There were several notable craft quotables from various presenters thruout Brewbound’s conference hosted in Santa Monica, CA over last 2 days. Here are some highlights:

Brooklyn Special Effects Testing in US Next Yr; Sleeman in Canada; US Platform Hit 5 of 6 KPIs Brooklyn Brewery is looking at non-alc beer space as a potential sizable oppy both overseas and in the US, CEO Eric Ottaway shared during Brewbound session. Recall, Brooklyn Special Effects was developed with Carlsberg to be sold in Europe initially (see Jul 10 issue). Launch is focused in Sweden and will branch out to other developed European mkts, but Brooklyn already plans to do “some market trials in the US” next year to “see what we learn.”  Non-alc beers have been stigmatized in the US, but “I think that’s gonna change in the US” and “change rapidly,” said Eric. And Brooklyn thinking more broadly about its product offerings in general. Co is “experimenting with a bunch of different products,” he added, pointing to success of Boston Beer as prime example of how that can work. “We’re opening our minds as to what we can be going forward,” looking at other categories and (almost) “nothing’s off the table at the moment.” 

Then too, Brooklyn also snuck in an announcement that it formed another international brewing partnership, this time with Sleeman Brewing in Canada – co’s “through our second or third test brew.” Recall, Sleeman is owned by Japanese brewer Sapporo. Indeed, Brooklyn continues to form partnerships with brewers in various geographies across the globe, between Kirin in Asia and Australia (24.5% ownership stake), Carlsberg distribution and brewing partner in parts of Europe (no stake), and several partnerships that Brooklyn formed with smaller craft brewers around the globe. As for its sales platform and partnerships in the US with 21st Amendment and Funkwerks, co delivered on 5 out of the 6 key performance indicators (KPIs) laid out in the beginning of the year (2 for each brand family), Eric shared. Brooklyn continues to have “interesting conversations” with other potential partners in the US as well, but again expressed that it has to be “the right fit” from branding, styles, geographic, and personal compatibility standpoints.

Rhinegeist Will Hit 100K Bbls in 5th Year; Tanks In Place for 50% Increase With one mo to go, Rhinegeist is on pace to reach 100K bbls in 2018, just its 5th year in biz, co-founder Bryant Goulding shared. Co currently has built in tanks “to grow 50% from where we are today,” he added. New lager, Cheetah, and “fruited ale,” Wowie (to go alongside last year’s big launch, Bubbles rosé ale) were highlighted as important additions to the portfolio in 2018. Yet this yr, Bryant and co spending more time “indoctrinate[ing] our people” with Rhinegeist culture, as well as building in-house capabilities with anything from distribution and logistics to printing t-shirts, tap handles and other POS, and experimental brews. Notably, Rhinegeist is a young company in more ways than one: avg age of employees is 31-32 yrs old.

Lawson’s, New Realm, Braxton Risks/Rewards of Growth and Expansion Lawson’s in VT, New Realm in GA/VA and Braxton in northern KY each talked about their fast paced growth, as well as the risks/rewards of expanding operations. Lawson’s jumped from 3 full time employees to 40 after opening its new brewery and HQ a little over 1 mo ago, founder Sean Lawson shared. Co essentially doubled production each of the last 3 yrs (suggesting co blew past Brewers Assn’s “regional” volume metric of 15K bbls in 2018), but more recently has “hit a happy balance for our brand between meeting demand and not going overboard” with supply. Its taproom is expected to become a sizable chunk of its biz in short order, he added.

After 3.5 yrs in biz, Braxton expects to end this yr “right around” 17K bbls, “really close to the largest craft brewer in Kentucky,” noted co-founder Jake Rouse. Co opened separate Braxton Labs for experimental brews and has taken “fail fast” mantra to heart. It’s going on 3rd iteration of IPA recipe, but at same time has found identity in “sessionable” craft brews, including recently launched craft lager, Garage Beer, at $15.99 per 15pk.

New Realm co-founder Carey Falcone likened Green Flash VA brewery to eating celery: “negative calories” and “didn’t see a lot of risk” since “we spent pennies on the dollar.” Recall, New Realm had been in planning for 8 yrs before officially opening 20K sq-ft brewery in Atlanta, and 4 mos later decided to buy 58K sq-ft Green Flash facility. Also, New Realm only considers one of the 4 original core brands “core” still.  Lesson learned – be flexible and “pay attention” to consumers, natch. Co already has 225 employees and highly experienced leadership team relative to most (all?) start-up craft brewers.

