Beer Marketer's Insights
As we've noted numerous times, numerous biz models of all shapes, sizes, portfolio structures, you name it, are succeeding in craft these days. But one curious fact popped in a review of BA massive data crunch in the May/June New Brewer. Eight of the top 10 brewpub chains lost volume last yr, including each of the top 6: Rock Bottom, Gordon Biersch Brewery Restaurants, McMenamins, Ram/Big Horn, Granite City and Gritty McDuffs. Collectively, they shipped 135K bbls last yr, down 5%. And that's while brewpubs overall put up a 12% growth trend to 956K bbls. What happened? In an overview of the biz, BA director Paul Gatza and economist Bart Watson pointed out that this was the 2d straight yr the chains "struggled" and suggested this performance "raises questions about how these groups can tap into the dynamism of the overall category." They also pointed out that the restaurant biz was soft last yr, "which may have hit the brewpub groups harder as they tend to be in higher profile locations." Yet, again, the overall brewpub biz, representing 1,243 outlets with 109 new openings, was pretty healthy. Only gainer among top-10 brewpub chains in 2013: Hofbrauhaus Brewery and Biergarten, up 23% to 7500 bbls. Smoky Mountain held at same volume, but Iron Hill and Great Dane each off slightly.
Newsletter
Craft Brew News
Tagged under
06/03/2014
How Manhattan Beer Adds to 28 Craft Suppliers; 2 Mil CEs of BA Craft in 2013; 100K CEs of Shiner?
Large NYC-metro distrib Manhattan Beer looks toward 35 mil CEs in 2014, projecting 2.4 mil CEs of that to come from BA-defined craft suppliers, sales veep and craft mgr Rob Mitchell told Brewbound crowd last week. The wholesaler handles brands from 28 craft suppliers, just over half of its 54 total beer suppliers (almost 1800 beer SKUs) in its territory across all of NYC, Long Island and northern suburbs. It shipped 2 mil CEs from those BA-defined craft brewers in 2013. And as much as 5% of that, 100K CEs came from first year of selling Shiner brands, Shiner sales and marketing chief Charlie Paulette told the NY Times. Just 19% of Manhattan's total biz is on-premise, Rob said, that's cuz almost 30% goes to home-d's (odd NY hybrid that can sell to consumers and other retailers, usually package-heavy) and another 30% goes to "grocery/deli," mostly thousands of NYC bodegas and corner stores. Year-to-date, 65% of the on-premise accts Manhattan serves (about 7300) bought at least one craft brand, up from 55% for all of last year. About 5700 off-premise accounts (45% of those Manhattan serves) bought at least one craft brand so far in 2014.
Rob and Manhattan have "no magic formula" for adding new craft brands to its book. That's a "situational decision," Rob said. He did share the co's "brand funnel" that guides these choices though. That process begins with assessing "consumer/market need" for the brand followed by Manhattan's "ability to absorb" it. They look at whether the brand will "add value" to Manhattan's biz and "enhance existing relationships" before determining if the "$$ work." Speaking about franchise law, including recent NY state carve out, Rob said Manhattan includes a "termination clause in every contract" because "we don't believe in doing business with people who don't want to be in business with us." He referenced difficulties evaluating value of purchasing a brand from another distributor (if it's more than that distrib has ever made from that brand and gives that competitor a big leg-up, maybe it's not worth it), but also the value of "small, niche distributors" to small brands. Indeed, he noted recent debut of "at least 3 new distributors in our market," and "there's room for 'em."
Rob and Manhattan have "no magic formula" for adding new craft brands to its book. That's a "situational decision," Rob said. He did share the co's "brand funnel" that guides these choices though. That process begins with assessing "consumer/market need" for the brand followed by Manhattan's "ability to absorb" it. They look at whether the brand will "add value" to Manhattan's biz and "enhance existing relationships" before determining if the "$$ work." Speaking about franchise law, including recent NY state carve out, Rob said Manhattan includes a "termination clause in every contract" because "we don't believe in doing business with people who don't want to be in business with us." He referenced difficulties evaluating value of purchasing a brand from another distributor (if it's more than that distrib has ever made from that brand and gives that competitor a big leg-up, maybe it's not worth it), but also the value of "small, niche distributors" to small brands. Indeed, he noted recent debut of "at least 3 new distributors in our market," and "there's room for 'em."
Newsletter
Craft Brew News
Tagged under
06/03/2014
Power Hour: Craft Gained Most Share of Total Alc On Premise; Up 8.5% to 25+ Share of Beer in 2013
>Craft dollar sales gained 0.5 share to 7.9 of total alc on premise, while all other beer segments collectively shed 0.9 share to 23 of total alc bevs sold, noted GuestMetrics VP of Strategy and Insights, Peter Reidhead during 1st ever on-premise BA power hour. Majority of drop came from premium light segment, while "imports showed some weakness in the on-premise space," and made up most of the rest of the share loss, along with premium regular. Meanwhile spirits/cocktails (+0.16) and wine (+0.24) each gained about 0.2 share, to 43 and 26.1 respectively. So share shed by other beer segments on-premise was "primarily at the hands of" craft segment, noted Peter.
