While craft way up in a down beer biz, there's wide variation in growth rates for craft brewers, even more so than usual. Many large craft brewers have slowed quite a bit, especially on their flagship craft brands. The market is getting more competitive and tougher for a number of players. Yet some continue to experience explosive growth, way ahead of the segment trends. And there are a ton of newbies.

Getting Tuffer for Top Craft Brewers Tho Big Boston Jump Recently in Scan Many top craft brewers growing at far slower rate than segment in 2013. Boston Beer reports Q2 tomorrow; almost undoubtedly, it will be a very strong result based on scan data. Total Boston up a whoppin' 35% last 13 weeks in IRI all outlet thru Jul 14. Recall, Boston Beer's Sam Adams brands down slightly in 1st qtr, even tho total shipments up 18%. More recently tho, its beer brands have taken off: Lager up 12%, Seasonals up 25% and Variety up 39% in IRI for 13 weeks. For 1st half, Boston's total beer trend will still likely up less than total craft segment.

Recall, Sierra up 3.5% in 1st half in total depletions (doing much better than that in scan), sales and mktg director Joe Whitney told CBN a couple of weeks ago. And New Belgium up 4% in IRI thru Jul 14 (all channel trend unavailable at presstime). Shiner up about 7% in 1st half, said chief sales and marketing officer Charlie Paulette. Deschutes up low double digits, according to founder Gary Fish, approaching segment growth rate. Those 5 craft brewers were estimated 36% of BA craft in 2012. Several other top 15 BA craft brewers scored below mkt trends in 1st half, including Harpoon up 5%, F.X. Matt flattish (in difficult northeast) and Boulevard (down 2% in home state Missouri for 5 mos).

Lagunitas Leads Growth; Founder's Flying; Sweetwater, Firestone, Oskar Blues Up 30%+ Even in this exceedingly competitive environment, there are a number of craft brewers that are sustaining exceptional growth rates. Lagunitas remains the hottest among the leading craft brewers by far. Shipments up 88% thru Jun, depletions up 75%, chief operating officer Todd Stevenson told CBN. It is still on pace to sell well over 400,000 bbls this yr. A lot of the discrepancy between shipments and depletions is because Lagunitas is still trying to play catch up from previous shipments shortfalls. "We have not yet gotten ahead of this monster called growth," said Todd. Lagunitas Chi brewery still scheduled to come on stream by year end.

Recall, Founder's up 51% in 1st half, with over half its growth from Founders All Day IPA, founder Mike Stevens recently told CBN. Some other craft brewers with outsized growth rates include Sweetwater up 31% said sales veep Dave Guender. And Firestone Walker up 36%, sales veep Steve Almarez told CBN. That's after 2 "record months" and a +50% home market, thanks to its 805 blonde ale, a brand FW keeps close to its Central Coast home. Oskar Blues up 38%, putting it on track to sell about 125,000 bbls in 2013, including 50,000 bbls brewed in North Carolina.

Bell's, Brooklyn and Stone Stayed Strong Bell's up a very solid 17%, Stone up around 20% and Brooklyn's +22% thru the end of Jun. Brooklyn's int'l biz is up 65%, but its domestic biz up 15%, chief oper officer Eric Ottoway told CBN. Brooklyn still up double digits in NY metro too. Obviously, many smaller players are growing at very rapid rates. The overall picture remains one of exceptional health, but it's getting more difficult and more crowded at same time. Craft's inroads into American beer scene grow deeper and deeper. Tho many expecting shakeout, it hasn't happened yet.

These are perhaps craft beer's most impressive results yet. Almost 2500 US craft brewers pumped out about 7.3 mil bbls during the first six months of 2013, according to the Brewers Assn. That's a 7 share of US beer shipments, with a 900K-bbl, 13% gain this yr, even while total beer biz depletions were down about 3% on selling-day adjusted basis and shipments likely down about 2%. Craft $$ sales are up even higher, +15% estimates BA's Paul Gatza. That implies prices about 2% higher on avg than a yr ago. Those sales split among 2483 "craft" brewers, by BA definition. That's the most in the US since the 1870s. The org counted over 1600 breweries-in-planning at the end of June, up from 1252 at this time last year.

In case you thought this trend might be topping out, craft beer accelerated again in early 2d half scan data to some of best short-term trends we've seen: craft beer up 19.6% last 4 weeks thru July 20 in Nielsen all-outlet (Nielsen craft includes Blue Moon and Leinie). One watch out tho: avg prices up only 1% for last 4 weeks. Craft also continued to put up stellar #s in segment's most developed channel, supers. Volume up 17% last 4 weeks there, and $$ share climbed 2 to 16.5. And in c-stores, craft up 22%.

