Here's one way Boston Beer's Sam Adams brand can stay relevant in hometown Boston mkt. "Samuel Adams will help Boston celebrate the remarkable career of Boston Red Sox all-star David Ortiz with an extremely limited release brew": Big Hapi, a mango juice infused double IPA "available only on Friday November 4th at the Samuel Adams Boston Brewery," co announced. Only 541 24oz bottles will be available to pay tribute to each of David Ortiz' career homeruns, "and all proceeds from the sale of the beer will go to The David Ortiz Children's Fund." Sales are limited to one 24oz bottle per person.

Then too, Boston Beer and Mass-based Berkshire Mountain Distillers (BMD) announced the release of Two Lanterns American Whiskey, "the result of a four-year collaboration with Samuel Adams," reported timesunion blog. "BMD created the premium whiskey by triple distilling Samuel Adams' flagship Boston Lager at its distillery in Great Barrington, followed by years of barrel aging in vintage bourbon barrels," noted paper. And "it took nearly 25,000 gallons of Boston Lager to produce the 1,000 gallons of Two Lanterns available for purchase at a suggested retail price of $120 per bottle." Once the barrels are empty, they'll be sent back to Sam Adams Boston Brewery to be "used for a yet-to-be-named barrel-aged beer."

 As more cos continue to experiment with sour and barrel-aged brews, two more young, fast growin' brewers on opposite coasts, CT's Two Roads and CA's Modern Times, also decided to build 2d facilities dedicated to further experimentation with these styles.

Using "newly acquired" 2.5 acres of land "adjoining the existing brewery," Two Roads will add a 25K sq-ft facility to its campus solely focused on sour and barrel-aging brews, co announced. The project is expected to cost $12 mil, featuring "a 50 barrel ROLEC brewhouse, foudres, a coolship and storage for 2000 wood barrels," as well as "a tasting room that can accommodate 120 visitors," per release. "With our sour beer program growing and gaining accolades...we felt this was the right time to expand into a new facility," said CEO Brad Hittle. Recall, last we spoke to Brad in Sep, co was expecting to grow Two Roads brands 40%+ to 45-47K bbls in 2016 (just its 4th yr in biz). That's mostly from its core portfolio, with Road 2 Ruin Double IPA and Lil' Heaven Session IPA leadin' the charge. But Two Roads increasingly finding time to experiment. This new facility will give Master Brewer/partner Phil Markowski enhanced ability to play around with new product development. And it's a far cry from dairy tanker parked outside during our summer visit, used to kettle sour line of gose collaborations with contract partner Evil Twin. Indeed, opening separate facility for sour production certainly a benefit (and relief) for Two Roads' other contract partners. And it will be able to expand production of much-touted specialty lineup, including GABF gold-medal winning Belgian style Lambic, Hexotic. Two Roads hopes to break ground on new facility in early 2017 and open in a year or less.

Modern Times Adding Anaheim Sour Facility, Leisuretown to Its Growing List of Locations Fast growin' San Diego-based Modern Times Brewing just keeps on buildin'. Recall, Modern Times shot up to 21K bbls last yr after just opening in 2013. So on top of multiple facility expansions thruout its first few yrs and its coming brewpub in downtown LA, co announced new Anaheim sour facility and all-around entertainment space Leisuretown, via blog. The space spans two stories and nearly 32K sq-ft as part of "mind-bending craft beer mecca" that'll include a sour facility, café and restaurant, various food vendor stalls "from some of SoCal's most kickass restaurateurs," a large swimming pool with a poolside bar and movie screen, a merch store and bottle sales. Modern Times is working with urban development "masterminds," The LAB, "behind the Anaheim Packing District, LAB Anti-Mall, and the CAMP," among other projects. Meanwhile, "it's taken us a little longer to jump through the requisite hoops in L.A. than we anticipated," co acknowledged, but insisted that "The Dankness Dojo in downtown L.A. is still very much happening, and its timeline will not be affected whatsoever" by this new project.

Next steps for Todd Haug, founding brewmaster of Minnesota's Surly Brewing, became clear early this week, not long after his high-profile resignation. Less high-profile: Todd's wife Linda was let go by Surly in Feb of this yr after coming on as Surly's director of restaurant operations to open big new brewery/beer hall. Now both will move to Chicago area to start work at famed 3Floyd's, the couple dished to Mpls.St.Paul Magazine. Importantly, Todd isn't replacing current 3F head brewer Chris Boggess (who's been with co as it's risen to international beer stardom), but will "help with expansion plans" and "forthcoming distillery," per mag. Linda will consult on 3F's brewpub. Recent visit "felt like I was coming home," Todd said, and close ties between 3F and heavy metal music community makes fit even better for Todd (who also has a band) and the couple (who own a small record co). But what of Surly? "They marketed the s*** out of me," he told magazine, and wondered if they "could do the same thing to me" as to his wife. No stake or "any other financial incentive to remain," as magazine writes, made it easier to take offer 3F co-founder Nick Floyd extended after Linda's departure. Some beer fans in Twin Cities already seemingly mourning Todd's departure, and MSP Mag not shy in asking key question already on many minds: "is Surly truly Surly" without him?  

