Think of “Maine” and visions of lobsters, beaches, pine trees, fly fishing, and LL Bean might pop into your mind. Now, Maine’s brand is increasingly linked to something else – craft beer.
Maine has long led the charge when it comes to craft beer in New England, with D.L. Geary opening up one of the first craft breweries in America in 1986. Today, Maine continues to lead. It is in the top three for most breweries per capita, as people are coming from around the world to visit Maine breweries and seek Maine beers. So how are Maine brewers building their collective brand, and why are craft beer fans around the world seeking out beer from this small state?
This commercial momentum began in 2017, when the Maine Brewers’ Guild launched an innovative project to promote export opportunities and the Maine craft beer brand internationally. Thinking big, they built the Maine Beer Box, a 40-foot refrigerated shipping container with 78 beer taps and a self-contained draft system. “The Maine Beer Box is utilized as part of a multi-year project based around a global exchange of beer between brewers from Maine and countries around the world,” said Sean Sullivan, Executive Director of the Maine Brewers’ Guild, which represents the state’s craft brewers. The Maine Beer Box is touted as the world’s biggest mobile kegerator.
The premise is simple - each year, the Maine Beer Box is loaded with hundreds of kegs of Maine craft beer and shipped by sea or land to another country where the Box is featured at a beer festival for local fans. Maine brewers join in and pour beer to promote the state’s craft beers. At the end of the event, the host country’s brewers fill the Maine Beer Box with their beer, and it is shipped back to Maine, at which point Maine brewers host that country’s brewers for a festival.
“When we found out it was cheaper to ship a container (from Maine) to Europe than it was to truck it to New York City (from Maine), we realized that building an export market for our brewers would be cost-effective and powerful,” explained Sullivan. “Interestingly, it’s also created a powerful draw for beer tourism - more people are coming to Maine to visit us ever since we launched this export project.”
Thus, the Maine Beer Box is part marketing initiative, part goodwill trade mission, and part economic development initiative. The guild plans to continue promoting Maine craft beer globally, sending the Maine Beer Box to overseas beer festivals on a regular basis.
Maine’s craft beer industry contributed more than $260 million to the state’s economy in 2017 (+ 14 percent versus 2016), according to a biennial economic impact study conducted by the University of Maine in conjunction with the Maine Brewers’ Guild. The report, which examined data from 2017, notes that in-state craft breweries generated more than $168 million in total revenue.
“An increasing number of consumers are making the shift away from macro and towards locally produced beer,” Maine Brewers’ Guild executive director Sean Sullivan told Brewbound. “At the same time, Maine is vacationland, and we are finding international audiences who want to buy our beers after they return home from their visit.”
The Economic Challenge
As the popularity of Maine beer has grown, many of the 144 Maine breweries are doing brisk business selling their beers within a small geographic area of where the beer is produced. However, the demand for Maine beers outside of the state's borders, and indeed overseas, has also grown. With more than 40% of beer brewed in Maine being sold outside of the state, many Maine brewers have clearly identified new opportunities to sell abroad to not only generate additional revenue, but to provide a powerful marketing experience and tool to attract more visitors to their breweries and state.
Exporting beer, and even selling it interstate, can be a big challenge. Fortunately, brewers are starting to understand the federal government has products and resources that can eliminate barriers to selling internationally. What used to seem like a daunting path to growth is now a well-lit walkway, thanks to products offered by the Export-Import Bank of the United States (EXIM).
EXIM enables American businesses to grow through exporting. EXIM, America’s official export credit agency, empowers U.S. companies to compete and win more international sales. Demand for U.S.-made products is expanding, and EXIM is here to make sure they can be exported around the world. Of interest, 91 percent of EXIM’s total transactions support small businesses. Plus, no deal is too small.
With its insurance and lender loan guarantees, EXIM is often able to assume the risks that the private sector is unable or unwilling to accept. The agency’s export credit insurance is designed to take the inherent worry out of exporting so U.S. companies can enter new markets and boost sales with new or existing customers. This growth fulfills EXIM's mission of maintaining and increasing jobs here at home.
EXIM Supports Maine Craft Breweries
Four craft breweries and the Maine Brewers’ Guild work with EXIM, the Maine International Trade Center (MITC), and insurance broker Brent Hoots of NaviTrade Structured Finance to boost their sales – Baxter Brewing Company in Lewiston, D.L. Geary Brewing Company, Inc. in Portland, Rising Tide Brewing Company in Portland, and Sebago Brewing Company in Gorham. MITC’s role is to help Maine companies find international opportunities and acquire the knowledge and skills to become successful exporters. “We are excited to be working with Maine craft breweries and EXIM Bank to find and develop overseas opportunities,” said Jeff Bennett, Senior Trade Specialist at MITC. Current markets are the United Kingdom, South Korea, and Canada, but the breweries are exploring more behind EXIM's support.
Once export opportunities are identified, EXIM’s export credit insurance then allows the breweries to extend competitive open account credit terms needed by the international distributor, achieve financing of the breweries’ foreign receivables, and provide peace of mind to these Maine companies regarding their greatest fear – not being paid.
Accounts receivable are often a large, uninsured asset on a company’s balance sheet. If foreign buyers don’t pay, there is often very little recourse for the U.S.-based company, and the financial hit can be significant. EXIM’s insurance allows exporters to safeguard their foreign receivables by protecting against commercial (e.g., bankruptcy) and political (e.g., currency freeze or war) nonpayment risks. If the buyer does not pay, the insurance covers up to 95 percent of the invoice value.
Furthermore, requiring cash in advance from foreign buyers tends to limit sales opportunities. Many foreign buyers are familiar with credit terms and expect them. With EXIM’s insurance, U.S. businesses can increase their global competitiveness by offering credit terms up to 180 days to win deals. The four Maine breweries have just started working with EXIM, and $209,000 exports have already been supported within eight months to the United Kingdom, South Korea, and Canada.