One has to see Lagunitas' new brewery in Chicago, still under construction (and well behind original schedule), to get a sense of the scale and scope of what it is planning. This is the most ambitious craft project in the middle of a major city so far, built in what used to be part of the Ryerson Steel Mill, near Douglas Park. The new brewery sits on 6 acres, 300,000 sq ft, and takes up 15 mil cubic feet (with very high ceilings, 57 ft in parts of building). Already installed: a 250-bbl brewhouse, 16 750-bbl fermenters, 4 more coming.

Lagunitas will be brewing this spring with an initial fermentation capacity of 300,000 bbls. But the Rolec brewhouse can get up to 500,000 bbls and a 2d is already on order for early next yr. Also already installed: a bottling line that can fill 550 bottles per minute (another that fills 1000 comes in this summer) and a kegging line. The price is pegged at $26 mil, which seems low for such a huge facility in a major city (recall Sierra spending over $100 mil).

Ultimately this facility will have capacity to brew 1 mil bbls or more, in addition to the Petaluma facililty, which has capacity to brew 500,000 bbls. But before Chicago is even up-and-running, restless founder Tony Magee is already setting his sights further out on the horizon. He told CBN that Lagunitas is planning a 3d facility in yet another part of the country, sighting locations, intrigued by an abandoned Pepsi bottling warehouse.

Ever since Tony announced his plans for a 2d facility, some craft vets have been behind-the-scenes doubters. Yet Lagunitas has maintained its dramatic growth and forged ahead with Tony's bold vision. Ever since he started Lagunitas, Tony sez he's been "obsessed" with "being in the fast moving part of the stream." As for the Chicago facility Lagunitas has "stepped it up a couple of notches" from original plan, said Tony (which only took up 150,000 square feet).

So Lagunitas is clearly planning for a ton more growth still. It's starting the yr at a 50% growth clip, even tho a significant % of orders are shorted. Lagunitas is finally getting to some new territories, including Indiana (with MillerCoors network), Cincinatti and Ky (with L Knife and Son's Beer House). And it is hotter than a pistol in Chi, before it even opens doors. More than doubled at Windy City last yr to 400,000 cases. Up 70% or so again so far this yr.

A few weeks back Lagunitas held a party at the fledgling facility attended by 4000 people on a very snowy night, featuring "live bands, stilt walkers, acrobats, burlesque dancers, fire hoopers and the Windy City Rollers," according to Chi Sun Times. This was "the wildest opening party since the Limelight in 1985," wrote the Sun Times. In the months ahead, Lagunitas will have a tasting room that sits 300 and an amphitheatre for concerts where Lagunitas hopes to have a capacity for 1000. It's taken longer than expected, with some bumps along the road, but Lagunitas is coming to Chicago in a style befitting its founder's outsized dreams.  

Lotsa positives in Boston's just-released figures for 2013 and early 2014, especially on volume. Most eye-poppin' is yr-to-date depletions trend for 7 wks thru Feb 15: +35%. That's quite an acceleration from very healthy +23% depletions trend for calendar 2013. Boston booked a 20% depletions gain in Q4, but shipments rose 29% in Q4 to catch up some production shortages in Q3. For the full yr, Boston core shipments up 25% to 3.4 mil bbls. Boston doesn't break out portfolio, but we estimate that includes in neighborhood of 500,000 bbls of cider. So looks like malt bev shipments up 8-9%. Net revs up 27.4%, but cost of goods sold and ad, promo, selling expenses rose sharply too. Plus Boston had much bigger asset write-off in 2013 than 2012. So operating income up "just" 18% to $113 mil. Still, that's more than double its 2009 operating income, while Boston built core volume by about 2/3.

Boston expects 2014 depletion growth of another 16-20%. Sees natl price increase of approx 2% for the yr. That's down from expectation of 2-3% back in Nov. (In 2013, net rev/bbl rose 2.4%.) Boston plans increased ad, promo and selling spend of $34-$42 mil (+15-20%), excluding any potentially higher freight costs. That includes expected brand investments for existing Alchemy & Science projects expected to come in between $5 and $7 mil.  

