Full Sail is ramping up its sales team, with sr hires from top brewers. Longtime MillerCoors sales exec Andy Krakauer is leaving MC to become Full Sail's sales veep, starting next week. Andy had been with MC for 27 yrs, most recently as part of Director of Biz Development and Strategy but had also served stints as regional chain director, area veep for Coors and gen mgr in Mich and Ill for Miller. "Andy's skills and experience will strengthen the focus of and execution of Full Sail's strategic plan as we continue to build on our long term partnerships with our distributors and retail customers." He is from Oreg, so he is returning home. Andy's brother is well-known author Jon Krakauer ("Into Thin Air," "Into the Wild"). Recall, Full Sail also recently hired AB sales director Jim Brady as its NW regional sales honcho. Employee-owned Full Sail at 115,000 bbls in 2013, up 5%. Got solid growth in recent yrs, but much slower than segment. Up 25,000 bbls, 28% last 4 yrs. Full Sail down 0.8% yr-to-date thru Apr 27 in natl IRI multichannel + convenience.

Meanwhile, longtime Firestone Walker sales exec Steve Almaraz "stepping down and seeking other opportunities," co-founder David Walker wrote to distribs earlier this week. "This was not an easy or quick decision, but one he made over a significant period and knows in his heart to be the right move. On a personal note I want to let you know how grateful we are for his friendship and guidance over the last 15 years….. His current duties will all fall to Dave Macon vp of sales and marketing." Recall, Dave joined from New Belgium earlier this yr. In meantime, Firestone Walker sales have been screamin' so far this yr. Volume up 79% YTD thru Apr 27 in IRI MULC, with numerous reports that its 805 brand on fire, both in home mkts along Central Coast, as well as its expansion mkts in SoCal.  

Craft "slowed" to sales $$ up 19% volume up 16% in latest 4 weeks IRI multi-channel + c-store thru May 18. That's compared to dollar trends in the low-to-mid 20%'s and volume trends at 20% plus that craft has enjoyed every mo prior in 2014. Still, craft $$ up 23%, volume up 20% YTD thru May 18.

Nearly all of the top craft vendors yr-to-date trends slowed a coupla pts in latest 4 weeks too, with the exception of Sierra Nevada (+11%), Gambrinus (+10%), and Sweetwater (+37%). Yet majority of these cos up healthy double-digits for the yr, so not much has changed YTD for top craft: Boston Beer (+38%, including Angry Orchard), New Belgium (+45%), Lagunitas (+79%), Deschutes (+11%), Stone (+24%), Bells (+38%), Dogfish Head (+32%), Long Trail (+13%).

Several Top Brands Slowed Too; Six of Top 30 Down YTD A handful of top craft brands slowed considerably in latest 4 weeks, including each of Sam Adams top brands to mid-single-digits or slower in that time. Sam Seasonal $$ sales started out yr at +50% thru Q1 riding Cold Snap release; YTD trend now +30%. Boston Lager lost 4 points off growth trend since end of Mar to +12%, still pretty solid for a flagship. Sam Variety Pk sales (-9%) softened even more YTD thru May 18. And tuffer comps comin' up in latter half of 2014, as Boston Beer has reminded. But Rebel IPA an incremental 312,000 cases in IRI thru May 18 and has helped keep Boston's craft biz humming.

Goose Island 312 Urban Wheat sales also slowed to only up 3.6% in latest 4 weeks thru May 18. That's a major shift, since brand was up 50% thru Mar 23, and has been one of top craft share gainers in IRI in recent yrs. Up 29% YTD thru May 18. Then too, more top craft brands down YTD than usual; six of the top 30 craft brands tracked by IRI, including Deschutes Seasonal (-1%), Magic Hat #9 (-1%), Shiner Seasonal (-2%, tho up 18% in latest 4 wks), Widmer Hefe (-2%), Sierra Seasonal (-7%), and Sam Variety Pk (-9%). And Deschutes Mirror Pond Ale and Kona Longboard each slightly down for latest 4 weeks, and only up mid-single digits for the yr. Yet all other top brands up double-digits plus despite the 4 week slowdown.  

Lengthy post on BA Blog by Brewers Assn prexy Charlie Papazian on need for franchise law reform is much-improved take on small brewers' perspective than Mar NY Times op-ed he defends at outset. Also notes entire BA board "fully supported and helped draft" that op-ed (an argument for "too many brewers miss the mark"). In any case, Charlie sets out a stronger point-by-point case for reform by refuting the arguments he sez have been made "against reform," calling all of these arguments false. Here are some highlights:

• Tho some say reform would compromise 3-tier system, Charlie points out that 3-tier "vibrant and effective" in states where laws reasonable or non-existent, i.e. Alas, Calif, DC, Del, NY and Wash.