Craft sales finished up 8.5%, +2 share to "over 25%" of total beer sales on premise in 2013. Recall, with GuestMetrics and Restaurant Sciences merged, their data now pulls from 8,078 locations (6,701 of them full service restaurants) tracking "over $15B in full service food & beverage sales from over 500MM checks per year"; 18,055 beer brands, 6,193 spirits brands, 12,352 cocktail items, and 26,514 wine brands (24,754 food items, 4,249 non-alc beverage items). Earlier in the yr, GuestMetrics reported slightly different #'s since their data set was smaller - 4,300 locations representing $10 bil plus in sales - before merging with Restaurant Sciences.
Craft saw highest growth trends - $$ up 13%, units up 9% - in fine dining segment, which overall was healthiest on premise channel. In comparison, craft sales up 8% in Casual Dining, up 6% in Bars. Still "very favorable numbers," thought Peter, considering overall traffic declined about 2% in both Casual Dining and Bars. Total beer sales were highest during happy hour ("between 3-6 pm") with craft at 9% and all other beer segments at 27% of total alc sales. That's still behind spirits 40% of $$ during happy hour. Spirits led all categories during dinner (6-10 pm) too, at 38% of sales, yet spirits really winning late night occasions (10 pm or later). Nearly 60% of late night alc purchases were spirits, compared to all beer comprising just 29%, craft dipped to just 6% of late night alc sales in 2013.
"Large Oppy" for Craft Natl Casual Restaurant Chains; Craft-Centric Chains Rely Lots More on Beer Then too, beer sales in "craft beer-centric" restaurant chains made up more than 4x the amount of total company sales than in "natl casual chains." This reveals "a large opportunity" to "push casual chains into the beer space," thought Peter. Indeed, only 6% of natl casual chain total sales are derived from beer, compared to 27% of craft beer-centric chains. Craft was the only beer segment that grew in craft beer-centric retailers (makes sense), up 5.3 share of total beer to 60% of $$ sales, compared to near 2 pt share drops in both import and premium light. premium regulars (-1.2) and "remaining segments" (-0.4) shed the rest that craft gobbled up. Meanwhile natl casual chain sales still comprised of 51% premium lights, compared to just 14% craft, 10% imports. So plenty more "future" growth oppys there, sez Peter. Not that natl casual dining chains aren't already starting to embrace craft; craft beer gained 3 share of natl casual chains tracked by GuestMetrics.
Brand "Proliferation" at Accelerated Rate; Growth Coming from Higher Priced Brands; IPAs +2.6 Share The sheer number of brands being introduced to the mkt is increasing at an accelerated rate; each qtr in 2013 saw # of brands increase at an increasing pace, from 6,040 in Q1 to about 7,400 in Q4. Over 10K unique craft brands were sold in 2013 on premise tracked by GuestMetrics, and 60% total craft sales (in units) were from just the top 200 brands. Those 200 brands' sales up 6%, units up 3%, while remaining 9900+ brands up 12%, units up 9%. "The flip side of this is volume per brand is declining," noted Peter. "There is still a role for premium light beer," since volume per brand for these are 5x more "efficient," than the avg craft or import brand. Restaurants, bars and off-premise retailers alike still hafta figure out the right "balance" for their stores, sez Peter.
While majority (65%) of craft beer sales were from brands priced in the $5.50 and below price-range, "almost all of the growth…came from more expensive brands," priced over $5.50, GuestMetrics found. There were 3,802 brands priced higher than $6 that accounted for 17% of total sales and were up 16%. Another 1,560 brands were priced between $5.50 and $6, and grew 19% to 18 share of total sales. In comparison, "Tier 3" ($5.00 to $5.50) amounted to 36% of $$ sales, and grew 4%. "Tier 4" (less than $5) comprised the remaining 29% share of $$; up only 2%, and unit sales actually dipped 1%.
Then too, total IPAs on fire on-premise too; snagged 2.6 share of craft $$ on premise to 18.3 in 2013, and "are continuing to do very well in 2014," sez Peter. In fact, two IPAs, Lagunitas IPA and Bells Two Hearted Ale, were two craft brands that gained most share on premise in 2013. Styles that gained next highest share gainer were "fruit/pumpkin/flavored," and "imperial IPA," each up 0.3 share. Meanwhile Amber ales (-0.9) were "biggest share donor," and 3 other styles - "Belgian dark strong" (-0.8), "bock" (-0.6), and "pale/bitter" (-0.5) - each dropped half a share or more.
Craft sales finished up 8.5%, +2 share to "over 25%" of total beer sales on premise in 2013. Recall, with GuestMetrics and Restaurant Sciences merged, their data now pulls from 8,078 locations (6,701 of them full service restaurants) tracking "over $15B in full service food & beverage sales from over 500MM checks per year"; 18,055 beer brands, 6,193 spirits brands, 12,352 cocktail items, and 26,514 wine brands (24,754 food items, 4,249 non-alc beverage items). Earlier in the yr, GuestMetrics reported slightly different #'s since their data set was smaller - 4,300 locations representing $10 bil plus in sales - before merging with Restaurant Sciences.
