Beer Marketer's Insights

Beer Marketer's Insights

Some serious questions about where craft is, where it's going and how, as well as a bit of news announced by Lost Abbey founder Tomme Arthur at Brewbound Session in Santa Monica this afternoon. First the news: operator of trio of brand families, Lost Abbey, Port Brewing and The Hop Concept, will now have a 4th, acquiring Brutus T Bubbles brand from Hollister Brewing Co this past Sep. Consumers seeking a canned sour beer from Lost Abbey, a longtime sour beer expert, Tomme shared. But his co also realized it "must not cheapen" the "super premium" position of Lost Abbey brand. In comes The Tiny Bubbles "line of live sour beers in a can," fronted by Brutus T Bubbles, embodied by playful cartoon bubble rocker repping a "living Gose style beer finished with Brettanomyces."

Whether it's hard seltzers, kombuchas, ciders, craft spirits or otherwise, craft beer is "losing fans" to these "newer alcoholic trends," sez San Diego Union Tribune in lengthy article headlined: "A better craft? Spirits, seltzer, kombucha and others take aim at craft beer." In San Diego mkt, "alt-beer leaders came from the very industry they are now competing against," paper notes, including former brewers from Ballast Point and Lost Abbey & Saint Archer, Yuseff Churney and Greg Peters, now at Cutwater Spirits (purchased by AB) and Juneshine hard kombucha (bought Ballast Point's Scripps Ranch facility with 100K bbls/yr capacity). And now that San Diego craft beer mkt is "over-crowded" and individual breweries have "struggle[d]" amid "bruising competition," several alt-beer cos see oppy to differentiate vs craft beer.

Another longtime leader in NorCal craft making leadership changes, bringing on experienced wine industry vet to take co to the next level. North Coast Brewing hired Jeffrey Ottoboni as its new CEO, taking over from interim CEO Sam Kraynek, who will retire, it announced today. Recall, Kraynek took over for founder Mark Reudrich earlier this yr, rising up from COO role when Mark retired after 30 yrs (see May 31 issue). And just in early October it laid off some of its sales folks, restructuring that team on path to mid-single digit growth in 2019, Sam confirmed with CBN (see Oct 11 issue).

The Ballast Point deal "stunned" the industry, wrote Chi Trib. That's spot-on assessment of reaction, our sibling pub INSIGHTS Express agreed. Beer folks "stunned" that in 4 short yrs, Constellation went from paying $1 bil for Ballast Point to selling it for mere cents on the $$ (tho purchase price not revealed) to a company most folks had never even heard of. In fact, even Kings and Convicts CEO Brendan Watters thinks it's "unbelievable," he told CBN. Kings & Convicts expects to sell just 660 bbls in 2019, he confirmed. Ballast Point expected to brew around 200K bbls, down from 275K bbls in 2018, we estimate.

Another day, another deal. And this week, unique is perhaps the best word to describe latest tweaks in craft M&A. Anderson Valley Brewing of Boonville, CA expects to change hands once more with the McGee family acquiring the co in a deal expected to close Dec 14. Terms not disclosed, but deal driven by longtime wine and beer industry vet, Kevin McGee, who will take on role of prexy/CEO at AVBC once deal closes. But no layoffs expected as Kevin largely looking to build on work AVBC already doing, bring on new folks to ramp up marketing efforts to help the 32-yr old co navigate increasingly competitive craft space. The co shipped about 39K bbls in 2018, according to state tax reports, selling a little less than half of that within Calif. That total was down about 14% from over 45K bbls in 2017. Tho Calif obviously an important piece of its biz, AVBC still distributes beer, including highly regarded takes on gose style, to 33 states.

Flying Saucer chain of beer-focused pubs will close its Columbia, SC location, it announced this wk. News comes about 2 yrs after co closed its Austin, TX location, claiming impact of new competition from brewery taprooms (see CBN vol 8, no 106). The Columbia location had been open for 16 yrs, will close on Dec 10, co wrote in social media post cited by Post and Courier's Free Times outlet. That location had already seen cuts to menu, beer prices and table service, paper pointed out. Among other recent area closings, location for another beer-centric chain, The Casual Pint, also closed. Columbia had only Flying Saucer in South Carolina, but co operates locations in both Raleigh and Charlotte, NC. Over half of co's 15 locations still in home state of Texas. The Casual Pint, which unlike Flying Saucer is a franchise on-premise op

'Tis the season for holiday-themed beers, but NC's Sycamore Brewing took holiday festivities a little too far this time. Sycamore will likely receive small fine from NC Alc Bev Control Commission for its new Christmas Cookie Winter Ale can design depicting "Kama-Sutra-inspired" cartoon images of "sexual reindeer," reported Charlotte Agenda. You can't make this stuff up. Cans showcase "little red and white cartoon reindeers resembling something out of an '80s Atari video game - except they're in various (very) compromising sexual positions," paper describes. Since these "were never intended for the grocery store shelves or any widespread distribution," co thought it had "freedom to be a little more risqué with the design," co-owner Sarah Brigham explained. But "someone sent an anonymous tip to the North Carolina Alcoholic Beverage Control Commission" and they sent an enforcement agent to review. Unsurprisingly, Sycamore "didn't get approval for the reindeer label," which is "an administrative violation," ALE agent Omar Qureshi told paper. Yet "the whole meeting was cordial and pretty matter of fact." Sycamore ultimately will be issued a notice of violation and will "likely face a fine" between $500-$1,000.

Stories of exploding bottles or cans from small craft breweries occasionally appear on social media and more often in industry discussions. Far fewer have hit even local media, let alone court rooms. But claim of an exploding bottle of Erie Brewing Soleil Shandy that injured a consumer in June of last yr led to lawsuit last Oct, per Go Erie. A little over a yr later, that suit now settled. No details on confidential settlement, tho plaintiff asked for over $225K across 3 counts in suit against brewery, retailer that sold the beer and, in later versions, bev distributor and packaging co.

ABI's Australian biz unit, Carlton United Breweries (CUB), continues to acquire more local Australian craft brewers even while it's still in the process of being sold to Asahi for $11 bil (deal announced Jul 19 hasn't closed yet, CBN understands). CUB acquired Balter Brewing Co, a Gold Coast-based co that was founded in 2016 by "childhood friends including professional surfers Mick Fanning and Joel Parkinson," co announced. CUB also bought Green Beacon Brewing just one mo after Asahi agreed to buy it from ABI, tho CUB had already reportedly "made overtures to Green Beacon months earlier prior to itself being bought out," Financial Review then noted (see Aug 23 issue).

Founder of Agoura Hills, CA-based brewpub Ladyface Ale Companie, Cyrena Nouzille, seeking a bit more freedom and time with family, sold the co to Pete Lee, a longtime fan and patron of the brewery and restaurant, according to the Ventura County Star. Founded in 2009, the LA-area brewpub will mostly see minor changes following deal completed in Oct. Pete is a newcomer to beer and restaurant biz after 20-yr career in software. In addition to new happy hour, menu tweaks at end of this yr will be followed by bigger overhaul of food offerings as well as some design changes to patio and dining room. But "it's still going to be about great food, great beer and a great location," Pete told paper. Cyrena founded the brewpub with brewer Dave Griffiths, who will stay at the co along with rest of staff, a key consideration for Cyrena. Note too, she's served as brewpub member of Brewers Assn board of directors for last 6 yrs. She aims to stay in beer biz as a consultant.