• Franchise reform doesn't compromise 21st Amendment either, as 21A doesn't include anything about franchise laws. Franchise laws hail from 70's and 80's, Charlie points out.



• While some say reforming franchise protections will create "disincentive" for distribs to invest in brands, again, that hasn't happened in "non-franchise states like California," or where there are "reasonable exceptions."



• Distribs like to point out that they can be terminated for cause under current laws, but that legal process "costly and smaller companies can't afford litigation." The only successful suits have cost hundreds of thousands of dollars, claims Charlie.



• Franchise law reform benefits smallest brewers, not just big-small brewers, since smallest brewers have fewest resources to fight in court to "get out of a bad distribution situation."



• "Fair franchise reform" ensures distribs don't get penalized by losing a brand, but rather get compensated fairly. What's more, reform reduces distrib's value only if it's a poor performer. Other distribs would gain value in reform by obtaining and growing new brands. In fact, current laws devalue brewers' biz when they can't move. "It is a dangerous and ill-chosen path for any business to seek guaranteed value through legislation," Charlie warns.



• Not all distribs in lock-step against reform, Charlie insists, and reform not only in brewers' interest. Many distribs want oppy to build biz with "underperforming brands" in competitor's book. BA supports reform for "any brewing company" that's a small share of distrib's biz and lacks bargaining power over distribs, including imports. At same time, BA wants to respect "economic stability and well-being of beer distributors'" bizzes.

Charlie also picks up some points we've heard from small brewers over last few mos. Tho some say this debate should not be in public, he sez small brewers and distribs have discussed this privately for 15 yrs, "with no progress." Distribs are critical to small brewer success and "should be natural allies," Charlie also reiterates, that reform best accomplished with both sides at the table "with an open mind." Reform is a state-by-state, not federal issue, Charlie reminds. And he sez it should be separate from other issues -- like self-distribution, tap rooms, growlers, brand ownership, cross-ownership etc. Bringing those issues into franchise reform is way to "mask a lack of justification for current beer franchise law," he believes. "There's beer at the table," Charlie closes. "Why aren't we both sitting around that table?" Click here to read the entire post. It will also run in the Jul/Aug edition of BA's mag New Brewer.  

Scientists at SoCal's White Labs and a joint venture between the Flanders Institute of Biotechnology and the University of Leuven, both in Belgium, have already sequenced the DNA of 240+ strains of brewers yeast, creating a mountain of new data about the key ingredient. By connecting the dots between the "genetic family tree for brewing yeasts," according to a NY Times article today, and resulting beer characteristics (flavor perhaps just the most obvious) for each, the research could open the door to developing new and exciting yeast strains. IDing hop varietals and making "single hop" beers already attracts many; putting a similar focus on yeast seems only a...skip and a jump, no? "In a few years we might be drinking beers that are far different and more interesting than those that currently exist," one of the Belgian researchers told the Times. More specifically, "let's say there's a yeast that produces an amazing fruity aroma in beer, but can't ferment past 3 percent alcohol," explained Chris E. Baugh, a microbiologist at Sierra Nevada, unrelated to the project. This research would allow scientists to "breed it with a more alcohol-tolerant strain."

Results of this research could "take off...in the craft brewing scene," Baugh continued, where "there is a big push for something new and interesting all the time." Interestingly, you'd be hard pressed to find a homebrewer that hasn't brewed with a strain derived from Sierra's house yeast (sold by numerous yeast suppliers, including White Labs, "001," and Wyeast, "1056" and often just called "Chico"). Compare that to AB, "which for decades had protected its flagship lager yeast under armed guard," the Times wrote. Indeed, "until recently, the brewing industry has been remarkably resistant to using the techniques of genetics and molecular biology to improve their brewing strains," a Nobel Prize-winning yeast geneticist told the paper, adding that the work is "long overdue." Even in craftdom, a bastion of experimentation, there's still "no market" for the "few hundred genetically modified yeast strains patiently waiting in our laboratory's freezer," according to another of the Belgian scientists. The specter of "GMO," regardless of how delicious the results might be, continues to keep demand for those strains low. Instead, increased speed and much-lower costs for sequencing yeast DNA (down to a few thousand dollars and a few days) will allow researchers to breed yeasts that exhibit sought-after traits without manufacturing such strains from scratch.