Fat Head's announced plans to open two new brewpubs: one in Canton, OH by next yr, pending two liquor options on the Nov 8 ballot, and another in Charlotte, NC by early 2018, reported Ohio's The Beer Blog. Co already has "deal in place to open in Charlotte's South End neighborhood" at a 10K sq-ft space with an outdoor patio. Indeed, Charlotte "is still a young [and growing] craft beer scene" with just about15 breweries no older than 7 yrs old, and "doesn't have many full-service brewpubs" yet, blog noted. And in Canton, co estimates it would spend $2 mil on the project if it were approved. "The fact that they picked Canton should speak highly of the demographics here," said local Royal Docks Brewery owner John Bikis. Then too, eventually "I think you'll see a few more brewpubs," co-owner and brewmaster Matt Cole told blog. "Where and when? I don't have as much of that buttoned down," but "we definitely...have a few cities we're also looking at." Currently Fat Head's operates three brewpubs in Cleveland, OH, Pittsburgh, PA and Portland, OR as well as a production facility and tap house in Middleburg, OH.  

"It looks like Brooklyn Brewery is being lured upstate [NY]" to build its new production facility, reported the Staten Island Advance, after being offered "a deal they can't refuse," according to "sources." Recall, Staten Island had been "leading contender" for some time after news broke in summer of 2014 that Brooklyn was lookin' to build a 200K sq-ft facility expandable up to 1 mil bbls/yr. But after "negotiations did not pan out" for original ex-NASCAR site on the West Shore, Brooklyn yet to make a decision. "We have evaluated multiple sites in New York City, upstate, and other areas throughout our search," Brooklyn CEO Eric Ottaway reminded paper, including Lower Hudson Valley and parts of New Jersey. "We continue to evaluate all our options," and "anticipate making a final decision by the end of the year," he added.

"State support is solely based on the merits of a project and its economic impact, and any claim that we offer different incentives based on location is entirely false," spokesman for Empire State Development Jason Conwall told paper separately. And state has shown willingness to support brewery projects in the past, including with Brooklyn back in late 2014 for two state grants totaling $6 mil (see Dec 17, 2014 issue of CBN), and more recently investing $9 mil into North American Breweries for Genesee Eco-Brewery District project (see Sep 9 Express). Regardless, Brooklyn would certainly be lookin' at lower costs further outside the city.  

Taking totally new tack with one of its limited-release 'Fusion' series beers, Lagunitas released new Fandom Ale this week across extensive Buffalo Wild Wings footprint. It strikes a couple new chords for a craft brand built more closely with the music scene, choosing instead to run a sports-focused play this time around. Also first time we've seen an announcement for new Lagunitas brand coming from retail partner. Of course, BWW ("B-Dubs") a pretty important one: it's still biggest draft beer outlet in US, now up to over 1200 locations. New 5.5% ABV hoppy pale wheat ale answered B-Dubs guests' call for "easy-drinking beers with full flavor," per release. Lagunitas "worked to come up with something approachable, interesting and fun for sports fans," brewer's communications director Karen Hamilton said in statement. It's first Fusion series beer to hit all 50 states, but still only available for limited time.

Note this is second time B-Dubs worked with top craft brewer on a new beer designed for sports fans, core focus for the chain, served across its full footprint. Back in July 2013, Craft Brew Alliance announced addition of Game Changer Ale to its Redhook portfolio, focused on hitting B-Dubs' then 925 outlets. By CBA's early Oct distrib meeting, it grew to top craft brand across chain by volume, which sold equivalent of about 130K cases during first 2+ months. That was just months before major "SKU rationalization" by CBA, which hit Redhook particularly hard in early 2014, recall. By Q3 of that yr, CBA reported Redhook's difficulty cycling launch. And since then, we've heard nary a word on the brand.  

Gearing up for holiday period with anticipated deep discounts across beer biz and some serious promo programs playing with price, followed by spring resets at major off-premise retail chains, consultant Bump Williams' latest client letter digs into SKU efficiency by brewer. Key point: hard to get new facings and easy to lose 'em, so it's "more important than ever for brewers to maximize the potential of their current shelf space," Bump wrote. IRI stats show performance varies considerably by this measure. Among top brewers industry wide, Boston Beer and Heineken USA not as efficient as similarly sized and larger brewers, like Yuengling, Pabst or especially Constellation (2d most efficient supplier in biz, ahead of MC; no one anywhere close to AB here, natch).

