Craft volume up 18%+ in IRI's multi outlet + convenience data base for 4 wks thru Jul 14. That pushed yr-to-date craft volume gain to +15.2% and $$ sales up 17.5%. Meanwhile, total beer off 1.1% YTD, premium segment off 2.8%. Craft grabbed 5.9 share of $$, 3.7 share of volume thru mid-Jul. In grocery channel, craft had 8 share of volume (+1), 12.5 share of dollars (+1.4).

Biggest craft brands still losing share of segment, but many are up. And that's yet another key difference between craft and mainstream mkt. Of top 10 craft brands, 7 are up across outlets. In mainstream, 7 are down. Among top 20s, 16 craft brands up, only 5 mainstreams gained. And top 2 craft brands up double-digits: Sierra Pale (+10.3%) and Sam Seasonals (+12.3%). Boston Lager up respectable 6.2% YTD posting double-digit gains for 4 and 13 wks. Shiner Bock up near 10%. Fat Tire still sluggish: -0.9% YTD, tho up almost 2% for 13 wks. Similarly Sierra Seasonals still -4.9% YTD, off more modestly for 4 and 13 wks. But Sam Variety and Sierra Torpedo runnin' up 28-29%. And Lagunitas IPA jumped 63%; Stone IPA up in same range. Widmer Hefe shaved YTD loss to -3.2% and put up modest gain last 4 wks. New Belgium Ranger and Redhook Long Hammer IPAs each up about 18%.

Overall, craft pricing up about 70 cents/case, 2.1% so far this yr. That's while premium segment got just 17-cent, 0.8% avg price hike. But most top craft brands had more modest price hikes than segment. Indeed, none of top 10 brands got anywhere near that 70-cent hike and 4 had avg price declines. Sierra Pale up 12 cents/case, Sam Seasonal got a quarter and Boston Lager 13 cents; each of those increases less than 1%. Shiner Bock got near 50-cent price boost, but its avg price still at least $1 less than top 3 brands.

If it's not quite burnin' it up yet, looks like things are on an encouraging simmer at Bronx Brewery. And it's doing it, so far, with emphasis on nothin' but pale ales. Demand has been encouraging enough to prompt move into cans, ordering of 20-bbl system for brewery/taproom site and expansion of distribution all the way north to Canadian border.

Recall brand founded by brewer Damian Brown and gm Chris Gallant launched in decrepit former ink-cartridge plant in once-notorious (but now mainly dull) South Bronx with plan of capitalizing on Bronx's brand recognition and filling void in craft desert (CBN, Vol 3, #53). To surprise of some local skeptics, brand has proved more than novelty, thanks in part to tight focus on well-crafted range of IPAs. It's become fixture well beyond Bronx's borders, with key accounts ranging from venerable Katz's Deli on Manhattan's Lower East Side to cavernous new Strand Smokehouse barbecue-and-bands joint in Queens. Taking its time, it's even heading into craft-beer and foodie bastion Brooklyn. Co should more than double biz to 4,500-5,000 bbl this year, producing at City Brewing in Wisc and Cottrell in Pawcatuck, Conn.

So now it's stepping things up. It's locked in site for brewery/taproom at 136 St and Walnut - so-called Port Morris section of the Bronx - for which it's ordered 20-bbl DME system that will allow output of 3K bbl annually, allowing co to end guest brewing at Cottrell. Building once was ironworks showroom that segued to lace factory (samples still turn up), then electrical contracting firm. Gallant jokes that it will take work just to qualify structure as a "shell." Plan calls for City Brewing to be retained for core Bronx Pale Ale line, still two-thirds of biz, while Port Morris produces smaller and innovative items. Partners hope to be brewing there by Dec.

With East Coast now showing similar fervor for IPAs as West Coast, Bronx partners are staking their identity on pale ales with roster that comprises Bronx Pale Ale, Summer PA, Rye PA, Black IPA and Belgian PA, along with versions aged in gin, bourbon or zinfandel barrels. Entry into 16-oz cans of core flavor is being followed by Bronx Black PA and other seasonals. Brand has expanded to 5 boros of NY, Long Island and Albany, all via L Knife distribution operations, and just hit I-87 corridor north to Canadian border via L Knife's new Craft Beer Guild Distributing, carved out of co's Union and Tri-Valley operations.

