VT’s Long Trail Brewing is back in the CBD game, this time with a Long Trail-branded infused non-alc seltzer, co announced on social media. It comes in blueberry melon flavor with 20mg of CBD, served in 12oz cans and sold “exclusively at the pub while our supply lasts,” per Twitter. Recall, ability to sell CBD bevs, including non-alc and alc bevs alike, in general mkt (outside of dispensaries) is still grey area as it pertains to FDA oversight, despite Farm Bill passing late last year, which federally exempts hemp-derived CBD from schedule 1 drug classification. Long Trail initially launched CBD-infused IPA with 6% ABV called “Medicator” in Sep 2017, with 20-30 mg of CBD per 12oz pour, priced at $8 per 12oz. It sold roughly 300 cases of $19.99 4pk cans out of its taproom in just 3 days, but co was forced to put that brew “on hold” in Mar 2018 as TTB was “reviewing” the Medicator label, local paper Seven Days then reported. But perhaps combo of Farm Bill passing, legalized recreational possession of cannabis in-state, and going non-alc infused route gave Long Trail confidence to jump back in.

Several different models and approaches toward balancing core brands with rotation nation were on display during Craft Brewers Conference panel featuring HI’s Maui Brewing, TX’s Austin Beerworks, CO’s WeldWerks Brewing and CA’s Seismic Brewing last week moderated by Maui founder Garrett Marrero. As pressure to constantly innovate ramps up, no one size fits all, Maui natl sales manager, Pete Scheider, Austin Beerworks co-founder and CEO Michael Graham, WeldWerks co-owner and head brewer Neil Fisher, and Seismic VP of sales and marketing Tom McGinty showcased.

Maui Has 90% of Volume in Core; 10% Specialty; “Rotational Customers” Too; 60K Bbls in 2018 Maui was the largest brewer represented of the bunch; it produced “about” 60K bbls last year, suggesting co grew high single digits in 2018 from 55K bbls in 2017. Even as Maui ramps up specialty releases to 61 total, they only account for 10% of its total volume thruout its 21-state footprint, Pete shared (more of $$ and profit). But Maui has “rotational customers” as well, referring to 2.2 mil people that “run through our island” per year. While that’s a challenge in sustainable sales, it also allows for its entire portfolio to remain somewhat “rotational” and fresh for visitors. Then too, Maui is “big enough” in HI that it can better manage core brands and mandate that retailers carry core brands in order to receive innovations. Yet its “far more liberal on the mainland,” in part due to shipping time to get there, along with competitive landscape.

Austin Beerworks Self Distribution Allows Innovation “Flexibility”; Brewery is the New Brand Austin Beerworks grew to 21K bbls in 2018, Michael shared, and all of its brews are self-distributed and sold in 600-700 accounts all within 40 mile radius of Austin, TX. This helps Austin have more control and “flexibility” over its innovation process, he said, since it can pick and choose how and where new brands are emphasized amid existing portfolio. For instance, co shifted seasonal platform to launch a new brew once per mo last yr and felt comfortable doing so with trained staff and drivers. It “simplifies the innovation platform” and allows co to “respond real quickly to community events.” In this new age of high competition, Austin Beerworks and others have “built a brand around their brewery” rather than individual beers, he added. Austin known for easy-drinking styles suited for hot TX climate. And people know that WeldWerks “make(s) awesome hazy IPAs” and “they’ll try them,” he used as an example (see below). That’s “smart way to think about things going forward.”

