The Craft Brew Alliance plot thickens, as Aug cutoff date fast approaches for ABI to make a qualifying offer at $24.50 per share to acquire remainder of CBA or pay $20 mil fee. Boston-based investment firm, Midwood Capital Management, the 7th largest shareholder in CBA with approximately 2% of co’s primary shares, wrote letter to Independent Directors of CBA earlier this week, urging co to “pursue a sale” either to ABI or a “third party.” There’s now “substantial gap between the Company’s public market trading price and its intrinsic value,” and Midwood encouraged the board to recognize the difficulties CBA faces to sustainably create shareholder value as an independent company,” Midwood founder David Cohen stated in letter. Indeed, Craft Brew Alliance (BREW) stock price peaked at nearly $21/share in Jul 2018 before steadily falling back to ~$15 at presstime. Ultimately, if ABI wants to make Qualifying Offer, CBA’s board “should absolutely accept it” and “the board should do whatever it can to facilitate ABI making an offer.” Yet if ABI chooses to hold off and pay the $20 mil penalty fee, “we believe there is considerable downside for the stock” and “in this event we believe the board should immediately announce a strategic alternatives process with a plan to sell the company.” Despite provisions put in place by CBA and plans to grow this yr, “the combined effects of the trends in the craft beer industry and CBA’s inherent challenges to grow revenue, profitability and cash flow, we strongly believe that the company must seek a sale to maximize shareholder value.”

Some Extra Background from Midwood’s Perspective When Midwood initially invested in CBA Jan 2017, CBA “represented a special situation with several intriguing attributes,” tho not without “its challenges,” David acknowledges. “Specifically, the company’s consolidated revenue growth was poor…the company faced (and continues to face) structural challenges in terms of its profitability due to its scale…with gross and EBITDA margins well below peers.” Fast-forward to present, “revenue growth remained muted…Widmer and Redhook continue to drag on total revenue…and operating income in 2018 was essentially the same as operating income in 2014.” While CBA has “new level of optimism” in 2019, expecting +5-8% growth, outsized investments in SG&A “are material and the bottom line is that there is no assurance that the company’s profitability will grow in 2019.”

Midwood sees 2019 as “pivotal” for CBA and “with the clock ticking on the Aug 2019 deadline…we have a stock whose price has declined 8% since the beginning of 2017.” “In our opinion, despite Kona’s virtues as a brand and its solid growth, the intrinsic value of this highly attractive asset will not be recognized by the public market with CBA as a stand-alone company,” sez David. Plus, “CBA lacks the margin structure and scale of its peers to grow sales, profits and cash flow consistently.” Using Boston Beer’s acquisition of Dogfish as an example, Dogfish received $1,000 per bbl and 2.6x sales based on 2019 volume estimates, vs public mkt currently valuing CBA at $435 per bbl and $1.5X 2019 volume. That’s “a monumental discount in our minds.” Further details are listed in Midwood's letter (see link above).

As pace of innovation in beer keeps ramping up, beer has become “most dependent on innovation” for sourcing its growth among all alc bev categories, Nielsen’s Danelle Kosmal and Kelly Nielsen highlighted at BMI Spring Conference presentation titled “Innovation across the beer industry… everything but beer?” In fact, beer category $$ would be down 3.4% for 104 weeks (2 yr-period) ending Apr 20, 2019 in Nielsen All Outlet data without growth from new items, Danelle noted. Beer $$ up just 0.3% for 2 yrs altogether. Comparitively, wine also very reliant on new items, but sales down just 1% excluding new items vs +2% in toto. And spirits remain healthy regardless, up 1% excluding new items and +2.5% all in. Beer’s also “least efficient” category when it comes to innovation. Total number of new beer items per year grew from 3,854 in Apr 2016 to 4,856 in Apr 2019, accounting for 25% of total category items and just 5% of total $$ sales. Both Spirits and Wine had fewer new items tracked in same period. And new items represented ~10% of total items and ~4% of $$ sales for each. Non-alc bev innovation represents both 5% of new items and 5% of total $$.

Surprise, surprise, craft category is the big reason for beer’s innovation inefficiencies, representing 78% of new beer items and just 39% of new $$. On the flip side, FMB/seltzer space appears underdeveloped with 12% of new items and 26% of new $$. Danelle’s “not saying we should stop innovation in craft,” adding that craft innovation plays “really important role” in fueling growth and “engag[ing] consumers.” But this gap on FMB side could mean there’s “still room for growth on FMB and seltzer innovation,” she added. Much of Danelle and Kelly’s presentation focused on criss-crossing of beverage category styles and flavors, and even the potential upside in ramping up speed of non-alc inspired style launches. Like it or not, all signs point to more “beyond beer” brands to come and then some.

