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Brooklyn Brewery’s long winding road to finding a new HQ and taproom has officially ended as it’s also in the midst of rebounding by strong double-digits for a 2d consecutive year from Covid-induced decline. In fact, Brooklyn Brewery is “having an amazing year on a global basis,” including low-double-digit growth in the US and export mkts “absolutely flying” up 40-45%, CEO Eric Ottaway told CBN. US is “still rebounding” vs 2019 levels but international mkts are now “solidly past 2019.” So after losing ~100K bbls from 2019 to 2020, Brooklyn’s on track to recover the majority of what it lost overall by end of 2022. New HQ at 1 Wythe Ave by 2024; Staying in the Neighborhood After All Brooklyn will stay in Greenpoint-Williamsburg nabe for the long haul, inking deal at 1 Wythe Ave industrial zone to occupy 41K sq-ft of an 82K sq-ft building in development, it announced today. Move is expected by summer 2024. Tho current lease lasts through end of 2024 to provide some extra “overlap and cushion,” Eric shared. Recall, Brooklyn has been looking for a new location for many years now as time was running out on its (extended) lease agreement for the current HQ/taproom. Co went thru all kinds of potential options including a multi-story operation in Brooklyn Navy Yard, before scrapping those plans and extending the lease at its current HQ to bide its time. Williamsburg continues to develop into a sprawling commercial neighborhood and “the ongoing commercial development of the area puts pressure on the ability for manufacturers like ourselves to remain in the area,” Eric stated in the press release. But Brooklyn was able to work with the industrial incentive zoning and owners of 1 Wythe Ave to use the industrial space being created in the building. “We are excited to be staying in the neighborhood we’ve called home for 35 years,” Eric added. This will be a bigger space for Brooklyn overall, tho it’s still early days as co still figuring out what it can do with the space as it’s built. Brooklyn Lager Growing Internationally, Driving Growth in US; But IPAs and NAs Becoming Bigger Part of the Overall Mix Flagship Brooklyn Lager continues to grow internationally and “specifically” is the brand driving growth for them in the US, Eric underscored. It’s dwindled within the portfolio mix over the yrs, as it used to be well over half of total sales. So co’s extra encouraged to see both draft and package growing “really solidly.” Yet Brooklyn Lager is down to 1/3 of Brooklyn’s global portfolio as IPAs have “come into their own overseas” at about 1/3 of the mix, and Special Effects non-alc portfolio is around 15%. Internationally, East IPA and Defender IPA are performing “really well,” alongside Stonewall Inn session IPA as co just “starting to intro” Pulp Art. In US, IPA portfolio is shifting more heavily toward Pulp Art hazies, Eric noted. And Special Effects non-alc variety pk is “still doing really well,” accelerating. Tho individual NA pks softer in scans this yr. Package Mix Shift to 1/3 Draft, 1/3 Bottle, 1/3 Can; Tasting Room 80-85% Back, but More Profitable Pre-pandemic, draft was about 45% of Brooklyn’s mix. Then it went to pretty much “zero” for a while. Now it’s about 1/3, 1/3, 1/3, when lookin’ at draft, bottles and cans. That’s a “big transformation for us.” Used to be almost all draft and bottles with just 10% in cans. But it’s “evolved” as bottles are slowly declining and cans continue to see “crazy growth.” Tho its core mkt, NYC, is still a bottle mkt no matter how much anyone tries to make the switch, Eric pointed out. City is still “really driven by bottles,” while virtually all out-of-state mkts now feature “majority” cans. Then too, tasting room has “bounced back solidly” at about 80-85% “of where we used to be” in terms of visitors. But the “composition shifted” and now Brooklyn’s “more profitable than ever” in the tasting room. Visits used to be 80% international tourists. Now it’s closer to 50/50 split between locals and tourists. “In some ways” fewer tourists “made more room for locals” to rediscover co, and now tourists are coming back “on top of that.” There’s also “huge thirst for events,” getting calls “all the time” for all kinds of different occasions. So Brooklyn will look to carry over and build upon these new taproom dynamics once the move to 1 Wythe is complete. “Focusing Energy into Existing Core,” Plus Innovation Built for Long Haul After yrs of innovating at a rapid clip, along with the rest of the industry, Brooklyn is really “focusing energy into the existing core,” Eric shared. Distrib warehouses are full. Retailer shelves are full. New brands are less likely to get “another shelf placement.” Brewers have been “constantly churning [their] own stuff,” and Brooklyn looks to break that habit. Our industry could be entering “a totally different time period” and “state of [brand] development” that’s more like “where we all started,” Eric thought. Cos “didn’t just give up after the first year or two after products didn’t do as well” in the early days of craft. They “kept at it and kept at it” and “eventually they grew into something.” Figuring Out In-Office Dynamics Post-Covid Brooklyn Brewery, along with everyone else, is working through best practices for in-office attendance, Eric noted. It depends on the dept, and personal/individual preferences and living situations, but essentially “we want you in the office a day a week minimum,” and “plenty” are in 3 days/week at this point. Typically Tues-Thurs. Another shift in mindset was to avoid rush hour and make sure traveling to work is at a “good time for you.” Tho gotta ensure they’re doing more team-oriented tasks, meetings and more when they’re coming in too. Net-net, across NYC, offices are still at about 50% occupancy and cos are still adjusting to the new norms.

Brooklyn Growin’ Double Digits in ’22 as it Lands New HQ/Taproom Locale in the Neighborhood by ’24

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