There are a "ton of new breweries popping up," and "I think there's room for us all." It's a comment that's been repeated umpteen times in just about every market in the US in recent years. This time, it came from co-owner of Threes Brewing in Brooklyn, NY, Greg Doroski during a panel discussion about brewing in the hip NYC borough, hosted by local media/art presenter BRIC last week. Other panelists agreed: there's a lot of room to run, particularly in a market as big as NYC. The largest city in the US is still a "far way off from being saturated" with breweries, thinks owner/head brewer at Strong Rope Brewery, Jason Sahler. He made familiar comparison to restaurants before asking, "there are how many bars in this city?" And "there are all those people that we can educate into trying something different," said co-owner of Bitter & Esters homebrew shop, John La Polla, who constantly works to "try to teach people about beer," while noting that "what the word 'beer' means is changing."

Many of the young brewery owners in the city know each other beyond shared experience of opening their breweries at the same time; relationships often go back to tight-knit homebrewing community, Greg and Jason recalled. The collegiality established by that continues: Greg will "trade hops back and forth with the Other Half guys" and Threes "washed our kegs at Other Half for six months," he said. The community of professional and hobbyist brewers also continues to grow and establish closer and more local ties, as "Dictator" of largest NYC homebrew club The Brewminaries, Sheri Jewhurst said. Finding ways to "encourage the community" has been a primary focus since establishing the club just last year. It's created a Brewminary-approved designation for "places that focus on making [and selling] quality beer." Members "continue to get jazzed up when a brewery opens up in their neighborhood," she noted. And there's always another neighborhood in a city like NYC. So as long as brewers "put quality at the forefront of our decision-making, there's room," Greg qualified. "One brewery is just a spot on the map," he said, but "a few together becomes a destination" and "something that people come to Brooklyn to do."

Local "Threat" to the "Not Local": IPAs, Freshness, Competition The rise of local is not all good news all the time, of course. "There is some threat to the breweries that are not local," Greg noted, "because there's so much great local beer." He sees this as a particular challenge within popular IPA style as rising interest in freshness: heavily dry-hopped beers, particularly of the hazy (Northeast/New England) variety so en vogue of late just don't last as long on the shelf and taste best uber fresh. "Why the heck would you buy an IPA made on the West Coast," he wondered, when there are amazing IPAs being made by local breweries like Other Half, which is "canning their IPA on Thursday and Friday and it's sold out on Saturday." He finds his own brewery's pilsner "competing for lines with imports" and asks the same question about freshness and travel-time.

Brewers, Farmers Adjusting to NYS Farm Brewery Licenses; More Music Metaphors, Line-Blurring Strong Rope operates under relatively new NY farm brewery license, Jason explained, and already uses 100% state-grown hops and 90% NY malts on the co's 2-bbl system. So scaling up from homebrewing wasn't so much an issue as "learning to brew with these New York state ingredients," Jason said. Being from Rochester, he has "always been into the idea of not losing all the farmland" upstate. But the "flavors and profiles of the hops," he said, were "not necessarily translating one-to-one," to the same varietals grown elsewhere. So the co did a bunch of single-malt and single-hop beers to learn flavor profiles. "Terroir is a thing," Greg said, so "it's different, even if it's the same varietal." Many of the "over 200 some-odd breweries in the state" have also opened with the less expensive farm brewery license, but beer-focused agriculture is "still young" in NY, Jason explained. "Maltsters have to teach the growers," things that "a lot of old school farmers weren't necessarily attuned to." Growing hops and barley at scale is "so new" for modern NY that there "aren't agricultural guidelines developed for the state," Sheri said. But the science is coming together, headed by a Cornell extension. "The growers are starting to up their game," Greg said, making it a "really fascinating time in New York," said Jason.

