MillerCoors and Atlanta Braves already have a "multiyear partnership" in place, so following Terrapin acquisition, natural step for GA-based Terrapin to "immediately...become the flagship craft brewery for the ballpark," co announced. A Terrapin taproom and brewery will be built "adjacent" to the Braves' new SunTrust ballpark, expected to be finished in time for opening day next season and open year-round. MC won't own taproom but will own brewery. Restaurant will be operated by separate co, Delaware North, featuring a rotating tap list and "world-famous" bbq joint, Fox Bros Bar-B-Q. The microbrewery will be used as a pilot system for exclusive Terrapin brews and collaborations, "including some special baseball-themed brands." (This article also appeared in INSIGHTS Express yesterday.)

Gotta note, this is another example of large brewers utilizing clout to get their craft brands more prominently involved in sports stadiums. AB's Breckenridge also recently partnered with the Denver Broncos, where AB already has partnership to be "predominant" supplier within the stadium, to create an exclusive beer called United In Orange (see Aug 26 issue). MC getting more active in retail too, along with recently opened Blue Moon pilot brewery and taprooms and/or brewpubs thru each of its new craft breweries (tho GA law prevents Terrapin's current taproom from sellin' much). Up to this point, AB has been far more active on the retail side thru its craft arms, but it seems both are keen on expanding retail branding oppys of their craft biz.  

Leader behind brewing ops at second largest Minnesota brewer, Surly, resigned this week, the co announced on its blog today. Todd Haug helped build Surly for past ten years with founder/prexy Omar Ansari, "often with his own two hands; brewing, welding, making connections and forming collaborations to establish the irreverent brand it is today," Omar said in statement. Todd will leave post as head of brewing ops "to pursue other opportunities and challenges in the industry that he has worked in for 25 years," the co wrote. He'll leave Surly "brewhouses in the extremely capable hands of our co-lead brewers and the innovative brewing team we've mentored together," Todd said in statement. Recall, Surly expanded into much larger Minneapolis facility, with capacity to brew up to 100K bbls, a couple years ago. It recently announced expansion to double that after finishing up 2015 shipping over 60K bbls, over 3/4 of that in its home state, before expanding into handful of midwest markets (see July 26 and June 16 issues). Expanded brewery slated to open next year. Surly was up 85% by volume in IRI multi-outlet + convenience data yr-to-date thru Aug 14 (though note that a lot of craft sold thru indie accounts not captured in IRI in Minn). 

We've seen a bit of an uptick in (public) product recalls this yr, the latest comin' from Chicago-based Revolution Brewing. Co issued a "product withdrawal of batches of beers produced with our house ale yeast that do not meet our brand specifications for taste and flavor," it announced via website on Monday. Affected brands include flagship Anti-Hero IPA, Fist City Pale Ale, Unsessionable Imperial IPA, Cross of Gold Ale, Mosaic Hero IPA and Eugene Porter that were packaged on various dates between Aug - Oct depending on the brand (see list via website link above). "We believe these off-flavors were produced by a wild yeast that has gotten worse over time and was not identified in time by our quality control methods," co wrote. Importantly, "there are no health or safety risks" from consumption. House ale yeast has been "re-propagated," and all beers now being brewed and packaged "meet our standards."

Over 10K bbls were likely affected, founder Josh Deth told Chi Tribune separately, "though much of it already has been consumed." Any consumers still in possession of affected beer can exchange it at the brewery. Then there's about 2K bbls of beer "still out there" that "will be pulled" and an 800-bbl batch of Anti-Hero that "will be destroyed," paper added. That's a tuff blow for Revolution, particularly after co had trouble earlier in the yr with several out of stocks while waiting for expanded capacity to come on line, one source told CBN. Rev's on-premise biz was particularly difficult to build in that time and Rev's seasonal program facing "same challenges" that have been goin' on nationally with Seasonals in general. But all things considered, Revolution worked its way back to positive growth for the yr in Chi-town up to this point. "This may throw a little curveball," source acknowledged, but overall viewed this as "a hiccup" that's been "professionally handled."

"It's like a death in the family," said Josh to Chi Tribune. "No one likes to deal with it, but you deal with it the best you can. And it brings people together and refocuses you on what really matters, which for us is the quality of our beer," he added. "It's a hit on our reputation and our reputation means a lot," but "we've always been an open and honest brewery."  

