Beer Marketer's Insights
Christian Moerlein Brewing Brings on New Ownership, Leadership; "Big Plans" for Little Kings
Cincy-based Christian Moerlein Brewing, which also sells Hudepohl, Burger and Little Kings brands, simultaneously announced new leadership and ownership team, along with "big plans" to restore Little Kings across the country. Jay Woffington, "former Global President of POSSIBLE, a global digital marketing and advertising agency," will become new CEO, joined by Michael Graham as CFO and Jodi Woffington as CMO, per release. The new leadership group "made an equity investment in the Company" as well, while current CEO, beer industry vet Greg Hardman will stay on as "Founder" and "Chief Market Development Officer, focused on expanding brand distribution." Greg initially founded Christian Moerlein in 2004 when he purchased brand assets previously owned by Hudepohl-Schoenling Brewing. Previously Greg was prexy and CEO of Warsteiner Importers Agency.
Turns out, Kings & Convicts mystery investor with largest stake that helped 'em acquire Ballast Point from Constellation is chairman of The Wine Group (TWG), Richard Mahoney, reported Chi Trib. (This article also apparated in sibling pub INSIGHTS Express.) The Wine Group was formed in the 80s to buy Franzia, became 3rd largest US wine company in the 90s, and also owns brands like Cupcake, flipflop, Benziger, and 7 Deadly among several others, according to its website. So, Richard Mahoney will be the largest individual stakeholder in Ballast Point once deal closes. "He's backed me and I've made him money," K&C CEO Brendan Watters told paper. Brendan also didn't rule out possibility of more acquisitions in the future: "never say never." Stay tuned.
Reuben's Brews, Monday Night, Cape May Growing Double Digits to 20-25K Bbls in Very Different Mkts
Here's a winning combination in craft these days: 7-8 yr-old breweries run by homebrewers who picked up the hobby while working in finance, founded with family and friends and intensely focused on going deep in relatively small footprints. Trio of leaders in "rising stars" panel at Brewbound Live this wk all fit that bill. Seattle-based Reuben's Brews making big jump at new facility in 2019, up 50% or so to around 21K bbls, co-founder/brewmaster Adam Robbings shared. Down in Atlanta, Monday Night Brewing growing around 15% to 22-23K bbls, said co-founder/CEO Jeff Heck. And in NJ, Cape May Brewing should end the yr around 24K bbls, co-founder/CEO Ryan Krill shared, also up about 50% from 16-17K bbls last yr.
Stone and Karl Strauss on Shifting Craft Landscape; Self Dist and Brewpub Benefits; New Brands
As craft landscape continues to shift, both Stone and Karl Strauss CEOs played up advantages they hold as brewers with scale and with triple threat of brewing, self-distribution and brewpub/retail locations thruout Calif at Brewbound Live conference.
One more update on ownership structure of Kings & Convicts, the brewer that acquired Ballast Point from Constellation, surfaced amid continued local media coverage. Tho Richard Mahoney of The Wine Group owns largest stake, each of the 6 investment partners have minority stakes in the co, reported San Diego Union Tribune. Richard owns 24.9%, K&C co-founders Brendan Watters and Chris Bradley each own 20%, and the rest is split between three other investors who remain unnamed. A few other additional tidbits: "expect redesigned labels," "increased advertising and events in the San Diego and California markets," "revival of the barrel-aged beer program" and "renewed emphasis on small batch of experimental beers, including some geared toward specific geographic regions," sez paper. Ballast Lager label, for example, was described b
Local Roots Kombucha Buys Latitude33 Facility as Latitude Forms Alt Prop with Green Flash
More movin' and shakin' in San Diego mkt, as another local hard kombucha brand looks to scale while another sizable local craft brand looks to alleviate mkt pressures. Local Roots hard kombucha acquired Latitude33 Brewing's 16K sq-ft facility in Vista, CA, looking to ramp up production and distribution in 2020 and beyond, reported SanDiegoVille. This is a turnkey purchase including brewing equipment and "many" of Latitude's brewers will now join Local Roots. So Local Roots leaps from 1K bbls/yr to 35K bbls/yr of capacity, just "trying to keep up with San Diego's thirst for our product," mktg director Kory Hunter told paper. Now co feels it can "comfortably service" San Diego mkt and "as far north as Los Angeles County." But co has its "eye on national expansion" as well, sez paper.
Two small AL brewers are joining forces, as Huntsville's Straight to Ale Brewing is set to acquire Tuscaloosa-based Druid City Brewing, cos announced Monday. Druid City co-founder Bo Hicks will "retain ownership" to some degree, and additional investors from Druid City "will get stock," per AL.com follow-up article. "So, it's not like a cash grab," he added. "We saw an opportunity where we could both succeed and be a bigger part of the culture and the community here in Alabama," Bo stated in press release.
Shifting Focus and Funds to Diversity & Inclusion by Some in Craft Landscape; Founders Backlash
In a year full of stories about brewers aiming to diversify their product offerings, US beer (and craft beer) biz has also seen uptick in attention of ways to diversify industry leaders, workers and consumer base. That newfound focus forced upon some players, however. Even following announcement that Founders settled racial discrimination lawsuit brought by former employee Tracy Evans, the co still faces backlash. Choice of some Mich retailers to remove Founders from its shelves and of some consumers to "move on" and shift beer buying to other cos highlighted by recent Marketplace radio story, a slightly different version of which also aired by MI's WKAR station this wk. Notably, it's the co's super high-end specialty products like barrel-aged stout KBS and CBS that are taking the biggest hit, according to owner of Tom's Party Store in East Lansing. Those beers used to sell out on day one at his store. But not this yr. Boycotts "will have a negative effect, at least in the short-term, on their bottom-line," economist at MSU told the station. If that happens, forcing Founders to "improve their culture, then the boycott will have been successful."
New Belgium sale to Lion Little World Beverages/Kirin Holdings is still under review and now has hit an unusual potential road block amid process for approval from NBB's ESOP. "Opposition" to Kirin's "joint venture with a military-run company in Myanmar is creating headwinds for its expansion plans in the US" as NBB's employees are being "urged" by various human rights groups to oppose deal, reported Nikkei Asian Review.
Another Yr of 4% Craft Growth Expected by BA; Record # of Breweries, More Closings & Tax Concerns
After reporting 4% volume gain for small & independent US craft brewers in 1st half, Brewers Assn expects that trend to hold thru 2nd half, for full 2019, it shared in release this wk. Scan trends suggest slower growth, even for isolated BA-defined indie brewers, +2% thru Nov 3 in IRI, the org shared. But that's "similar" to last yr, when total BA-defined craft growth also up 4%. In meantime, record number of breweries continues to rise, topped 8,000 operating US breweries, BA wrote. Org also seeing many more closings, as CBN's coverage this yr can also attest to. BA expects around 300 brewery closings this yr, an uptick from last couple yrs but still fairly low as % of total. Org celebrated other 2019 achievements, including usage of its Certified Independent seal, inclusion of important craft/beer artifacts and stories in new Smithsonian National Museum of American History food/drink history exhibit (which BA helped sponsor) and expansion of its diversity & inclusion resources and event grant program.

