The Global Rise of American Beer

Will European beer lovers buy American craft brew?

Peter McNulty wants to reverse the flow of beer—not from the keg, but across the Atlantic.

“American craft beers have set the standard for craft beers globally,” says McNulty, DMSB’04. “Other countries don’t have access to American hops. Malt is malt and wheat is wheat—but we have the best growing conditions in the world for hops in Washington’s Yakima Valley.

We’ve Americanized the world’s taste in beers—bigger, better, stronger, and bolder.”

While Crafted Exports is still young, total revenue increased 85 percent from 2016 to 2017 and the amount of beer shipped overseas more than doubled.

“They make my life a lot easier,” said Jon Schwartz, vice president of business development for Harpoon Brewery in Boston. “We concentrate on making great beer and let them worry about the overseas distribution logistics—quality control, inventory, shipping, and taxes. They make the export business a turnkey operation for us.”

Filling a niche

The birth of Crafted Exports is timely, given the saturation of the American market by the recent explosion of microbreweries.

Ten years ago, there were fewer than 500 craft breweries in America; now there are more than 6,000, according to the Brewers Association. In the past year alone, more than 1,000 microbreweries and brewpubs have sprung up around the country. So brewers are looking for new markets where they can continue to grow.

Enter Crafted Exports.

McNulty said his business sells convenience, quality control, and economies of scale. As a supply chain expert, he takes care of the entire export process from the moment the beer is kegged in an American brewery to the moment it’s poured from a London tap.

“We want to be a one-stop-shop for our brewery partners,” he said. “They don’t have to deal with distribution, exchange rates, data analysis, or sales and operational systems. These are all services we provide.”

McNulty honed his supply chain skills at a major U.S. beer distributor and later at Six Point Brewing in Brooklyn, New York, where he handled the supply chain in 20 states and five countries. Since starting Crafted Exports in 2014, he’s kept his personal income flowing with a full-time job as finance director of Orion Worldwide, a global media company based in Manhattan.

In addition to quality control and efficiency, Crafted Exports provides its clients with the data analysis and international relationships needed to open new markets. A year ago, McNulty urged one of his clients, Captain Lawrence Brewing in Elmsford, New York, to enter a contest sponsored by the Swedish government, which controls all imports into the country. 

“We won the competition with our grapefruit IPA,” said Scott Vaccaro, founder of Captain Lawrence. “We launched our exports to Sweden in March and sold 2,000 cases in our first month. We never would have known about this opportunity if it hadn’t been for Crafted.”

The global rise of American beer

“The world of beer has changed in this country,” says Vaccaro. “American beer used to be the laughing stock of the world with Spuds McKenzie and girls in bikinis selling bubbly lagers. Now small brewers around the world looking to America for inspiration.”

Part of the reason, he said, is the willingness of American craft brewers to experiment.

“We never had a strong brewing tradition in America like they did in Germany and England,” said Vaccaro. “Because of that, we were unchained to tradition, free to go off the rails and create something new.”

But the unique quality of American craft beer also presents some challenges. Because it’s unpasteurized and heavy on hops, which break down more quickly than other ingredients, freshness is paramount. The beer has to remain cold throughout the shipping and storage process, and it has to be sold within a month or two after brewing. If the exporter fails to meet either requirement, the flavor begins to deteriorate.

The dedication of Crafted Exports to quality control is what sealed the deal for Harpoon.

“They were committed to quality from Day 1,” he said.  “They assured us they would have cold storage throughout the entire process. A lot of exporters don’t do that and it shows up in the quality of the beer.”

Growing pains

Like any first-time entrepreneur, McNulty and his partners made a few mistakes along the way. For example, when they were developing their international distribution network, they had trouble finding overseas partners that had the same emphasis on quality control. It also took a while to develop an accurate feel for the export market.

“At first, we were overly aggressive in our sales forecasting and projected growth, and that put us in a complicated financial position,” he said. “You take on inventory and assume you‘ll grow the account to fill that need. We took on too much inventory and then couldn’t find it a home.”

That presented both an ethical and a business dilemma: Do they sell the beer past it’s optimum sale date, or throw it out and eat the cost?

“In our business, credibility with the customer is paramount,” said McNulty. “They have to trust that we’re only going to export fresh beer. So we had to take a loss on the aging inventory.”

That decision came at a significant financial cost.

“We made the kind of mistakes that nearly tanked the business,” McNulty acknowledged. “But we powered through them and survived—by the skin of our teeth in some instances.”

Based on its double-digit growth and the rave reviews from key clients, McNulty believes Crafted Exports has cleared the startup potholes and is now on the road to success.

by Bill Ibelle

Original Article