Best account has proved to be Madison Square Garden, where brand expanded from 8 lines to 20. That ended when Garden recently closed for renovations. Despite brand's Bronx heritage (and enticing prospect of doing larger-size packs called Bronx Bombers), Yankees have proved tougher nut to crack, with brand only in 2 eateries at Stadium so far. But on game days, brand works margins, say, by using its cans for Bucket of Bronx promos in bars during broadcasts, or pitting brand vs Stone, say, when Yanks face Dodgers.

A couple of clips this week indicate that American entrepreneurs and hip drinkers in craft strongholds may be beginning to look beyond beer. Sake, the often-cloudy fermented rice beverage Japanese brewers have spent centuries perfecting, is the latest subject of the American craft alcohol movement, according to a Georgia NPR report this week. Unsurprisingly, the homes of America's few sake-producers include some familiar names: Portland, OR; Asheville, NC; Austin, TX, Minnesota and Maine. While a NYC-based sake-only retailer snubs American versions for Japanese classics, founder of Moto-I, the "original American sake microbrewery" notes that "America makes great wine and great beer, and with sake, we're seeing the same American story again." American sake makers are currently struggling with some of the same issues early American craft beer makers struggled with: access to ingredients (large quantities of high-quality rice) and equipment ("where would you find a 250-kilogram rice steamer in America?"). They're also bringing American innovation: a soon-to-open Asheville sake-maker plans a bourbon-barrel aged sake, even though sake is traditionally served fresh, like beer, and is rarely aged. That same sake-maker noted that he "wouldn't want to be opening a brewery now."

Elsewhere, young drinkers in San Francisco seem to be heating up to aperitifs and digestifs, which are "attracting the kind of learn-about-me buzz that two years ago was all about beer," according to a HuffPost Taste blog. Further, "there's definitely a movement afoot in the cocktail world that's trending back toward sessionability," a SF cocktail-focused bar manager explained to HP, since "people want to be able to drink more than one cocktail, and they want to be able to taste their dinner." Another cocktail-guru noted that "there is definite interest in more variety in lower-alcohol drinks." It seems bar-goers are willing to spend more money on less alcohol and are more invested in flavor and taste than in alcohol's effects. Finally, "chefs are even cooking with digestifs," which often offer herbal and bitter flavors hard to find in other liquors. It's unlikely these niche trends will make a dent in craft sales, in fact they might even help craft: taken together they indicate greater interest in independent, small-scale American-made products that have strong flavors that pair well with food. The new focus on "sessionability" and finding drinks you can have more than one of sure can't hurt beer either.

The oldest brewpub in Colo is flexing its muscles outside its Denver home, pushing sales of self-distributed brands up 80% yr-to-date over 2012. It's big growth to be sure, but on a tiny base of course. Wynkoop sold just under 4000 bbls last year, according to BA stats, and all but about a quarter of it was bought on-site at its Denver pub, "conductor/idea man" Marty Jones told CBN this week. But so far this year, distributed products are more like 35% of Wynkoop's biz (beyond the BA's 25% cut-off for inclusion as a "brewpub" rather than a "microbrewery"). Sales of 12-16 beers on tap at the pub are up too, but 4 yr-round beers in 12-oz cans and 22-oz bombers of its "Even Smaller Batch Series" are flying. Marty noted the need for balancing sales stats with the "artistry" of beer making. So too, the co balances leveraging its historic brand with big-time innovation. Twelve of the taps at Wynkoop stay the same yr-round, Marty said, providing "really good beer that people can count on." At the same time, the co is trying to "put some sacred cows out to pasture and adopt a new mindset." For example? "Well, we put out a beer with bull testicles." Fair enough. Recall that's a reference to April Fools joke turned real brand, Rocky Mountain Oyster Stout, one of the two "Even Smaller Batch" brands along with Colorojo, an imperial red ale that Marty says "could be our biggest selling beer if we can supply it." Meanwhile, Wynkoop is resisting catering to the rotator bars: Marty advises his sales team that they "can waste a lot of time...pitching to those accounts." Instead, the co has "shifted our focus" towards accounts where they can keep a tap handle for a while or "retail stores that can move many cases a week." Other ways Wynkoop is generating excitement for the 25-yr old brand include work with local theme and water park Elitch Gardens, which was "shocked at how well" 2 park-specific brands sold last year, so upped its commitment to a third for 2013.