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Seven of the 20 individuals named James Beard Award Semifinalists in"Outstanding Wine, Spirits or Beer Professional" category this week work primarily in beer, 1 more than # last yr. A full 13 of this yr's semifinalists were also semifinalists last yr, including Dogfish Head founder Sam Calagione and Brooklyn Brewery brewmaster Garrett Oliver, 2 of the 5 finalists in 2013. Alongside Don Feinberg and Wendy Littlefield of importers Vanberg and DeWulf, the Floyds brothers of Three Floyds and Tom Peters, proprietor of Philly's Monk's Cafe, all once again on the list, Allagash's Rob Tod and Cigar City's Joey Redner were also honored this year. Indeed, just 4 of the semifinalists work in wine, down from 7 in 2013, when a wine professional won the award. Yet 8 of this yr's 20 are spirits professionals, up from 5 last yr; the list includes a cider-maker too, Stephen M. Wood of Farnum Hill Cider. Finalists will be announced next month before awards are given in May. Is it beer's time, will spirits buck tradition or is wine still too ingrained in the food world for a non-wine professional to take home the award?  

Expanding on growing number of state and regional brewers guilds (plus murmurings of farm brewers assns, organic brewers assns, and others), state hop growers will benefit from founding of Michigan Hop Network, a new non-profit "dedicated to improving and promoting Michigan's developing hop-growing market," The Right Place announced today. TRP, itself a non-profit org focused on economic development in West Mich, worked with state brewers and current hop growers to aid in education of fledgling industry, backed initially by a Mich Economic Development Corporation grant. Hop acreage in the state is expected to grow to 300 acres this yr, up from 200 in 2013, supported by 10 harvesting centers and 8 processing operations. With many new states interested in expanding hop growing capabilities, this could be just the beginning of such assns.  

Loosening a relatively tight three-tier system is proving a tough row to hoe in Georgia, less so in Idaho. A recent study commissioned by a state Senate committee determined that "Georgia brewers need to work within the status quo," according to the Macon Telegraph. Some small brewers in the state had hoped to be extended the right to sell their beers from their breweries, especially those "in the start-up phase," when "life isn't easy," according to the paper. But the committee chair who ordered the study countered that "if their strategic plan was based on them opening up a microbrewery then changing state law, then that was a poor strategic plan." Ouch. Further, what the 3-tier system "was designed to do and is designed to do is regulate an industry that needs regulating," Sen Murphy told the paper.

But study did lead to 2 drafted bills, according to Forsyth County News: one to allow wineries to fortify their wines without sending them out of state and another to expand beer and wine tastings to outlets that sell the products as well as liquor (currently restricted to shops that only sell beer and wine). "In Georgia, producing, distributing and retailing beer must be handled by three separate entities" still, the paper concluded. Meanwhile, a bill's been intro'd in Idaho's legislature to allow brewers to offer samples, "almost identical" to regulations governing state wineries, according to the Idaho Statesman and backed by both brewers and beer and wine distributors. We'll see if any of those parties' positions change if brewers seek to extend rights further.

Mass Bill Back (Again), Globe Supports (Again) The war of the op-eds has returned to Mass, where legislators are once again considering a bill to allow brewers that represent less than 20% of a distrib's biz to pay that distrib fair mkt value to move the brands elsewhere. After op-ed from Beer Distributors of Mass prexy Bill Kelley (see last issue), the Boston Globe printed an op-ed today in support of the bill, describing Mass as "the cradle of the craft brewing movement" and craft brewers as "hemmed in" by current restrictions. After acknowledging distribs' concerns, editors call Bill's assertion that the law change would lead to spikes in "after hours" sales or sales to minors a "red herring." The paper notes Boston Beer is the state brewers guild's "most powerful member," and "now among the largest US-owned beer makers," but still contends that, if brewers are below 20% cap, "lawmakers should be willing to cut these small-scale breweries a break."

Not To Be Disregarded, Distillers Say "Us Too" Just as small brewers have argued that they wish to have the same rights as wineries, it's becoming increasingly common for small distilleries to ask to have the same rights as breweries. That's the case now in both Iowa and Pennsy. Some Iowa legislators have worked with micro-distillers to draft a bill that would expand liquor-makers' ability to sell their wares on-site, from 2 bottles to 12 for off-premise consumption and from free 2-oz samples to paid servings for on-premise. Not all distilleries are hoping to capitalize on the law, including the state's oldest and largest spirits producers, according to the Des Moines Register.

