The most exciting challenge in years to the most boring part of the beer industry has ended. Don’t cry because it’s over, smile because it happened: PepsiCo last week announced it was throwing in the towel on Blue Cloud Distribution, its ambitious attempt to muscle its way into the obdurate middle tier.
“In only two years, the Blue Cloud Distribution team stood up a malt alcohol distribution network across 18 states,” a Pepsi executive told Brewbound in a statement. “We are proud of the Blue Cloud associates who pioneered a new business model in a new space.”
Translation: This wholesale juice ain’t worth the squeeze, we’re out.
I’ve never had much luck getting the American drinking public to care about the machinations and intrigue of the beer industry’s middle tier. But Pepsi’s unceremonious exit from the wholesale business is certainly remarkable to me, and if you’re a Hop Take reader, probably to you, too, so let’s indulge some discussion on its demise, shall we? After all, this is Big Soda we’re talking about here, people! Pepsi has a market capitalization of ~$225 billion and a door-to-door ground game in 50 states that would make a logistics officer drool. There are not many firms in the country better positioned to disrupt the status quo of the notoriously unmalleable American middle tier.
Yet the middle tier remains, and after just over two years in existence, Blue Cloud does not.
Its death is as good an occasion as any to survey the progress