Just like the conversation about saturation of breweries and local vs non-local, the panel's discussion about the growing relationships between small brewers and nearby farmers echoes across the US. Indeed, we've heard or read about similar conversations, focused on individual communities, many times. Notably, these industry members, focused so closely on their home market, remain generally optimistic. One final familiarity: using music metaphors for craft never seems to get old. "Craft beer is the new punk rock," John said, from the position as the oldest panel member (he's been homebrewing since the 90s). "You can meet the brewers, you're star struck by them," he said. "Homebrewers are the garage bands: some of them just want to jam" while others wanna hit it big. He compared bottle shops to record shops, with passionate employees guiding customers. And "my shop is the guitar shop," he said. There, he sees a continuous flow of "curious" newbies at the 3 beginner homebrewing classes it hosts every week. As a brew-on-premises location, customers with only mild interest in brewing can brew a half-bbl batch of beer at Bitter & Esters to bring home. But "the pros" come in too, grabbing 15-lb bags of grain in a pinch. So "the lines are blurring a little bit," John said. Quite.  

Quick update came in on dispute between Southern Glazer's and at least Boston Beer over distribution rights in Ohio (no new news on Great Lakes side of suit). Attys for Boston Beer and its Ohio distrib Southern Glazer's filed brief "report" with US Dist Ct Fri that "the settlement discussions" ordered by the court "remain ongoing." They requested judge's "standstill" order maintaining status quo be held until this Fri (Oct 14), "at which time the parties may be ordered to file a further report." (This appeared earlier today in INSIGHTS Express.)  

"Times New Roman">More signs that craft biz keeps changing more rapidly than anyone can keep track of and not always for better. As trends slow, even some of hottest craft beers get discounted more, especially on slower moving variants (tho it might not be brewer that initiates the discount). Case in point: Ballast Point. Recall, it grew 60% in Constellation's 1st qtr and about 20% in its 2d fiscal qtr (thru Aug). But source just sent us pictures of big stacks of Ballast Point from upper midwest with Sculpin Pineapple priced at what ad said was "hot blowout price"of $3.99 per 6-pack. And if you buy 4, get 'em for $3.50 each. Price was "$14.49" per 6 pack. That's about 75% off if you bought 4. Then too, flagship Sculpin, Grapefruit Sculpin and Pineapple Sculpin also shown in separate ad with "Buy 2 get one free" promo, more common among Bud and Bud Light. Net price is $9.13 per six, sez ad. (A version of this article appeared earlier today in INSIGHTS Express.)  

Following June schism that created competing small brewer trade associations in one of key craft states, leadership of Colorado Brewers Guild and Craft Beer Colorado hammered out basics of agreement that will reunite both orgs, Denver Biz Journal reports. Group will keep Colo Brewers Guild moniker and require that all members produce less than 6 mil bbls per year with less than 25% ownership by a non-craft brewer, tracking requirements used by national Brewers Assn, CBG board member/Pike's Peak Brewing owner Chris Wright explained to paper. As part of agreement, still to be ratified by each group, CBG will embark on a search for a new full-time executive director to replace long-time leader John Carlson, who stepped aside following split.

Recall, multiple considerations swirled around news of the group's split. Questions about what to do with member-brewers (and representative board members) when acquired by larger bizzes received majority of attention at the time. It's the same issue state guilds across the US face too, and was still a pretty fresh issue in Colo after AB acquired Breckenridge. Prexy Todd Usry was a CBG board member. But local coverage also noted impact of legislation that paves way for chain grocers to begin selling strong beer, wine and liquor over next two decades. That so-called "compromise" bill cut-off at the pass a ballot initiative that could have brought such grocers into stronger alc bev sales much more quickly, something many small brewers actively opposed. Behind-the-scenes negotiations on that bill, and the guild's role (or lack thereof) in them, was suggested as another facet of organizational divide.