One of more aggressive movers in craft M&A in last couple yrs as well as fast-growing co in scans, CANarchy portfolio topped 420K bbls all in last yr, currently up 30% by $$ in IRI multi-outlet + convenience data thru April 21, after strong double-digit gain last yr too. “We are seeing that growth continue and we are finding new ways to win,” prexy Matt Fraser said during Beer Insights Spring Conference in Chicago yesterday.

More Deals on the Docket? No “Pressure” from Fireman, No IPO (Yet?) And CANarchy still “looking” for new deals. It’s “having fun defying industry trends right now, and looking forward to adding additional partnerships to the collective,” Matt said. Co willing to bring on more brewery partners as long as they’re run by people “you want to work with,” there’s relatively good distrib network alignment, and high quality beer. CANarchy folks “talked to hundreds and hundreds of breweries over the last 5 yrs,” looking for potential brewers to bring in the fold. And these days, conversations happening with “the cream of the crop,” as Matt described them. So, “if we can agree on economics,” co will “likely continue to add to the collective,” he said.

Co’s strategy in building out platform after initial set of partnerships in Utah, Colorado and Michigan pretty clear: geography and population. Most populous states are Florida, Texas and California, where co acquired Cigar City, Deep Ellum and Three Weavers. On CANarchy map, Matt acknowledged a “glaring hole in the Pac-Northwest,” as well as oppys in Chicago area and northeast. And since it’s working on building a “network of facilities” to provide the “freshest beer to our consumer,” could suggest co is looking there for new potential partners. “The consumer wants a fresh, consistent, quality beer every time,” and brewing in different places makes that possible for a national IPA brand, especially. It already makes lead brand Cigar City Jai Alai IPA at 4 facilities, including original Cigar City brewery in Tampa and Oskar Blues plants in Brevard, NC, Austin, TX and Longmont, CO.

But what of prospect that private equity backer Fireman Capital wants out? Matt and co “don't have any pressure to do anything,” he said firmly. Fireman leader Dan Fireman “has publicly said that he can hold this business for a long, long time.” So co’s “got a fiduciary responsibility” to its shareholders (including brewery founders, Matt pointed out) and will “continue to evaluate strategic options down the road.” That includes a public offering. However, on that front, “it will take a year to get ready,” so such a deal is “at least a year out, ’cause we're not getting ready for it.” Therefore, “nothing imminent.”

Cigar City “Runway,” Near 200K Bbls This Yr; National by 2020; Oskar Innovation Leading Its Growth Even after growing to its number 1 brand family by volume last yr, Cigar City still has “a ton of runway,” in Matt’s view. Jai Alai is still up 70% YTD, he said, referencing IRI scan data. Of course, “some of that is entering new markets.” And it’s got more to enter. Cigar City brands currently in 34 states, will be 40 before too long and likely “national by the end of next year,” he said. Currently, Cigar City on pace to reach nearly 200K bbls in 2019, Matt added, up from ~140K bbls last yr.

The strength of Cigar City “has really allowed us to focus on innovation with other brands in the portfolio,” Matt shared, adding “when you don't have a gun to your head,” you “have the advantage to take your time” and get other things right. Innovation so far particularly helping Oskar Blues, which had a “challenging time in ’17 and ’18,” he acknowledged. During the “first four months in 2019...three of the top four brands” in Oskar Blues portfolio “are innovation brands.” Dale’s Pale is still CANarchy’s #2 brand behind Jai Alai, followed by Deep Ellum’s Dallas Blonde. But right after that is new Wild Basin hard seltzer brand under Oskar portfolio. In fact, that means total Oskar and Cigar City shipments neck-and-neck in early 2019, with Oskar taking lead in April and May, Matt shared. There’s “nothing like good healthy competition amongst family,” to motivate the teams.

