Beer Marketer's Insights
Was Discovery Channel's Brewmasters series headed by Dogfish Head founder Sam Calagione simply ahead of its time? Perhaps so, as History Channel will begin airing Dark Horse Nation on the 29th, focusing on Mich's Dark Horse Brewing, according to local Fox station. It joins Brew Dogs from Esquire Network, which follows American travels of BrewDog founders.
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Was Discovery Channel's Brewmasters series headed by Dogfish Head founder Sam Calagione simply ahead of its time? Perhaps so, as History Channel will begin airing Dark Horse Nation on the 29th, focusing on Mich's Dark Horse Brewing, according to local Fox station. It joins Brew Dogs from Esquire Network, which follows American travels of BrewDog founders.
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Ain't just Stone banking on European interest in IPAs. On back of bigger SD brewer's announcement (above), Green Flash flashed out news it's enlisted Belgian Brewery St-Feuillien to produce its flagship brand "for broad distribution throughout Europe." The two breweries have already collaborated on co-branded beers at least a few times, but brewing at St-Feuillien seems "the most logical and efficient way" to bring Green Flash's West Coast IPA to European beer drinkers, founder/ceo Mike Hinkley said in statement. Folks in UK, Belgium, Switzerland, Norway, The Netherlands, Austria, Denmark, Finland, Italy, Germany and France already lined up to distribute bottles and kegs of the brand.
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07/22/2014
Capacity Expansions: Heavy Seas 70K-Bbl Cap by 2015; Against the Grain 5X by Sep; Solemn Oath 2X
Another handful of capacity expansions announced in the last handful of days. Baltimore, Md's Heavy Seas annual production capacity will be just under 70,000 bbls for 2015 after it replaces current system with "60-barrel, 5-vessel system," and receives the "300 barrel bright beer tank" it ordered, on top of the two 240-bbl fermenters already added, co announced. Equipment is expected to be operating by Sep 2014, upping "potential daily production from 200 barrels to 480 barrels." Currently Heavy Seas "on pace" for 45K bbls in 2014.
Against the Grain Brewing, based out of Louisville, Ky plans to quintuple production capacity to 6,500 bbls in 2015 with new 25K sq-ft production/packaging facility that'll also include a tasting room and retail space later on. Additionally co plans to increase barrel aging program capacity "by 10 times." Net-net, new facility expected to up "national and global" sales by 250%, and home-state, Ky sales +150%.
Late last week, Solemn Oath Brewing outta Naperville, Ill announced it will nearly double capacity (+94%) from about 3200 bbls, and start packaging cans "before the end of 2014," co-founder John Barley wrote on company website. Expansion will include a three-vessel 30-bbl brewhouse system, four 60-bbl fermenters and a 60-bbl brite tank to recently added 7,000 sq-ft of warehouse space at the brewery, as well as a nearly 19,000 cubic-foot cooler. Recall, in May, Solemn Oath entered its 1st out-of-state mkt, Wisc with Wirtz Beverage and is distributed by Windy City in Ill. The expansion is expected to satisfy "demand in existing markets for the next several years," sez co.
Against the Grain Brewing, based out of Louisville, Ky plans to quintuple production capacity to 6,500 bbls in 2015 with new 25K sq-ft production/packaging facility that'll also include a tasting room and retail space later on. Additionally co plans to increase barrel aging program capacity "by 10 times." Net-net, new facility expected to up "national and global" sales by 250%, and home-state, Ky sales +150%.
Late last week, Solemn Oath Brewing outta Naperville, Ill announced it will nearly double capacity (+94%) from about 3200 bbls, and start packaging cans "before the end of 2014," co-founder John Barley wrote on company website. Expansion will include a three-vessel 30-bbl brewhouse system, four 60-bbl fermenters and a 60-bbl brite tank to recently added 7,000 sq-ft of warehouse space at the brewery, as well as a nearly 19,000 cubic-foot cooler. Recall, in May, Solemn Oath entered its 1st out-of-state mkt, Wisc with Wirtz Beverage and is distributed by Windy City in Ill. The expansion is expected to satisfy "demand in existing markets for the next several years," sez co.
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Boston Beer again got highest marks of all suppliers in 2014 Tamarron Survey where distribs grade suppliers' overall performance, rated on a 0-5 point scale (3 being "good," 4 = "very good," 2 = "fair," etc.). Boston received a 3.66, an 0.07 increase from last yr. Boston also received highest "relationship" and "performance" grades from distribs; about 94% (of 160 BBC distribs that responded) graded Boston's "relationship" with distribs an A or B, and 89% rated co's performance an A or B. Relationship grade jumped up from 88% of distribs in 2013, while a couple fewer distribs gave high marks for performance grade. In comparison, MillerCoors was only supplier that came close, up 0.12 to 3.60 overall score, and 86% of 221 MC distribs thought "relationship" deserved an A or B tho fewer (71%) thought "performance" deserved high marks. Constellation Beer Brands (3.38) narrowed the overall score gap too, up 0.13 pts and was only brewery that received higher "performance" grade (84% of distribs) than "relationship" grade (82%).