WeldWerks “Exponential” Growth After Starting Over with Vast Innovation Platform; 8,500 Bbls This Yr WeldWerks, located in CO just outside of Denver area plus contract partnership with Sleeping Giant Brewing, didn’t see success until co entirely revamped biz model after 2017 to “push limits of innovation,” which ended up “fueling growth.” After opening in 2015, co had 5-6 core beers that “did really well out of the gate,” but “continued to slow after” launch, Neil explained. So last yr co essentially decided to “scrap everything and start over,” with “campaign to produce 100 brand new SKUs.” Co made 136 different brews, packaged 125 of ’em and distributed 100. And growth skyrocketed as a result, reaching “just under” 6K bbls last yr and targeting 8500 bbls in 2019, said Neil. CO provides certain “legislative benefits” that cater toward this style of biz, and this is “not a solution for everyone,” he acknowledged. But “our growth was exponential…from this idea of starting over” and leaning into “consumer drive.” Notably, WeldWerks found success in hazy IPA style. However, hazy success has pigeon-holed the brewer to the style in some ways, as retailer feedback is to focus more on hazy launches. Yet regardless, Neil’s overarching message: “it’s never too late to evaluate your portfolio.”

Gotta Know Who You Wanna Be: Seismic Planned to Be Distribution Brewery from the Start Seismic Brewing was youngest co of the bunch at just over 2 yrs old, but quickly established itself in Sonoma County, CA thru distribution network rather than focusing on-site or self-distribution, Tom noted. That’s rare among new brewers these days, especially in states with legislative leeway. Yet Seismic ain’t most other brewers. Recall, Seismic was founded by Chris Jackson, son of top wine-making family, Jackson Family Wines. So without capital restraint, co launched in 13K sq-ft location in Santa Rosa, installed expensive equipment to keep low environmental impact, and brought on brewers with experience at Anderson Valley and Firestone Walker, San Fran Chronicle reported back in late 2016. Notably, owners told Tom from the start that they wanted to be in “every community, but not every account” in CA, with “affordable but accessible” brands that can grow “over time.” Co knew it couldn’t service vast CA area efficiently on its own and sought out distribs as a result.

Also, Seismic pilots 180 different brews but chooses very selectively on which ones go to mkt. While Seismic may “need to get a little bit more aggressive” on innovation front, that can be difficult within crowded distribution system, Tom acknowledged. If you bring in something new to distribs, they ask “what are you going to take out?” he noted and several agreed. Distribs “are going to get to a point” where there are “so many things that it puts ’em “at somewhat of a disadvantage,” so “knee jerk reaction” is to pull one SKU for every new one that comes in, Pete added. But Seismic has found itself in position to sometimes “take handles” from more mature competitor brewers. It can cause “frustration with distributors,” but ultimately Seismic not apologetic. “We don’t target anybody,” but that’s nature of the biz amid environment where “what we think is core and new isn’t going to be new in six to eight months,” said Tom.

Off-premise craft trends far from improving as segment moves into 2nd qtr. Craft sales down 4.5% by $$ for 4 wks thru April 6 in Nielsen all outlet + convenience data. Now off near 1% yr-to-date. As usual, given continued increase in avg price per case, volume trends steeper. Craft cases down 2.2% YTD, and off fully 6.1% for 4 wks. Toughest trends we’ve seen for segment. FMBs still stealin’ the high-end thunder in malt bevs, unbelievably still accelerating, largely behind growth of hard seltzers. FMB volume +18.5% YTD and +19.1% for 4 wks. Notably, FMB segment also gaining mucho distribution. Total Distribution Points (TDPs) for FMB segment up 6.2% in total Nielsen off-premise picture for 4 wks thru 4/6. Combo of FMBs and superpremium segment (TDPs +15% for 4 wks) picked up equivalent of well over 300 distribution points in Nielsen data. At same time, total craft TDPs down 4.5%, well over 200 distribution pts.

That shift even clearer in biggest off-premise channel for craft, grocery stores, where craft TDPs off 6.3% for 4 wks. These Nielsen stats suggest grocery retailers cutting beer space (total beer TDPs -2.5), while giving more to FMBs (TDPs +3.2%) and superpremiums (+10.5%). Mainstream segment distribution also slipping, natch, down a couple points in grocery as well as crucial convenience store channel. Craft still gaining a little space in c-stores. But superpremium segment has almost as many TDPs in c-stores as craft, while FMB segment has twice the convenience distribution as craft. So while craft c-store distribution up less than 1%, superpremium TDPs +11.8% and FMBs +9.7%. Cases sold for both those segments up double digits YTD in c-stores. Superpremiums +13% and FMBs +31% in grocery stores YTD thru 4/6. Craft segment lost a half-share of beer $$ for 4 wks, all outlet, and down over 1 share of $$ in grocery stores.

