Adrian Glasenapp is New Belgium's Brand Activist Man; we spelled his last name incorrectly last issue.Go To  

Shmaltz Brewing has "exceeded growth expectations and is already expanding brewery capacity and staff going into its second year" at new upstate NY facility, co announced. Production up 42% in 2014, and "sales have grown over 700% in the Capital region of Upstate, NY" since co opened its $4 mil Clifton Park, NY brewery last July. Recall, Shmaltz had contract brewed all of its volume until opening new facility. He'Brew line is "now placed in over 100 Upstate New York bars, restaurants, and off premise accounts," added co. So with production rampin' up, Shmaltz has subsequently made plans to up annual capacity 65% to "nearly 40,000 bbls" with installation of "four new 200 barrel fermenters," in Aug and Oct 2014. Co has doubled its staff to 24 since opening the new facility, and is looking to hire 3 more new positions too. Shmaltz currently is in 37 states after entering 6 new states earlier this yr - Ky, Vt, Fla, NC, Minn, and Ia.

Troegs to NC, New Storage Spot; Heavy Seas Boosting Brewhouse Size; Large Track 7 Move Pennsy's Troegs Brewing announced entrance in NC market slated for September, along with additional 55K sq-ft storage facility in nearby Elizabethtown, according to Penn Live. NC will be first new Troegs market in about 5 yrs, adding to distribution in 8 states plus DC. Also in Mid-Atlantic region, Heavy Seas shared status of new brewhouse at Maryland plant with fans this week: new system nearly triples daily brewing capacity to between 500-600 bbls/day and should be operational early next month, according to brewery newsletter. Out west, Sacramento's Track 7 just signed lease on new 35K sq-ft facility coming off of production of 1200 bbls in 2013, reports Sacramento Bee. Founded in 2011, Track 7 will keep working at current smaller spot with tasting room then open new facility with initial capacity around 8000 bbls, likely to get much bigger. Track 7 signed on with Markstein to distribute locally back in Feb, with expectation to hit 2800 bbls by end of 2014.  

Not just other beer or alc bev marketers can overstep, infringe on trademarks held by brewers. Lawyers can too. That's exactly what folks at Full Sail allege Atlanta-based firm The Sessions Law Firm, LLC has done in recently filed suit in Portland, Oreg US District Court. And it could be one of the more cut-and-dry infringement suits we've seen in a while. Evidence laid out in suit shows almost identical use of Full Sail's shield-shaped Session logo (with addition of an "s" and replacement of "PREMIUM LAGER" with "LAW") by Sessions Law Firm "on a paper bag designed and distributed for the express purpose of holding a can or bottle of beer," according to filing. The bags, shown holding a 12 oz can in evidence, use the same shape "shield" and the same font in black-and-white; digital uses of the logo shown in suit use same red color-scheme as Full Sail's Session line. The use of the mark in conjunction with DUI-defense lawyers deemed "direct and malicious" by Full Sail, as well as "intentional and unjustified interference" with its biz. By "marketing services on the Internet using counterfeit versions" of the Session logo, Sessions Law has potential to confuse customers and has already led "at least one" of Full Sail's "contractual business partners" to question the use. Full Sail seeks damages, attorney's fees in request for jury trial, but it may not get that far. On its surface, the firm's use of the mark is so strikingly similar that it seems like a quick lifting of Full Sail's logo and the mark currently not used on firm's website. Settlements common in trademark issues, so discussion in this case could be to determine how much harm the firm's use of the mark did rather than anything else.  

Up, up and away: the number of operating breweries in the US topped 3000 by the end of June, hitting 3040 mid-way thru 2014, according to the Brewers Assn count. That's the highest it's been since the 1870s, according to blog post from BA economist Bart Watson. Recall BA director Paul Gatza predicted the brewery count to pass the 3000-mark by the end of June at NCSLA (see June 18 issue) and to hit 3200-3350 by yr-end. Brewery-in-planning count now tops 2000 too, Bart noted, while reminding that "what it means to be a brewery is shifting, back toward an era when breweries were largely local, and operated as a neighborhood bar or restaurant." By the way, matching the 1873 brewery-per-capita rate with current US population would put brewery count over 30K, "unlikely," Bart says, but continued growth means "resurgence of American brewing is far from over."  