Can the imperative toward "new and exciting" push what in many ways is still a very traditional industry into new territory? Look to homebrewers for a clue: a coming machine from ex-Microsoft developers totally reinvents brewing, condensing a home operation into one microwave-sized, tabletop apparatus called PicoBrew Zymatic. Founders, which blew past fundraising expectations and have now raised well over $1 mil thru loans and angel investors but mostly Kickstarter, hope it will appeal to those wanting a homespun brew without the effort and "become as common as a home espresso maker or bread machine," according to Bloomberg Businessweek.  

Lotsa near religious fervor for some of Vermont's small, iconic brewers, particularly the "holy trinity of brewers" - Hill Farmstead, Lawson's Finest Liquids and the Alchemist Brewery, as CNBC called them in lengthy feature called "Pilgrims Journey to Craft Beer Mecca." Article detailed events the brewers each hosted "that have aficionados journeying" from all over. Indeed, travelers from Sedona, Ariz, Atlanta, Ga, and North Haven, Conn, (to name a few) spoke with local paper, Burlington Free Press. "Beer tourism at its best," Sean Lawson told the paper.

Recall that Hill Farmstead topped RateBeers list of best brewers this yr and the Alchemist's Heady Topper tops Beer Advocate's list of best beers. The first Hill Farmstead event kicked off at Parker Pie Pizzeria in West Glover, where 15 Hill Farmstead brews were made available, followed by "about 40 varieties" tapped at 3 local bars in the town of Waterbury, noted CNBC. Same weekend in the same town, Alchemist hosted a one-off sale - 500 cases at $75 each - "of his Beelzebub American Imperial Stout and Focal Banger IPA…limited to one case per person." Co expected to sell all 500 cases in a mere 90 minutes, owner John Kimmich warned via Alchemist blog. And another 100 cases of Heady Topper double IPA were available at a beer store in town, the Craft Beer Cellar, where "supply was exhausted in less than two hours - even with a limit of three four-packs per customer," reported Burlington Free Press. Then too, a coupla towns over, Lawson's released its newest creation, Triple Sunshine triple IPA, an even more dialed up version of its Double Sunshine, at a local farmers market from 9am to 1pm on Saturday. There were 50 people on line at 6 AM. "Forty years ago, Vermont was known for maple syrup. Twenty years ago we were known for Ben & Jerry's…now we're known for brewing the best beer in the world," director of on-air fundraising for VT's public television network, Brennan Neill told CNBC.  

More breweries "graduated" into Brewers Assn's regional brewer status last yr than in any prior yr (that is, they produced more than 15K bbls for the first time in 2013). Twenty two brewers shot up past that milestone in 2013, compared to between 7-10 breweries in each of the last 5 years. That boosted the total number of regional breweries to 119, according to latest data-rich issue of BA's New Brewer magazine. This group of 22 collectively sold 410K bbls in 2013, +64%, almost 160K bbls.

They range in size from Oreg's Boneyard Brewing, +74%, which just barely got over 15K-bbl mark, to Foothills Brewing, more than doubling to near 26K bbls. Indeed, lotsa breweries screamed past 15K bbls last year: 7 of the 22 more than doubled and 2 of those almost quadrupled. Only 2 of these companies posted single-digit volume gains. These 22 co's gained over 0.7 share of BA-defined craft in 2013 to 2.6. That's up from less than 0.8 share in 2008.

Five of the 22 breweries weren't even operating in 2008, including Devils Backbone's production facility ("Outpost"). The original Devils Backbone brewpub sold less than 700 bbls in 2013, but its Outpost put out just shy of 25K bbls, up near 150%. Impressively, Revolution, of Chicago, and 10 Barrel, of Oreg, both jumped from around 6000 bbls in 2012 to almost 24K bbls in 2013. So their nearly 18K bbl gains last year alone would have been enough to qualify them as regional breweries. Boneyard (see above) and Karbach, of Texas, were the other newly-regional breweries that weren't around in 2008. Just one of remaining 17 co's didn't more than double in that time -- New Jersey's Flying Fish, finally in its new facility and up 28% to over 19K bbls in 2013. Back in 2008, these breweries collectively sold just 65K bbls.

Mich's Atwater nearly doubled last year, +93% to less than 25K bbls, and metro-NYC's Captain Lawrence picked up another 4500 bbls, +31% to 19K bbls. Both Calif's Drake and upstate NY's Ithaca grew about 40% to around 18K bbls. Good People (Ala), Weyerbacher (Pennsy) and Ale Asylum (Wisc) all ended 2013 between 17-18K bbls, each of them finishing expansion projects between the end of 2012 and mid-2013. The rest of the group: Santa Fe (+23% in 2013), Coronado (+116%), Natty Greene's (+8%), Lazy Magnolia (+8%), Sly Fox (+34%), Rahr and Sons (+20%), Tallgrass (+47%), and Red Oak (+74%).  