However, state beer wholesalers have opposed the bill, claiming it "would undermine the state's three-tier system," the paper wrote. (Recall, Iowa, a control state, handles all liquor wholesale.) Indeed, chairwoman of the state's alc bev commission believes the bill could "represent a 'slippery slope' that could threaten the three-tier system." But one state distiller reminds "that's all we're asking for: let us do some of the things the breweries and wineries can do." State sales of spirits from Iowa's 9 licensed distillers grew from $3 mil to $7 mil in 2013, the paper wrote, less than 3% of all liquor sales in the state. That's just as the Pennsy Liquor Control Board is considering allowing distillers to deliver products directly to consumers and licensed retailers, "the same privileges enjoyed by licensed limited wineries," the Pittsburgh Post-Gazette cites. The PLCB began allowing state liquor makers to deliver products to bars and restaurants last Nov.

The Canadian Alternative: Small Brewer Difficulties with Beer Store; "Price-Gouging"? Debates over Ontario's largely province-run system of beer sales have heated up recently. While province c-stores and small brewers have sought deregulation, current retailers - the Liquor Control Board of Ontario and The Beer Store, currently owned by Labatt (ABI), Molson Coors and Sleeman (Sapporo) - have resisted. C-store owners wish to have the right to sell beer, while The Beer Store has warned consumers that prices could increase by about a third for the average case at convenience stores. Boston Beer's Jim Koch has often pointed to Canada as an example of what the US beer industry might look like if not for the 3-tier system ("no 3-tier, no craft beer"). Small brewers there are frustrated with their options, both of which come with "high listing fees," according to the Toronto Star. While one small brewer told the paper "you just can't afford it" as a small biz, another asserted that "if it was a little easier to open and a little easier to distribute, you could easily create 10,000 jobs." That's just as the Canadian Restaurants and Foodservice Association has asked the province's Standing Committee on Finance and Economic Affairs to examine the price discrepancy between retail prices to consumers at The Beer Store and those charged to licensed restaurants and bars. The CRFA argues its members can pay about 30% more for a case of beer than consumers pay, according to Toronto Life.  

New joint venture between Stone Brewing and Maui Brewing, distribution co Maui-Stone Craft Beverages, currently in "licensing process," on target for shipping beer come April, Stone co-founder/prexy Steve Wagner told CBN. Tho operation initially focused only on Maui, the territory Maui Brewing currently self-distributes in, the new biz is also "a test for us," Steve said, which "if it's successful, I would expect that there would be an interest in us bringing it to the rest of the islands." While Maui Brewing "brings an established network of customers" on retail level, some of backroom operations - admin, HR, accounting, etc - "we will handle here in San Diego," part of the "synergy of it," sez Steve. The JV will likely employ 4 or 5 on "day one," and add a couple more employees before the end of the first yr.

In the works for the "last six months or so," MSCB grew out of a "fondness for the place and our relationship with Garrett," Marrero, founder of Maui Brewing, and "driven by beer fans wanting Stone" and other mainland brands on the island. Indeed, each of first set of brands (except Maui of course) will be new to the island, "part of the selection process" for the new co. Recall, the co will handle 9 brands (including Maui and Stone) on the island; Stone's SoCal distrib biz handles between 30-35 brands, Steve shared. That co shipped 1.9 mil cases in 2013 and is forecasting 2.4 mil CEs for this yr. Stone began self-distributing out of the gate in 1996 and began distributing other brands just a couple years later, mostly "out of necessity," according to Steve. While sometimes a "headache," Steve reminded that he believes "self-distribution rights for craft brewers are hugely important" and "one of the main reasons California has such a thriving craft beer scene." In states where such an operation is legal, this seems a "natural" progression.  

As expected, 21st Amendment recently announced plans for new brewing facility in San Leandro in East Bay region near SF, including initial 100K-bbl capacity, plus tasting room, restaurant and event space. With capacity scalable up to 250K bbls within 95K sq ft facility, the plant and initial tasting room should open by the fall, with additions to follow, including brewery offices plus new beer garden and full-service restaurant. Plans include adding 20 new jobs over 9 months, and 80 more over the next 5 yrs. Pegged at $21 mil, the new brewery sits nearly next door to just-expanded Drake's Brewing facility, 30K sq ft itself, according to the SF Business Times. 21A still plans to produce about 70K bbls at Cold Spring this year, co-founder Nico Freccia told CBN, which "will taper down for 2015." Nico added that "for now, they remain a great asset for midwestern and northeast markets and we will continue to maintain our relationship with them." Recall, 21A's sales are split nearly 50/50 between the east and west coasts.