Pabst Won’t “Aggressively Pursue” More Craft Partners but “Happy to Help…From Time to Time”

While Pabst is branching out into several different segments in the coming year, craft is one area co plans to take a more measured approach, recently appointed GM Matt Bruhn shared. Pabst is “happy to help craft partners from time to time” but isn’t looking to “increase” the “clutter” in craft space. “If we can help some of them we will,” but Pabst is “not going to aggressively pursue” more partners. Co is far more focused on PBR line extensions in light lager, non-alc, hard seltzer and spirits, along with regional heritage lagers. (Meanwhile, Pabst and MillerCoors settled much-discussed lawsuit over contract brewing relationship, tho Pabst still in middle of suit with glass bottle producer, both covered extensively by sibling pub INSIGHTS Express.)

Squeeze on Shelves Pressures Prices, Cramped Warehouses Puts “Onus” on Brewers; Whither “Long Tail”?  Intriguing thoughts and reactions to current state of craft competition shared by leaders at trio of up-and-coming, fast-growing brewers. Discussing difficulty of getting and holding onto retail shelf space, tap handles and attention from distribs, co-founder of Wyoming’s Melvin Brewing Jeremy Tofte noted that cracking into broader set of retail chains is challenge his co currently facing. Speaking a day after AB’s Felipe Szpigel touted success his co’s acquired partners have achieved, Jeremy quipped that “Felipe’s been doin’ a great job filling the shelves out there.” And some cos now playing the price card in craft, but “we can’t make a $9.99 IPA. We’ve tried and we’ve tried and we’ve tried and we just can’t,” he said.

Wholesalers’ “heads are spinning right now,” in view of Brandon Börgel, director at San Francisco’s Fort Point. “They’re looking for ways to streamline and simplify their universe,” which is “putting the onus back on breweries to do better, to be better, to work harder.” These days, “we view them as logistics partners in many ways” because “we still have to do the work to educate the market.” Promoting benefits she sees in joining CANarchy collective, Three Weavers co-founder Lynne Weaver thinks many in craft are now realizing that “strategic partners aren’t all bad.” Working with group like CANarchy means “you can make a $9.99 IPA because you have economies of scale,” she said, riffing on Jeremy’s earlier comment. But on more dour note, she also thinks craft in general is “coming to its realization that it’s not going to always be able to have a super long tail.”

Will Crafthouse be the national franchise of on-premise craft-focused retailers that sticks? That’s the plan as co that currently operates 3 restaurants in Northern Virginia secured $250+ mil to help potential franchisees finance 100+ Crafthouse locations across US in next 5 yrs. Funding backed by American Development Partners (ADP), a “full service development, general contractor, architectural and private equity firm” with lots of experience financing or consulting with franchisees for wide range of chains: from Wendy’s, Dairy Queen and Dunkin’ Donuts to Tilted Kilt, Twin Peaks and World of Beer, according to website. Cos have big plans. But other attempts at franchising and quickly expanding a restaurant concept focused on craft beer haven’t quite hit their marks, at least on this scale. And some of the twists and turns along the way suggest making this model work is far easier said than done.  

Crafthouse touts “commitment to using local ingredients and vendors as much as possible,” with existing locations serving 50 draft beer options plus 150 bottles and cans. Those locations owned by Evan Matz, whose experience and vision for chain of locally-focused restaurants impressed ADP, COO Caleb McMillen explained in statement. ADP will finance 100% of new-build standalone locations, ideally between 3,900-4,500 sq ft with room for 150 guests, for franchisees with $300K in liquid assets, a net worth of over $1 mil. Co also tends to prefer folks with franchise experience across multiple locations and multiple brands. Initial target markets include NC, MI, VA and MD, according to Natl Restaurant News.

Franchisor/Franchisee Rift Causes Shift from WoB to Crafthouse  Those 3 initial Crafthouse locations used to be World of Beer locations, but shifted to new name and tweaked concept following disagreements between Matz and WoB, as Washington Biz Journal spells out in a handful of articles over last 2 yrs. “Operational differences” led him to rebrand his restaurants as Crafthouse last spring, when Matz “indicated he had chosen to terminate the franchise agreements,” as WBJ wrote. That caused WoB to sue, but a FL judge forced parties to go to mediation, the outcome of which is not public. Then just last month, Matz sued WoB for $6.9 mil in damages for wrongful termination. Announcement to franchise Crafthouse came earlier in month, “after Matz settled his lawsuit,” per WBJ.