LA is by far the biggest Calif craft mkt and it is also easily the least developed. But it's coming on. Craft only at 9 share of Calif foodstores. Craft up 22% here. Interestingly, CBA is #1 craft player in this mkt. Up double digits and 15 share of segment. Recall, AB owns branches in much of LA mkt and so likely relies heavily on CBA portfolio to participate in craft in any meaningful way. Boston Beer is #2 and also up 15% with 14 share of craft. Sierra Nevada #3 and up 9% with 11.6 share of segment. And NBB up 13.7% and 10.9 share. So those 4 players over 50% of craft in giant LA mkt, but they lost 4 share of segment, collectively. Lagunitas is coming on in LA. Up 145% and jumped 4 share to 8 share of craft there. Number 5 craft in LA is Stone, up 38%. Gained 1 share of segment to 8.75. Closest to local in top 10 is Hangar 24. It's up 35% and ranked #7 in LA.  

In even more developed SF mkt, craft is now up to 29 share of $$ in foodstores and still growing double-digits, according to IRI. Big changes are afoot in the Bay Area too. Lagunitas up another 41% there this yr and has grown to 17.64 share of craft in SF/Oakland foodstores. That's less than one point behind Sierra Nevada, the craft leader there for probably decades. Sierra $$ sales up 6% in SF and it's at 18.35 share. So another yr of comparable trends, and Lagunitas could be #1 there. Each of them have about 5 share of overall mkt. CBA is taking a bath in this mkt; down 9% this yr, but it's still #3. And Anchor is #4 craft brewer in its home mkt and chugging along at 32% growth. Boston Beer is actually #7 here with less than 5 share of craft segment $$ YTD.  

Dialing down to craft's most developed channel, foodstores, in one of craft's hottest mkts, San Diego, you can see some big changes. Craft $$ sales up 28% in San Diego and gained 3.4 share to 24.7 share of SD foodstores in IRI yr-to-date data thru Apr 27. But big news there is that Ballast Point actually became #1 craft brewer in SD foodstores. BP displaced longtime local leader Stone. But not by much. By $17,000 thru 4 mos. To be clear, it ain't like Stone doing badly. Its $$ sales still up 23% in its home mkt. But Ballast Point up 156%. Each of them are about 3 share of overall mkt. But within craft, Ballast Point jumped 6.7 share to 13.5. The big share losers in SD craft are all the leading natl craft players: Boston, Sierra, New Belgium and Craft Brew Alliance lost over 7 share of craft segment YTD. Local players Karl Strauss and Coronado are #8 and #9, growing 31.5% and 70% respectively.  

With 450 craft brewers in Calif, plus many out-of-state craft brewers looking to make their mark there, Craft Brew News takes a look at how the nation's largest and probably most diverse craft scene is developing in scan data. It differs dramatically by mkt. Craft beer $$ sales up $18.8 mil, 21% in total Calif IRI multioutlet + convenience yr-to-date through Apr 27. Gained 1.4 share to 11.5. That is extremely healthy, but it's actually less strong than the natl trend of 24% growth in same period. Believe it or not, about 1/3 of Calif IRI craft growth from one very hot co: Lagunitas, up $6.3 mil, 81%. Lagunitas leapfrogged CBA (#3) and Boston (#4) to become #2 craft co in Calif behind Sierra. Sierra Nevada about 20% of Calif craft. And it does about 36% of its natl IRI biz in Calif. It's up 9% there. Meanwhile, Lagunitas jumped 4 share to 13 share of craft. And does over 50% of its natl IRI biz in Calif.

Some other key Calif craft players are coming on strong. Fast-rising Firestone Walker is actually the 2d biggest $$ sales craft gainer in Calif IRI. Up $2.2 mil, 76%. Jumped 1.45 share of craft segment to 4.62 and #7 craft in Calif IRI. But the other eye-popping gainer is Ballast Point. It's up $1.7 mil, 165% and gained 1.3 share to 2.5 of craft segment. Each of Firestone Walker and Ballast Point do well over 80% of their natl IRI biz in Calif.

Think about it: Three cos, Lagunitas, Firestone Walker and Ballast Point represented nearly half the growth of Calif craft in IRI. They gained near 7 share of the segment yr-to-date. Wow! The competitive landscape is changing fast for Calif craft brewers. That plays out in surprising ways in individual markets.