When Suds Go X-Border

Americans love their beer.

Not only is this evidenced by its presence at all quintessential American events, like ballgames and barbecues, but also by the industry’s staggering value. According to the Brewers Association’s May/June 2016 edition of The New Brewer magazine, the U.S. beer market is worth nearly $106 billion.

The forces keeping this thriving industry afloat aren’t just large-scale brewers, like Coors and Budweiser — quite the opposite, in fact. It’s small and mid-sized craft and microbreweries that are churning out America’s favorite pale ales, hoppy IPAs and creamy stouts. The Brewers Association reported that craft beer sales increased by 12.8 percent in 2015, adding $55 billion to the nation’s economy. New brewery openings now outnumber closings 10 to one as consumers look to small, independent brands to quench their thirst.

And, as it turns out, American beer is becoming increasingly beloved internationally as well.

The U.S., of course, isn’t alone in its affinity for beer, nor is it spearheading the craft movement by itself. From the U.K. to China to France, people across the world are searching for the best microbrews out there. And just as many lager lovers in the U.S. are looking to access more international brews, the demand for American beer abroad is growing.

One beer enthusiast who doesn’t need to look far for a top-notch cold one is Shannon Long. Long is the CEO of Brew Export, a comprehensive solution for brewers entering international markets, as well as a resident of Grand Rapids, Michigan — otherwise known, as she’s quick to point out, as “Beer City, USA.” PYMNTS caught up with Long, whose beer expertise is complemented by her knowledge of international marketing and cross-border shipping, to discuss the international craft beer craze and the challenges of providing alcohol to a global market.

‘Beer City’ And Beyond

Long first got the idea for Brew Export while studying international marketing at Michigan State University. Instructed to create a capstone plan for exporting just one item to one market, she knew immediately what she wanted to focus on.

“If I’m doing 50 pages on something, I’m going to do it on craft beers,” she said of her thesis paper.

Long decided on a specific brand, Michigan’s Founders Brewing Company, and chose to create a plan for exporting it to Singapore. After speaking with industry professionals on both sides of the shipping process, she realized that international demand for American craft beers was high. She also found that, although American brewers wanted to expand distribution all around the world, many were discouraged by the intricate logistics of shipping alcohol internationally.

Beer is a universal language, according to Long.

“We kind of took those styles from Germany, from Belgium, from the U.K., from Ireland, all these different places, and did the American thing — we innovated on them, made them very much our own. And now, we’re known globally for some of the most innovative and best beers on the planet,” Long said. “A lot of people are interested in our beer, and a lot of these breweries — some of the smaller ones, medium-sized, even some of the large ones — are turning down the international sales just because of the perceived difficulty of exporting.”

Simply put, she said: “It was overwhelming for the breweries.”

After identifying this issue, Long decided to bring her theoretical plan to life and launched Brew Export in March 2015. The service acts as a one-stop shop for U.S. brewers looking to distribute their products overseas and also works with global distributors looking to stock American craft beers.

Brew Export coordinates the process of bringing local beer to international markets from start to finish. For U.S. brands, the company makes sure legal standards are being met by handling elements like laboratory testing, customs documentation, TTB documentation, import/export licensing and label translation and printing. It also deals with shipping logistics, like securing refrigerated containers, organizing pickup and dealing with insurance. Brew Export even offers U.S. brewers international marketing services, from promotional materials and event coordination to price analyses and market selection research. For importers, Brew Export offers not only access to a range of U.S. craft beers but also support with marketing, cold chain logistics and product relabeling.

While Long’s goal of streamlining trade among the global craft beer community is straightforward, the process of shipping alcohol across borders can present numerous challenges.

Cross-Border Complications

Currently, Brew Export works with 13 American brewers from across the U.S. and ships to international markets that include China, the Bahamas, Puerto Rico and Taiwan. Exporting to France will start within the next few months and, Long said, she hopes to open that up to another three to five markets in 2017. Long says she targets markets frequented by Americans so that there’s an existing customer base.

“Most importantly, a lot of places I look need some Americans going in and out of it,” she said. A steady stream of American tourists helps spread “the good word of the good beer,” Long explained.

Time is yet another factor that adds to the cross-border challenges. International markets like China have a bigger appetite for brown ales, ambers, Belgian-style stouts and lighter craft beers, but now, with the availability of American beers, the region’s palate is just beginning to warm up to the hoppy flavors of American beers, she said.

Long’s ideal export destinations are also home to existing craft brew “movements” so that local patrons already have an interest in tasting new beers. Once she locates a desirable market, Long establishes a partner overseas to which she can distribute American brands.

So far, Long has seen particular success with craft beers produced by Back Forty Beer Company in Gadsden, Alabama, and Dark Horse Brewing Co. in Marshall, Michigan. She cited the breweries’ “excellent branding” and their commitment to building and supporting their brands internationally.

Like with any cross-border endeavor, however, Long’s operations occasionally run into road blocks. As alcohol laws vary by country, Brew Export needs to ensure it fully understands the regulations surrounding labels and taxes for each market. One of Long’s recent challenges came as she attempted to get into the Brazilian market.

“[Brazil has] a whole craft beer movement. They love craft beer down there. I’m friends with tons of people on Facebook down there, and I feel awful because, at this point, I just cannot get beer down to them. It’s a challenging market to enter, and alcohol regulations are challenging,” Long explained. “Especially with me with the Olympics, I really would have liked to get beer down there. I’d love to get beer down there with all the events they have coming up, because there’s going to be so many Americans down there and people from around the world, but there’s just no way, not at this point.”

Keeping the beer as fresh as it is when it leaves the brewery is another challenge. Long explained that sending brews from the U.S. to China can take a month and a half — a long time for a product that must be kept cold.

“This isn’t pasteurized beer, this isn’t fake beer and it has a shelf life varying between six months and a year, but that shelf life is only maintained if it’s kept cold. Craft beer has to be cold,” said Long. “So, the biggest challenge is refrigerated containers. They’re a little harder to come by, they’re a whole lot more expensive, but we do 20-foot to 40-foot refrigerated containers, which are exactly what they sound like — giant refrigerators packed to the brim with beer.”

One area that has been surprisingly smooth sailing for Long is payments, despite the bulk of her transactions being cross-border. Currently, she requires that her clients wire her at least 30 percent of the total cost at the time of the order, and she collects the rest later. The relatively simple process does come with significant international banking fees, she said.

Although she’s being paid by people all over the world, Long has customers pay her in U.S. dollars to minimize the risk associated with juggling multiple currencies and exchange rates.

What’s Brewing For Brew Export?

As Long continues to expand Brew Export, she’s hoping to break into even more markets to bring microbrews to the masses.

By the end of 2016, the company is projected to export 48,616 gallons of beer, which is the equivalent of about 518,400 bottles.

Although the company is just over a year old, Long said it has experienced significant growth, largely fueled by advances to technology, which have allowed her to bridge the many communication gaps present in cross-border business.

“The technology is key,” she explained. “I’m not just selling the beer; it’s like a partnership with those distributors and making sure we sell through that beer and making sure we build the brand. That’s critical.”

Cheers to that.

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The PYMNTS X-Border Payments Optimization Tracker™ provides an organizing framework for evaluating the many players that help merchants optimize their cross-border clients effectively and efficiently.