Meanwhile, mixed bag for other top craft cos included in the survey. Sierra and New Belgium each scored a 3.15, tho Sierra's score improved 0.11 pts, while New Belgium score flat. Yet Sierra's relationship grade went down to 77% of distribs giving an A or B, compared to 84% last yr. Then too, first Tamarron survey go-around for Craft Brew Alliance scored them at 2.93, below the 3.09 industry average. Gotta note, number of CBA distribs that participated (56) in this survey was lowest of any by a long shot. Recall earlier this yr, Tamarron released its 1st ever craft-focused survey, in which each of the 8 craft suppliers scored higher than NBB and Sierra, and Odell (4.15) and Deschutes (3.87) both scored well above Boston, tho with far fewer distribs responding to the survey.
Meanwhile, mixed bag for other top craft cos included in the survey. Sierra and New Belgium each scored a 3.15, tho Sierra's score improved 0.11 pts, while New Belgium score flat. Yet Sierra's relationship grade went down to 77% of distribs giving an A or B, compared to 84% last yr. Then too, first Tamarron survey go-around for Craft Brew Alliance scored them at 2.93, below the 3.09 industry average. Gotta note, number of CBA distribs that participated (56) in this survey was lowest of any by a long shot. Recall earlier this yr, Tamarron released its 1st ever craft-focused survey, in which each of the 8 craft suppliers scored higher than NBB and Sierra, and Odell (4.15) and Deschutes (3.87) both scored well above Boston, tho with far fewer distribs responding to the survey.
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07/22/2014
NBB Bringing Up New Natl Field Sales Dir
New Belgium announced promotion of Michael Corrigan, previously sales dir of NBB's Central division, to Natl Field Sales Dir this month as it looks at managing growing salesforce and markets. Addition of new role allows NBB to "spend enough time across all markets to improve our communication between the brewery and the field, while managing consistent sales execution across the country," Joe told CBN. Which leaves him to stay focused on overall "marketplace strategy," working back in Fort Collins to balance "execution in our current footprint and work on expanding nationally with Asheville coming on line." Fifteen yrs in the craft biz, Michael has been with NBB since 2008 after spending time with Boston, Western Bev Distributing and MillerCoors.
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Clicking along +7.5% yr to date, Cleveland institution Great Lakes Brewing is in the midst of a $7-mil expansion of brewing operations at home. Flagship Dortmunder Gold remains about 20% of Great Lakes biz, "about the same" as seasonal Christmas Ale, sales director Mike Doyle told CBN recently, but that's down from closer to a third a few years ago. Dort's up "low-single digits," but, as for many other breweries, GLBC's IPAs are growing faster. Only yr-round IPA, Commodore Perry trending up 18%, with others like Rye of the Tiger, Chill Wave and Lake Erie Monster all now packaged after some "trial and error at the brewpub" in Cleveland. But unlike some other larger brewers, GLBC's seasonal program still "drives a lot of the growth," Mike said. Seasonal brands are up 16-17% yr to date, even as on-premise remains tough. The "challenge is staying in the rotation," Mike reports, as he sees plenty of bars putting a seasonal on for a month then switching it out, rather than keep it for the full 3 months it's available, just the "nature of the beast" these days. As such, "distribution is up on-premise," Mike said, but "velocity's down."
Perhaps it's good then that off-premise is about ? of GLBC's biz, not including its Cleveland pub. And tho the co's variety pack has been available for a "long, long time," Mike said, "in some of our newer markets" it's the "fastest growing because of that sampling experience." It's currently dealing with some out-of-stocks on the pack, up "not-quite-double-digits, certainly growing." New markets have mostly been "filling in footprints" over last few years, rather than new states altogether. "Leading styles vary a lot" market by market, Mike told us, so for example Commodore Perry took the reins in Northern NJ, while Edmund Fitzgerald Porter leads the way in parts of Minn and upstate/Western NY. GLBC will be paying attention to chain footprints too as it chooses new markets, with a particular focus on places "within a 500-mile radius of Cleveland" to expand distribution territory, currently 13 states + DC. Big box retailers like Walmart and Costco have been "big customers for us," the former "for years," the latter a "more recent" addition. That's as GLBC has upped its focus on "key accounts" and keeps hiring across the board: somewhere around 20 new positions this yr, Mike said.
But work conditions at GLBC changing too as Great Lakes moved its offices to a nearby building to make room for current expansion to its brewery. A pair of 600-bbl brite tanks landed earlier in the month and four fermenters the same size are being put in place this week. All should be online and in use come early September, Mike said, bringing GLBC's total capacity somewhere in the 190K-bbl range. Mike expects that capacity to get the co thru 2015 and into 2016, but by the end of this year they'll be analyzing when to fill out their "landlocked" brewery. Much of the juggle for GLBC depends on its big winter seasonal Christmas Ale, already in some tanks, forecasts for which will require new tanks to come online and under allocation "for years." Popularity of Christmas Ale and seasonal precursor Oktoberfest likely means boosting the co's full-yr trends into expected "low-double-digit" range for 2014.