Craft saw highest growth trends - $$ up 13%, units up 9% - in fine dining segment, which overall was healthiest on premise channel. In comparison, craft sales up 8% in Casual Dining, up 6% in Bars. Still "very favorable numbers," thought Peter, considering overall traffic declined about 2% in both Casual Dining and Bars. Total beer sales were highest during happy hour ("between 3-6 pm") with craft at 9% and all other beer segments at 27% of total alc sales. That's still behind spirits 40% of $$ during happy hour. Spirits led all categories during dinner (6-10 pm) too, at 38% of sales, yet spirits really winning late night occasions (10 pm or later). Nearly 60% of late night alc purchases were spirits, compared to all beer comprising just 29%, craft dipped to just 6% of late night alc sales in 2013.
"Large Oppy" for Craft Natl Casual Restaurant Chains; Craft-Centric Chains Rely Lots More on Beer Then too, beer sales in "craft beer-centric" restaurant chains made up more than 4x the amount of total company sales than in "natl casual chains." This reveals "a large opportunity" to "push casual chains into the beer space," thought Peter. Indeed, only 6% of natl casual chain total sales are derived from beer, compared to 27% of craft beer-centric chains. Craft was the only beer segment that grew in craft beer-centric retailers (makes sense), up 5.3 share of total beer to 60% of $$ sales, compared to near 2 pt share drops in both import and premium light. premium regulars (-1.2) and "remaining segments" (-0.4) shed the rest that craft gobbled up. Meanwhile natl casual chain sales still comprised of 51% premium lights, compared to just 14% craft, 10% imports. So plenty more "future" growth oppys there, sez Peter. Not that natl casual dining chains aren't already starting to embrace craft; craft beer gained 3 share of natl casual chains tracked by GuestMetrics.
Brand "Proliferation" at Accelerated Rate; Growth Coming from Higher Priced Brands; IPAs +2.6 Share The sheer number of brands being introduced to the mkt is increasing at an accelerated rate; each qtr in 2013 saw # of brands increase at an increasing pace, from 6,040 in Q1 to about 7,400 in Q4. Over 10K unique craft brands were sold in 2013 on premise tracked by GuestMetrics, and 60% total craft sales (in units) were from just the top 200 brands. Those 200 brands' sales up 6%, units up 3%, while remaining 9900+ brands up 12%, units up 9%. "The flip side of this is volume per brand is declining," noted Peter. "There is still a role for premium light beer," since volume per brand for these are 5x more "efficient," than the avg craft or import brand. Restaurants, bars and off-premise retailers alike still hafta figure out the right "balance" for their stores, sez Peter.
While majority (65%) of craft beer sales were from brands priced in the $5.50 and below price-range, "almost all of the growth…came from more expensive brands," priced over $5.50, GuestMetrics found. There were 3,802 brands priced higher than $6 that accounted for 17% of total sales and were up 16%. Another 1,560 brands were priced between $5.50 and $6, and grew 19% to 18 share of total sales. In comparison, "Tier 3" ($5.00 to $5.50) amounted to 36% of $$ sales, and grew 4%. "Tier 4" (less than $5) comprised the remaining 29% share of $$; up only 2%, and unit sales actually dipped 1%.
Then too, total IPAs on fire on-premise too; snagged 2.6 share of craft $$ on premise to 18.3 in 2013, and "are continuing to do very well in 2014," sez Peter. In fact, two IPAs, Lagunitas IPA and Bells Two Hearted Ale, were two craft brands that gained most share on premise in 2013. Styles that gained next highest share gainer were "fruit/pumpkin/flavored," and "imperial IPA," each up 0.3 share. Meanwhile Amber ales (-0.9) were "biggest share donor," and 3 other styles - "Belgian dark strong" (-0.8), "bock" (-0.6), and "pale/bitter" (-0.5) - each dropped half a share or more.
Newsletter
Craft Brew News
Tagged under
06/03/2014
Tex Small Brewers Production Up 44% to 266K Bbls; Big Growth "Expected for Next Several Yrs"
Excluding Gambrinus' Spoetzel Brewery, 98 craft brewers from Texas collectively upped production 44% to 265,958 bbls in 2013, according to Texas Brewers Guild. That's up 0.4 share to 1.36 share of "beer consumed in Texas." "It's just starting to take off now," Karbach brewmaster, Eric Warner told Houston Chronicle, adding "I think that kind of growth should be expected for the next several yrs." At the top of the list, Houston's Saint Arnold Brewing up 19% to 58,397 bbls in 2013, according to BA's New Brewer. Co "expects to brew at least 65,000 barrels," this yr, sez paper. Not far behind, Real Ale Brewing up 23% to 53,330 bbls in 2013. And red hot Karbach Brewing actually added the most new bbls in 2013 of this group. The rapidly expanding Northwest Houston brewery graduated to regional status in just its 3rd yr of production, shipping 18,627 bbls in 2013; up about 10,500 bbls, +128%. Recall, "construction is under way" for its new $15 mil, 19,000 sq-ft facility, noted paper. Those 3 brewers combined were about half of total production by Tex craft cos (excluding Spoetzl) in 2013.