World of Flux  Matz’s exit from World of Beer in 2017 came alongside a number of other WoB closings, terminations and shifts. In fact, his suit against WoB alleges that his repeated expressions of frustration with WoB franchisors “emboldened” other franchisees to “voice their concerns” in 2016. The Atlanta location closed in Feb, after all 4 CO locations, 3 in south FL and one in WI closed last yr, as we wrote early in 2018 (see Feb 8 issue). Stories of sudden closings in Florida, Ohio, Texas and Arizona have plagued the chain for years (see Dec 21, 2014 issue, for example from OH).  

Yet others continue to open. WoB’s website points to just shy of 70 restaurants currently open, including a “coming soon” location in Dunwoody, GA, just outside Atlanta. A second Louisiana spot announced for Lafayette, not yet on website. Back in 2014 the chain had 55 locations in 16 states, opened its 75th the next year and expanded to China in 2016. By mid-2017 though, it touted “over 70 locations” in 20 states. Again, ADP participated in that growth, funding franchisees in multiple states, particularly in the chain’s core Southeast market. Numerous press releases over last few yrs proudly announce partnerships with ADP for multiple-outlet deals on chains like Taco John’s, Captain D’s and Church’s Chicken, many touting those franchisees’ experiences with brands like WoB.

Crazy Mtn Evictions & Franchisee Flip-Flops; Half-a-Bil $$ Dog Haus Deal  Recall fate of a pair of ex-WoB locations in CO: franchisee kept locations but turned to state’s Crazy Mountain Brewing for brand license agreements (vol 8, no 62 & 75). Crazy Mtn never operated those locations, but benefited from brand visibility in suburbs of Denver, CEO Kevin Selvy explained to CBN. Fast-forward a year-and-change and that hasn’t panned out too well. Owner of one of those properties evicted the franchisees, Jason and Alexander Rappaport, earlier this summer, after suing the operators for unpaid rent in Feb, according to Business Den. Turns out, earlier this yr, Crazy Mtn also evicted from its original Edwards, CO brewery, hence closing (see Jan 16 issue), and then later was served eviction papers for even more recent outpost at ski resort in Winter Park, paper reports.

Again, the brewery didn’t run the 2 rebranded Denver-area taprooms, which even before troubles early this yr had issues with Colorado regulators over status of its liquor license, state records show. One of those operators, Jason Rappaport, was also the WoB franchisee behind bringing chain to CO in first place and also the very first WoB franchisee in Southeast FL with Philippe Theodore. Litigation between that pair popped a couple years back over running (and closing) of St. Petersburg WoB. Meanwhile, Jason and his father Sandy were this week cited as key to massive expansion plans of Dog Haus fast-casual hot dog chain in QSR Magazine, including a promised 30 locations in San Antonio and Houston over 5 yrs.

Those plans also funded by ADP, which just under 2 yrs ago announced its “largest franchise commitment” ever, a $500-mil investment to build 300 Dog Haus Biergarten concepts over 5 yrs. As QSR points out, that was just a piece of Dog Haus’ plans to open 450 total locations, with ADP’s commitment focused on the Biergarten concept. At the end of last yr, Dog Haus had 28 locations open and planned to open 40 more in 2018. Its website currently lists 36 existing locations, including a downtown NYC limited-time pop-up that has already closed. Those ADP-backed Biergartens, much like the Crafthouse model, promise to highlight “craft beers on tap from local breweries.” Perhaps Crafthouse will buck the trend and meet its aggressive goals.

Wiseacre sold “minority” stake to Memphis-based PE firm, Kemmons Wilson Companies, as part of upcoming project for eventual 100K bbls/yr brewery in Downtown Memphis (see last issue), co-founder Kellan Bartosch confirmed with CBN. Kellan and his brother/brewmaster/co-founder Davin remain majority owners, primary decision makers, and in charge of “day-to-day” operations, he assured. While co met with other potential suitors as well, locally-based Kemmons Wilson Cos had “a lot of mutual friends,” “were fans of what we did” and “realized we had an opportunity to grow.”