Top craft brand families (at least as defined by Nielsen) gettin’ hit. Especially Sam Adams, both $$ and volume down 24-25% for 4 wks thru April 6. Distribution off in high-teens for 4 wks and down by over 20% in key grocery channel. Sierra volume down double digits now for 4 wks, -8% YTD, while New Belgium slipped into negative for 4 wks, -1.4%, holding onto volume gain of less than 1% YTD. Also included in Nielsen craft trends: total Blue Moon family off high-singles for 4 wks and YTD; Leinie Shandies “improving,” cases -18% for 4 wks (5 pts better than YTD trend); Shock Top -29% for 4 wks. Note too that Constellation-owned Ballast Point softening more and more as year goes on, according to read of similar Nielsen off-premise data thru 4/6 by Morgan Stanley analyst Dara Mohsenian. Ballast $$ trends actually steeper than volume and decelerating as time goes on. Down 16% for 52 wks, -26% for 12 wks and -31% for 4 wks, Dara reported this wk.

At same time, Dara (and others) pointing to shift in Easter timing as possible reasons for particular softness across beer over last few weeks. Easter fell on April 1 in 2018, but comin up this Sunday in 2019. Importantly, Spring Break often timed with Easter. So associated sales could be still to come.

The unraveling of Ballast Point, and Constellation’s craft portfolio, took another tuff turn, as co made several moves to “adapt” cost structure amid “declining sales volume,” Constellation told Ballast employees. Constellation will close its Temecula brewpub and Trade Street brewery (sour and barrel-aged facility located next to Miramar brewery) and “pause plans” for any new Ballast brewpubs. It also will “halt” future “broad-based” brand intros. As part of this, Constellation will “more fully integrate” Craft & Specialty unit with larger Constellation Beer Brands Division unit, with exception of craft home mkts – SoCal (Ballast), FL (Funky Buddha) and TX (Four Corners). Those will continue to have dedicated sales support. Altogether, these decisions will result in another round of layoffs, co acknowledges.

This comes shortly after Constellation took a 2nd impairment charge on Ballast Point, bringing total “impairment” charges to near $200 mil since its $1-bil purchase of Ballast. Plus, co sold off its Scripps Ranch facility to upstart hard kombucha co, JuneShine, earlier this yr. While “necessary” to “scale down” costs, such decisions “never easy.” Co hopes to “quickly” make adjustments and work with “impacted employees” to help them get to other oppys either inside or outside co.

Join us for our next exclusive, in-depth webinar to get the lay of craft-land. Craft Update, 2019, a 2-part webinar series, brings you the most comprehensive, accurate and up-to-date review of craft data and news developments. Part II is coming right up, on Wednesday, May 1, from 1-2:30pm EST. Sign up today to review small brewer shipments and share across most US states, deep-dives into top craft suppliers in select states, market-specific craft retail data, important themes and trends driving craft news in early 2019, legal & legislative updates and more. And don’t worry if you missed Part I: the webinar deck, a recording of the webinar presentation and a supplemental report packed with data on top craft supplier shipments, national on- and off-premise retail data and much more are still available. Sign up for the entire 2-part series and save $50. Interested in signing up your whole team or using Craft Update, 2019 as an educational tool for new hires and craft sales specialists? Send a note to This email address is being protected from spambots. You need JavaScript enabled to view it. or call us at (845)507-0040 to find the solution that best fits your needs.

“At the end of the day you are business people. You want to bring in more people.” That blunt acknowledgement came from Ren Navarro, writer/speaker and craft salesperson based in Ontario, Canada during wide-ranging inclusion and diversity-focused panel discussion at CBC last week. Working towards making craft more inclusive is “almost a no brainer” in Ren’s view. “Do you want to make money?” Yet Ren, her fellow panelists and moderator Dr. J. Nikol Jackson-Beckham, the BA’s diversity ambassador, all acknowledged that the issue reaches far beyond the bottom-line. And the work associated with it is far from simple or easy.