Perhaps it's good then that off-premise is about ? of GLBC's biz, not including its Cleveland pub. And tho the co's variety pack has been available for a "long, long time," Mike said, "in some of our newer markets" it's the "fastest growing because of that sampling experience." It's currently dealing with some out-of-stocks on the pack, up "not-quite-double-digits, certainly growing." New markets have mostly been "filling in footprints" over last few years, rather than new states altogether. "Leading styles vary a lot" market by market, Mike told us, so for example Commodore Perry took the reins in Northern NJ, while Edmund Fitzgerald Porter leads the way in parts of Minn and upstate/Western NY. GLBC will be paying attention to chain footprints too as it chooses new markets, with a particular focus on places "within a 500-mile radius of Cleveland" to expand distribution territory, currently 13 states + DC. Big box retailers like Walmart and Costco have been "big customers for us," the former "for years," the latter a "more recent" addition. That's as GLBC has upped its focus on "key accounts" and keeps hiring across the board: somewhere around 20 new positions this yr, Mike said.
But work conditions at GLBC changing too as Great Lakes moved its offices to a nearby building to make room for current expansion to its brewery. A pair of 600-bbl brite tanks landed earlier in the month and four fermenters the same size are being put in place this week. All should be online and in use come early September, Mike said, bringing GLBC's total capacity somewhere in the 190K-bbl range. Mike expects that capacity to get the co thru 2015 and into 2016, but by the end of this year they'll be analyzing when to fill out their "landlocked" brewery. Much of the juggle for GLBC depends on its big winter seasonal Christmas Ale, already in some tanks, forecasts for which will require new tanks to come online and under allocation "for years." Popularity of Christmas Ale and seasonal precursor Oktoberfest likely means boosting the co's full-yr trends into expected "low-double-digit" range for 2014.
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07/22/2014
Stone Announces Berlin Breweryland, Sells "Futures" to Help Fund; East Coast Announcement Soon
Welcoming back founder/prexy Greg Koch from sabbatical with a literal bang, Stone Brewing announced plans to build $25 mil brewery/restaurant/retail/gardens/event space in Berlin, Germany over the weekend. Standing in front of 43K sq ft red brick gasworks factory built in 1901 that will house brewhouse plus restaurant and retail, Greg appeared at groundbreaking ceremony Saturday on a forklift and "dropped a boulder on a pyramid of mass-produced lagers, soaking the German earth with fizzy yellow brews," the San Diego Union Tribune wrote. But "we have no attitude that we are coming to save anybody or conquer anybody," Greg said. Instead "we are coming to add our shoulder to help push that boulder up the hill," Greg told the Trib, that is, challenging current "industrialized notion of beer," in Germany and beyond.
The brewery, expected to open in late 2015/early 2016, will initially be able to produce around 85K bbls/yr for distribution "throughout Europe," functioning "as the company's international hub," the co announced. Five years after first seeing the site (and over 100 others), Greg and Stone jumped on opportunity to lease the space when new ownership took over recently, CNBC reported. For now, this project represents the biggest bet abroad from a US craft brewer yet. And its construction will run on parallel track to Stone's brewery/restaurant/retail/etc east of the Mississippi, expected to be announced in a month or two.
This addition of 2 tourist-friendly breweries and pair of World Bistro & Gardens Restaurant locations greatly expand Stone's already sprawling empire. Recall, Stone reached $137 mil in revs last yr as it sold 213K bbls, in addition to large wholesaling arm in SoCal (with new distrib kicking off in Hawaii earlier this yr), pair of big San Diego restaurants and a handful of retail operations. It's one of few US brewers with meaningful operations in all 3 tiers. As the co continues to break down notions of what a brewer can be in the US, it'll face a population of lager-lovers largely not used to Stone's hop-heavy beers abroad. "Is Germany - and beyond - ready for an ale invasion?" Tomme Arthur of The Lost Abbey/Port Brewing asked the Trib. At least a couple of German brewing folk indicated to the paper that the country is in fact ready. And Greg told CNBC he's seen "dozens and dozens of IPAs of all styles" being brewed in the country where, like the US, pale-colored lagers dominate beer consumption. "I am not critical of German brewing," Greg said during Saturday's festivities. "I am critical of the state of German brewing…. I'll agree that German commodity beer is better than American commodity beer, but who cares about commodity beer?"
Crowdfunding Campaign Offering $50 "Futures" of 1.5L Collabs, $500 Cases Not Limited to Consumers In perhaps an unexpected turn, brewery announcement came alongside launch of IndieGoGo crowdfunding campaign to help brewery raise funds. Tho plenty questioned Stone's need for the dough via social media, "why not reach out to everybody and ask for a little boost on this project to help us achieve and overachieve," Greg told CNBC. "But we are not angling for handouts," the campaign page says, as "we're collaborative types, and we prefer to call this endeavor a crowd-participation campaign." As incentive, Stone is "offering 'beer futures,'" a linked blog post describes, in the form of 1.5L magnums of collaboration beers to be brewed at the Berlin facility when it's built. "This is in no way a donation," that post insists, while noting that regularly "reinvesting profits" in ops/experimentation "leaves us on a bit of a shoestring budget at times." So "we have enough money to open breweries east of the Mississippi and in Berlin, but not enough to immediately install our dining, garden and retail elements," which is where IndieGoGo comes in.