Lotsa references over the years to Kim Jordan's 2003 prediction that craft would get to 10 share of US beer volume. Most believe that's now inevitable. But Mich Brewers Guild director Scott Graham recently upped the ante during NPR interview. Asked about potential "saturation" of Mich craft brew mkt, which currently entertains 140+ players, Scott said he figures beer "brewed and sold in Michigan" was just below 4 share there in 2012. But "a lot of room for continued growth" and he "expects to see it get to 10% and beyond."

When it comes to ensuring worker safety in breweries, "there's always more that can be done," Brewers Assn Director Paul Gatza explained to CBN this week. We checked in with Paul after Reuters published an article on the comparatively high rate of safety violations, incidents and deaths at craft breweries versus large breweries, on a per-bbl basis. From 2009-2012, "at least four people died in craft brewery accidents in the United States, compared with two deaths at large breweries that make 10 times more beer," Reuters noted, citing its analysis of OSHA stats. Those stats also show about 4x the "violations" (547, almost half of which are termed "serious") at craft breweries than larger beer manufacturing facilities between 2003 and 2011. Craft breweries may have a higher rate of incidents per bbl-produced, but larger breweries have a higher rate of incidents per facility according to these same stats, Paul reminded. (Rates of incidents per employee are harder to nail down.) He also said that the OSHA stats are likely "not thorough or complete," as the article notes as well. For instance, Reuters spoke to Teri Fahrendorf, founder of the Pink Boots Society, who suffered a serious burn while working in 1989 that was never reported to OSHA and so does not show up in its statistics. Indeed, OSHA lists only 2 "serious injuries" at a craft brewery since 2002, both at Ballast Point and both for burns during the summer of 2010. Since then BP has had no injuries requiring hospitalization while churning out 5x the beer, cfo Rick Morgan told Reuters. In attempting to explain the phenomenon, Deschutes founder Gary Fish explained that demand leads to haste, which in turn leads to accidents.

"Manufacturing facilities are dangerous," Paul reiterated, with "chemicals, temperatures, pressures" and always with the addition of "humans." As the number of operating breweries continues to increase, so does "the chances of something going wrong." As such, the BA recently announced the addition of a safety-focused subcommittee formulating under its Technical committee. Paul called the committee a "great move" in the assn's "growing role" to "provide resources to the membership" that they can implement at their breweries. Safety consultant and Ploughshare Brewing founder Matt Stinchfield will be heading up that committee, and while Reuters quotes him heavily, it omits this new role at the BA. Paul suggested that the new committee might work toward creating a "living document" or "online manual" for members, hopefully making it easier for them to maintain and measure safe work environments. While larger manufacturers may have dedicated employees monitoring safety conditions, tapping into that knowledge-base and "sharing information" could be helpful in keeping brewery-workers at any-sized facility safe. "We are going to be facing more manufacturing environments," Paul reminded, so "awareness" and "vigilance" are crucial.

Founders Brewing has been shorting orders since March and is still up 51% YTD, co-founder/ceo Mike Stevens told CBN. The co, unsurprisingly, announced this week that phenom All Day IPA will be a yr-round brand as it's taken over as Founders' biggest volume brand from Centennial IPA. All Day's now at about 25% of vol and moving towards 40% "based on sell rates" and "growth in the points of distribution," Mike and team are seeing. The brand represents almost 60% of Founders' growth so far in 2013, even tho it wasn't even on shelves 'til March. After a +45% Jun, expansion of manufacturing space is over, "orders that are going out in July are being filled" and "forecasts for August can be met." That includes the co's "mid-August" launch in Florida with Brown Distributing and appearance of All Day 12-oz cans in 12 pks. It's the first brand Founders will can since the co "waited until we could spend a couple million on a canning line," which is now "up and running." Addition of the pkg will help Founders toward maintaining average yearly growth rates of over 70%: Mike projects almost 125K bbls in 2013 and about 200K bbls in 2014. That would be over 8x the co's 2010 volume. Mike points to the co's insistence on quality and maintaining its position as a "highly product-driven company" as reasons for Founders' success. It spent 3-4 years developing the recipe for All Day, "developing a full-flavored beer that was under 5% alcohol," a "motivating" and "great challenge." The brand "really took off on us" and "caught us by surprise," Mike said, since consumers are "intrigued and interested in finding some beers that are lower in alcohol" but "high in flavor." All Day fits the bill, and Founders' reputation ain't hurting, even amidst the "oversaturation that we have of IPAs," which leads Mike to underline the "important words" on All Day's label: "session ale."