“Get Out of the Way” “You need to not pander,” an easy trap to fall into if a biz owner is just focused on the $$, said Maggie Skinner, Milwaukee chapter head of Girls Pint Out, natl group of beer-loving women, as well as sales rep for Wisconsin Dist. And when asked how to avoid pandering, Dr. J. explains that “you should get out of the way or you should form a partnership with a person in that community.” In answer to these “how” questions, she pulled together 3 mini-panels made of individuals that exemplify potential partners from 3 general groups: homebrew clubs, event & community organizers and industry & consumer educators. Whatever you do, be genuine, Dr. J. and all of her panelists stressed. “Try to understand to the best of your ability where they’re coming from” and “the barriers that have existed for them,” whether “financial” or otherwise, according to Rebecca Sandidge, founder of homebrewing club Queers Makin’ Beers, with a couple of chapters including her own 900-strong group in SoCal.

Identify Shared Values Dr. J. referenced a separate diversity-focused CBC seminar she ran on “differentiating between transactional relationships” and “transformative relationships.” That is, the difference between forging a relationship with one of these community groups purely to gain new customers versus forging them in a way that changes how the biz functions and makes it more representative of the community it serves. Valuing “community” and “integrity” and “not selling out” came up “a lot” during CBC, recalled Toni Boyce, writer and outreach director at Beer Kulture. Those values are all “very important to the black community as well,” she pointed out. “If you want to see more of us, we need to see more of you,” Toni said, noting that some “work can’t be done from inside your taproom.” So “get out of your comfort zone” and “see us where we are,” she said. To form “long-term relationships, you have to see people as your neighbors. As someone who’s a part of your community,” she insisted, “not just as a consumer.”

Face the Fear, Talk the Tough Topics Dr. J. also reflected on the “common theme” of “fear” when she talks to a “brewery about taking these steps or about messing up when they reach out.” First, “that’s a real fear and I want to acknowledge it,” she said. But “lots of people buy $80,000 worth of stainless” and “put their own financial futures at risk” when opening or expanding a brewery. “And that seems scary too.”

Part of that involves taking on tough topics. Where’s the line between “urban revitalization” and “gentrification”? That question not explicitly explored during this particular discussion. But concerns about breweries moving into urban centers and participating in patterns of displacement there certainly informed some comments. “These are your neighbors,” said Mike Potter, founder/CEO of Black Brew Culture and co presenter of Fresh Fest, the 1st Black beer festival in the US, started last yr in Pittsburgh. He recognized the big impacts breweries can have on cities and encouraged small brewery owners looking to open in a new area to “identify what are the conditions in the community” and to ask “how can you connect on a genuine level.” Part of the success of Fresh Fest, he explained, was its explicit structure to partner interested breweries with Black community members and activists. Tasking them to collaborate on beers served at the fest established real camaraderie.

Toni spoke more directly on the issue. “For those of you who do have breweries that are in areas of color, that should be your focus. That is your community,” she said plainly. “If it’s about community, are you keeping the money in the community?” Will you “hire people who live there” and “are you distributing beer in that community?” Or perhaps just shipping it out to the suburbs, where craft is more established? Helping breweries connect with those people is one of Beer Kulture’s explicit missions. Beer Kulture founder Dom “Doochie” Cook recently published the book This Ain’t the Beer That You’re Used To, a tool aimed at bridging the gap between high end, flavorful beer and, as they say, “the urban landscape.”