Bump zeroed in on craft to point out a couple of key learnings (note that on small scale, efficiency stats can be skewed quickly). First, expanding items per store works when "met with high consumer demand," so that efficiency of portfolio doesn't slow. That's happening for cos like Perrin and Lawson's Finest. Keeping the number of offerings tight but broadening distribution works with "expansion into the 'right' stores," as Pelican Pub and Brewery seems to be experiencing this yr. On the other hand, slowing sales so far decreasing SKU efficiency of a number of brewers this yr. Still others continue to grow slowly after expanding offerings more substantially. That also negatively impacts efficiency. Again, differences here are key for retailers as they identify the best use of their limited space.  

MC's Tenth & Blake arm had a particularly tuff Q3, collectively down high-single-digits including a high-single-digits decline for Blue Moon franchise and even steeper mid-teens decline for Leinenkugel thru peak summer mos, co reported yesterday. Indeed, craft segment's overall slowdown got another shout out on Molson Coors call later in the day (see below). Yet interestingly, MC attributed Leinie's slowdown "partially" to "Summer Shandy demand outselling production a month earlier than planned." Initially, Summer Shandy "got off to a poor start in April due to the colder than normal weather that really had a significant impact on volume," MC spokesman Marty Maloney told CBN separately. Enough so that co "altered internal forecast to sell less" and "sequentially pulled back on ingredients orders." But "when the weather heated up, and sales returned to the velocity we have come to expect in June and July," production schedule was already altered to the point that MC was unable "to meet demand in August and Septmember."

Scans tell the story. Leinie Shandy Seasonal volume improved to down just 0.4% for 4 wks thru Jun 12 and then grew 1% for 4 wks thru Jul 10 before dropping 13% for following for 4 wks thru Aug 7 and takin' a 30% nosedive in each of the next two 4 wk periods thru Sep 4 and Oct 2 in IRI multi-outlet + convenience data. Lookin' at more recent data from Nielsen All Outlet, Leinie Shandy franchise volume now up mid-singles for latest 4 wks thru Oct 22, suggesting that it's fall shandy seasonal performing better too. But overall, Leinenkugel family is still down for the year.

Blue Moon Down 9%, Leinie Down 17% in IRI for 12 Wks Scan trends in line with MC's quarterly report. Blue Moon brand family volume down 9% and Leinenkugel craft brand family down about 17% for 12 wks thru Oct 2; now -6% and -8% YTD respectively. While Blue Moon Seasonal and Variety Pk still represent majority of the family decline, flagship Belgian White (-3%), White IPA (-43%) and Cinnamon Horchata Ale (-2%) all declined during latest 12 wks. So Blue Moon brands pretty much negative across the board for period. Meanwhile, Leinenkugel Grapefruit Shandy continues to perform well in its 2d year, more than doubling sales in latest 12 wks. And smaller Leinie IPL and Wisconsin Red Pale Ale providing tiny boosts. But most of the rest of Leinie's portfolio saw sharp double-digit declines. Acquisition cos are all still growin' solidly, but they're collectively too small to curb MC's overall craft decline.

Another US Craft Slowdown Shout Out from a Global CEO; Retailer and Consumer Components Less than a week after ABI's Carlos Brito talked generally about craft segment's overall slowdown in US, Molson Coors CEO Mark Hunter also made a point of calling out the slowdown from his perspective, referencing several familiar soundbites: i.e. "oversupply of flavors and SKUs, or beer styles and SKUs," as everyone trying to "make sense of the plethora of choice"; seasonals under pressure while some consumers "making up their own seasonal packs by the way they actually shop the shelf"; highly hopped IPAs are "great" but not necessarily for "a long occasion," so there's some "stepping back" to light beers. From retailers' persepective, some seeking more "simplified offering[s]," like Wal-Mart's recent resets and more "progressive" retailers focusing on brands with "long-term distinctive positionings" and higher velocity. Net-net, craft "not weak for everybody," but it's "starting to shake itself out" by "well positioned and "distinctive" brands, sez Mark. CEO Gavin Hattersley echoed Mark, saying simply: "there's tons of choice and there's not a lot of floor space."  

Multiple moving parts of Craft Brew Alliance portfolio clearly visible in 3d qtr results co just reported. Net-net: total CBA depletions barely up in Q3. But that was well ahead of shipments of owned and partner brands combined, down 4.5%. Add in contract volume and total shipments down more than 5%. Similar split yr-to-date: depletions basically flat, shipments down 2.5%, the co reported. Depletions trends for CBA's owned and partner brands rounds to zero. But some huge variation within that. Kona continues to kill it: shipments up 13% for the qtr, and now up near 17% for the yr. Both of those actually slightly behind depletions too, +18% for both periods. But Widmer Bros and Redhook still pulling back hard, each down 20+% in Q3. Omission family also down double-digits for the qtr and YTD. CBA now getting solid boost from partner brands including Square Mile cider and Resignation plus Appalachian Mountain and Cisco. Those brands added just over 5,000 bbls to CBA shipments in Q3, twice that YTD. But still, not quite enough to push total volume trends into black. CBA now expecting to finish out the year with depletions anywhere from down 1% to up 1%, "reflecting the growth potential of our Kona Plus strategy, as well as the significant competition and headwinds in the craft beer segment." Shipments likely to come in -3% to -5%. That implies 4th qtr depletions won't move needle much, but shipments even softer than YTD.