3 Separate Seltzer Brands Could Help Co “Accelerate” Thru Summer Wild Basin ain’t alone as a CANarchy seltzer entry. Both Perrin and Wasatch/Squatters have entered the fray too. So Matt and co “actually believe that trends are going to accelerate as we move into the summer months,” especially since “a number of things…are really just starting to hit.” Wild Basin already in 30 states, “fifty by the end of June.” Meanwhile, tho it’s seltzer that’s typically counted with flavored malt beverage segment in scans (and BMI data), “we are considering it a craft brand,” Matt said. It’s brewed “on the equipment that we’re making Dale’s Pale Ale on,” and the same brewers could be “scheduled to make Dale’s Pale Ale on Tuesday night and Wednesday they might come in and make Wild Basin.” Tho “the brand itself is marketed by a different team,” with a separate “brand strategy,” Matt still thinks “it’s craft.”

An Oskar “Mistake” or Two, No Emphasis on CANarchy as a Brand, Cannabis Oppys on Hold Separately, CANarchy worked thru a couple of missteps on Oskar brand too. “The 16-pack launch was a mistake,” Matt said frankly. “It doesn’t fit in the cooler very well.” That variety pack switched to 15ers early this yr and “up near 100%,” he said. So he’ll “give away a few points of margin” for a brand to double “any day.” Similarly, when asked about the Guns ‘n’ Rosé issue with band Guns ‘n’ Roses, Matt simply said that’s something they’re “working on” and will “likely make some changes.” Meanwhile, despite experiment with a mixed-brewery-brand variety pack and coming “Collaboratory” brewpub in Asheville, co’s “always going to be about the individual brands that are in the portfolio” and “we never want to take that away,” Matt said. “To us, CANarchy is a brand that resonates with our distribution partners and our retail partners,” but he’s not sure if it will end up being “a consumer facing brand.” Finally, while co has discussed working with cannabis, especially since “the Oskar Blues brand has always had subtle hints” on packaging, co has determined it’s not quite ready for prime time. Legal considerations key to that, Matt suggested. Indeed, “there's a lot of confusion of what's legal and what's not.” So “we’ve talked about it. We've met with THC manufacturers, CBD manufacturers” and are “watching it very, very closely.” So “if the time is right,” CANarchy “absolutely will” play in cannabis space. But there’s “not anything that's in the near future.”

Bill clearing North Carolina brewers under 100K bbls to self distribute up to 50K bbls cleared easily by state Senate, now headed to the governor. Recall, bill introduced via joint press conference featuring NoDa Brewing’s Suzie Ford and NC Beer & Wine Wholesalers Assn exec director Tim Kent. Bill’s passage via “overwhelming majority support” represents “an important step forward for the beer industry adding to existing opportunities for brewers in North Carolina,” the pair said in joint statement. Recall, bill also “provides greatly-expanded legislative support for the state’s Beer Franchise Law and the three-tier system,” the two added.

As the crow flies, St. John Malt Brothers and 95ate5 currently operate brewpubs less than 2,000 feet from eachother in the small community of St. John, Indiana, a town of about 15,000 people less than 10 miles southeast of 3 Floyds’ home in Munster. With plans for a new retail development displacing the current Malt Brothers operation, the co already started working on a new production brewery next door to 95ate5 in order to expand sales and distribution across the state. And founders of 95ate5 (a play on its address, 9585 N Industrial Drive) want to retire and leave their son Bill Mix to lead the biz. That all happens with deal struck between the two less-than-5-yr-old brewpubs, according to the Times of Northwest Indiana.

SJMB’s original location will stay open for next couple of months, before the building is razed for the new development. It’ll also expand seating and re-brand the 95ate5 spot as St John Malt Brothers at 95ate5, while building out the production facility at the same address. That’ll leave one brewpub, with modest system making beers created by both SJMP and 95ate5 (and serving 95ate5’s food menu), and one larger brewery to increase distribution of SJMB brands. New co is already looking to lease a building and open a taproom further south in West Lafayette, outside Indianapolis. Could head east to South Bend to do the same, founder/prexy of SJMP Jim Estry told paper.

Latest craft-on-craft deal is goin’ down in WI, as Wisconsin Brewing will acquire Lake Louie, cos announced. Deal’s been in the works for about 2 yrs and “will allow us to utilize our scale to expand and enhance the Lake Louie portfolio,” Wisconsin Brewing CEO Carl Nolen stated. Lake Louie would’ve either had to borrow money for expansion or “merge with a great group of people whom I’ve known and respected for decades,” explained Lake Louie founder, Tom Porter, who will stay on board and “active” with co. Deal expected to close Jul 1.