After 13 yrs at Dogfish Head, CEO Nick Benz will leave the company at the end of 2016, the co announced today. Taking over: founder, thought leader and board chairman Sam Calagione. Nick's served as CEO for 2 yrs now, following roles as CFO and COO. He "has played an incredibly important role as a leader and brilliant business mind helping us grow in our own intentionally off-centered direction," Sam said in statement. He particularly credits Nick with developing "most talented and awesome team of leaders we have ever had." Looking forward, Sam's "never been more excited for the future of Dogfish than I am right now." Nick will finish the year then spend next year focusing on family and board chairman position at local school. "I've given Dogfish my all for 13 plus years," he said in statement, "and starting in 2017 it is time for me to do the same for my wife and 3 young children."

Decision "100% Nick's," Sez Sam; Prexy Search; Distribs Confident about 2017; Strong Finish to 16? Decision to step away from Dogfish CEO role was "100% Nick's," founder Sam Calagione told CBN today, and "founded" on his desire to spend more time with family and in Europe. Sam and spouse Mariah "surprised" when Nick shared his plan in Aug, but they know how much CEO job can "be all-encompassing and absorbing" and "have nothing but gratitude for Nick's role here." Sam envisions his time as CEO will be "for the long haul," but search to fill prexy position to "go live" in weeks. "We're not taking our time" on that, said Sam.

Given squeeze on craft and so many current twists and turns in biz, we asked Sam about his excitement for next year. He pointed to oppys provided by: 1) cans for 3 key brands; 2) tripling of sales force in chains; 3) opening handful of new mkts for first time in over 5 yrs. "We're making bright moves to have an explosive year in 2017." Distribs share enthusiasm, Sam said. Sales veep Todd Bollig came back from recent round of distrib mtgs and found their expectations for next yr to be in range of 9-17% volume gains. And that's in current mkts. New mkts will add incremental biz. Right now, Dogfish Head "trending flat" for 2016, but launch of cans in Mid-Atlantic next week and holiday IPA series suggests to Sam a "good chance" to end yr "a little bit up." 

Starbucks has taken next step in it's utilization of beer into its "evening stores" with new drink that combines an espresso shot and an IPA, several papers reported. Espresso Cloud IPA "was inspired by the mixing process behind Starbucks' Shakerato -- where a combo of espresso and syrup is shaken until it becomes frothy," noted The Independent. So "espresso is shaken over ice with orange pieces and a touch of sweet vanilla to create a cloud of micro-foam," which is then "layered on top of a freshly poured IPA." (Editor's note: no mention of particular brand(s) used for the concoction.) The beer is then "served with the cold-shaken espresso shot on the side" and it's recommended that you pour it into the beer. The result is "a refreshing punch of vanilla orange-infused espresso and citrusy IPA." 

Plenty more expansions to discuss these days, though they increasingly have an on-premise retail bent. For example, another Goose Island brewpub planned, this time in beer-loving East Coast market, Philadelphia, The Inquirer reports. It's targeting a summer 2017 opening, prexy Ken Stout told the paper. And when it opens, it'll be far from alone among breweries/brewpub in the area. Meanwhile, Richmond's Legend Brewing announced it'll open its first satellite location in a historic building in Portsmouth, VA. New Legend brewpub will occupy 4,000 sq-ft of total 74K sq-ft redevelopment project that'll bring in 81 residential units and a handful of offices, according to Richmond Times Dispatch.

Up the coast outside of Boston, Jack's Abby provided more details on what it's doing with recently acquired space next door to its relatively new Beer Hall and Kitchen (see Sep 6 issue). It'll open Springdale by Jack's Abby, a space devoted to expanding the co's barrel-aging program as well as make styles outside of its lager-only focus, like IPAs and Belgian ales, the co posted to new Facebook page. The 30K sq-ft space will be home to a Barrel Room, opening this winter, with 3,000 barrels for aging and a dozen foeders planned by the end of next year. While Springdale to include plenty of space to host visitors, "there are no current plans for distribution." Out in California, publicly-traded Evans Brewing has a letter of intent to buy a site in Orange County where it'll build a second production facility, in addition to current brewery and recently opened The Public House restaurant in Fullerton.  

"Due to an unforeseen slowdown in our consistent growth and changes in the craft beer landscape," Stone Brewing had to make "difficult" and "careful decision" to lay off about 5% of its ~1100 employees, recently hired CEO Dominic Engels said in written statement (this likely one of 1st major decisions in new role). Dominic particularly points to "tremendous pressures" on "the larger independent craft segment" from all angles. Both "Big Beer as a result of their acquisition strategies, and the further proliferation of small, hyper-local breweries has slowed growth." So "with the business and the market now less predictable, we must restructure to preserve a healthy future for our company" and "ensure that our company will remain competitive and profitable." Those who lost jobs were "offered a substantial notice period and career transition services" and "no additional layoffs are expected within Stone's foreseeable future."

