Beer Marketer's Insights

Beer Marketer's Insights

Uber-owned alc bev e-commerce marketplace Drizly insufficiently and continuously failed to protect its data, leading to breaches in 2018 and 2020, FTC alleges in complaint filed against co and its ceo James Rellas yesterday. The 2018 breach should have put the co on notice, in FTC's view. But hackers still found vulnerabilities and obtained data about some 2.5 mil users in 2020.

As Canopy Growth plans to accelerate entry into US under new single entity, "Canopy USA," Constellation is lookin' to cut some of its losses and remove itself as an active participant in the co. STZ plans to "transition existing common shares ownership interest in Canopy Growth into new exchangeable shares," co announced. If transaction is approved, STZ would retain interest in Canopy solely thru "non-voting and non-participating shares." It would have "no further governance rights in relation to Canopy, including rights to nominate members to the Board of Directors of Canopy, or approval rights related to certain transactions, and all nominees of Constellation will resign from Canopy's Board of Directors." Co also intends to surrender its 139,745,453 warrants to purchase Common Shares that woulda given it over 50% ownership of Canopy. STZ subsidiary Greenstar and Canopy also "intend to negotiate an exchange of up to C$100 million" for "outstanding senior notes of Canopy due July 2023." Parties would "terminate the investor rights agreement, administrative service agreement, co-development agreement, and all other commercial arrangements between them and their subsidiaries, excluding the Consent Agreement and certain termination agreements," per release.

Despite goin' against particularly easy comps and in final mo before fall price increases kicked in, domestic taxpaid shipments slipped 0.9% in Sep 2022 vs 2021, Beer Inst estimates. So domestic brewers declined 1.3% in Q3. Still down 3.9% YTD thru 9 mos, shedding over 5 mil bbls to 124.4 mil bbls, according to BI. Gotta note, Q3 was easiest comp of the yr as shipments declined nearly 7% in Q3 2021 vs 2020 including -8% in Sep. Indeed, shipments to wholesalers still rightsizing as distribs are "carefully managing inventories heading into the fourth quarter," NBWA's Lester Jones wrote in Sep Beer Purchaser's Index post (see Sep 29 issue). Imports remain the only category consistently growing orders vs last yr in BPI.

Few other states boast homegrown craft segments as developed as Oregon. Few other states have seen as many 2019 brewery closings as Oreg, too. In late October, longtime Portland brewpub Lompoc Brewing closed (see Oct 25 issue) days before natl Rock Bottom brewpub chain closed its downtown location. Another couple days later, Coalition Brewing also shut down. Recall, 2019 started with closing of one of Portland’s oldest breweries, BridgePort. Closings of mostly small, locally-focused brewers punctuated the yr in Oregon. But many others doin’ just fine.

Uniquely, new brewing outfit Gorges Beer Co acquired Coalition’s physical assets with plan to open in space at least temporarily, the Oregonian explained. Gorges, run by handful of experienced OR beer folks, including brewer from just-closed Lompoc, plans to eventually move to Cascade Locks, some 40 miles outside of town east along the Columbia River. That’s same town where fast-growing Hood River-based pFriem Family Brewers broke ground on its 2nd major brewing facility earlier in yr (see Feb 8, Oct 7 issues). And Portland-based Great Notion, which quickly gained attention for hazy/juicy IPAs, recently announced plan to open a taproom in Seattle.

Some of the largest Oregon breweries, like Deschutes and Ninkasi, now dabble beyond beer. Other smaller players seem far less interested in such experiments. Ninkasi also anchoring new Legacy Breweries platform, doing deas with Laurelwood and Aspen Brewing. Yet visits with a number of the state’s up-and-coming breweries revealed less concern about headwinds experienced by other industry players and more focus on finding stability in their own bizzes. And with the strong growth they enjoy, it’s no wonder they see little need to diverge from paths they’re already following. Read on. 

 

For the first time ever and to kick off Beer Marketer's Insights' 50th Anniversary Year, BMI's senior editorial staff will present a fast-paced, data-driven year-in-review webinar, The Year in Beer 2019. Get a handle on early estimates for total US shipments, top supplier volumes and top brand trends and look back at the crucial stories that shaped the US beer biz in 2019. All before the end of January. This 60-minute webinar plus exclusive Q&A with presenters Benj Steinman and Eric Shepard arrives on January 29, 2020 at 1pm Eastern. Don't miss this unique opportunity to review a transformational year in the US beer biz. At just $150 per person, The Year in Beer 2019 is the most affordable way to start 2020 with the data and insights you need to succeed. Multi-user discounts start at 5 participants from the same organization. Reach out for more details.

Planning "big picture" investment of $12.5 mil to build out a 5+-acre campus in its home town of Astoria, OR, including new brewery with up to 60K bbls annual capacity, Fort George Brewing isn't necessarily rushing to fill it all up. It's already grown considerably since opening in 2007. The co shipped almost 24K bbls in 2018, more than double its volume in 2014, according to Brewers Assn stats. Fort George can probably push current location to tight 30K bbls/yr and expects to hit 26-27K bbls this yr, said co-founder Jack Harris while showing CBN around late last month. So it continues to grow solidly with tight distribution in only Oregon, Washington and Idaho. It doesn't plan to expand beyond the PacNW, either. But Jack still sees the oppy to find what he sees as a "sweet spot" of 40-50K bbls in that footprint. He gives his and co-founder Chris Nemlowill's biz 4-10 yrs to get there and fill up most of capacity at coming brewery, giving the pair "lots of time to decide" what happens from there.

Portland's breakout brewer Breakside will grow high single-digits to about 30K bbls this yr, founder Scott Lawrence told CBN. And it's aiming to keep that pace up for the next decade or so, growing solidly but not too speedily in that time. But free-wheeling discussion in brewery's Slabtown pub in Portland's Northwest quadrant revealed just how many levers Breakside has yet to pull. Over 2/3 of its biz remains draft, packaging just 32% of its beer, basically all in 22oz bombers. So Scott and leadership only now crunching the numbers on a canning line.

One of Oregon's fastest growing brewers of the last few yrs, Pelican Brewing uniquely grew out of an array of coastal operations, all deeply connected to the area's beach-driven tourism biz. Pelican expanded in-state sales by 10X over last 5 yrs, going from just over 2K bbls in 2013 to near 26K bbls by end of last yr. That's vast majority of about 31K bbls it shipped in 2018. In terms of absolute bbls gained over last 5 yrs, only AB's 10 Barrel and MC's Hop Valley grew more in (and out) of OR.

About a year after Dharma Tamm named prexy of Rogue Ales by prior Joyce family leadership, the self-described "hippie" with 6+ yrs experience at AB is stabilizing the iconic Oregon-based brewer. Total Rogue beer depletions should finish yr flat to up slightly, Dharma told Craft Brew News. In particular, it's seeing major boost from intro of Batsquatch hazy/juicy IPA. But Rogue always has a heckuva lot going on across its wide-ranging biz. Flat to up slightly would be Rogue's best volume trend since 2014. It fell from about 117K bbls that yr to under 100K bbls in 2017, dropping another 9% to just below 90K bbls last yr. So even flat a considerable improvement, especially in ever-more-competitive environment.

No matter how saturated the Oregon beer scene seems, as a whole, in-state brewers find ways to grow. That's far from across the board, natch. But collectively, in-state shipments from Oreg brewers still up low single-digits for 12 mos thru Sep 2019, we estimate based on state tax reports. In state where around 300 breweries have about 1/4 of total state beer volume, "local" still plays better than just about anywhere else.