Net sales grew by almost 1% during CBA's 3d qtr, to $55.2 mil and gross profit up slightly slower. The co reported increases in net rev per bbl, but gross margin contracted during Q3 and down to 30.1% YTD. Notably, lower gross margin for qtr driven by brewpub margins, as "Beer gross margin" actually expanded. But for full-yr, it's opposite. Selling, gen and admin expenses up low-singles again Q3 and YTD. Net income down a full 25% during Q3, so diluted earnings per share down a penny. But now YTD, CBA reported 2-cent diluted loss per share. CBA stock fluctuated a bit earlier today even before earnings release after market close. It ended day just over $15, down from closer to $16 in the morning and $21+ high back at end of August.

Cowen "Constructive," Confident in CBA: "Meaningfully Transformed" Biz, "Still Considerable Work" Ahead of today's results, Cowen Insight's Vivien Azer visited with CEO Andy Thomas and team and "walked away constructive on the prospects of this meaningfully transformed business model," she wrote in report late last week. Lotsa change necessary for CBA, "but the payoff is finally tangible," in Vivien's view, particularly in light of recent agreements with ABI. Of course, BREW stock's "been volatile" to say the least.

Before stock's recent surge, the co's "double-digit revenue growth proved low quality," Vivien wrote, since EBITDA margin slimmed at same time revs revved. Now that craft slowing overall, "with most big brands in decline," CBA's decision to pull back on Redhook and Widmer, while letting Kona fly "has proven prescient." Of course, CBA also experiencing tougher retail trends recently: its total biz down 3.6% by $$ YTD thru Oct 2 in IRI multi-outlet + convenience data. Volume declining at slightly steeper pace; recent trends even softer. Just 2 CBA brands remain on top-30 craft list by YTD $$ sales in IRI MULC: Widmer Hefe -8%, Kona Longboard +2.5%. Peek at trends thru mid-Aug showed faster-growing Kona brands behind Longboard. Both Big Wave Golden Ale and Island Hopper Variety Pack up more than 30% at that point.

Ongoing "geographic retrenchment" so far in better shape for Widmer, Vivien wrote. Hefe off-premise depletions up 5% in Oregon during 2d quarter, up over 3% for 1st half with "favorable comps" in 2d half. Yet Vivien sees "still considerable work" on Redhook, which is proving "more challenging" considering that brand's wider distribution footprint. The good news: "rightsizing" Redhook "frees up retail shelf-space" for partner brands like Appalachian Mountain, Cisco and any others CBA might find in the future. Kona, of course, still very encouraging. But that "new ABI deal" key to Cowen's continued "outperform" expectations for CBA.

Andy on ABI Agreements, Craft "Maturation," Marijuana With lotsa flux in market and even more coming, there are plenty of folks in craft world, like those at CBA "who believe we have the brands of tomorrow, looking to partner with people who have the resources that we're going to need tomorrow," Andy told just-drinks in recent interview. He discussed work with part-owner ABI extensively. Recent announcements to extend distrib agreement, move over some production to AB plants and grant global distrib rights "was a way to 'create certainty' and 'eliminate chatter,'" according to interview. He also clarified that CBA's future int'l biz likely to be mix of small, independent importers, like current partner Craft Can Travel, in spots "where the market is fragmented," and within ABI system elsewhere. Looking at craft generally, Andy zoomed out further than recent flux: "it's not 'how has the craft beer landscape changed.' It's 'how many times has it changed, and how quickly are these changes accelerating?'" We're currently in period of "maturation," Andy said, which comes with "a whole new set of challenges." Indeed, craft is "starting to redefine the base that it once was a kind of counter to." Finally, Andy underscored potential major impact of marijuana legalization. Its effects are "really yet to be understood," he said. A whole generation choosing among a broader range of products when going out, as Andy sees, suggests a bigger net-negative impact on the beer biz than others so far discussing.  

MI's Jolly Pumpkin is expanding out of state for first time to open a new restaurant and bar in Hyde Park neighborhood of Chicago, co announced. The 5800 sq-ft space right near University of Chicago will serve 30 plus taps including all parent co Northern United Brewing Co brands - Jolly Pumpkin, North Peak, Grizzly Peak, Nomad Cidery, Civilized Spirit and Bonafide Wines - along with a full pub menu. This is Jolly Pumpkin's 4th location.