It’s the Experience, Stupid When it comes to homebrew clubs like Queers Makin’ Beers and SoCal Cerveceros, repped by Agustin Ruelas, hosting club meetings is a great place to start. Show up for those meetings yourself, though. “The very first brewery that ever contacted us,” Agustin said, did so thru “a consultant that the brewery hired...to basically engage the community” of Latino homebrewers. The club turned down the offer and then “a year later,” that brewery’s owners reached out, an offer the Cerveceros took. The club now has over 100 members, including employees at numerous LA-area breweries. Agustin is in the process of opening Brewjeria, his own brewery in metro LA. Separately, Anchor Brewing just announced a collab beer with Maltitude, another in-planning brewery by other SoCal Cerveceros members. Homebrew clubs, Agustin and Rebecca agreed, can act as great employee pipelines if breweries know how to use them.

Some panelists, like Ren, have seen a hunger for information and a legitimate interest from local brewers to learn and improve. Ren specifically has had success combining collaboration beer releases with talks, lectures or discussions on the often challenging topics of diversity and inclusion. Other panelists, like Holli McPherson, chapter head of the Grand Rapids Girls Pint Out, have not seen the same eagerness on the part of breweries to connect with her or her group, she shared. GPO chapters all over the country bring together women who love beer. Formal collaboration beers are now national efforts, Maggie pointed out. Hosting GPO events can help breweries carve out a “safe space” for women, something some of Maggie’s members prefer. But generally, GPO members simply seek “their one place that they go all the time,” which can be done by hosting creative, “memorable events,” Holli said. And at the very least, beer biz members can “signal boost,” or simply share these ideas, comments, activities or events with their own, often larger group of followers.

A proposal unlike any we’ve seen before emerged in Delaware recently, seeking to put the Brewers Assn directly into state code. A bill intro’d there last week and already passed by its first committee changes license provisions for DE-based “brewery-pubs” and “microbreweries.” Current law allows suppliers/brewers outside the state to own DE-based small brewers and keep existing license privileges for those in-state operations as long as total production remains under 2 mil bbls. But unlike other states, the code doesn’t include that specific bbl figure. Instead, it points to federal tax code, which provides a reduced per-bbl excise tax rate for some production by brewers under 2 mil bbls. The new proposal seeks to replace the reference to fedl law with a reference to the BA. If passed, out-of-state brewers could keep DE-based brewpubs (capped at 4K bbls) and microbrewers (still capped at same 2-mil-bbl fedl cap) as long as the total co doesn’t sell more than “a craft brewery, as currently defined or as hereafter amended by the Brewer’s Association or its successor organization, is permitted to brew or sell,” according to new proposed language in bill.

Proposals (and laws) in a number of states looked to the BA’s thresholds for guidance over the years. But this is the first proposal we can recall that would explicitly codify not only the current BA craft brewer definition but also any future amendment to its “small” volume-focused pillar. That’s a fairly remarkable shift of power from the DE legislature to current and future BA boards. But that’s not the primary function of this bill, CBN understands. Beyond codifying the BA’s 6-mil-bbl cap, the bill would also pave the way for relatively large brewers, in range of 2 mil to 6 mil bbls, to acquire a DE-based brewer without having to give up any license privileges currently enjoyed by that brewer. Note that the number of potential acquirers that fall in that range are very few and even fewer is the list of brewers in that range that are also currently considered craft brewers by the BA.

Another fast-growing brewer from SoCal, Modern Times, is seemingly takin’ a page from BrewDog’s playbook to help partially fund next round of expansion plans (rather than takin’ the Golden Road). Modern Times will launch an equity crowdfunding campaign so fans of the brand can become partial owners, founder and CEO Jacob McKean announced. WeFunder campaign opens Apr 22. Recall, Modern Times initiated ESOP (employee stock ownership plan) process in 2017, selling 30% stake to employees with goal to work toward 100% employee ownership. Indeed, Jacob views selling to “strategic” or private equity cos as “easy way out.” He has “tried really hard to stay independent during a very competitive time in the industry,” he acknowledges in campaign video. “Those paths are available to us,” but he wants to remain indie and “stay accountable” to fans “on our own terms.” Yet independent, fast-paced growth means Modern Times “really would benefit from a change in ownership structure that gives it some additional support,” he said.