Keep in mind, Stone Brewing still remains one of the largest, if not the largest, employers in the craft brewing segment, with several restaurant/pub outlets thruout CA, breweries in California, Richmond, VA and Berlin, Germany, plus its distribution biz. Last yr, Stone volume grew 13% to 325,645 bbls and revs grew another 17% to $217.1 mil, making it the 135th largest co on Inc 5000 annual list of fastest growing cos (see Aug 19 issue). And interestingly, Stone trends have been consistently solid all year long in scan data, with volume up 18% and $$ up 14% YTD in IRI multi-outlet + convenience data; much stronger in c-stores (30%+) compared to far more developed foodstores (+6-8%). (Note comparative on-premise strength, above, too.) So Stone slowdown seemingly occurring outside of tracked scans.

Indeed, "growth projections for 2016 had been revised downward several times this year," co-founder and chairman Greg Koch told San Diego Tribune. While both Greg and Dominic separately attributed slowdown to those "tremendous pressures" (listed above), co "also suffered a rare self-inflicted wound last year when it reformulated its original beer, Stone Pale Ale," to Stone Pale 2.0, paper added. That "didn't quite get the wind in its sails," and has been discontinued, said Greg.

All in, this is yet another warning sign that craft segment as a whole is much more challenged in this next phase. One source went as far as to compare 2015 to 1995 and 2016 to 1996 all over again. "The parallels are amazingly similar and the hand-off of volume growth from craft to imports ['and/or brands that they have faith in and are recognizable'] is a key element." Yet overall "the 'high priced segment' is very healthy" and "when you combine the two curves of craft and imports they create a nice smooth upward trend." So "if a person saw this as a historical event returning then what will happen next becomes pretty clear, but still the chorus of 'it's different this time' is hard to ignore...."  

Brooklyn Brewery has long had one of the more unique business models in craft, relying more and more in recent yrs on intl biz to get solid growth, culminating in its deal to sell 24.5% to Kirin, announced this week. This yr, Brooklyn's international biz will again be up 20-25% and become very nearly half of Brooklyn's approx 300,000 bbl biz, CEO Eric Ottaway told Craft Brew News. Domestic biz will be down a couple of points, even tho flagship Brooklyn Lager up, and its IPAs up 35% (led by Defender), as Eric pointed to "a lot of softness around seasonals." Brooklyn also up in core NYC mkt this yr. But this is 2d yr in a row that its US biz down, yet overall it showed good growth. Brooklyn will be up high singles to low double digits this year. It expects an acceleration to "solid" mid-teens next yr, including up US, Eric added.

More on "Comfortable" Kirin Deal Which Became a "No Brainer" Before inking deal with Kirin, "we talked with a lot of people," acknowledged Eric. But Kirin "felt comfortable" right from the start. Doing this deal ultimately became a "no brainer," according to Eric. Kirin is "super long-term focused" and of 4 big Japanese brewers they "understood craft the most." Recall, Kirin already bought 33% stake in largest craft in Japan, Yo-Ho Brewing, and started its own Spring Valley Brewing Co, including strong retail presence (Spring Valley was Kirin's original name over a century ago). Brooklyn's Japanese JV with Kirin will launch early next yr (Kirin 60%, Brooklyn 40%) and they will also launch another JV in Brazil. That's "plenty to chew on right there," said Eric. But the partners will also "look at retail as a component of what we do." Brooklyn retail "can be done all over the world," added Eric.

Remember, Brooklyn's Korean brewing project Jeju also gets off ground next yr and it's biz with Carlsberg continues to grow apace ("another great international partner," said Eric). So Brooklyn has carefully cultivated several core intl partners that make it a player as craft goes global. And now it gets huge capital injection to help fund its expansion projects like Brooklyn Navy Yard and a new brewery, especially welcome as craft gets more challenging.

"Messy Phase" in US Craft ; "Absolutely Overwhelmed Consumer" As usual, Eric had some choice, well-articulated words for current state of craft. Craft going through a "messy phase" that will "sort itself out" over next couple of yrs. The culprit: "We have absolutely overwhelmed the consumer" with choice. The consumer "is going cross-eyed," he added. As result, Eric is "not at all surprised" to see imports like Corona resurgent, with their "simplicity of message." There's "too much clutter" and "too many IPAs." Furthermore, craft's wounds are "somewhat self-inflicted," added Eric. For example, craft brewers "hurt ourselves" with "absurdly early launches" of seasonals. "Who the f--- wants a pumpkin beer in early July," quipped Eric. And so pumpkin beers "have collapsed." In Brooklyn's case, it got hurt by Summer Ale this yr. Late spring softness because of bad weather caused distribs to cut orders and Brooklyn to cut production. Then when sales ramped up, Brooklyn couldn't meet demand and "left a lot of beer on the table." In spite of general seasonal softness, Summer Ale still sells. "We've taken most of our medicine" and Brooklyn Summer Ale "will grow" next year.