Plenty of breweries have promised future beers to fans before, often in the form of societies or clubs, membership to which earns folks a portion of super-special brewing projects. But we can't recall seeing a program of this size. Three not-yet-in-existence beers are part of initial offering, others to become available throughout the campaign at $50 per magnum, about $1/oz; the first 1000 folks to ante up for each beer get a bonus $10 gift card (or two) with the purchase. Cases of 12 magnums can be nabbed for $500. T-shirts, glasses and thank you notes available too for smaller amounts, but the beers (unsurprisingly) are the real draw: 385 magnums have been sold by press time, half of them the collab with Scottish BrewDog.
Importantly, "there is no way for us to police who purchases the beer via this platform," (besides underage) so "anyone, including distributing companies and retail operations" can get in on the action, according to campaign page. Stone frames this as incentive for fans to order now rather than hope the beers will become more widely available later, but it seems at least a couple of industry members caught on to the opportunity. Most buyers are coming in for small amounts expected of fans picking up a magnum or two, but a small group of undisclosed purchases remain "private," including one from "Cavalier Distributing," and another ostensibly from a small NH brewery (note that anyone can buy and give themselves any IndieGoGo username as well as donate as "Anonymous"). Stone may not be actively seeking larger purchases from folks in the trade, but at about $78K in day 4, the pace of purchases will need to pick up to hit $1-mil goal by Aug 16. Stone promises to "unlock a special beer" if it hits $2.5 mil and to "bring back a selection of the most popular past collaborations" if it hits "herculean milestone" of $5 mil.
The brewery, expected to open in late 2015/early 2016, will initially be able to produce around 85K bbls/yr for distribution "throughout Europe," functioning "as the company's international hub," the co announced. Five years after first seeing the site (and over 100 others), Greg and Stone jumped on opportunity to lease the space when new ownership took over recently, CNBC reported. For now, this project represents the biggest bet abroad from a US craft brewer yet. And its construction will run on parallel track to Stone's brewery/restaurant/retail/etc east of the Mississippi, expected to be announced in a month or two.
This addition of 2 tourist-friendly breweries and pair of World Bistro & Gardens Restaurant locations greatly expand Stone's already sprawling empire. Recall, Stone reached $137 mil in revs last yr as it sold 213K bbls, in addition to large wholesaling arm in SoCal (with new distrib kicking off in Hawaii earlier this yr), pair of big San Diego restaurants and a handful of retail operations. It's one of few US brewers with meaningful operations in all 3 tiers. As the co continues to break down notions of what a brewer can be in the US, it'll face a population of lager-lovers largely not used to Stone's hop-heavy beers abroad. "Is Germany - and beyond - ready for an ale invasion?" Tomme Arthur of The Lost Abbey/Port Brewing asked the Trib. At least a couple of German brewing folk indicated to the paper that the country is in fact ready. And Greg told CNBC he's seen "dozens and dozens of IPAs of all styles" being brewed in the country where, like the US, pale-colored lagers dominate beer consumption. "I am not critical of German brewing," Greg said during Saturday's festivities. "I am critical of the state of German brewing…. I'll agree that German commodity beer is better than American commodity beer, but who cares about commodity beer?"
Crowdfunding Campaign Offering $50 "Futures" of 1.5L Collabs, $500 Cases Not Limited to Consumers In perhaps an unexpected turn, brewery announcement came alongside launch of IndieGoGo crowdfunding campaign to help brewery raise funds. Tho plenty questioned Stone's need for the dough via social media, "why not reach out to everybody and ask for a little boost on this project to help us achieve and overachieve," Greg told CNBC. "But we are not angling for handouts," the campaign page says, as "we're collaborative types, and we prefer to call this endeavor a crowd-participation campaign." As incentive, Stone is "offering 'beer futures,'" a linked blog post describes, in the form of 1.5L magnums of collaboration beers to be brewed at the Berlin facility when it's built. "This is in no way a donation," that post insists, while noting that regularly "reinvesting profits" in ops/experimentation "leaves us on a bit of a shoestring budget at times." So "we have enough money to open breweries east of the Mississippi and in Berlin, but not enough to immediately install our dining, garden and retail elements," which is where IndieGoGo comes in.
Plenty of breweries have promised future beers to fans before, often in the form of societies or clubs, membership to which earns folks a portion of super-special brewing projects. But we can't recall seeing a program of this size. Three not-yet-in-existence beers are part of initial offering, others to become available throughout the campaign at $50 per magnum, about $1/oz; the first 1000 folks to ante up for each beer get a bonus $10 gift card (or two) with the purchase. Cases of 12 magnums can be nabbed for $500. T-shirts, glasses and thank you notes available too for smaller amounts, but the beers (unsurprisingly) are the real draw: 385 magnums have been sold by press time, half of them the collab with Scottish BrewDog.