Revised Stats for Prior Yrs Along with yesterday's release, the BA included revised stats for craft production during the first halves of 2009-2012. Each half-yr revised upwards by 200-400K bbls, since original release. So this yr's trend is based on 6.4 mil bbls sold in the first half of 2012 (last yr, BA released a figure of 6.0 mil bbls in 1st half). Craft brewers sold about 5.5 mil bbls in the first half of 2011. Interesting to note that for the past 4 yrs, BA's half-yr volume number amounted to about 45% of the assn's final full-yr craft stat. If that's the case again in 2013, we're headed toward 16.2 mil bbls of BA-defined "craft" this yr, or +22%. But that seems highly unlikely. Cut another way, if craft ends 2013 +13%, or about 15 mil bbls, the 7.3 mil craft bbls produced during the first half of this yr would be closer to 49% of the full-yr total. And craft would be over 7 share for the full yr.

Major theme of Beer Inst mtg this yr was "One Voice." Several speakers stressed need for unity among all brewers and an end to attacks on competitors. True, there has been plenty of denigration of big brewers' beers as "fizzy yellow lager" (and worse) from craft brewers and their fans over the years. And that's not likely to end. But at least US brewers don't face barrage like they get in UK from BrewDog. Highly successful Scottish craft brewer repeatedly attacks big brewers, their beers and regulators. And it has an extremely foul mouth. Latest flare-up was over conclusion by the Advertising Standards Authority, UK's ad regulators, that a BrewDog home-page ad was "likely to cause serious offense to some people" and "unlikely to be acceptable in marketing communications." The line: "BrewDog is a post-apocalyptic motherfu*ker of a craft brewery." There were also references to "corporate beer whores" who BrewDog urged be "drilled" with a Luger. The ad disappeared temporarily, reports Huffington Post, tho BrewDog sez that was to push its "Equity for Punks" crowdfunding program (on track to raise another $6 mil from fans). For good measure, co-founder James Watt flipped the bird to the ASA, noting BrewDog listens to its fans "not the killjoy, self-important pen pushers at the ASA…. Those mother*&#!ers don't have any jurisdiction over us anyway." ASA said it is "monitoring the situation closely, but depend on BrewDog to turn this to its advantage.

Amidst chatter about taking "occasions" back from spirits and distinctions between bevs, as well as between big and small brewers and their brands, worth noting comments from big retailer who sells it all, Michael Binstein of Binny's Midwest chain. Recall that Michael detailed health of craft and current trends in his stores for INSIGHTS' Spring Conference back in May (see CBN #25). In recent interview with Shanken News Daily, Michael focused on parallel craft spirits trend. As in beer, craft is a very hot whiskey segment and suppliers have supply issues. Another potential parallel: for some "great iconic brands" like Cutty Sark, "their best days are behind them." Drinkers of mainstream vs craft differ too: "No one will ever blog about having a Cutty Sark on the rocks. It's also part of the intersection of social media and the youth movement. It's been a perfect storm." This reminds us that while makers of mainstream beers talk a lot about refreshment, social lubrication and other attributes, craft brewers/craft drinkers much more focused on the beer and the taste. Then too, Michael added: "I also think that there's a lot of crossover between craft beer and craft spirits with our customers." That's seems like oppy and challenge for going after "occasions." It also suggests craft beer and craft spirits have more in common than not, at least for some drinkers, and at least one key retailer.

That was controversial contention of Denver Off The Wagon, a blog "about the alcohol culture and community in Denver." Its accessibility and "the sheer size of their marketing machine mathematically makes Blue Moon Belgian White the most common bridge between BMC and craft," said Josh Clauss ("BMC" is geek-speak for BudMillerCoors). Its ability as a "gateway beer" to steer consumers toward the "perpetually enthralling exploration of all make and model of craft beer" is a reason to love Blue Moon, he added. "Blue Moon now boasts sales equivalent to 10% of the entire craft segment in the US," yet while many people disdain it for its "crafty" nature, gotta realize, Josh contends, that as big brewers increasingly try to play in the craft field, they inevitably drive more attention to their craft counterparts. Blue Moon deserves props for this, sez Josh.

MillerCoors is also making noise in craft-centric Colorado with AC Golden through "its sour program, led by Coors' next Keith Villa, Troy Casey. That project, more than any other, has been the biggest awakening for me in craft beer since my own gateway moment," said Josh. In short, "Troy began turning up to craft community events, quietly holding best-of-show sours in unmarked bottles to share with unsuspecting enthusiasts. People were blindsided by how well they stood up to the most sought-after beers in the world. Soon after, they made their first bottling run, which sold out immediately… They've overcome the stigma and won over some of the most discerning customers in the market."