So other 135K bbls came from a long list of micros budding on the scene. Many of the fastest growing Texas microbreweries only popped up in the last 3-4 yrs, including (in order of highest total production): Austin Beerworks (+72%), Deep Ellum Brewing (+661%), Revolver Brewing (+3253%), Thirsty Planet Brewing (+58%), No Label Brewing (+171%), Pedernales Brewing (+201%), and Lakewood Brewing (+605%) - to name just a handful of the fastest growers, according to New Brewer. Each of these cos grew nearly 2,000 bbls (at least) and both Deep Ellum and Revolver grew 5,000 bbls in 2013. And the longer established top local micros still growin' double digits too: Southern Star (+16%) and Independence Brewing (+11%), 512 Brewing (+25%), and Live Oak Brewing (+27%). "As the BA doubles, we'd expect this number (in Texas) to double as well," Tex Brewers Guild's executive director, Charles Vallhonrat, told Houston Chronicles.
Including Shiner Beer (+8%), total Texas craft production up 17.6% to 833,191 bbls in 2013. That's 5.3% of total US craft production for the yr.
So other 135K bbls came from a long list of micros budding on the scene. Many of the fastest growing Texas microbreweries only popped up in the last 3-4 yrs, including (in order of highest total production): Austin Beerworks (+72%), Deep Ellum Brewing (+661%), Revolver Brewing (+3253%), Thirsty Planet Brewing (+58%), No Label Brewing (+171%), Pedernales Brewing (+201%), and Lakewood Brewing (+605%) - to name just a handful of the fastest growers, according to New Brewer. Each of these cos grew nearly 2,000 bbls (at least) and both Deep Ellum and Revolver grew 5,000 bbls in 2013. And the longer established top local micros still growin' double digits too: Southern Star (+16%) and Independence Brewing (+11%), 512 Brewing (+25%), and Live Oak Brewing (+27%). "As the BA doubles, we'd expect this number (in Texas) to double as well," Tex Brewers Guild's executive director, Charles Vallhonrat, told Houston Chronicles.
Including Shiner Beer (+8%), total Texas craft production up 17.6% to 833,191 bbls in 2013. That's 5.3% of total US craft production for the yr.
Newsletter
Craft Brew News
Tagged under
"Craft velocity at retail has more than DOUBLED since 2010," and "continues to post double digit growth year after year," noted BWC Company's Bump Williams in his latest update. That's helped drive total $ velocity of beer to be "growing period to period…turning nearly 4x faster than Wine and nearly 7x faster than Spirits," in IRI data. Editor's note: Craft $ velocity per point of distribution up 21% in IRI multi-channel + c-store thru Apr 27. Twenty-six of top-50 craft breweries velocity up double-digits and 43 outta the top-50 growing thru Apr 27. Total beer $ velocity up nearly 5%.
Compared to craft, imports are "turning 2x faster," riding "strength and phenomenal growth and appeal of select Mexican and Belgian import brands and breweries," sez Bump. Yet craft velocity is growing more than any other segment, +$443,000 per point of distribution thru Apr 27. Imports velocity is growing next fastest at +$360,000, followed by super premium (+$323,000), cider (+$142,000), and PAB's (+$137,000). So high-end (including super premium) $ velocity up $1.4 mil per point of distribution. Meanwhile, premium segment $ velocity "is relatively flat," tho still highest velocity by far, and hard to argue against "persuasive" dollar sales to retailers. But "it's the trends that scare me a little bit and I think that's what retailers are starting to look at a bit more closely as they set their shelves for the Beer season." "The question to me is….whether or not this segment deserves any additional space at retail and whether or not there are too many duplicate packages on the shelves that force OOS's on the quickest moving Premium packages?" Importantly, it's likely "that we will NOT see too much cold shelf space added…to the beer category over the next several years," thought Bump. Yet Bump stresses the point that craft "is not being sold at all points of distribution," leaving more oppys to get into new spaces in coming yrs.
Compared to craft, imports are "turning 2x faster," riding "strength and phenomenal growth and appeal of select Mexican and Belgian import brands and breweries," sez Bump. Yet craft velocity is growing more than any other segment, +$443,000 per point of distribution thru Apr 27. Imports velocity is growing next fastest at +$360,000, followed by super premium (+$323,000), cider (+$142,000), and PAB's (+$137,000). So high-end (including super premium) $ velocity up $1.4 mil per point of distribution. Meanwhile, premium segment $ velocity "is relatively flat," tho still highest velocity by far, and hard to argue against "persuasive" dollar sales to retailers. But "it's the trends that scare me a little bit and I think that's what retailers are starting to look at a bit more closely as they set their shelves for the Beer season." "The question to me is….whether or not this segment deserves any additional space at retail and whether or not there are too many duplicate packages on the shelves that force OOS's on the quickest moving Premium packages?" Importantly, it's likely "that we will NOT see too much cold shelf space added…to the beer category over the next several years," thought Bump. Yet Bump stresses the point that craft "is not being sold at all points of distribution," leaving more oppys to get into new spaces in coming yrs.