A follow-up on piece about big bottles as "major factor" in craft-centric mkts. Turns out there is clear leader in this big bottle trend, especially in Southern Calif. And that's Stone. Believe it or not, Stone has 30 share of big bottles (22-32 oz bottles) in SoCal foodstores last 52 weeks thru Jun 23 in IRI. Stone got $3.7 mil in big bottle sales in Calif supers, out of a total of $12.4 mil. Big bottles were 13 share of craft in SoCal as total craft at $92 mil last 52 weeks. Stone has the #1, 2 and 3 big bottles in SoCal, with Arrogant Bastard the clear #1. And Arrogant Bastard is also the #1 big bottle nationally, more than twice as big as #2, Lagunitas Hop Stoopid.

Stone Avg Case Price Over $53 Stone's strength in big bottles brings retailer "profit and variety without taking up much space," said sr mgr natl accounts Brian Dewey, recently on board after long tenure at Sierra and shorter stint at Golden Road. And Stone has highest average price per case equiv among craft brewers, according to Brian, with avg price per case of $53.58 in IRI multichannel data last 52 weeks. A big bottle of Stone can be same price as six-pack of many leading craft brands, so retailer gets more turns, more profit and takes up less space. That could be part of why big bottles are taking off, tho some are also offered at lower prices, and consumer can get more of that variety he/she craves without spending on whole six pack.

Sublimely Self Righteous Doubles; Other Brands Up Even More Arrogant Bastard alone is more than 10 share of big bottles in SoCal, but it has also slowed somewhat; up 6.7% for 52 weeks. Other Stone big bottles are up big: IPA up 28%, Ruination up 25%, Sublimely Self-Righteous (Black IPA) up 100%, Smoked Porter up 58%, and Cali Belgique up 49%. In fact, Sublimely Self Righteous actually grew $$ sales the most of any Stone big bottle brand, up $175,000.

Yet as growth of big bottles explodes in SoCal foodstores, several other brands flying at even faster rates. At least 4 gained more in $$ sales than Sublimely Self-Righteous and each more than doubled. Lagunitas Hop Stoopid 22-oz bottle up $239K, 225%; Firestone Walker Double Jack up $208K, 159%; Ballast Point Sculpin IPA 22-oz up $189K, 225%; and Green Flash Imperial IPA 22-oz up $184K, 125%. Could these trends spread to other mkts or are they specific to So Cal?

Stone "Pretty Much on Pace" for 20% Growth; Lots Going On Stone is up 47% overall in IRI last 52 weeks as IPA distribution "really starting to take off" said Brian. In all channels, Stone's growth is somewhat slower, but still strong. Stone is "pretty much on pace" to achieve its goal of 20% growth in 2013, added Brian. In other Stone news, it is very active in all 3 tiers, sometimes to the chagrin of Calif distribs. Not only has Stone just about completed its new packaging hall, but it opened a 2d restaurant in May, complete with its own 10-bbl brewhouse (no packaging there). Stone currently has 5 retail shops open. Stone also just opened a Bistro Bar in San Diego airport. Recall, Stone also has very successful distribution co (1.6 mil cases in 2012).

