of these clients are/will be small enough that a full time sales rep isn’t in their budget, while he might also find clients that are so large that their reps are now stretched through 3-4 states and need help. This is the in-between niche that Monon fills so well. Sean’s fervent hope is he will represent these brands so well that the smaller breweries will grow into needing sales rep.s, and that the larger breweries will realize that they may not need a rep. in each state because he is representing them so well. As long as people are learning about, enjoying and buying the brands he represents, Sean will be a happy guy.
Sean sounds like a great guy to work for, doesn’t he? Scott said, “I am proud to be the first “employee” for Monon Beverage Brokers. Whomever he works with for out of state development will need to meet his commitment and work ethic. At the end of the day it’s this simple, I work for somebody who shares a love and passion for quality Indiana beer. If you are looking to grow your business, reach out to Sean.”
Well, if you are a self-starting, highly motivated, people kind of a person who wants keep learning day after day after day – then maybe Monon Beverage Brokers, Ohio is your dream job. Down the road, Sean is also looking to expand into Kentucky sometime in 2018 – Sean isn’t looking for employees, he might be the boss, but he needs a colleagues in Ohio and later in Kentucky – that could be you… or you…..well, maybe not that guy over there.
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