Newsletter
Craft Brew News
Tagged under
06/03/2014
$1 Bil In Capacity Expansion "Needed" for Indie Craft, Sez Demeter Grp; 40% Say Blue Moon "Craft"
Almost 40% of 650 male survey participants consider Blue Moon a "'Craft' beer," according to a Google Consumer Survey commissioned by investment bank Demeter Group and cited in new Demeter presentation titled "Protecting Craft Against Pseudos," (their word, not ours). That's a small sample, but results fascinating. Of 7 brands, Blue Moon put in craft barrel by largest portion of respondents, closely followed by Sam Adams, considered craft by just over 39%. About 27% considered Sierra Nevada part of craft club, ahead of 25% calling Redhook, Pyramid and Lagunitas "craft" and 24% attaching the much-argued-about adjective to Shock Top. Odd that so few would recognize leading craft breweries as such - could it be some respondents only consider much smaller brands "craft" and others weren't familiar with some of these brands at all? Demeter analysts put all these brands and others into a "Craft to Consumer" bucket that they estimate were about 21.5 mil bbls back in 2012 (including brands to be brought into Brewers Assn definition after recent change). This "broader" consideration of the term likely exacerbated by retailers that "co-mingle" BA-defined craft brands with so-called "Pseudos," marketed by larger brewers.
The "craft to consumer" group captured about 19% of retail beer $$ in 2013, presenters estimate. Assuming 15% growth for next 2 years and +8% after that in a flat overall volume market, BA-defined craft could hit 18.4 share of volume by 2020 while "craft to consumer" could be over 24 share, Demeter projects. Based on consistent 2% growth in overall beer $$, this larger group of brands would capture about a third of all beer sales. "In other categories, Pseudos have captured a large portion of the opportunity," the presentation notes, highlighting personal care, bread and restaurant industries. So these brands "will intrude on craft's growth," Demeter asserts. "To guard against" them, BA-defined craft brewers will need to keep expanding capacity thru 2020 by well over a million bbls per yr. That could get the group to 41.6 mil bbls of capacity and 37.4 mil bbls of production by then. But the pricetag would likely hover somewhere around a billion dollars. Analysts note that brewers under 100K bbls have "limited growth equity options," and taking on debt and sales/partnerships come with their own baggage. So the $1 bil figure begs the question asked by a reader in response to the "$87 million being invested in Denver area" on expanding breweries (see last issue): "where are all these shekels [$$] coming from?"
The "craft to consumer" group captured about 19% of retail beer $$ in 2013, presenters estimate. Assuming 15% growth for next 2 years and +8% after that in a flat overall volume market, BA-defined craft could hit 18.4 share of volume by 2020 while "craft to consumer" could be over 24 share, Demeter projects. Based on consistent 2% growth in overall beer $$, this larger group of brands would capture about a third of all beer sales. "In other categories, Pseudos have captured a large portion of the opportunity," the presentation notes, highlighting personal care, bread and restaurant industries. So these brands "will intrude on craft's growth," Demeter asserts. "To guard against" them, BA-defined craft brewers will need to keep expanding capacity thru 2020 by well over a million bbls per yr. That could get the group to 41.6 mil bbls of capacity and 37.4 mil bbls of production by then. But the pricetag would likely hover somewhere around a billion dollars. Analysts note that brewers under 100K bbls have "limited growth equity options," and taking on debt and sales/partnerships come with their own baggage. So the $1 bil figure begs the question asked by a reader in response to the "$87 million being invested in Denver area" on expanding breweries (see last issue): "where are all these shekels [$$] coming from?"
Newsletter
Craft Brew News
Tagged under
As Smuttynose Brewing Co marks its 20th Anniversary this yr, its set to open its new 14-acre, 40,000 sq ft facility in Hampton, NH this weekend. "It's fantastic. It's a showpiece," Scott Schaier, exec dir of Beer Dist of New Hampshire told local Sunday News. He sees it as a "destination for 'hop heads.'" Smuttynose, capacity-constrained and +3.8% in 2013 to 42,300 bbls, originally estimated cost at $16 mil, and founder Peter Egleston said new estimate of around $24 mil was a "shockingly high number," but added, "I don't regret making the choices we've made." Some of costs overruns were associated with Smuttynose efforts to meet fed energy conservation and environmental standards which meant co spent money on "constant consultations" with power co's, engineers and others. New "campus" which includes a barn, orchard, a farmhouse (which will house a 95-seat restaurant) and eventually a beer garden this fall, could add 50 new jobs on top of 60 Smuttynose currently employs. Smuttynose, which is in 23 states and recently expanded to Puerto Rico, will up its international footprint as well (already in Sweden) with shipments to UK, South Korea and Germany "in coming weeks."
Meanwhile out in Colorado, Great Divide Brewing (also celebrating its 20th Anniversary) has disclosed plans for a new $38.2 mil, facility or "Colorado Country spread," as Denver Post called it. Great Divide purchased 5 acres in "booming" River North neighborhood to build a 70,000 sq ft warehouse, "a top priority" for "space-crunched" brewer. Phase one of project calls for demolition of an auto parts warehouse beginning in next month or so and scheduled to be completed by Spring '15. Facility will include a new canning line so Great Divide can begin offering new package option, noted founder Brian Dunn. The River North facility will eventually be able to produce 250K bbls annually, but start-up capacity will be in 80-100K range as Brian pointed out. They have time to grow into that after brewing 37,100 bbls last yr. A 2d phase of project will eventually add a tasting room and beer garden in next 2-3 yrs. "That is the part that is kind of hard to communicate with people," said Brian. "Yes, we are starting. We are building a warehouse right away. But all the good stuff that people want to come to see won't be there for a couple of years." His current downtown tap room gets about 1,800 visitors per week and 400 tours weekly as well.