Lotsa talk about brewers and allies speaking with "one voice" at annual Beer Inst mtg this week in Chi. Chairman Tom Long (MC ceo), vice chair Luiz Edmond (ABI North American prexy) and BI prexy Joe McClain each talked about importance of unity to advance beer's image, public policy positions (including current tax advantage) and even "commercial success." Remarks aimed at members and suppliers in attendance, of course, but more specifically, tho unstated, craft brewers and BA who have not exactly been on same page as big brewers re taxes and another issue or two. Clearly Tom had craft brewers in mind when he called for halt to "denigrating competitors. It is bad form…. Be for beer," he said. "Hard liquor continues to move its agenda forward," he pointed out, including tax equalization which would be devastating for all brewers. And while beer biz members don't agree on all matters, gotta focus on 90% they do agree on, Joe advised, and suggested "it's not prudent to send mixed messages to the public." Reiterated BI's position that tax policy "should not pick winners and losers." Also warned brewers against fighting in the press and "drawing false distinctions between products." Phrase "craft vs crafty" not stated, but it was in background.

More specifically on tax policy, Tom stressed that beer biz has to be careful to protect current advantage vs spirits, which is based on beer's traditional moderate ABV levels and pre-set serving sizes. But some "outliers" pushing ABV to wine levels, he said, and that could "threaten the entire regime" since typical consumer "will not see the logic of different tax levels" if beer ABVs go there.

While several small brewers and BA execs in attendance, none on BI program. Several other speakers, including head of non-alc American Bev Assn and BI's inside-the-beltway political pros, also voiced importance of unified message before policymakers and public. There was closed mtg between BA and BI, where tax policy and other issues aired out. Tho BI and BA continue to pursue different tax bills, which creates ongoing tension, they're clearly unified against any increase in beer taxes, as well as .05 BAC limits, keg theft and more.

Thinking about BI mtg, recent rhetoric and mos of "craft vs crafty," several ironies emerge. Big brewers have fully embraced notion of building beer category via taking occasions back from wine/sprits. And Tom Long noted that focus on simply grabbing beer share from competitors doesn't cut it with retailers. But it's craft brewers who have always talked about a "rising tide lifting all boats" and tho they can be plenty competitive, they're also traditionally far more "collaborative" than their big brewer brethren have been. Then too, BI speakers never used word "liquor" without adjective "hard." That may not be "denigrating" per se, but it sure ain't friendly and sure won't help "unified efforts" to defeat proposals from public health advocates who target all alc bevs and who explicitly try to exploit any cracks between beer, wine and spirits. Craft brewers, on other hand, don't attack liquor. Indeed, a number of major craft brewers are distillers, and highly unlikely to adopt harsh anti-spirits rhetoric. Pointing out that TTB's recent comments on serving facts "makes crystal clear that a drink is not a drink," Tom insisted that "consumers want transparency" in labeling, agreeing with craft brewers, tho on different subject than disclosing who makes the beer. Tom did not finger any specific brewer/brand when he said that "outliers" producing high ABV beers threaten beer's tax advantages (which some might say pick winners and losers). Many craft brewers make high ABV products, for sure. But so do MC (bourbon bbl-aged version of Big Eddy Russian Imperial Stout is 12% ABV) and ABI (Goose Island Bourbon County Brand Stout is 15%). Gallo's Barefoot wines (#2 wine brand in US, according to Impact) range from 9-13% ABV.

Baxter Brewing Co is moving into its new brewery in Lewiston, Me following a 6-mo, $2-mil expansion that added three new 8,000-gallon fermenters to ramp up production from 8,000 to 15,000 bbls annually, reported Bangor Daily News. That's pretty good for a 3-yr-old co, but founder/prexy Luke Livingston already has plans in works to add three more of those same size fermenters by end of this yr, "effectively doubling production again." "In the old days, we'd maybe package 85 barrels," said Luke. "This week, we packaged 185 barrels of beer. We're getting a little closer than we were," to keep up with orders, he noted, "but our total orders for this week are still more than 600 barrels." In 3 yrs, Baxter has spent $4 mil upgrading its facility, with a staff of 16, which Luke anticipates is about "halfway" to what co will eventually employ. With added capacity, Luke hopes to fill more orders in Maine and neighboring Mass. "I get calls on a weekly basis from distributors. I have to tell them, we can't get to Montana before we get to New Hampshire."