Figure Out Potential Ceiling and Work Backwards; “Optimistic” and “Reasonable” After nearly maxing out capacity just a few yrs after opening, Wiseacre had to ask itself the “tough question”: “What is your ceiling?” and work backwards. Co realized it wasn’t trying to be the next 1 mil-bbl, or even 300K-bbl brewer, but a 100K bbls/yr brewery feels within reach, Kellan and co concluded. Then co hadda “figure out what makes sense” in terms of equipment and financing. “You want to be optimistic and reasonable,” particularly in this next phase of increased competition in craft.  Co consciously avoided scenario of building “another small brewery” that it could potentially grow out of again in short order, but co wasn’t lookin’ to “stack more debt” either. Ultimately, after going thru this process, “we have more of a vision of where we want to be.” Tho originally “we thought we were doing that when we opened up” current brewery, he quipped.

21K Bbls in 2018; Tiny Bomb Pilsner 40% of Mix, #1 Focus Advantage Wiseacre’s current brewery is “basically at its maximum capacity,” tho co will squeeze out an additional 1K bbls to 21K bbls for full year 2018. And even as the new brewery is in development, Kellan and co “think we’ll be able to support…slight pick-up of pace” and “a couple [new] markets” tacked on to its 7-state footprint. Yet TN is still “most of our volume.” And Tiny Bomb pilsner is 40% of production, already among top craft pilsners sold in scans. The differentiating factor that gives Tiny Bomb a “really unique edge” is that Tiny Bomb is co’s #1 focus, Kellan emphasized. All other top craft pilsner brands are typically not the flagship or core focus for those other brewers (with the exception of Trumer Pils). Davin “fell in love with making lagers a decade ago,” and craft category only recently started going after that style and occasion. Newer launches tend to be secondary brands within their respective portfolios, but “if we get one shot at a tap handle” or shelf space, “we’re throwing Tiny Bomb up there.” Gotta note, co’s also got Ananda IPA and Gotta Get Up To Get Down Coffee Milk Stout as prominent brands in the portfolio. But Tiny Bomb has exceeded expectations, jumping to ~60% of sales in out-of-state mkts like New Orleans, Chicago and Philly.

“Willing to Go Pretty Far” Wiseacre purchased the land for the new brewery project and expects to hear from the city on its PILOT (payment in leiu of taxes) application Dec 11. And once the new brewery’s up and running, “I think we’re willing to go pretty far” in terms of distribution, Kellan noted. Filling out AL, and adding FL and GA “will be the first things for sure.” But “if there’s a connection” with the brand, Wiseacre’s willing to follow.

Once more, adjudicators agreed that St Louis Brewery had established its Schlafly brand of beer well enough to allow the co to own the trademark. This time, Federal Circuit Court of Appeals unanimously denied the appeal brought by the heirs of conservative activist Phyllis Schlafly, also the aunt of brewery founder Tom Schlafly, Law360 and other sources report this wk. Case goes back to the brewery’s 2011 application to trademark Tom’s last name for beer, arguing the surname had “acquired a secondary meaning” as a beer brand over 20 yrs of consistent beer sales under it, a necessity under trademark law. But Tom’s cousins, Phyllis’ children attempted to block that registration in 2012, claiming that the name was still primarily a surname. In 2016, Trademark Trial and Appeals Board disagreed and granted the brewery the trademark (see vol 7, no 65). Phyllis’ family asked TTAB to reconsider, but board responded that “to be blunt, this was not a close call,” according to Law360. So they appealed to Fed Circuit, which, again, upheld the TTAB’s 2016 decision this wk. But, refusing to let the issue die and referring to the decisions as “an example of overreach by a federal agency,” Phyllis’ sons say they plan to appeal this wk’s decision to the US Supreme Ct.

What the beer geeks giveth, the beer geeks can taketh away. A social media dust-storm, kicked up by a lengthy post from a former employee, calls into question the reputation of one of New England’s most-discussed young breweries. Just a month after Boston-based Trillium Brewing opened a new taproom and restaurant in the Fort Point neighborhood, the company is attempting to smooth over relations with staff and consumers alike. The fast-growing co is one of MA’s “it” breweries, garnering a lot of attention from some of the most engaged, attentive craft consumers for its hazy IPAs and wild ales, much of which Trillium sells directly to consumers. But late last Tuesday, an ex-employee took to the Beer Advocate forum to rant about Trillium’s employment practices and much more. The post was deleted, but not before it was copied and shared broadly, racking up views and vitriolic comments across various social media platforms. By Friday, the Boston Globe reported on the “intense backlash” faced by “the darling of Boston’s booming craft beer scene.”