Plans for the more than 30 start-up brewing companies we've come across in the last couple of weeks range from $10K, 1.5-bbl-system nanobreweries to multi-million-dollar investments into multi-acre properties. Plenty more homebrewers are "going pro," some on the super-tiny, keep-your-day-job scale. But more and more we're hearing about big investments into American brewing, some with a clear craft-bent and others hoping to capitalize on local-love or sudsy excitement. On the big, less craft-like side is Kikkerfrosch LLC, which hopes to build a $29 mil facility in Orange County, NY (about an hr NW of NYC) for its "true European lager." Greek entrepreneurs with stakes in the Macedonian Thrace Brewery (makers of Vergina Beer) plan to invest $9 mil in the project, supplemented by another $20 mil in grants and low-tax or no-tax loans. Town officials in Chester, NY are on board and have already helped scout an 18-acre "shovel-ready" site for the 90K sq-ft, 200K-bbl capacity facility, according to local Chronicle and Times Herald-Record reports. Similarly, Cleveland could get a huge Hofbrauhaus franchise location that will brew the brand's traditional German beers on-site. Investors expect an $8.4 mil-price-tag on the project, have already received some small biz loans and plan to have space for nearly 1700 drinkers at a time.

Some big craft bets include Wisconsin Brewing Co, equipped with a 20K sq-ft facility, 80-bbl brewhouse, 100K-bbl initial annual capacity and space on hand to double that. Founders and ex-Capital Brewery employees Kirby Nelson and Carl Nolen plan to be open by late fall, wrote Isthmus this week. A couple of Savannah, Ga breweries' physical footprints are at least as large, if brewing plans are less ambitious, according to a Savannah Morning News story. Founders of Service Brewing already have two facilities planned: a 30K sq-ft building to house its 30-bbl brewing system, as well as "an old welding shop" being converted into "a smaller brewing facility." Coastal Empire is leasing a former Pepsi bottling plant in the city, after spending 2 yrs contracting at a brewery in Hunstville, Ala. President of the city's tourism department is thrilled about the possibilities of expanding "culinary tourism" in the area. Two owners and 25 investors have put $1.7 mil into opening Kansas City Bier Co's 10K sq-ft facility, prepping for a Nov opening sez the Kansas City Star. One investor has sunk $1.8 mil into revamping a 6400 sq-ft "blight" for Brown Iron Brewery in Washington Township, Mich, according to the Advisor & Source.

Restaurant Chains, Wineries, Farms Get Brewing Instead of looking for a brewer to contract beer for its restaurants, the Twin Peaks chain has decided to turn one of its Texas restaurant locations into a brewpub, according to Dallas Morning News. The 46-unit chain, a Hooters-like establishment (its name's an innuendo and it's Bikini Week at the moment) has received approval to brew on-premises at one DFW location, a decision made after the legislative changes affecting brewpubs in the state. In Florida, Keen and Curley Winery has outfitted its wine operation with a 7-bbl brewhouse to open Two Henrys Brewing by fall. The co is already making Cigar City's hard apple cider, according to the Lakeland Ledger. Elsewhere, Brewery Terra Firma is opening up its 10-acre farm brewery in Traverse City, Mich and Lickinghole Creek Brewing is closer to firing up a 20-bbl brewhouse on its 200-acre farm in Goochland Cty, Va. Both farmer-brewers are growing their own hops and other ingredients like berries or pumpkins for their beers. Lickinghole Creek has already been picked up by Brown Distributing for Va distribution, founder Sean-Thomas Pumphrey told Richmond Biz Sense, and hopes the farm will differentiate the brands since "we're not just another brewery in an industrial park."

Lots More Nanos Filling Niches There are, of course, plenty more itsy-bitsy brewing operations opening in industrial parks, abandoned downtown buildings and elsewhere, and they're getting some serious attention too. Both the NY Times and Chicago Sun-Times ran articles on their respective cities' growing nano-scene in the last week. More than 200 nanos are in operation or about to open in the US, NYT claims (BA data indicates 200+ breweries produced less than 100 bbls last yr, another 150+ brewed less than 300 bbls) following "a nationwide upsurge in home brewing." Rather than spend millions, nanos "can start for as little as $10,000," especially if brewing in their backyards or garages, like a number of NYC-area operations. One nano-founder told the paper that after working through "a basic business plan," he "came to the conclusion that this was a horrible idea." He opened Big Alice Brewing anyway. The goal for many, the Times writes, is to "grow quickly, using their proven demand to justify a loan to build a larger system." Meanwhile, "people want local beer," and as the Sun-Times states, "the operations may seem amateurishly small, but the product is not." The model has its benefits, especially when self-distributing, which allows for "more competitive prices."