General health of portfolio, including huge pop from new focus on Namaste, led to up-beat half-yr report from Dogfish Head sales veep Adam Lambert. Total biz up 16% thru end of June, so Dogfish Head is right on target to hit "internal goal" of 235K bbls in 2014 (over 202K bbls last yr). Flagship 60 Minute IPA still growing, "up mid-teens," Adam wrote, in addition to 90 Minute +30%. Total 8-brand IPA portfolio up 20%, including smaller brands Sixty One +53%, Burton Baton "up high teens" and 120 Minute doubling. But Namaste, DFH's riff on Belgian witbier style, more than 8X where it was at this time last yr, largely thanks to addition of 6-pks (and likely plenty of focus, too). The co isn't the only one reporting "a challenge" in Spring, particularly associated with seasonal program, but its entry, Aprihop, still up 30% this yr, and tart summer-brand Festina Peche off to strong +27% start. Dipping into some IRI stats, Adam shared that 7 of DFH's brands make top-50 list 750 ml bottles in grocery channel and its total portfolio +27% in full IRI picture. The co continues to hire regional managers to assist with distrib execution too, now at 20 and "not stopping there," Adam wrote, as "the fight continues."  

Harpoon joined New Belgium, Full Sail, Alaskan, Deschutes (and possibly others) going ESOP route to resolve succession/ownership issues. Original shareholder group transferred 48% of ownership to ESOP, Harpoon announced today. Remaining 52% still in hands of co-founder Dan Kenary, who now becomes CEO, and 6 other long-term shareholders, Dan told CBN earlier today. The other co-founder, Rich Doyle, steps down from CEO role, but will remain on hand part-time to focus on "key marketing and sales initiatives" as well as new biz development. Rich is "built into the DNA of Harpoon and always will be," Dan said. No other mgmt changes on tap.

Harpoon started looking at succession/ownership issues about 2 ½ yrs ago, Dan said, then dropped it for a while, but revisited about a year ago. "All successful private businesses face the same transition/ownership issues," Dan pointed out, and with he and Rich having been "at it for a long time" (nearly 30 yrs), in their mid-50s and constantly facing questions about Harpoon's future, they needed to make decision. They looked at all the "regular suspects": going public, strategic buyers, private equity, next generation, etc. They did not want to go public, Harpoon isn't a family biz (they decided long ago) and Dan didn't like prospect of driving by the brewery in 5 yrs and seeing it owned by foreign brewer. ESOP "met the needs of liquidity, continuity and providing a solid framework for the future." Also, it "fits beautifully" with Harpoon's culture, its local focus and "our incredible group of employees." Dan introduced the employees to the "strangers in suits" (lawyers and bankers) at emotional mtg at brewery last night. Said he wanted to introduce employees to new owners and asked everyone to turn to person next to them and shake his or her hand as those new owners. Tears and cheers followed. Employees always felt like owners, Dan said. Mgmt challenge is to "drill down" fact that they now are owners. Finally, ESOP route a good fit for craft biz in general, Dan added, given combo of collaborative culture and local roots with resistance to private equity, big/foreign brewer ownership. "I'll think we'll see a bunch more" going ESOP, Dan predicted.

"We Will Run the Business As We Always Have," Sez Dan While ESOP creates a bit of a "convoluted structure," Dan acknowledged, decision-making process no more complicated now than last week. ESOP trustee is appointed by the board but not on the board. All indications so far suggest "we will run the business as we always have, but the employees will benefit in the future in a more tangible way." Previously, key decisions were made by group of senior sales and other execs. Decisions now will be made by same folks, said Dan. Then too, "Rich is not leaving the conversation." Let's hope not, since Rich has been one of the more outspoken, upfront veteran craft brewer execs. Recall that at last November's Beer INSIGHTS Seminar Rich teed up some comments that became key topics in early 2014. "Resistance to [franchise law] carve-outs is a mistake," Rich said then, noting accommodations like the NY law, which he called a "firebreak," and "much better than a forest fire." He also pointed to small brewers' growing political presence and advised keeping internecine industry squabbles out of the public eye, themes that many industry execs picked up earlier this yr.

How's Harpoon's Biz So Far in 2014? "A bit sluggish in the first half," Dan told us. Up low to mid-single digits thru Jun, tho Jun itself +10% and Jul so far strong. "We're bullish" on the rest of the year. Harpoon, like everyone in Mass, took hit from Yuengling intro there in Mar, which "sucked the oxygen out of the market for a while." He thinks Yuengling volume came from both craft and mainstream as there was "plenty of experimentation." Is Harpoon's draft getting smacked, like some other established players, via rotator bars and others seeking new? It's "market by market," with taps harder to hold in some places than others. Constant craving for new "will have to play itself out," in Dan's view: "I'm not sure who it benefits." Harpoon hasn't added new states in 5 yrs (it's in 26). Any new markets on the horizon? "Nothing planned," said Dan.  