Report notes that Great Divide's plans are "latest ambitious expansion from one of the state's legacy independent craft breweries," including Breckenridge Brewery's "farm style" $20 mil, 12 acre facility and Avery Brewing's new $27.4 mil brewery and restaurant in Boulder. "These breweries made it through some really tough times in craft brewing," noted Steve Kurowski, mkg dir for Colorado Brewers Guild. "Every one of these breweries going through an expansion right now probably had a day they didn't know they were going to be open the next day."
Look for more from Craft Brew News more often in 2014!
Keep up with us between issues at our blog, and on Twitter: @BeerInsights, @CraftInsights and @ BevInsights
Meanwhile out in Colorado, Great Divide Brewing (also celebrating its 20th Anniversary) has disclosed plans for a new $38.2 mil, facility or "Colorado Country spread," as Denver Post called it. Great Divide purchased 5 acres in "booming" River North neighborhood to build a 70,000 sq ft warehouse, "a top priority" for "space-crunched" brewer. Phase one of project calls for demolition of an auto parts warehouse beginning in next month or so and scheduled to be completed by Spring '15. Facility will include a new canning line so Great Divide can begin offering new package option, noted founder Brian Dunn. The River North facility will eventually be able to produce 250K bbls annually, but start-up capacity will be in 80-100K range as Brian pointed out. They have time to grow into that after brewing 37,100 bbls last yr. A 2d phase of project will eventually add a tasting room and beer garden in next 2-3 yrs. "That is the part that is kind of hard to communicate with people," said Brian. "Yes, we are starting. We are building a warehouse right away. But all the good stuff that people want to come to see won't be there for a couple of years." His current downtown tap room gets about 1,800 visitors per week and 400 tours weekly as well.
Report notes that Great Divide's plans are "latest ambitious expansion from one of the state's legacy independent craft breweries," including Breckenridge Brewery's "farm style" $20 mil, 12 acre facility and Avery Brewing's new $27.4 mil brewery and restaurant in Boulder. "These breweries made it through some really tough times in craft brewing," noted Steve Kurowski, mkg dir for Colorado Brewers Guild. "Every one of these breweries going through an expansion right now probably had a day they didn't know they were going to be open the next day."
Look for more from Craft Brew News more often in 2014!
Keep up with us between issues at our blog, and on Twitter: @BeerInsights, @CraftInsights and @ BevInsights
Newsletter
Craft Brew News
Tagged under
"I don't know that it's more difficult," Sierra Nevada sales/mktg director Joe Whitney said on midday sales panel at yesterday's Brewbound Session in Boston, just "a different kind of brand building than it was five years ago," even more different than 5 or 10 years before that. Tho speakers laid out plenty of caveats, potential difficulties, and what-not-to-do's, there's still lots of upside and lots of winners. Of course, "we can all come together and collectively be brothers," Narragansett prexy/ceo Mark Hellendrung said early on, but "someone's gonna be the biggest and someone's gonna be the smallest." Even so, from a $$ perspective, craft segment can "easily represent a third of the industry over time," Craig Farlie of Farlie Turner & Co said. In fact, "I don't think we could possibly come up with a scenario where the craft beer market is healthier," he claimed.
Perhaps only a broadly healthy market could support brands and bizzes as diverse as those detailed across the day: a 100+ year-old brand revamped, spun into craft-like territory and attracting young New England consumers; regional brewers on both coasts making widely varying beers, some focusing on contiguous territory expansion and others picking and choosing sometimes far-flung markets; contract models; lager-only; session-only; Belgian-only; cider-only; warehouses in the 'burbs; itsy-bitsy brewery tap rooms in hot urban neighborhoods; high-end bottle shops; big chains; large single-entity wholesalers and craft-focused alliances of multiple smaller distribs. Add in marketing firms, financial firms, strategic planning and sales firms of varied sizes and clientele. Anyone not getting in on the action?
Sales Tips: "Next Frontier," Don't Program "Lagging" Brands, Allocation There are "so many emerging craft bars," Allagash's national sales director Naomi Neville said on that sales panel with Joe and Marty Ochs, now of his own E3 Craft Strategies firm after time as Ninkasi's sales veep and others before. This "next frontier of accounts," in the form of sports bars and Irish pubs, is ripe for the picking, Naomi said. And the good thing about these accounts is they "don't change their menu," at least not very often. But all three wholeheartedly agreed that new space opening up for craft brands is by no means keeping up with the growing number of craft brands and brewers.