Importantly, "there is no way for us to police who purchases the beer via this platform," (besides underage) so "anyone, including distributing companies and retail operations" can get in on the action, according to campaign page. Stone frames this as incentive for fans to order now rather than hope the beers will become more widely available later, but it seems at least a couple of industry members caught on to the opportunity. Most buyers are coming in for small amounts expected of fans picking up a magnum or two, but a small group of undisclosed purchases remain "private," including one from "Cavalier Distributing," and another ostensibly from a small NH brewery (note that anyone can buy and give themselves any IndieGoGo username as well as donate as "Anonymous"). Stone may not be actively seeking larger purchases from folks in the trade, but at about $78K in day 4, the pace of purchases will need to pick up to hit $1-mil goal by Aug 16. Stone promises to "unlock a special beer" if it hits $2.5 mil and to "bring back a selection of the most popular past collaborations" if it hits "herculean milestone" of $5 mil.
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Allagash of Portland, Maine has marched to its own drummer for nearly 20 yrs, with a number of key points of difference from most other craft brewers its size or larger. Allagash sells mostly draft and all Belgian style beers, sells no IPAs, entered no new states in last decade, only builds out to what it thinks it can sell nearterm, and its largest distribs sell neither AB nor MC. Allagash stayed pretty small for most of its existence, but in recent yrs it jumped to more prominence. In 2014, Allagash growing at 24% clip, on pace for approx 72,000 bbls (or just under 1 mil cases), founder Rob Tod told Craft Brew News last week. That's triple what it sold in 2010. And over 10x what it sold in 2006. "The first dozen years were a grind," Rob acknowledged. Allagash sold about 6,500 bbls in 2006. Rob started Belgian-inspired brewery in 1995 and for yrs, it was hard for him to even get his flagship White, a cloudy Belgian wheat beer, into bars.
But persistence paid off and now on-premise draft is key source of strength. About 70% of Allagash biz is still in draft and almost 80% of its biz in White. Do the math. That means well over half of Allagash biz (about 56%) is White on draft. That's the key and so Allagash fanatically focused on keeping it fresh. The average keg in a distrib's warehouse is just 19 days old and the avg keg in the trade is 34 days old. If a keg is older than 60 days, that's a red flag. Allagash White is still growing at a 20% clip. So Allagash remains far more dependent on its growing flagship than most and is without a single hop-forward beer in its portfolio.
Even its distribution network different; its 3 largest distribs not from either AB or MC networks and are each independent/craft and wine. Tho Allagash available mostly in East, Southern Calif is actually co's unlikely #1 mkt via Wine Warehouse, its #1 distrib. Craft Guild of Boston (a unit of L. Knife & Son) is #2d largest and Windy City (Reyes Bev Group) is #3. Of its 25-30 distribs, quite a few are L Knife or Reyes Bev Group. In home state, Allagash (draft and package) likely reached about 1 share of ME total beer mkt in 2013.
Meanwhile, not only has Allagash refused to engage in gold-rush mentality; it hasn't entered a single new state in nearly 10 yrs. Back in 2009, it actually pulled out of about 9 states entirely and parts of others "where we didn't think we could support a full time salesperson," Rob said. He called that move "one of the best things we ever did" business-wise, because "it gave us the ability to focus" on "most relevant markets" at the time. Currently Allagash is in 17 states + DC. And it's going deeper within them.
Only about 5 yrs ago, Rob hired his first salesperson, Naomi Neville from Ri Ra's chain of Irish pubs. Allagash now has 10 full-time sales people, reporting to Naomi. Lately Allagash "having success with…on-premise chains," sez Naomi, listing Legal Seafood, Yard House, Umami Burger as a few that have come on for Allagash. Then too, Rob sees "huge potential" off-premise. Already Allagash does "a lot of business though Costco" and co still hasn't "been able to focus on package" as much since they're "so busy keeping up with draft." Package sales are mostly 4pks and 750ml bottles, and "package is growing faster" than more established draft, sez Naomi. Four packs are typically in the $9.99 - $11.99 range depending on mkt.
Allagash's latest yr round brew Saison is "cranking," already 2nd largest brand in the portfolio, reaching "7% of our business" in Mar and Apr, sez Naomi, while Allagash still gradually "opening up states" with Saison. Allagash has 6 yr-round brews. Several brands now have unified look in 4 packs. Allagash also brews impressive array of specialty, barrel-aged and/or brett brews, many in original much smaller facility next door. Those "might be one percent of our business" tops, with little return on investment in strict financial sense, but it's "an important part of our branding" and "the experience," said Rob. Many of these Belgian style beers are made traditionally using "coolship" (Anglicization of Belgian koelschip). Recently Allagash won a silver medal in Belgian beer competition in Brussels, where they were the only company invited that operates outside of Belgium.
Allagash has evolved from co begun by just Rob Tod into sizable organization that is now 70 people strong. It hired mktg director a few mos back, Jeff Pillet Shore. Jeff spent 7.5 yrs at Nestle and also worked at Stonyfield. His objective is to "get our story out there" in a "sustainable" way that is "true to our roots."
