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By May 2020, Craft Beverage Warehouse co-founder Kyle Stephens knew that an aluminum can shortage was imminent and that small breweries would bear the brunt of the crisis.
The COVID-19 pandemic forced beverage makers to quickly shift from draft and fountain to bottles and cans, driving up demand for those materials and prices for small to mid-sized brewers.
So, in a mix of intuition, experience and timing, Stephens and his business partner Michael DeGrave launched CBW, a beverage-packaging materials distributor for small craft breweries, cideries, wineries and seltzer makers.
Stephens, Good City Brewing Co.’s former CFO, knew that many small craft beverage makers didn’t have strong relationships with can manufacturers and that, without an option to buy cans in smaller quantities, it would be difficult for them to survive.
“Just being in the industry, I saw it coming, and I saw the smallest of the small breweries and beverage manufacturers being the ones that were going to be left out,” Stephens said. “I was like, ‘if I don’t do this, nobody’s going to service this customer base.’”
Small craft beverage makers were challenged to find cans and when they did find supply, they ordered by the half-truck load at a higher price rather than by a sufficient one to two pallets, Stephens said. By April of last year, Stephens had already placed orders for cans, allowing CBW to have available supply when other distributors were without product.
Now the one-year-old company’s market covers 49 states including Alaska.
Will CBW’s niche wholesale business still have a place in the market as supply levels return to normal post-pandemic? Stephens says “yes,” based on demand so far. But it’s also CBW’s ability to make large purchase orders and the storage space it can provide to customers that give the company staying power, Stephens said.
“We think we’ve positioned ourselves well with our online platform and with the fact that we’ll pretty much throw stuff on a truck next day or sometimes even the same day as our customers call, which a lot of places don’t do,” Stephens said.
Now CBW is exploring ways to customize beverage carriers for its customers, including six-pack carriers with printed designs or logos and customizable case trays sent to liquor stores.
“With these other operational changes, we could pull in Michael’s background and do merchandising for breweries too,” Stephens said.
Location: 3945 N. 31st St., Milwaukee
Founders: Kyle Stephens and Michael DeGrave
Product: Craft beer materials distributor
Goal: Expand team, develop relationships with customers and shippers.
Experience: Stephens was previously Milwaukee-based Good City Brewing’s chief financial officer. DeGrave has co-founded and owned multiple businesses including real estate firm Cream City Capital and Routine Baseball, a clothing brand and digital magazine.