Short's Announces $5-Mil Expansion, "Confident" in Coming Passage of New State Brewer Caps After just recently announcing expansions to its Bellaire, Mich brewpub and coming off shipping over 24K bbls in 2013, Short's Brewing is expanding its Elk Rapids production facility. Addition of adjacent land, a new bottling line, a wastewater pre-treatment system and other improvements will total $5 mil. Equipment, including upgraded packaging and the water treatment system, will be in place by May; development of 2 adjacent acres will begin shortly thereafter. The plans will expand capacity initially to around 60K bbls, and eventually to as much as 200K bbls, according to the Detroit Free Press. Recall, Mich brewers have been working to expand production cap for state's definition of a "micro brewer" from 30K bbls to 60K bbls, but that bill has been caught up in a group of other potential changes to state alcohol regulation, only one of which caused contention between state distributors and retailers. Short's CFO Scott Newman-Bale told CBN that it "looks like that is rapidly moving towards conclusion," so much so that the company feels "comfortable enough" to make this announcement. Indeed Scott believes his discussions with state legislators about Short's plans helped tip the scales, as they had been put on hold til the legislative all-clear.

The Bruery Invests in Improved Quality, Bigger Capacity; GoodLife, Pipeworks, Strike Too High-end focused The Bruery announced planned investments to its Placentia, Calif brewery this week, including a new brewhouse, bottling line and centrifuge, plus expanding lab space and completely separating sour beer production. Besides making life infinitely easier for shift brewers, the additions should boost The Bruery's capacity to around 20K bbls. Bend, Oreg's GoodLife Brewing will install a canning line and new fermentation space that could allow the brewery to produce 25K bbls, up from 9000 in 2013, according to the Bend Bulletin. That's as Pipeworks Brewing of Chicago leaked plans to sign a lease on a new space to allow for 15K bbls of production initially, scalable to 40K bbls, to a BeerAdvocate forum. Strike Brewing will open a new 6000 sq-ft brewery/tap-room in April in San Jose, Calif, according to Silicon Valley Business Journal.  

A lot more North American beer drinkers will be able to access beers from 3 of Colorado's Front Range breweries next Monday. Odell Brewing announced details of its planned Texas launch, bringing draft beer into the state beginning Monday, with packaged brands to follow March 31. Working with Ben E. Keith statewide, the Fort Collins brewery scheduled over 70 events for next week, including a specialty beer made with an ex-Odell brewer who now runs Pinthouse Pizza in Austin. To help spread the news, Odell whipped up a "Deep in the Heart of Texas" video parody that tours viewers thru the brewery's brands, staff and Colo facility. The last time Odell opened a new market was over 2 yrs ago. Recall, co-founder Wynne Odell told CBN that Tex alone could provide a 10% volume boost this yr. Odell will have 3 sales folks on the ground in Tex, mktg mgr Amanda Johnson-King told us, "probably the biggest investment we've made entering the state."

Oskar Blues brands will be available in Nevada for the first time Monday, distributed by Wirtz Beverage statewide, Wirtz announced this week. This launch is part of Oskar Blues' aggressive market launch plan for 2014, which has already included Ida, Minn and Del and will include Kans and Mo before long. Also expanding its footprint is Front Range neighbor New Belgium, which announced its beers will head to Alberta, Canada on Monday. The co launched British Columbia last fall and will work with Horizon Beers in the new province. Recall, NBB will enter Miss in early March and is eyeing Ky and HI.  

More beer, more markets, more steel. More money. More rights. More orgs. "More" remains the name of the game in early 2014, at least in a craft segment that seems to chant "can't stop, won't stop." Caveats abound and "more" is certainly not always better. But plenty of notable expansions to report this week: a few top craft brewers will enter new markets come Monday; lots more money is being invested by small breweries to expand the amount and quality of beer they're able to produce; successful bizzes are diversifying into new but related operations to support growth; small brewers the country over continue to seek new rights in state legislatures; and a network of for- and non-profit organizations is growing up under all these expanding bizzes to support them. Read on for details on how these expansions manifested recently.