Founder Rob is patient and methodical, perhaps at least in part because of all those yrs where he barely got by. Also notable: absence of outside investors. The co is owned by Rob and his dad. Rob sounds more business-like than many craft founders, frequently referencing standard big business terms like KPIs (key performance indicators-Allagash has lots of 'em) and continuous improvement. And each expansion is, by design, just "incremental," not a swing for the fences. Indeed, the next one will only take them through next year's planned production of over 90,000 bbls. Only last yr, Allagash expanded into new brewhouse and tasting room. That cost Allagash around $4 mil for facility that could someday allow 200K-bbl annual production. Next expansion starting this fall will "dramatically improve work flow" adding space to rearrange equipment in better layout and adding 3 more loading docks up from just 1. These and other improvements, combined with highly differentiated branding, steady but not outsized growth and a high rev per bbl (well over $300), make Allagash a craft brewer to watch. Allagash of Portland, Maine has marched to its own drummer for nearly 20 yrs, with a number of key points of difference from most other craft brewers its size or larger. Allagash sells mostly draft and all Belgian style beers, sells no IPAs, entered no new states in last decade, only builds out to what it thinks it can sell nearterm, and its largest distribs sell neither AB nor MC. Allagash stayed pretty small for most of its existence, but in recent yrs it jumped to more prominence. In 2014, Allagash growing at 24% clip, on pace for approx 72,000 bbls (or just under 1 mil cases), founder Rob Tod told Craft Brew News last week. That's triple what it sold in 2010. And over 10x what it sold in 2006. "The first dozen years were a grind," Rob acknowledged. Allagash sold about 6,500 bbls in 2006. Rob started Belgian-inspired brewery in 1995 and for yrs, it was hard for him to even get his flagship White, a cloudy Belgian wheat beer, into bars.
But persistence paid off and now on-premise draft is key source of strength. About 70% of Allagash biz is still in draft and almost 80% of its biz in White. Do the math. That means well over half of Allagash biz (about 56%) is White on draft. That's the key and so Allagash fanatically focused on keeping it fresh. The average keg in a distrib's warehouse is just 19 days old and the avg keg in the trade is 34 days old. If a keg is older than 60 days, that's a red flag. Allagash White is still growing at a 20% clip. So Allagash remains far more dependent on its growing flagship than most and is without a single hop-forward beer in its portfolio.
Even its distribution network different; its 3 largest distribs not from either AB or MC networks and are each independent/craft and wine. Tho Allagash available mostly in East, Southern Calif is actually co's unlikely #1 mkt via Wine Warehouse, its #1 distrib. Craft Guild of Boston (a unit of L. Knife & Son) is #2d largest and Windy City (Reyes Bev Group) is #3. Of its 25-30 distribs, quite a few are L Knife or Reyes Bev Group. In home state, Allagash (draft and package) likely reached about 1 share of ME total beer mkt in 2013.
Meanwhile, not only has Allagash refused to engage in gold-rush mentality; it hasn't entered a single new state in nearly 10 yrs. Back in 2009, it actually pulled out of about 9 states entirely and parts of others "where we didn't think we could support a full time salesperson," Rob said. He called that move "one of the best things we ever did" business-wise, because "it gave us the ability to focus" on "most relevant markets" at the time. Currently Allagash is in 17 states + DC. And it's going deeper within them.
Only about 5 yrs ago, Rob hired his first salesperson, Naomi Neville from Ri Ra's chain of Irish pubs. Allagash now has 10 full-time sales people, reporting to Naomi. Lately Allagash "having success with…on-premise chains," sez Naomi, listing Legal Seafood, Yard House, Umami Burger as a few that have come on for Allagash. Then too, Rob sees "huge potential" off-premise. Already Allagash does "a lot of business though Costco" and co still hasn't "been able to focus on package" as much since they're "so busy keeping up with draft." Package sales are mostly 4pks and 750ml bottles, and "package is growing faster" than more established draft, sez Naomi. Four packs are typically in the $9.99 - $11.99 range depending on mkt.
Allagash's latest yr round brew Saison is "cranking," already 2nd largest brand in the portfolio, reaching "7% of our business" in Mar and Apr, sez Naomi, while Allagash still gradually "opening up states" with Saison. Allagash has 6 yr-round brews. Several brands now have unified look in 4 packs. Allagash also brews impressive array of specialty, barrel-aged and/or brett brews, many in original much smaller facility next door. Those "might be one percent of our business" tops, with little return on investment in strict financial sense, but it's "an important part of our branding" and "the experience," said Rob. Many of these Belgian style beers are made traditionally using "coolship" (Anglicization of Belgian koelschip). Recently Allagash won a silver medal in Belgian beer competition in Brussels, where they were the only company invited that operates outside of Belgium.
Allagash has evolved from co begun by just Rob Tod into sizable organization that is now 70 people strong. It hired mktg director a few mos back, Jeff Pillet Shore. Jeff spent 7.5 yrs at Nestle and also worked at Stonyfield. His objective is to "get our story out there" in a "sustainable" way that is "true to our roots."