Current trademark spat between AB and Natty Greene's Brewing Co in NC getting typical David vs Goliath treatment in local Greensboro media. "We feel this is a little bit of a nuisance suit by [AB] and unfounded," Natty Greene founder Kayne Fisher told WFMY news reporter. "I don't know why they're wasting time on a smaller local brewery," he added. (Natty founders expect to hit around 20K bbls in 2014, they told Triad Biz Journal this Spring.) But, as atty Randy Michels posted on Stites & Harrison website: "To maintain trademark rights…trademark owners like AB must police their marks and take appropriate action against trademark violations." In other words: use it -- and defend it -- or lose it. AB, which owns Natty Light trademark, could have taken tuffer stance than just seeking administrative review of Natty Greene's application, Michels points out, going straight to lawsuit. So "this appears to be a measured response to an application that could arguably diminish the value of the Natty Light brand," he wrote.

Interestingly, AB has been thru this once already. Back in 2006, Pabst sought to trademark "Natty Boh," oft-used moniker for its Baltimore-based National Bohemian brand. AB filed similar opposition. But local folks had been referring to Natty Boh since late 50s, Pabst pointed out, well before Natty Light even conceived. Michels called that a "reverse judo chop," noting AB actually "ended up jeopardizing its Natty Light registration." As most of these issues do, the parties settled. Pabst rescinded its trademark application, but still uses the phrase on its website and in its mktg. Michels suggested there may have been some money paid out. But "outcome makes sense since AB makes nationwide use of the Natty Light mark while 90% of Natty Boh's sales are in Baltimore."

Will that outcome "save" Natty Greene's trademark application? "Probably not," opines Michel. Natty G doesn't have same "previous use" argument that Pabst had and will have to argue there's no likely confusion between the Nattys. Indeed, "we're going to stand firm in our belief that there's no confusion between General Nathanael Greene and what [AB is] alleging," Kayne told the tv reporter. But Michel calls that a "tall order" and predicts a settlement. "Real fight," in his eyes, is whether AB requires Natty Greene's to "stop all uses of the Natty mark. This would require Natty Greene's to change the name of its business to, say, Nathanael Greene's." That's his bet. Ironically, while Natty Greene's may have to lengthen its name, Natty Light went in opposite direction. Beer vets may recall AB originally called the brand Anheuser Busch Natural Light.

Harvester Brewing Turns to Fans for New Name Speaking of name changes, Oregon-based gluten-free Harvester Brewing seeks input from fans for a new name after being asked to stop using the moniker by Hope Family Wines. While trademark disputes between beer companies seem to be popping up every other day, this charge of potential confusion from a winery indicates growing importance of looking beyond beer into other alc bevs when vetting new brand names.  

No doubt it's tough to stand out in crowded San Diego craft scene, so 7-yr-old TailGate Beer packed up its pickup and headed to Tennessee, according to Nashville Biz Journal. After contract brewing in Calif and distributing to 14 states (and internationally), TailGate plans to relocate operations to big 16K sq-ft multi-building spot (on 7 acres, with enormous parking lot, natch). Ajax Turner and L&H distribute the brand locally. Plans include outdoor beer garden/picnic area to open next month, with repairs to buildings/phased construction coming later, according to local station WTVF.  

South Street Brewery, opened back in 1998 in Charlottesville, Va, celebrated its final night under original ownership late last week before prepping to come under the wing of growing Blue Mountain Brewery and Blue Mountain Barrel House family. Downtown location will get facelift, with beer/food menu and brand refresh, according to note from Blue Mtn owner Taylor Smack, who spent 5 yrs brewing at South Street. Name will stay the same under new ownership, as Blue Mtn continues to expand presence in North Central Va. Virginia Eagle will handle distribution for South Street beers once re-opened. Blue Mtn Brewery/Barrel House produced just under 6000 bbls in 2013, according to Brewers Assn stats.  

More states continue to get on board with direct shipping from wineries (South Dakota is considering the move, according to Capital Journal, and it's on the table in Mass now too). But shipping beer directly to consumers remains a harder nut to crack. Most of the new models we've seen enter the space recently have added a local focus to digital presence. NYC now has a slew of web-based outfits picking up beer (and other products) at local retailers and delivering them to users. Some are grocery-based, like NYGrocery or BeerRightNow.com. Drizly, a mobile-app, started simply delivering wine and spirits but has recently expanded to offering beer in the city. Similar outfits have popped up in other major metro areas as well. Just this week, an ex-police officer in San Antonio announced founding of his Beer Runners service, bringing beer and tobacco products to people's doors. Licensed by the state alc commission, founder Gabriel Gutierrez told My San Antonio that c-stores could make deliveries too, but typically don't want to worry about it. At the same time, some craft-focused online beer merchants following the winery model with broader shipping have had a little more trouble. Cascade Brewing of Portland, Oreg suspended shipments of its largely barrel-aged sour brands recently "due to the legalities of sending beer across state lines." The co posted the message to their site within a few weeks of similar announcements from Let's Pour and BeerDreamer, BeerPulse noted this week.