Chief area of focus for the Globe, and one of key complaints of the anonymous ex-employee, was recent change to how Trillium compensates taproom employees. The co had been paying those tipped staff members $8/hr, but when opening the new Fort Point and other locations, lowered that to $5/hr. State minimum wage for tipped workers is $3.75, the Globe points out. But the employee alleged that some longtime workers had to reapply for their positions and then got the pay reduction. The Globe spoke to a current employee that’s similarly “dissatisfied” due to lower recent paychecks. Another key piece of the disgruntled puzzle: taproom employees could be pouring and serving pints, for which customers typically tip, or selling packaged beer to go, which buyers customarily pay for without tipping, the paper explains. The company’s fast growth and relatively high prices (upwards of $20/4-pk of 16oz cans or more for specialty releases) seem to be particularly galling for employees the Globe spoke to and for the original poster.

Furthermore, that post alleges far more than above change to taproom employee wages. It veers into eye-opening allegations about both service standards and cellar practices. The claims easily rankled readers and heightened responses from the uber-engaged beer drinkers who follow these forums closely. Yesterday, Trillium posted a letter to its website, acknowledging the reduction in retail pay, promising that it’s already made some changes and is looking into making more and apologizing “that this has caused any of our employees, customers or friends to doubt, in any way, the integrity of Trillium or their ongoing support of us.” Unfortunately, it doesn’t seem to have cooled the heads of many angered internet commentators, who rage on. Social media storms, often stirred by a relatively small community of vocal participants, sometimes blow over quickly and cause limited lasting damage. But many young or fast-growing breweries are closely tracking this one, perhaps hoping to learn from how long it sticks around and how it impacts Trillium’s trajectory.

After more than two years of searching, Memphis, TN’s Wiseacre appears to have settled on a location for its sizable second facility that will be capable of brewing 100K bbls/yr when all’s said n’ done, reported Daily Memphian.  Wiseacre confirmed plans to open 43K sq-ft brewery and taproom in Downtown Memphis just a couple days after public documents surfaced last week. Recall, after opening in 2013, Wiseacre quickly shot up to 19K bbls in 2016. But co remained capacity-constrained at ~20K bbls each of the last 2 yrs as it searched for potential second locations, per paper. At one point, Wiseacre presented “potential redevelopment plan” to Memphis City Council for 2d facility in part of the historic Mid-South Coliseum, but that was “just one of several options.” Yet “project is still a work in progress,” co-founder Kellan Bartosch acknowledged. Plan requires a “zoning exception” from the city, since Wiseacre will produce above the “micro-brewery” limits allowed. And co plans to apply for “payment-in-lieu-of-taxes (PILOT) incentive” tax break, which will be “crucial” for the project to work financially, Kellan added. An investment from local family-run investment firm, Kemmons Wilson Companies, is providing funding for the project as well, paper noted.

If plan comes thru, Wiseacre will shift focus at its current 12K sq-ft facility to specialty brews, which currently make up less than 1% of total production. Shift would enable co to “triple the output” of specialty brews, said Kellan. Then too, taproom only accounts for 3% of sales volume, and Wiseacre intends to focus on production most of all. “We don’t intend to open multiple retail locations,” he noted, adding that the downtown brewery “is our second album and hope this is our last album. We hope to grow in this facility for a while.” Wiseacre plans to double full-time work force from 20 to 40 folks and gradually add equipment that’ll eventually boost capacity to 100K bbls/yr.

Jack’s Abby Boston Taproom; Lord Hobo Revamped Taproom  Another pair of regional MA brewers are adding and/or sprucing up retail presence in Boston area. Jack’s Abby “will take over the train bar in North Station this winter, transforming the space into Track Zero Taproom,” reported Boston.com. Taproom is slated to open sometime late this year or early next yr, including 10 taps featuring 7 core brews and 3 specialty brews from its Springdale line. Then too, Lord Hobo officially reopened its revamped taproom in Woburn, MA earlier this mo, now including food, additional seating, new brews, live music, and more, Boston.com also reported. Recall, Lord Hobo shot up to 30K bbls plus in 2017, and rapidly expanded to 15 states currently. But co now has “turned our attention inward,” founder Dan Lanigan told paper. New bar doubled number of taps from 20 to 40 and can host up to 180 people.