Notably, both cos are coming off down years in-state in 2018. Wisconsin Brewing slipped 20% plus to just under 8K bbls in-state, and Lake Louie down 12% to 3,525 bbls, according to WI Dept of Revenue stats. Yet Wisconsin Brewing still managed to grow mid-singles to 18K bbls in total, thanks to solid contract brewing biz. And Lake Louie’s only sold in kegs, creating oppy for packaging boost. In fact, Lake Louie could triple production to 10K bbls, Carl told Madison.com separately, also pointing out co didn’t have sales and marketing dept until now. Lead brand Warped Speed Scotch Ale (1/3 of sales) touted several times by both cos. “We see great growth potential for both of our companies” and “all of us are very optimistic about what the future will bring,” sez Carl in released statement. Tom will retain ownership of his brewing facility in Arena, WI and his three employees, including head brewer, will become Wisconsin Brewing employees as well, according to Madison.com.

$6 Mil Expansion for Up to 80K Bbls Capacity; Contract Brewing NAs On top of acquisition, Wisconsin Brewing is planning $6 mil expansion that will add high-speed canning line and could boost capacity by 80K bbls/yr. And later this fall, co will start contract brewing non-alc bevs for two out-of-state cos. Wisconsin touting the short turnaround time on production of NAs as an extra oppy to “bolster the bottom line.” And canning line will allow them to stop sourcing cans from Stevens Point Brewing and allow for “wider range of other products,” paper noted. Indeed, “we don’t see ourselves as a brewer only,” Carl Nolen told paper. “We’re a beverage company” and “everything is on the table.” Second phase of expansion could add up to 40K sq-ft by mid-2020. Once expansion is complete, Lake Louie’s small-batch production will be moved and Tom will likely look to sell current brewing equipment in Arena.

Competition Revving Up; Lotsa Top WI Brewers Struggling Lately “We’re the first guys doing this but we won’t be the last,” Tom told paper regarding this strategic in-state deal. It’s the first deal between two brick-and-mortar brewers in WI since Miller bought Leinenkugel in 1988, according to release. “Quality control is key but the competition has moved way up” and “now you’ve got to be jet-pilot crazy-good,” Tom added. There are nearly 180 breweries and brewpubs in WI currently. Yet “you don’t see them pouring more concrete at the liquor store…You have to maintain presence” and “that’s where this whole marketing savvy comes in. If you’re trending, great. If you’re not, you’re done.”

To that end, several top WI brewers have been struggling in recent yrs, Madison.com noted. Indeed, Wisconsin Brewing yet to hit 20K bbls after initially planning to build brewery capable of 250K bbls/yr. Capital Brewery production essentially “cut in half” since 2014 when it produced 27K bbls. Down another 16.5% to 13,900 bbls last yr. Ale Asylum dipped 12% to 15,600 bbls in 2018. Stevens Point’s own brands continue to fall double digits; down 23% to 42,600 bbls in 2018 according to state stats. Tho its contract biz has ramped up in recent yrs. And Lakefront continues to seesaw, down 8% to 45,800 bbls in 2018 after growing solidly year prior. One constant growth engine has been New Glarus all along, it grew 5% to 235K bbls in 2018 according to state stats. And a handful of smaller brewers are growing at fast-paced clips. Net-net, WI craft brewery production grew 3.2% to 559,151 bbls in 2018, according to WI Brewers Guild (excluding Leinenkugel, Minhas brands). But as has been the case elsewhere, WI craft much more of a mixed bag these days.

While there have been rumors swirlin’ about Stone Brewing’s distribution operation up for sale, Stone CEO Dominic Engels addressed rumors head-on with “short answer: SDC is not for sale,” he stated in letter to employees, CBN understands. Stone Dist still viewed as “critical” piece of Stone’s biz in its largest mkt and co “committed to the continued growth of SDC,” Dominic sez. Notably, “fueling rumors is common practice by large wholesalers who look to undermine retailer confidence in the alleged seller,” he added. And “given the success of SDC as the largest independent craft beer distributor, whenever there is activity in the market, SDC is a prime target.

Recall, after investing “a significant portion of a decade and significant millions,” Stone sold its Berlin brewery to BrewDog in April (see Apr 5 issue). Private equity firm VMG invested minority stake in Stone back in 2016, initially planning to also invest in various craft brewers and build a platform called True Craft. Yet that never materialized. And several suggest that Berlin sale won’t be Stone’s last move needed to get squared away with VMG.