Brooklyn Will Someday "Fill Out" Rest of US There's no rush or "specific dates," but "at some point" Brooklyn Brewery will "fill out the rest of the country," Eric noted. (Currently, it's in 26 states.) Brooklyn hiring folks, "improving skill set" and is now "ready" to expand. He particularly pointed to hiring of Dave Duffy as vp of biz development as a "good step." 

For second 4-wk period in a row, craft volume declined slightly in the segment's largest off-premise channel, grocery stores, IRI data shows. Segment's 0.5% decline for 4 wks thru Oct 2 in foodstores further dragged down yr-to-date trends, now up 4.4% YTD. Dollar sales stronger, natch. Across channels, craft $$ sales up 8.6% YTD thru Oct 2 in IRI multi-outlet + convenience data. But that's over 2.5X the segment's 4-wk trend, +3.2%. By volume, craft grew just 0.6% for 4 wks, now up just over 5% YTD. So for most recent periods, craft barely gaining share of total beer $$ or vol. Craft +0.56 share of $$ to very near 11 YTD, +0.3 share of volume to 7. Craft also slowing in c-stores: $$ still up over 11% YTD but just 7% for 4 wks.

7 of Top 10 Brand Families/Brewers Down; Segment Up Double-Digits YTD, Ex-Big AB/MC Entries Trends remain ugliest at the top, where biggest craft brands losing space and share to smaller ones. Four of five largest craft brand families or brewers down YTD thru Oct 2, as only New Belgium up. And for 4 wks, volume down for all 5. Largest brand family, Blue Moon -3.4% by $$ YTD, a little steeper during recent periods. Other big MillerCoors brand family IRI includes in with craft, Leinenkugel's, down 5.8% YTD, -14.5% for 4 wks.

Among next group of 5, Lagunitas remains strongest by far, $$ +23.6% YTD thru 10/2 and even a little faster recently. Other grower in top-10 is Deschutes: +15.5% by $$ YTD. Like the segment as a whole, it slowed to high single-digit growth in most recent 4 wks, cases just +3%. Other big brewer entry, Shock Top brand family, also in this group. It's down 11% by $$ YTD, -18.5% for 4 wks. So that means, combo of Blue Moon, Leinie and Shock Top families, about 17.5 share of craft $$ YTD, down 5.7% so far in 2016. These 3 brand families down just over 10% as a group for 4 wks. Remove them and rest of IRI-defined craft $$ +12% YTD, volume +9%. Cut those numbers in half for 4-wk trends.

Next Tier Still Getting Some of Strongest Growth; All Craft Below Top-18 Still Up 20+% YTD Big piece of craft growth coming from 5 brewers between #11-18 in IRI. Goose Island and Bell's both up around 30% yr-to-date thru Oct 2. But as Goose Island cycles bigger numbers in back half of last yr, its 4-wk trends about half that. On the other hand, Bell's accelerating, up over 37% for 4 wks. Stone still solid, up mid-teens by $$ and volume, YTD and for 4 wks (see below). Other big growers here are Founders and Firestone Walker, still driven by continued success of All Day IPA and 805. Both brewers up over 40% for 4 wks even as category as a whole slows, with Founders cases up over 50%.

SweetWater and New Glarus each up 9-10% YTD thru Oct 2 by $$, about 6% for 4 wks. That's as Dogfish Head now up less than 4% YTD and actually declining slightly for 4 wks. These 18 large craft companies and brand families (including just top 4 Sam Adams brands, Sierra Nevada, Gambrinus and CBA, in addition to those mentioned above) represent about 62% of craft $$ YTD and almost 2/3 of volume. Collectively, they're up just 1.8% by $$ and volume down 0.8% yr-to-date. That means the rest of craft is under 40% of $$ but getting over 85% of craft $$ growth. Up almost $200-mil YTD, 22%. Increasingly, these gains clearly coming at expense of larger competitors, further challenging the segment as a whole.

Great American Beer Festival was about 2% of Denver's GDP last year during those 3 days of the festival. Not 2% of the city's annual GDP as we mistakenly wrote previously.