Big Heist Eyes Biz Oppy Over Brewing Oppy in MN  There are still plenty of folks from outside the industry that see biz opportunities in craft, it seems. New St Paul, MN-based brewery, Big Heist Beer Co, was started by an ex-financial advisor and co-founder of a wrestling app, MatBoss, reported Pioneer Press. “We see this more as a business opportunity than necessarily a brewing opportunity,” app co-founder Eric Gerold told paper. Big Heist will be South St Paul’s first craft brewery, according to paper. Earlier this mo, city council members approved $145K loan for Big Heist and co also received $250K loan from Live Oak Bank for equipment purchases. Big Heist formed a partnership with local developer firm, Master Properties, which will buy a 1-acre lot, build the brewery on part of it and lease the space to Big Heist. Land deal hasn’t been finalized, but folks involved expect approval “as soon as January,” paper added. “South St. Paul is primed for a brewery and there’s not a whole lot there in terms of amenities for the local community. So, for me, that spells opportunity,” said Eric Gerold. The name “Big Heist” is a nod to the city’s history, according to co-founders, referencing a famous local robbery and fatal shooting in the 1930’s that occurred just “a stone’s throw” away from the brewery site.

Border X in LA Opens in Early 2019 San Diego-based Border X is 2 mos away from opening 7K sq-ft brewery and taproom in the City of Bell suburb of LA, reported Eater LA. Recall, Border X is a Latino-owned brewery focused on combining Mexican and craft cultures thru branding, ingredients and more. Space includes 10-bbl brewing system, as well as 16 taps, TVs, a “live entertainment space and art display area showcasing local artists,” and food vendors in the parking lot.

A loophole that a number of on-premise retail operators in California found, but didn’t slip thru carefully enough, may now be closing after round of stepped up enforcement from state regulators and a new law passed earlier this fall. In certain counties where full on-premise liquor licenses were few, far between or extremely expensive, some prospective licensees worked around that limited availability. By getting the much less expensive Type 75 “brewpub-restaurant” license, these licensees could start selling all forms of drinks for on-site service, but were also supposed to make and serve their own beer. But many didn’t.

An investigation into 70 of the state’s approximately 150 Type 75 licensees, conducted by CA ABC, recently found that “nearly 50 were not in compliance with their licenses,” reports Calif Statewide Law Enforcement Assn (CSLEA). Terms of license required at least 100 bbls of production per yr. Some non-compliant licensees weren’t brewing quite enough to meet limit. Others were “not brewing beer at all.” So, at least 1/3 of total Type 75 licensees were out of compliance, but could be more like 2/3, based on investigation’s findings.

Notably, establishments (improperly) operating under this license didn’t necessarily bill themselves to the public as brewpubs or breweries. Unlike the manufacturer’s license that vast majority of state’s near 1,000 breweries and brewery-restaurants operate under, the Type 75 is an on-premise retail license that has brewing privileges. Generally speaking, these are not your average Calif brewpubs, which typically hold a Type 23 manufacturer’s license, Craft Brew News understands.

Over 3 yrs ago, the San Francisco Chronicle reported on the uptick in the use of this “loophole” in the city (see our vol 6, no 79 issue from Oct of 2015). At that point, the city had gone from 5 such licenses in 2010 to 17, some of which “don’t even pretend to make beer.” The rise to over 150 such licensees spurred conversations about a potential law change to add more provisions to the license and adjust some language so the ABC could better enforce restrictions on licensees.

A couple mos back, at the end of Sept, the legislature passed and the Governor signed a new law affecting the Type 75 license by increasing the minimum brewing requirement to 200 bbls/yr, requiring that licensees have at least a 7-bbl brewhouse on site and more. It was an amended version of a bill originally pushed by the folks at the Artisanal Brewers Collective, the restaurant group building a small empire of beer-focused outlets, brewpubs and entertainment locations in SoCal, led by Tony Yanow (former Golden Road co-founder). Initially, the bill sought to add some of the retail privileges that were available on a traditional brewer’s license to the Type 75 license, including allowing growler sales and donations of beer for non-profit events. Before it was passed, the above-mentioned new production minimums and other limitations were added.

Dark clouds still mostly hovering over craft segment in off-premise retail data, as total segment volume stubbornly negative thru back half of the yr. Down 1.1% for 4 wks thru Nov 17 in Nielsen all outlet + c-store data. Craft holds onto yr-to-date volume growth by slimmest of margins, +0.1%, with dollar sales up 1.2%. But here’s a tiny sliver of silver lining or two: craft’s 1.1% 4-wk volume decline in these channels was the 1st time since at least July that the segment performed better than it did during comparable 4-wk period last yr, when segment down closer to 2%. It’s also segment’s best 4-wk trend since September. But those points probably speak more to craft’s off-premise difficulties this yr than to the potential of a recent “improvement.”

