Cellar Door Sales

A brave new world.

It is time for the Swedish government to allow cellar door sales (gårdsförsäljning) in the same way it works in most of the wine and beer producing world.

Beerbliotek is a small batch brewery in Gothenburg. We have concerns about the new model for local product sales (lokalsortiment) that will be introduced by Systembolaget in September and the effect it will have on our overall business.

Introduction

In the current local products model (lokalsortiment), we have been allowed to choose which products we would like on the shelves of Systembolaget. Our business model is to brew one-off batches, which means we have brewed 62 different beers in 18 months and it made financial sense to select just two at the start which we could add to the local selection. This also meant they were included in the order assortment (beställningsortiment) and the logistic solution (logistiklösning), allowing customers all over Sweden to order at least two of our beers.Demand has exceeded our expectation, and we had decided to include more beers over time, as our business grows along with our capacity to meet the demand.

That was until we heard about the changes coming our way in September.

The local selection was a great way in which Systembolaget passively helped small breweries gain a minute foothold in the monopolised Swedish market. If this access is to continue under the new rules, then a compromise between the rules set by Systembolaget and the laws prohibiting cellar door sales (gårdsförsäljning) will need to be considered.

Tourism and travelling Swedes

Three of the partners in Beerbliotek come from different parts of the world, Australia, New Zealand and South Africa. We understand what Cellar Door Sales mean to the millions of tourists that visit the local wine farms and local breweries. Those experiences are also something millions of Swedes experience when they travel internationally. How would a small wine producers in Italy, France, Portugal or Spain be able to survive, without opening their doors to the tourists that pass by? Tasting, before buying, has been a way the small producer has always sold their goods. Just ask any cheese shop owner in Sweden, and they will confirm, it is the way the customer makes a choice.

Imagine a trip to the Napa Valley in the US, where there is an abundance of wine producers and breweries, and you had to go to the local liquor store to buy, then try the local wines and beers. Why travel there at all if it’s the same way you have to buy their goods when you’re back in Sweden?

What happens with tourists coming to drink beer in Sweden? They can only buy the products at a bar, or via Systembolaget, and only the closest three to the brewery. Why is it harder to buy ice cold drinks that contain alcohol over 3,5% in Sweden, than most other places in the world? Surely Sweden is a leader in food and beverage, as the evidence quite clearly shows with the amount of quality new breweries that have popped up in the past few years.

Cellar Door Sales (Gårdsförsäljning)

The term cellar door sales, mean allowing the producer to sell their products directly from their door. The actual place where the products are produced, in the same way Swedish farmers sell their vegetables, fruits, berries, dairy products, etc.

All breweries in Sweden are already regulated by the tax authorities, and as in our case, we are already allowed to sell our 3,5% Sockerbruket Saison from the brewery door. It is not cellar door sales in the true sense of the word, but it is still selling alcohol from the brewery door. What would be the difference between 3,5% or 6,0% or allowing the customers to choose what they buy, with the expert guidance of the breweries’ own staff, in the same way they choose for themselves when they shop at Systembolaget?

The small breweries represent under 5% of the overall Swedish market, and surely cannot be seen as a threat to the system or an influence on the increased overall alcohol consumption in Sweden?

Order Assortment (Beställningsortiment)

Another change to the rules is to, instead of delivering beer ordered from around the country to your closest Systembolaget shop, we now have to send our products to Systembolaget’s warehouse in Örebro, which is around 300km away from our brewery. The costs associated with this is very high for a small brewery such as ours and would increase the overall price of our products. We will therefore not include any beer in the order assortment as of the 1st of September when the new rules come into play, because it just does not not make financial sense.

For the time being we will leave those products we have available at Systembolaget on the shelves of our three closest stores. How we will continue has not been decided. Business as usual Beerbliotek will still be available in the pubs and restaurants in Sweden, and perhaps in the exclusive range at Systembolaget. But Beerbliotek is quick to note, that we are not in favour of the new rules from Systembolaget.

Confused

There has been a lot of discussion between the smaller breweries, and in the last couple of days a lot has been written about the new rules, and the effect it will have on the smaller breweries. One common thread is that the new rules are very complicated and confusing and seem directed more to the larger producers who appear to work exclusively for Systembolaget’s different assortments and ranges.

As an example, our Pale Ale Bobek Citra, have been ordered and sent to more than 60 stores around the country, but was deemed too popular by Systembolaget to stay in their Logistics Solution (Logistiklösning). Under the new rules, breweries will be able to get their beers into more stores if there is sufficient demand, but we have a few questions. How can Systembolaget measure the demand for a product that they themselves took out of their own system, thus meaning it was unable to be ordered into other stores? How then can they say the demand is to low to qualify under the new rules? From an environmental perspective, how can they ask us to send our beer to Örebro, just to then send it back to local stores if there is sufficient demand?

We are open to a discussion with Systembolaget and other small producers to find a meaningful and long-term solution to these questions and many more concerns we have.

Alternative revenue streams

The Swedish government could come in at this time and help the smaller producers, by opening other channel for sales, such as cellar door sales (gårdsförsäljning), allowing the producers themselves to present their products in the best way they see fit. As wine producers and brewers all over Europe are able to do, in order to survive and grow their businesses.

The growth in the last two years for smaller breweries have been immense, but on a whole, the new model could have two regrettable side effects, reduced earnings for the breweries concerned and less jobs for Sweden.

Cutting off a revenue channel for a small brewery means that going bankrupt is a real possibility. Finding new revenue streams mean a large proportion may seriously consider exporting their products instead of selling them to the local market.

A bright future

Beerbliotek is in favour of implementing a cellar door sales business model, that considers all possibilities and options, in order for everyone in the chain to be able to build their businesses and the end consumer in Sweden, as well as the tourists, given access to more locally produced beer.