he post$-$Prohibition three$-$tier system requires the sepa$-$ ration of the production, distribution, and retailing of alcohol in most states. That was not a major issue for craft brew$-$ ers during the explosive growth years, such as $20112015,$ when craft beers doubled their beer$-$market share and had trouble keeping up with demand. However, when craft beer volume through the three$-$tier system declined steadily from $20162020,$ craft brewers turned to direct distribution for growth. Adding direct distribution, mainly through operation of taprooms and brewpubs, results in approximately $4$ percent volume growth. Taprooms are locations where consumers can buy beer, and brewpubs are restaurants with their own breweries. Taprooms account for almost $8$ percent of all U$.$S$.$ bar traffic. Small craft brewers are excited about thisthey make higher margins selling direct compared to using an indi$-$ rect channel of distributors and bars. A brewers average cost per keg of craft beer is $$70,$ and a keg sells to distributors for $$120.$ The distributor then resells the keg to a bar for $$150.$ Each keg serves about $10014\mathrm{.}5-$ounce glasses, the amount typically poured into a $16-$ounce glass at a bar to accommo$-$ date a foam head. Therefore, a bars cost per glass of craftbeer poured is approximately $$1\mathrm{.}50$ per glass. The standard in the bar industry is to have $19$ percent liquor cost, mean$-$ ing $19$ percent of the price to consumers represents the bars cost of goods sold, leaving $81$ percent for the bars margin$\mathrm{.}12-14$ Calculate the price at which a bar will sell one $14\mathrm{.}5-$ounce glass of craft beer if the desired $81$percent margin is based on selling price. What is the bars dollar markup on a glass of craft beer? Refer to Setting Price Based on External Factors in Appendix $2$: Marketing by the Numbers to learn how to do this analysis. $($AACSB: Analytical Thinking$)12-15$ Determine the brewers cost per $14\mathrm{.}5-$ounce serving $($one glass$).$ What price would a brewer sell that glass of beer for to achieve an $81$ percent margin based on its selling price at its own taproom or brewpub? What dol$-$ lar and percentage margin would a brewer realize if the glass of beer was sold for the same price as it is sold in bars? Is the brewer better off using the direct channel compared to the three$-$tiered system indirect chan$-$ nel? $($AACSB: Analytical Thinking; Reflective Thinking$)$