Elsewhere, a new brewer in New Jersey is moving into the site that Flying Fish just left, Isthmus reported. Nearby, an entrepreneur hopes to turn 20K sq-ft of land and a blighted building into a neighborhood-revitalizing brewpub/beer garden/event space near the Jersey Shore, which a councilwoman thinks is "fantastic," according to NJ.com. Meanwhile, Eighteenth Street Brewery is "poised to become an anchor for the Lake Street business community" in Gary, Ind, wrote the Gary Post-Tribune and Dry River Brewing is being looked to as an "early adopter" of business revitalization along the riverfront in LA. We've also read about startups in Ga, Mo, Ind, Minn and Wisc, 3 in Muskegon, Mich, and 2 in Burlington, Vt recently, and there doesn't seem to be an end in sight.

Epic Brewing just got started at its new Denver facility, announced last Oct during GABF, and it's only adding fuel to Epic's fire. Its original Salt Lake City brewery took it up 34% YTD over 2012, before Denver came online, ceo/co-founder David Cole told CBN this week. That facility's "on track for" 10-13K bbls this yr, and the Denver spot provides another 10-12K bbls of capacity for Epic. The Colo brewery is helping Epic "try to meet demand," Dave says, not necessarily pump out as much beer as possible. That's particularly because Epic is becoming increasingly known for its specialty brands like Hopulent IPA in its Elevated series, and barrel-aged versions of Brainless in its Exponential series, which they're "scaling up significantly" in Denver. Epic's beers are available in 14 states and DC, with NJ, Va and NC the only states on the East Coast, and Oh, Mich and Minn in the middle of the country. Epic "might open a nearby state" -- it's gotten inquiries from NM and a couple from Tex -- but it has "way more than enough" going on, before those added complications. Back in Salt Lake City, a 2+ yr process to get a zoning change and redevelopment agreement just ended, allowing Epic to potentially "push barrelage-production a little bit," but mostly allow for construction that "simplifies our operation," Dave says, and "makes us more efficient." As if balancing those plans, production at the new Denver brewery, getting the Denver tap room open (looking like Sept 28, just in time for GABF crowds), and distribution agreements with Elite and American Eagle in Colo weren't enough, the co is also setting out on building a "little brewpub" in Salt Lake City. "This Prohibitionist movement in the state," Dave claims, helped "create all these interesting loopholes" and "weird rules," so Epic is taking advantage of them and putting in a "gastropub"-style restaurant with a 7-bbl system that'll serve some "really sessionable saisons" and "really push the envelope." "Just for fun," of course.

It took Bell's Brewery owner Larry Bell yrs to resolve ownership issues, and now a nasty, new threat has popped. As part of clean-up efforts in wake of massive Kalamazoo River oil spill in 2010, oil co set up dredging pad very close to Bell's Brewery on Morrow Lake in Comstock, Mich. Both Bell's and Township officials think they're setting it up in wrong place and location threatens bizzes and residents. Not surprisingly, Larry has been among most vocal critics of placement, tho he acknowledges clean-up has to move forward. At township mtg earlier this mo, he said: "The EPA doesn't know what is in the sediment. They don't know what they are dredging up. They are going to put it next to my brewery and they don't know what contaminants are there. It's federal incompetence." Then, with typical bluntness, Larry added: "Whatever idiot decided to put a pollution remediation facility next to a food processing facility should be shot." (All quotes from mlive.com.) In lawsuit filed this week, Bell's said dredging will "release pollution, hazardous substances, odor, dust and particulate," threatening brewery operations. Local officials have requested state deny a permit for the dredge site and a local village also voted to file a lawsuit over water concerns, according to mlive. "I've faced a lot of challenges in my business career," Larry also said at township mtg, "but I've never thought I'd lose my business. This makes me worried I'll lose my business. People will not want to buy my beer if they think it might be contaminated."