In his presentation, Marty stressed the importance of programming on growth brands not "lagging" brands. He's also seen incentivizing goals leading to quick drop-offs after they're hit, so don't just set goals, make plans for going above and beyond. Speaking of above and beyond, Joe shared story of how "we f***ed up" roll-out of Torpedo 5, 6 years ago. Sierra "under-forecasted," thought they'd sell 10K bbls of the brand in year 1 and that "twenty would be more than enough." Since it was an early brand to use a bunch of Citra hops, Sierra "could only make so much a week to make it thru the year," allocated all of it, ended up doing 40K bbls and "could've made 3 times that." But that allocation "came across as a great tactic" to Marty, who helped Ninkasi roll out lagers under allocation so they "knew what was gonna go out." Joe and his team "spend way more time forecasting now than I ever thought we would," he said. "Your sales force constantly has to be providing updated forecasting," particularly with "5 different seasonal programs going on at the same time." It's "just a beast." Further, sales reps have a "9 day-a-week job," Joe said. He and Naomi continue to hire; Allagash is "up to 9 on the street right now."
Evolving M&A Conversations; Good Beer "Not Enough"; Opposing Marketing Opinions "We've heard the conversations evolve" surrounding craft mergers and acquisitions, Craig Farlie said, "becoming more nuanced." Instead of simply "selling out," folks are seeing transactions as "decisions to be made in growing your business." Craig believes "the pace [of transactions] is going to pick up." But watching expansion plans of small brewers, he believes the category is, in general, "under-equitizing growth" and depending (perhaps too much) on taking on debt. While debt works out fine if growth continues, "everything doesn't go up and to the right forever." When putting value on a brand, he stressed the importance of "quality."
But "good beer is not a differentiating idea" in itself, Mark Hellendrung said earlier, and "great beer's just not enough, local's not enough." With so many brewers "competing for that 'local' moniker," brands need to be based on something else: "local is not unique; quirky names and cool packaging is not unique" and "not enough." Brand owners must seek out and share "credentials, not claims." Awards and "third party endorsements" are key as "those are other people doing my job for me." He also noted that "social media is the great equalizer," and Narragansett would be "wasting money if we do" advertising like billboards, like bigger brewers. But later in the day, Andrew Teman of Heart Creative Agency noted that, at least where Facebook is concerned, "it's a race to the bottom." Howzzat? "You are only reaching 6% of your own fans on Facebook" with each post that isn't promoted (read: when you don't spend money), and "they still may not see it, they still may not care about it." Meanwhile, the digital-focused marketer shared his surprise at the effectiveness of a recent billboard campaign in Boston and noted that advertising on tv, particularly in a localized way, could be "cheaper than you think." Indeed, Bentley recently shot an entire ad on an iPhone. Look out for more info on a few specific models detailed during meeting next week.
Perhaps only a broadly healthy market could support brands and bizzes as diverse as those detailed across the day: a 100+ year-old brand revamped, spun into craft-like territory and attracting young New England consumers; regional brewers on both coasts making widely varying beers, some focusing on contiguous territory expansion and others picking and choosing sometimes far-flung markets; contract models; lager-only; session-only; Belgian-only; cider-only; warehouses in the 'burbs; itsy-bitsy brewery tap rooms in hot urban neighborhoods; high-end bottle shops; big chains; large single-entity wholesalers and craft-focused alliances of multiple smaller distribs. Add in marketing firms, financial firms, strategic planning and sales firms of varied sizes and clientele. Anyone not getting in on the action?
Sales Tips: "Next Frontier," Don't Program "Lagging" Brands, Allocation There are "so many emerging craft bars," Allagash's national sales director Naomi Neville said on that sales panel with Joe and Marty Ochs, now of his own E3 Craft Strategies firm after time as Ninkasi's sales veep and others before. This "next frontier of accounts," in the form of sports bars and Irish pubs, is ripe for the picking, Naomi said. And the good thing about these accounts is they "don't change their menu," at least not very often. But all three wholeheartedly agreed that new space opening up for craft brands is by no means keeping up with the growing number of craft brands and brewers.
In his presentation, Marty stressed the importance of programming on growth brands not "lagging" brands. He's also seen incentivizing goals leading to quick drop-offs after they're hit, so don't just set goals, make plans for going above and beyond. Speaking of above and beyond, Joe shared story of how "we f***ed up" roll-out of Torpedo 5, 6 years ago. Sierra "under-forecasted," thought they'd sell 10K bbls of the brand in year 1 and that "twenty would be more than enough." Since it was an early brand to use a bunch of Citra hops, Sierra "could only make so much a week to make it thru the year," allocated all of it, ended up doing 40K bbls and "could've made 3 times that." But that allocation "came across as a great tactic" to Marty, who helped Ninkasi roll out lagers under allocation so they "knew what was gonna go out." Joe and his team "spend way more time forecasting now than I ever thought we would," he said. "Your sales force constantly has to be providing updated forecasting," particularly with "5 different seasonal programs going on at the same time." It's "just a beast." Further, sales reps have a "9 day-a-week job," Joe said. He and Naomi continue to hire; Allagash is "up to 9 on the street right now."
Evolving M&A Conversations; Good Beer "Not Enough"; Opposing Marketing Opinions "We've heard the conversations evolve" surrounding craft mergers and acquisitions, Craig Farlie said, "becoming more nuanced." Instead of simply "selling out," folks are seeing transactions as "decisions to be made in growing your business." Craig believes "the pace [of transactions] is going to pick up." But watching expansion plans of small brewers, he believes the category is, in general, "under-equitizing growth" and depending (perhaps too much) on taking on debt. While debt works out fine if growth continues, "everything doesn't go up and to the right forever." When putting value on a brand, he stressed the importance of "quality."