$30 Mil and 68K Bbls in ’18 with Net Loss of $3 Mil, $12.5 Mil in Debt; “May Not be Profitable for Foreseeable Future” Modern Times had one of the largest craft volume gains in the country last yr, and revenue grew even faster, as co pitching this crowdfunding oppy as “rare, rare chance” to “enjoy some of the upside of owning a piece of Modern Times,” Jacob explained and documents detailed. Revs grew 59% to $30.5 mil in 2018. Volume grew 38% to 68,265 bbls as co became top-50 BA-defined brewer in volume. And revs projected to grow another 21% to $37 mil this year. Notably, 34% of dollars are generated from on-site retail sales, vs 60% from wholesale and 7% from direct-to-consumer specialty products. Yet co still far from makin’ money. Co incurred net loss of nearly $3 mil in 2018. Lost $1.26 mil in 2017. It had short term debt of $2.2 mil, and total outstanding debt of $12.5 mil as of Apr 2019. EBITDA grew 38% to $2.9 mil, just 9.5% of total revs in 2018. WeFunder’s “pre-money valuation” of Modern Times is $264 mil at presstime. Essentially 90X co’s 2018 EBITDA!

Modern Times embarked on slew of new tasting room projects and expansions. Now has 5 tasting rooms spanning San Diego, LA and Portland, OR, alongside 3 breweries, 3 kitchens, and 1 coffee roaster. And co plans to open 3 more locations in CA this year, in Santa Barbara, Oakland and Anaheim, it shared. “Unlike companies on NASDAQ, early-stage startups have little operating history” and “financial analysis is not as useful when there is limited data,” co sez following disclosure of financials. Yet among key risks listed for investors to consider were that “we have historically experienced net operating losses and may not be profitable for the forseeable future.” Certainly a watchout and strikingly similar to BrewDog’s current operational “risks” in US (which haven’t stopped its investor Punks from taking part or BrewDog from continuing to grow its biz here).

“Lots of Headroom Left To Grow”; 7-State Footprint; Largest Brewer in Stone Dist With current financials taken into consideration, Modern Times’ aggressive approach toward expansion and growth has in turn created a strong regional craft player in this ultra-competitive craft environment. Along with growing retail presence, distribution sales continue to grow strong double-digits as well, particularly in SoCal home mkt. Modern Times became “top-performing beer brand in Stone Distributing portfolio in both dollars and volume” (aside from Stone brands of course) as sales grew 30%. So volume and $$ with Stone Dist are larger than several other established CA brands in Stone’s portfolio such as AleSmith, Bear Republic and 21A, as well as other locals like Pizza Port and Mother Earth. Then too, no one beer has more than 20% share of total sales, “insulating Modern Times from changes in consumer preferences,” co notes in additional 12-pg presentation. And without spending any money on ads, co “garnered the 6th largest social media following in independent craft beer through organic growth.” All in, there’s “lots of headroom left to grow both in the markets we’re already in and new markets with new tasting rooms and new distribution,” said Jacob. Stay tuned.

Is AB’s Golden Road on its way to becoming a 1-million-barrel brewer? Founder Meg Gill seems to think so, and thinks it can happen “quickly,” she told Forbes in recent interview. “Golden Road should continue to grow in priority for Anheuser-Busch InBev, its wholesalers and retailers in order for it to be the million-barrel brand it can be, quickly,” she said. “I would like to continue to help Golden Road become that household name, expand what a beer can be, and do it in ways that haven’t been dreamt of before!”

Recall, Golden Road grew 70% plus and surpassed 160K bbls in 2018, we estimate. That made Golden Road AB’s largest craft growth brand family and 3rd largest craft acquisition, behind only Goose Island and Elysian. Indeed, Golden Road propelled to natl scale more rapidly than most other acquisitions. First with Wolf Pup Session IPA 15pks, then with Mango Cart (and “Cart” series of fruit-forward wheat ales) and now branching out further this year with natl rollout of Spiked Agua Fresca. That brand under umbrella of support from AB’s bustling Beyond Beer program.