Founder Rob is patient and methodical, perhaps at least in part because of all those yrs where he barely got by. Also notable: absence of outside investors. The co is owned by Rob and his dad. Rob sounds more business-like than many craft founders, frequently referencing standard big business terms like KPIs (key performance indicators-Allagash has lots of 'em) and continuous improvement. And each expansion is, by design, just "incremental," not a swing for the fences. Indeed, the next one will only take them through next year's planned production of over 90,000 bbls. Only last yr, Allagash expanded into new brewhouse and tasting room. That cost Allagash around $4 mil for facility that could someday allow 200K-bbl annual production. Next expansion starting this fall will "dramatically improve work flow" adding space to rearrange equipment in better layout and adding 3 more loading docks up from just 1. These and other improvements, combined with highly differentiated branding, steady but not outsized growth and a high rev per bbl (well over $300), make Allagash a craft brewer to watch.
But persistence paid off and now on-premise draft is key source of strength. About 70% of Allagash biz is still in draft and almost 80% of its biz in White. Do the math. That means well over half of Allagash biz (about 56%) is White on draft. That's the key and so Allagash fanatically focused on keeping it fresh. The average keg in a distrib's warehouse is just 19 days old and the avg keg in the trade is 34 days old. If a keg is older than 60 days, that's a red flag. Allagash White is still growing at a 20% clip. So Allagash remains far more dependent on its growing flagship than most and is without a single hop-forward beer in its portfolio.
Even its distribution network different; its 3 largest distribs not from either AB or MC networks and are each independent/craft and wine. Tho Allagash available mostly in East, Southern Calif is actually co's unlikely #1 mkt via Wine Warehouse, its #1 distrib. Craft Guild of Boston (a unit of L. Knife & Son) is #2d largest and Windy City (Reyes Bev Group) is #3. Of its 25-30 distribs, quite a few are L Knife or Reyes Bev Group. In home state, Allagash (draft and package) likely reached about 1 share of ME total beer mkt in 2013.
Meanwhile, not only has Allagash refused to engage in gold-rush mentality; it hasn't entered a single new state in nearly 10 yrs. Back in 2009, it actually pulled out of about 9 states entirely and parts of others "where we didn't think we could support a full time salesperson," Rob said. He called that move "one of the best things we ever did" business-wise, because "it gave us the ability to focus" on "most relevant markets" at the time. Currently Allagash is in 17 states + DC. And it's going deeper within them.
Only about 5 yrs ago, Rob hired his first salesperson, Naomi Neville from Ri Ra's chain of Irish pubs. Allagash now has 10 full-time sales people, reporting to Naomi. Lately Allagash "having success with…on-premise chains," sez Naomi, listing Legal Seafood, Yard House, Umami Burger as a few that have come on for Allagash. Then too, Rob sees "huge potential" off-premise. Already Allagash does "a lot of business though Costco" and co still hasn't "been able to focus on package" as much since they're "so busy keeping up with draft." Package sales are mostly 4pks and 750ml bottles, and "package is growing faster" than more established draft, sez Naomi. Four packs are typically in the $9.99 - $11.99 range depending on mkt.
Allagash's latest yr round brew Saison is "cranking," already 2nd largest brand in the portfolio, reaching "7% of our business" in Mar and Apr, sez Naomi, while Allagash still gradually "opening up states" with Saison. Allagash has 6 yr-round brews. Several brands now have unified look in 4 packs. Allagash also brews impressive array of specialty, barrel-aged and/or brett brews, many in original much smaller facility next door. Those "might be one percent of our business" tops, with little return on investment in strict financial sense, but it's "an important part of our branding" and "the experience," said Rob. Many of these Belgian style beers are made traditionally using "coolship" (Anglicization of Belgian koelschip). Recently Allagash won a silver medal in Belgian beer competition in Brussels, where they were the only company invited that operates outside of Belgium.
Allagash has evolved from co begun by just Rob Tod into sizable organization that is now 70 people strong. It hired mktg director a few mos back, Jeff Pillet Shore. Jeff spent 7.5 yrs at Nestle and also worked at Stonyfield. His objective is to "get our story out there" in a "sustainable" way that is "true to our roots."