Stone Distributing has become sizable biz over the years, reaching ~4.5 mil cases sold annually among ~45 brewer partners and over 300 employees covering ~12,700 accounts across 40K square miles of SoCal, San Diego Magazine profiled back in March 2019. Stone is its largest brand of course, yet several other craft brands have risen in rank thru Stone Dist, including Modern Times now the “top-performing beer brand…in dollars and volume,” ahead of AleSmith, Bear Republic, 21A, Pizza Port and Mother Earth, among others (see Apr 19 issue). Notably, fast-growing hard kombucha brand, Boochcraft, listed by Stone co-founder Steve Wagner as another high performing partner in San Diego Mag article.

Distribution biz isn’t without its challenges these days, of course. “We used to look for people who made really good beer. But that’s not enough anymore,” said Steve. “For us to be interested now, a brewery has to have a real plan to grow. They have to have good marketing. And they have to have capacity so they can deliver on sales.” And in general, “unfortunately I think there’s going to be pullback in the number of breweries,” he added. “We’re already starting to see that with some of the recent closings.” But Stone Dist continues to grow.

When Diageo opened its new Guinness Open Gate Brewery outside Baltimore last summer, the co’s beer biz was up high single digits. Volume grew 7.9% yr-to-date thru Aug 4 2018 in Nielsen all-outlet scans. Its FMB biz was up stronger, a major driver of those trends. But the co aimed for and is still working toward “balanced growth,” as prexy of Diageo Beer Co USA Nuno Teles explained during the Beer Insights Spring Conference in Chicago last week. That means getting Guinness to healthier place. After opening the brewery, DBC seeing “acceleration month after month,” with Guinness brand family up less than 2% for 52 wks in Nielsen xAOC + Convenience thru April 20, but up around 4% for the last 4, 12 and 24-wk periods, he shared. It’s driven by double-digit gains for flagship Guinness Draught in cans, up 14.9% for 4 wks thru 4/20 as well as Guinness Extra Stout, +11%. With the opening of the new brewery, the co is looking to “move from Guinness the brand to Guinness the brewer,” Nuno said.

The brewery has led to “an uptick in sales in the local region,” US brewmaster Peter Wiens said during discussion at conference. Co hosted its 300,000th visitor at MD brewery early this month, both Nuno and Peter pointed out. And brewed upwards of 75 different beers on its small brewhouse, served in taproom upstairs. Those visitors from “all 50 states and 35 different countries,” Peter shared. Taproom runs thru about “105 kegs a week” and “our top performer is our Guinness Draught stout.” Number 2 is Guinness Blonde, which Peter and team “freshened up a bit” before re-launching in US last yr.

But co “didn't expect how well our innovation beers would do.” After top-2, ranked by average percent of total sales per week, the next 15 top-sellers in Guinness taproom have all been small innovation brands. Most with “other flavors or other additions to it,” like “fruit purees or hibiscus,” Peter shared. And it’s looking to those experiments and sales figures to look for oppys to expand sales outside of the taproom. Team is looking for “something we think we can scale,” Peter said, recently eyeing a white ale (think Belgian witbier) or a milk stout, which will “probably be the next one.” DBC plans to “test them in the Baltimore region and locally,” then “move out to that next circle,” Peter explained.

A handful of notes from big brewers on their respective craft portfolios surfaced during our Spring Conference last week in Chicago.

AB Craft Collective Up 19%; Hands are “Full” Right Now AB craft unit, now dubbed the Brewers Collective, is up 19% (including VEZA SUR), AB sales vp Brendan Whitworth shared. That’s “outpacing the industry” by 19X essentially, he noted (likely citing craft volume in scan data). And co has devised “very deliberate plans” for home and regional mkts going forward, as well as select national oppys. “We have a nice thing on our hands right now” and “absolutely have our hands full within that space” currently, he added. And only one or two craft founders “decided to move on” post-acquisition.

MC “Fast, Messy, Awesome” with Blue Moon and Saint Archer Gold Both Blue Moon and Saint Archer Gold got shout outs separately for being “fast, messy, awesome” during new CMO Michelle St Jacques’ presentation. “Fast, messy, awesome” is Michelle’s mantra for MC as co ramps up pace of both innovation and marketing/messaging. “You have to move at the speed of culture,” she explained. Blue Moon’s Lunar Lander Keg launch inspired by Jeff Bezos/Amazon’s announcement of new space program called “blue moon” is an example of MC reacting quickly to cultural event and looking to “grab the conversation and connect the brand in a really authentic way.” Recall, Blue Moon is doubling media spend in 2019, Michelle reminded, and campaign just kicking off now. And gotta note, flagship Blue Moon Belgian White much improved, back to growth in latest scan data.