Net-net, Golden Road continues to stand out among AB craft acquisitions, keeping up consistent high growth rates each year since deal in late 2015. And it’s accelerating again this yr. Golden Road $$ sales grew 69%, volume up 78% YTD thru Mar 24 in IRI multi-outlet + convenience data, including up 79% and 93% respectively for latest 4 wks. Flagship Wolf Pup remains up 20% plus. Mango Cart and Fruit Cart Mixer variety pk snagging virtually all incremental gains in scans and became co’s 3d and 4th largest brands. In limited time, new Spiked Agua Fresca Variety Pk $$ sales nearly as large as Melon Cart (+429%) in IRI as co’s 8th largest brand by $$ and 5th by volume (priced notably low, at $26.73/case on avg). And Golden Road seasonal ($$ up 178%), new Hazy LA IPA and coupla smaller new brands continue add to growth as well.

Chaotic, challenging, still growing, not all doom and gloom, time to buckle down, paranoid, vibrant, poignant, natural evolution, and fun. These words and phrases were all used to describe current craft landscape during reprise CBC seminar dubbed “Growing Into the Headwinds, The Sequel,” featuring panel of CA craft brewers – Karl Strauss’ Chris Cramer, Russian River’s Natalie Cilurzo and Firestone Walker’s David Walker – moderated by BMI’s own Benj Steinman. While panelists each acknowledged tuffer times, they’re finding different ways to grow, and seemingly optimistic about the future of craft overall. Panel covered wide range of topics, including influx of brewers, competition, distrib consolidation, innovation, growth, quality, expansion and more. But one key message stood out among room full of young upstart brewers, many with fast-growth trajectories tryin’ to figure out next moves: You can actually decide to “stop growing” volume.

Russian River Now on Rapid Growth Trajectory with Tweaked Model; Plans to Cap at 50-60K Bbls This was Russian River’s key message: “you can actually stop growing,” Natalie stated during Q&A when one fast-growing brewer asked for advice on how much they should look to expand as it’s brushing up against capacity. Instead, look to grow more in profitability, so you can pay down debt, buy out investors, and/or invest in better quality, equipment, personnel, packaging, all panelists agreed. “You can be successful at 10,000 barrels” with “right mix between retail and distribution,” she added.

For Russian River, “we know we have the discipline to stop growing when we want” and co fully plans to cap volume “around” 50-60K bbls/yr, Natalie shared. In many ways, Russian River decision to build $50-mil new brewery came at particularly risky time, amid tuffer competition, less foot traffic from visitors, local distrib consolidation and natural disasters (fires, floods) that devastated Sonoma County and northern CA. Yet Natalie and Vinnie (husband/brewmaster/co-founder) were comfortable with the investment regardless, having already paid off debt, bought out investors and put “everything in line to buy property and make that massive decision,” she detailed. Russian River also readily made shift from 70/30 mix of retail vs wholesale sales to 50/50 model as mkt shifted. And co’s growing rapidly in volume after years of steady growth. Russian River grew nearly 50% to 25K bbls in 2018 and expects to reach 35K bbls in 2019, sez Natalie, adding that “it’s awfully nice to say yes” to distribs and retailers asking for product. But after “interviewing a lot of friends of ours that have much larger breweries,” virtually all of ’em said their “favorite time” was around 50-60K bbls. That’s “our personal comfort zone” and co willing to “slow things down.”

Indeed, there’s a sense of “productive paranoia” in craft that perpetuates investing in expansion and taking financial risks to do so, Chris added. If Russian River said they wanted to build 250K-bbl brewery in 2014, “everyone would’ve said yes,” but Natalie and Vinnie “set out very modest, realistic plans to grow over time” that “seemed appropriate to them and their lifestyle.” Also, brewers like Firestone “started in another time…of indifference to beer” and “we didn’t make any money until we hit 50-60K bbls,” David noted. “The bigger you get the harder it is,” and Firestone’s “as paranoid as everyone else in the room.” So David and co “always lean on the side of prudence” and “patience,” he said, comically adding that “there’s old pilots and there’s bold pilots, but there’s no old bold pilots.”