Founder Rob is patient and methodical, perhaps at least in part because of all those yrs where he barely got by. Also notable: absence of outside investors. The co is owned by Rob and his dad. Rob sounds more business-like than many craft founders, frequently referencing standard big business terms like KPIs (key performance indicators-Allagash has lots of 'em) and continuous improvement. And each expansion is, by design, just "incremental," not a swing for the fences. Indeed, the next one will only take them through next year's planned production of over 90,000 bbls. Only last yr, Allagash expanded into new brewhouse and tasting room. That cost Allagash around $4 mil for facility that could someday allow 200K-bbl annual production. Next expansion starting this fall will "dramatically improve work flow" adding space to rearrange equipment in better layout and adding 3 more loading docks up from just 1. These and other improvements, combined with highly differentiated branding, steady but not outsized growth and a high rev per bbl (well over $300), make Allagash a craft brewer to watch. Allagash of Portland, Maine has marched to its own drummer for nearly 20 yrs, with a number of key points of difference from most other craft brewers its size or larger. Allagash sells mostly draft and all Belgian style beers, sells no IPAs, entered no new states in last decade, only builds out to what it thinks it can sell nearterm, and its largest distribs sell neither AB nor MC. Allagash stayed pretty small for most of its existence, but in recent yrs it jumped to more prominence. In 2014, Allagash growing at 24% clip, on pace for approx 72,000 bbls (or just under 1 mil cases), founder Rob Tod told Craft Brew News last week. That's triple what it sold in 2010. And over 10x what it sold in 2006. "The first dozen years were a grind," Rob acknowledged. Allagash sold about 6,500 bbls in 2006. Rob started Belgian-inspired brewery in 1995 and for yrs, it was hard for him to even get his flagship White, a cloudy Belgian wheat beer, into bars.
But persistence paid off and now on-premise draft is key source of strength. About 70% of Allagash biz is still in draft and almost 80% of its biz in White. Do the math. That means well over half of Allagash biz (about 56%) is White on draft. That's the key and so Allagash fanatically focused on keeping it fresh. The average keg in a distrib's warehouse is just 19 days old and the avg keg in the trade is 34 days old. If a keg is older than 60 days, that's a red flag. Allagash White is still growing at a 20% clip. So Allagash remains far more dependent on its growing flagship than most and is without a single hop-forward beer in its portfolio.
Even its distribution network different; its 3 largest distribs not from either AB or MC networks and are each independent/craft and wine. Tho Allagash available mostly in East, Southern Calif is actually co's unlikely #1 mkt via Wine Warehouse, its #1 distrib. Craft Guild of Boston (a unit of L. Knife & Son) is #2d largest and Windy City (Reyes Bev Group) is #3. Of its 25-30 distribs, quite a few are L Knife or Reyes Bev Group. In home state, Allagash (draft and package) likely reached about 1 share of ME total beer mkt in 2013.
Meanwhile, not only has Allagash refused to engage in gold-rush mentality; it hasn't entered a single new state in nearly 10 yrs. Back in 2009, it actually pulled out of about 9 states entirely and parts of others "where we didn't think we could support a full time salesperson," Rob said. He called that move "one of the best things we ever did" business-wise, because "it gave us the ability to focus" on "most relevant markets" at the time. Currently Allagash is in 17 states + DC. And it's going deeper within them.
Only about 5 yrs ago, Rob hired his first salesperson, Naomi Neville from Ri Ra's chain of Irish pubs. Allagash now has 10 full-time sales people, reporting to Naomi. Lately Allagash "having success with…on-premise chains," sez Naomi, listing Legal Seafood, Yard House, Umami Burger as a few that have come on for Allagash. Then too, Rob sees "huge potential" off-premise. Already Allagash does "a lot of business though Costco" and co still hasn't "been able to focus on package" as much since they're "so busy keeping up with draft." Package sales are mostly 4pks and 750ml bottles, and "package is growing faster" than more established draft, sez Naomi. Four packs are typically in the $9.99 - $11.99 range depending on mkt.
Allagash's latest yr round brew Saison is "cranking," already 2nd largest brand in the portfolio, reaching "7% of our business" in Mar and Apr, sez Naomi, while Allagash still gradually "opening up states" with Saison. Allagash has 6 yr-round brews. Several brands now have unified look in 4 packs. Allagash also brews impressive array of specialty, barrel-aged and/or brett brews, many in original much smaller facility next door. Those "might be one percent of our business" tops, with little return on investment in strict financial sense, but it's "an important part of our branding" and "the experience," said Rob. Many of these Belgian style beers are made traditionally using "coolship" (Anglicization of Belgian koelschip). Recently Allagash won a silver medal in Belgian beer competition in Brussels, where they were the only company invited that operates outside of Belgium.
Allagash has evolved from co begun by just Rob Tod into sizable organization that is now 70 people strong. It hired mktg director a few mos back, Jeff Pillet Shore. Jeff spent 7.5 yrs at Nestle and also worked at Stonyfield. His objective is to "get our story out there" in a "sustainable" way that is "true to our roots."
Founder Rob is patient and methodical, perhaps at least in part because of all those yrs where he barely got by. Also notable: absence of outside investors. The co is owned by Rob and his dad. Rob sounds more business-like than many craft founders, frequently referencing standard big business terms like KPIs (key performance indicators-Allagash has lots of 'em) and continuous improvement. And each expansion is, by design, just "incremental," not a swing for the fences. Indeed, the next one will only take them through next year's planned production of over 90,000 bbls. Only last yr, Allagash expanded into new brewhouse and tasting room. That cost Allagash around $4 mil for facility that could someday allow 200K-bbl annual production. Next expansion starting this fall will "dramatically improve work flow" adding space to rearrange equipment in better layout and adding 3 more loading docks up from just 1. These and other improvements, combined with highly differentiated branding, steady but not outsized growth and a high rev per bbl (well over $300), make Allagash a craft brewer to watch.
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