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New Orleans' Urban South turned 10 in Mar and celebrated with a block party and concert at which they brought back some of their original beers. The festive mood was at least partially in contrast with the tuff times in craft writ large, to which Urban South hasn't been immune. Tariff-related aluminum costs, war-influenced raw materials prices, a generation that doesn't drink as much as its parents and an impending federal ban on most hemp-derived THC-based products all weigh on the co, which shipped close to 24K bbls last yr and is "hoping to break the 25,000 barrier this yr," co-owner Jacob Landry recently told CBN. But it's not all bad news. The co continues to expand in the Southeast, specifically in FL, AL and TN, with an eye on SC as well, as it seeks to deepen its roots in the region. And they're not against bringing new brands onboard if the right ones become available. "Every Time You Expect to Catch a Break a War in Iran Starts" "We're desperately trying not to raise prices but something's gotta give," Jacob said. "Every time you expect to catch a break a war in Iran starts." The economic pressures aren't limited to production, as wallet-tightening has driven down on-premise sales in New Orleans. "I think that casual weekend trips aren't happening any more," co-owner Kyle Huling said, adding that "accounts are scaling back on draft systems" in response. "Say a piece of equipment breaks. They're having a hard discussion on 'are we going to replace it?'"Beer was down 8% statewide last yr, while Urban South was only down 6%, Jacob said, but that was "mitigated by the THC beverages." That silver lining, however, is clouded by the impending federal market cap on hemp-derived THC drinks of 0.4 mg/container, set to be enacted in Nov. Jacob said 20% of co's distribution revenue came from its Driftee and Stratus cannabev lines, the latter of which rebranded from a seltzer to a spritz earlier this mo. The reasoning? "We're starting to hear our distributors say 'we don't want another seltzer.'" The co is also working on a full-sugar THC cola line.And yet, there's a real fear that, come Aug and Sep, retailers will begin paring down their orders in anticipation of the Fall deadline to remove full-strength THC products from shelves. The company is a member of the Hemp Bev Alliance and Jacob has traveled to Washington, DC twice to lobby the state's Congressional representatives, which includes House Speaker Mike Johnson, tho "none of that delegation has really been a champion for us," he said. Contra to brewers in OH, who lobbied to get state law changed in advance of a Mar deadline set by the governor, Jacob thinks it's a federal change or bust in the Bayou State, where its biggest channel is Rouses grocery store, which he "can't imagine" would continue selling it "if you need a new framework."Potentially Expanding into New States, Adding Brands, RTDs Urban South expanded to the FL panhandle 2 yrs ago with Publix and between itself and sister brewery Perfect Plain, "within that distributor the IPAs for both are #1 and #2 by a good bit," Kyle said. In LA, Jacob added, the $10.99 6pk is a "a standout category" but that's "not necessarily the case in every market." The next new market they're targeting is SC, and "those convos are just starting to happen with an eye toward 2027 resets." From there, "part of our strategy is to go methodically and take time with things," Jacob said, adding that after that the co would "start looking at North Carolina and Georgia and then the rest of Florida."Success in dealing with distributors is the fundamental differentiating factor between breweries, Jacob commented. Over 10 years, the co has learned "what levers to pull and what not to do," and "that's the reason we've gotten where we've gotten." It's also the reason the co isn't fighting for survival right now, and that "there will be opportunities for a company like ours and bring additional brands into our portfolio" over the next coupla yrs, Kyle said. On top of that, Urban South only recently was able to apply for a permit to begin tinkering with RTDs, which will help co's continued outward expansion even as both Kyle and Jacob believe beer will make a comeback. It's "been around for millennia," Jacob said, "but we're also realizing we need to diversify a bit." As Kyle says, the "industry is cyclical" and "I am positive that at some point the next generation is going to turn toward beer." The only question is: when?

New Orleans' Urban South Aiming for 25K BBLs in 2026; THC Bevs Make Up 20% of Distrib Revenue; Aiming to Expand into SC; Eyes on New Brands and RTDs

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