But "good beer is not a differentiating idea" in itself, Mark Hellendrung said earlier, and "great beer's just not enough, local's not enough." With so many brewers "competing for that 'local' moniker," brands need to be based on something else: "local is not unique; quirky names and cool packaging is not unique" and "not enough." Brand owners must seek out and share "credentials, not claims." Awards and "third party endorsements" are key as "those are other people doing my job for me." He also noted that "social media is the great equalizer," and Narragansett would be "wasting money if we do" advertising like billboards, like bigger brewers. But later in the day, Andrew Teman of Heart Creative Agency noted that, at least where Facebook is concerned, "it's a race to the bottom." Howzzat? "You are only reaching 6% of your own fans on Facebook" with each post that isn't promoted (read: when you don't spend money), and "they still may not see it, they still may not care about it." Meanwhile, the digital-focused marketer shared his surprise at the effectiveness of a recent billboard campaign in Boston and noted that advertising on tv, particularly in a localized way, could be "cheaper than you think." Indeed, Bentley recently shot an entire ad on an iPhone. Look out for more info on a few specific models detailed during meeting next week.
Newsletter
Craft Brew News
Tagged under
With much sound, but surprisingly little fury, South Carolina bill to make state more appealing to eastward-looking Stone Brewing zipped thru legislature and well on its way to becoming law. On Wednesday, both state Senate and House passed bill that both brewer and wholesaler organizations compromised on and got behind. Just one legislator voted in either house voted against it; it now only awaits the governor's signature. The bill blows up production cap for state brewpubs, from 2000 bbls to 500K bbls. But will it signify anything other than encouraging current SC brewers? Stone continues to insist it hasn't made any decisions yet. "Without this they would not come," state Senator Rankin told the Myrtle Beach Sun News, "we can only hope that with it they will."
Newsletter
Craft Brew News
Tagged under
Jack Joyce, one of the truly unique characters in the craft beer biz, passed away at 71. Jack founded Rogue in 1988 and built a highly unconventional biz empire in the ensuing decades. Rogue sold 104,000 bbls of beer last yr, but the Rogue Nation also included several brewpubs, distilleries, a hop farm with overnight accommodations and more. Jack was often ahead of the curve, such as with 22 oz bottles, dozens of high-priced flavorful brands sold broadly across US and creative packaging. His plainspoken grit and humor brought down the house at an NBWA panel we moderated yrs ago. "Jack Joyce was one of the fascinating and wonderful people who made it so rewarding to work in this industry," said Brooklyn co-founder Steve Hindy. "I will miss his quirky sense of humor and his wise counsel. We are all enriched by having known Jack." And Boston Beer founder Jim Koch told CBN: "I served with Jack on the IBS Board, the BAA Board and the BA Board and we disagreed on everything except the important things. Guys like Jack are the reason craft beer is personal and fun. I'll miss him."
His son Brett sent out a note earlier this week: "Yesterday the Rogue Nation and Family lost our co-founder, leader, friend, and father as Jack Joyce passed away at the age of 71. Following a career as both a small town attorney and Nike executive, Jack and some friends founded Rogue in 1988 in Ashland, Oregon. From the outset, Jack set Rogue on a path of innovation, creativity, and rebellion. Rogue made hoppy, flavorful beers and was told that no one would drink them. Rogue made a wide range of beers and was told no one wanted variety. Rogue sold 22oz bottles of beer and was told no one would pay a premium for a single serve beer. Rogue opened multiple pubs and breweries and was told that it would be wise to follow a more efficient and logical business plan. Rogue took the road less, or perhaps never, travelled. Rogue was the first U.S. craft brewer to send beer to Japan. Rogue won 1,000 awards for product and packaging excellence. Rogue worried about getting better, not bigger. Rogue began distilling. Rogue began farming. Rogue remained dedicated to its small town roots and made sure to give back to its local communities. Rogue started a Nation. This was all vintage Jack. He was the true Rogue and will be missed by us all."
His son Brett sent out a note earlier this week: "Yesterday the Rogue Nation and Family lost our co-founder, leader, friend, and father as Jack Joyce passed away at the age of 71. Following a career as both a small town attorney and Nike executive, Jack and some friends founded Rogue in 1988 in Ashland, Oregon. From the outset, Jack set Rogue on a path of innovation, creativity, and rebellion. Rogue made hoppy, flavorful beers and was told that no one would drink them. Rogue made a wide range of beers and was told no one wanted variety. Rogue sold 22oz bottles of beer and was told no one would pay a premium for a single serve beer. Rogue opened multiple pubs and breweries and was told that it would be wise to follow a more efficient and logical business plan. Rogue took the road less, or perhaps never, travelled. Rogue was the first U.S. craft brewer to send beer to Japan. Rogue won 1,000 awards for product and packaging excellence. Rogue worried about getting better, not bigger. Rogue began distilling. Rogue began farming. Rogue remained dedicated to its small town roots and made sure to give back to its local communities. Rogue started a Nation. This was all vintage Jack. He was the true Rogue and will be missed by us all."
Newsletter
Craft Brew News
Tagged under