Then too, Saint Archer Gold test is another example of how MC is “moving faster to learn” and “pushing a lot on innovation,” said Michelle. While still very early days for Saint Archer Gold, the brand quickly became Saint Archer’s 2nd largest brand for 4 wks thru Apr 21 in natl IRI multi-outlet + convenience data, testing in just 4 mkts. Its incremental $118K in sales, along with incremental $104K from new hazy IPA, singlehandedly put Saint Archer brand family back on growth track this yr; $$ up 21%, volume up 27% for 4 wks. Saint Archer Gold sold at $29.94 per case on avg for period.

Craft Still Expected to Play “Important Role” for STZ; “Very Pleased” With Funky, Four Corners Asked if Constellation would place “less emphasis” on its craft portfolio going forward, CEO Bill Newlands acknowledged Ballast Point struggles head on, but co remains “very pleased” with both Funky Buddha and Four Corners acquisitions. And craft still expected to play “an important part” in co’s broadening high-end portfolio. But “where the emphasis is going to come from” is “evolving,” he added. Constellation “tried virtually everything” to fix Ballast and it “hasn’t gone particularly well,” Bill said. At time of acquisition, “we saw the quality was just superb” and “that’s why we bought it.” But “reality is the craft market changed.”

Once upon a time, differing views of what to include or not include with the craft segment focused mainly on ownership. A new set of questions now emerges as a growing number of brewers make strategic moves in and around the craft segment. That includes questioning the “beer” part of “craft beer,” for a change. Should hard seltzers made by small, craft brewers be considered craft or flavored malt beverages, where we typically categorize hard seltzers? Recall CANarchy prexy Matt Fraser’s insistence that CANarchy hard seltzer brands are “craft” in his view, during our Spring Conference in Chicago last week (see last issue). Earlier in the day, AB sales veep Brendan Whitworth suggested throwing out traditional beer category segments altogether. His co would rather we all redraw the lines based on a price index to Bud Light (its largest brand and also the largest US beer brand). That would create a much, much larger segment including most craft brands as well as more expensive import brands like Stella Artois (but not Corona and most Mexican imports, let alone lower priced imports like Labatt), a fair few FMBs, ciders and more. But note that some in craft have started introducing brands at a slightly lower price tier. Add another question based on comments during our conference: where to file Guinness volume brewed in the US? Most of the beer sold in the US under the Guinness brand name is the classic stout, still imported by Diageo. But Guinness Blonde is now brewed at the co’s new Maryland facility. And it’s brewing quite a bit of beer in small batches sold almost exclusively at its on-site taproom, similar to thousands of small craft brewers.

This year is marked by such segment-bending moves. Indeed, this kind of line-blurring was one of the key trends across alc bevs and all consumer packaged goods categories pointed to by Danelle Kosmal at Nielsen, during her presentation last week. But how big are these grey areas now and how big will they get? We already offer a look at a “broader view” of craft in our Craft Update webinar series. There, we add in a little less than 3.3 mil bbls of Blue Moon, Leinenkugel and Shock Top volume to the 26.15 mil bbls of craft volume in 2018. Inside that total 29.5 mil bbls, about 6.6 mil bbls is sold by large players like AB, MC, Constellation, Heineken and FIFCO. That includes about 110K bbls of Magic Hat and Pyramid volume sold by FIFCO USA. Not included: the same co’s ventures into high-end, small-batch beers under the Genesee Brewhouse brand (total Genny about 400K bbls last yr, we estimate, mostly subpremium classic Genny Cream; then too, seen those Labatt Citra commercials yet?); Diageo’s beer imports, about 1.2 mil bbls last yr, mostly Guinness. Again, a growing piece of that will not be imported in 2019 (including 600, 700 or 800 bbls of taproom-only brands). And how big will small brewer hard seltzers and other non-beer bevs get this yr? With dozens of brands, including a big push from CANarchy, can they top 100K bbls? It all adds up. And where they’re counted increasingly matters for the same reason that every one of these players turns to these strategic choices: when growth slows, every bbl counts.