Logistics in the Limelight

The impact of global logistics is making headlines with the recent controversy in the US about Beck’s beer not being brewed in Germany.

Beck’s has been brewed in Germany and exported to the US up until recently. Feeling the pinch in market share a couple of years ago, the company quietly moved their brewing operations for the US market from Germany to the US.

One might wonder why any company would risk a global brand by making such a change. Beck’s has acknowledged a savings of $12 million in transportation costs. Unlike other operational savings, savings in logistics go straight to the bottom line. 

This becomes a huge coup for any company competing in the fierce beer marketplace, where market share can shift with popular tastes. Logistical savings can really impact an organization's profitability, which is something shareholders love to hear. Bottom-line savings of $9 million a year is probably worth the risk of a little controversy.

The Beck’s shift happened in 2012 and a recent class- action suit   is offering up to $50 compensation for misled consumers. This case of Beck’s moving their brewing operations to save transportation costs is an instructive example. Real transportation savings trump many organizational risks because the savings are direct and tangible.

We should expect more of these kinds of changes in the future. The only question now is, will Beck’s change their branding to become a domestic beer along the likes of Budweiser, Coors, and Pabst Blue Ribbon?