Just one top craft brand family saw off-premise trends substantially improve lately, but still well off last yr’s volume. New Belgium cut total volume decline to -5.2% for 4 wks, but still down by more than double that YTD. Sierra Nevada trend slipped back into negative territory, -2.3% for 4 wks. And Sam Adams brands also stubbornly down high-single digits for another 4-wk period, -7.8%. That’s on par with total Blue Moon franchise, off 7.2%. But Leinenkugel Shandies (-33%) and Shock Top (-19%) still biggest drags on craft trends in Nielsen-tracked retailers. All other craft brands, over 2/3 of segment volume, up 2.9% for 4 wks. That’s also the group’s best short-term trend since Sep and better than last yr’s comp (+2.5%).

Well over 400 breweries have already signed on to participate in project spearheaded by Sierra Nevada to raise money for its Camp Fire Relief Fund: Resilience Butte County Proud IPA. Sierra made call late last week, asking breweries across the country to brew this special IPA and to pledge donation of 100% of sales to the fund. Sierra worked to secure ingredients and is sharing the recipe it’s using to brew its batch (on Giving Tuesday, next week), providing tap handles, coasters and other market support to call attention to the project. Overwhelming list of participating breweries, ingredient suppliers and others, posted to Sierra’s website, reaches across entire US.

Thank you all for your continued readership and support. May you and yours enjoy a peaceful, joyful and thoughtful Thanksgiving.

Come early 2019, New Jersey will have another small beer distributor. Cape Beverage will become (nearly) state-wide distributor for Cape May Brewing, co announced late last wk, growing out of its self-distribution arm. “In the works for a while,” co-founder/CEO Ryan Krill explained to Craft Brew News, the new distrib already has one other brand signed on, an imported craft brand from Nicaragua, and seeks a “handful” of others across beer, wine and other bevs to form a small portfolio. Ryan and co “don’t have aspirations of carrying a lot of brands,” he told us. But after building out its self-distribution ops over last 7 yrs, “turns out we’re pretty good at it,” he said. Already outfitted with a fleet of “all new trucks” and “well-trained,” “uniformed” drivers, the co’s “doubling down on distribution.”

Increasing production of one of Cape May’s seasonal releases, The Bog, a cranberry shandy that poses particular production challenges, also played key role in the co “crafting an alternative route,” as Ryan and team call Cape Bev venture. Due to the fresh fruit and unfermented sugars, “The Bog needs to be pasteurized” to be packaged and shelf stable, as co-founder Chris Henke said in statement. Co can’t do that on its own. In the past The Bog has been draft only. So Cape May cut deal with NY’s FX Matt to contract can production for future releases. That out-of-state production, however, requires a licensed NJ distributor to import the beer into the state. Hence: Cape Beverage.

Co in process of getting its legal ducks in a row to ensure smooth switchover from self distribution early in 2019. It’s moving much of its NJ sales team over to the new co, while it seeks out an ops-focused leader to run the distributorship. From there it’ll look to attract other brands for those folks to sell in to NJ retailers, Ryan explained. He thinks a handful of aspects of Cape Bev’s biz will appeal to other suppliers: its promise to keep a tight portfolio, that products are “always kept cold,” its “very experienced” sales team and no concerns about strict franchise enforcement. NJ’s franchise law “makes sense,” Ryan said, “for a big supplier.” But not those Cape Bev looks to work with.  

Meanwhile, Cape May Brewing also growing quickly. It’s “been like 60% growth since day one,” Ryan said. Co expects to finish this yr “somewhere around 17,000 bbls sold,” he said, up from 9-10K bbls last yr. That’s almost entirely in NJ and the greater Philly area, where brand is with Origlio. It’s forecasting 27K bbls for 2019. Cape May growth driven by its core lineup of yr-rounds, accounting for almost 2/3 of its volume, Ryan said, including lead horse IPA, natch. Next yr, Cape May hopes to release more mixed fermentation beers out of smaller, sour-focused facility on its campus of a couple of buildings at the very southern tip of NJ, he shared. Currently, it can package about 24K bbls/yr, Ryan estimated. So contract work with FX Matt will come in handy next yr as co IDs and executes its best option for production further into future.