Coincidentally, dredging issue emerged just weeks after 8 Mich brewers (tho oddly not Bell's) joined "Brewers for Clean Water" initiative in partnership with Natl Resources Defense Council to shore up Clean Water Act. Twenty craft brewers signed joint letter to President Obama to urge the Administration to "finalize and issue guidance that provides greater clarity that a variety of water bodies are protected from pollution by the Clean Water Act." Bush-era guidelines have been interpreted, brewers say, to exclude many streams/wetlands. Draft guidelines from EPA would include them and assure clean water, the brewers point out. In a nice touch, the letter reminds the President that "like you, many of us started out as home brewers" and "like you," they learned the importance of quality ingredients, especially water, "which makes up roughly 90% of any beer." Among brewers who signed letter: Sierra Nevada, New Belgium, Goose Island, Founders, Allagash and 15 more.

Here's a quick progress report on how contract brewing is in process of reinventing itself and providing alternatives for the many fast growing craft brewers unwilling or unable to invest in expanding their own facilities. There are already several different wrinkles; new contract brewing concepts like Two Roads, Brew Hub and Beltway, are cropping up with increasing frequency and do appear to be getting some traction. Tho it's still early days and the models are unproven economically, there does seem to be demand for these new contract brewing services.

Over $20 mil poured into Two Roads' impressively large and up-to-date facility in Stratford, Conn, including debt, equity and state grants. It's something to see, this handsomely refurbished 100,000 sq foot 1911 structure on 6.6 acres dating to Connecticut's manufacturing heyday. And they're off to a running start, ahead of plan, according to ceo Brad Hittle.

Two Roads has 10 contract customers, 8 brewing there already, including Stillwater, Evil Twin, Fire Island and Hartford's City Steam (other customers remain confidential). It expects to sell 30-35,000 bbls of contract production in its first full yr. Total would have been even higher except that govt approval process takes awhile, and that's one of key learnings so far. Two Roads will also sell 5,000 bbls of its own brands in 2013, with 900 points of distribution all in Conn. It's already 1 of top 10 suppliers for its biggest distrib Star. While there are 21 craft brewers in Conn, none has firmly established lead position in the state, but Two Roads is trying to get there. In late Aug, Two Roads will also enter RI. Two Roads expects to be cash-flow positive by early next yr, said Brad.

Two Roads already up to 28 employees, including brewer Phil Markowski and his team, a Yale PhD microbiologist, a sales force of 2, event and marketing folk, etc. It is installing 10 new fermenting tanks, 8 300-bbl and 2 100-bbl. Those will bring its brewing capacity to 150,000 bbls. It has 100-bbl brewing system, a 300-bottle a minute bottling line, 280-cans per minute on its canning line, a kegging line and more. Its brand-spanking new equipment can be seen from its spacious tasting room overlooking the brewery.

Another somewhat similar concept is Brew Hub, funded by Ron Burkle's Yucaipa, a private equity firm. That's also going to have both contract and its own brands, plus adds the experience and consulting services of seasoned team of ex-AB execs. The concrete is poured, walls go up this week, noted prexy Jerry Mullane, adding that Brew Hub is also "well received" and "ahead-of-plan" on its approx 100,000-bbl facility, which will open next spring. In fact, if it were to sign contracts with those players with whom it is currently negotiating, then Brew Hub "would be oversold by a wide margin," said Jerry. Lots of interest, especially from fast growing 10-15,000 bbl players (but some up to about 50,000 bbls). They get Brew Hub's concept of "partner brewing," thereby avoiding the big capital commitment of getting to the next level of production. Brew Hub also having conversations with some global players who want to brew here and finding "enthusiastic response" to its advice and consulting services as well. Stay tuned.

Earlier this week, Beltway Brewing in DC area profiled in Wash Biz Jnl with yet another wrinkle on contract brewing. Beltway's Stan Sellier raised near $2 mil for a brewery that will start brewing in Aug and be ready to go to mkt in a couple of mos. Beltway will make small batches for "individuals or smaller breweries who can't justify the expense of sinking hundreds of thousands or millions of dollars into a brewery." He wouldn't name names but ¾ of his potential clients (contract negotiations are ongoing) are startups or home brewers looking to "go pro." Others are restaurants who want to serve their own beer or "out of state breweries trying to break into the D.C. market." There is so much demand for craft beer these days that existing capacity and players can't yet capture it all. A similar model is starting up in Ohio City nabe of Cleveland (where Great Lakes has been based for a couple decades). Platform Beer Co hopes to be a "spring board for home brewers hoping to turn a hobby into a career," according to the Plain Dealer. Its 10-bbl system will be available mid-2014 for those looking to work on an alternating-proprietorship basis.

Latest market-expansion for third-largest craft supplier will be in hands of AB network of 8 distribs in Utah, NBB announced today. New Belgium's brands will hit streets in Utah "later this summer," though "exact brands" are still tbd; 12 ozers of Fat Tire are the only sure bet.