Yet lines along which Colorado brewers cleaved remind of much broader struggle facing future, reunified org and many other similar ones across US: protecting the interests of a membership that's both constantly expanding and diversifying. The largest craft brewers in Colo were among those that separated to form Craft Beer Colorado, including New Belgium, Oskar Blues, Odell, Left Hand and Great Divide. As craft continues to broaden, at least in terms of the size and models of the bizzes operating within it, managing and satisfying the needs of all members becomes an increasingly tricky task. 

Brewers Assn's top brass touched upon several hot topic issues during GABF media briefing last Friday. Here are some of the highlights:

Brewery Count: 4,840 Thru Aug; At Least 1900 More Likely to Open in Next 1-2 Yrs There were 4,840 active breweries and 6,720 total TTB brewery permits issued thru Aug 2016, Brewers Assn chief economist Bart Watson shared. That's another 184 breweries since end of Jun when BA reported its mid-year review (see Jul 26 issue). And "probably at least another 1900 breweries that will open in the next year or two," said Bart. Recall, last mo Beer Institute chief economist Michael Uhrich pointed to potential early signs of slowdown in total brewery count; roughly 2/3 fewer TTB permits issued this yr vs last yr (see Sep 12 issue). "A huge reduction." Bart attributed lower number "mostly" to TTB being unable to "keep up with all the processing they have to do," during separate Calif Craft Beer Summit. But again, either way we're unlikely to see much of a slowdown in the number of breweries in the near future with nearly 2K issued brewery permits that aren't yet active.

CBMTRA Has "Good Chance" to Pass but "Wouldn't Say I'm Confident," sez Pease Despite increased level of support for Craft Beverage Modernization and Tax Relief Act (CBMTRA), now with 285 co-sponsors in the House and 52 in the Senate, BA CEO Bob Pease still "wouldn't say I'm confident" about bill passing this yr, he acknowledged during Q&A. But "we are very hopeful," he explained earlier, "that we will be part of that conversation during the lame duck session." Over past 3-4 yrs Congress "has done some type of very large tax package" when "they come back after this break." And likely "our bill needs to be attached to something fairly substantial in order for it to move." Main reasons BA believes there's "a good chance" for it to pass is because it came "so very close" to passing last yr and that last yr's bill "had some liabilities that we addressed in this past year." But after being dropped from final draft "at the 12th hour" last yr, Bob feels he has to "take the approach that it's not going to pass, but we have a shot."

FDA Menu Labeling Update: "Optimistic" About Suggested Stylistic Nutrient Averages "We're working with the office of nutrition and food labeling at the FDA" and "getting to a point where they're starting to realize that" in bev alc the most important nutritional labels are "calories and carbs and fat," said BA director Paul Gatza. Recall, FDA menu labeling rule, which doesn't go into effect until May 2017, currently will require chain restaurants to put calories on menus and have 10 other nutrients available "upon request." BA is still "in discussion with working out a stylistic approach" for "other nutrient classes" (see Mar 18 issue), where there is a general average by style, ultimately helping brewers "avoid required lab testing to get all those data points. I mean, do you really care about how much dietary fiber you're getting out of your 12oz pale ale?" he quipped. Ultimately, BA is "optimistic" that brewers won't "be forced into testing every beer that they want to have distributed in a chain restaurant."

GABF ~2% of Denver's Annual GDP Last Yr GABF contributed $28.6 mil for city of Denver in 2015, Bart shared using Visit Denver estimate. Impressively, that's "about 2%" of Denver's annual GDP in just those 3 days. Wow! This is "the largest selection of American beer ever served" and "the largest ticketed beer festival in the United States," BA's Julia Herz noted. Indeed, there were an estimated 60K folks in attendance thruout the weekend, along with 780 vendors serving 3800+ beers collectively. It's also the largest beer competition in US, judging 7,227 entries (+9% vs 2015) from a record 1,752 breweries covering 96 beer categories and 161 different beer styles (including subcategories), per BA press release.

Export Development Program Efforts "Very Timely"; ~80 BA Members Actively Exporting The BA's Export Development Program started 9 yrs ago and "we were certainly ahead of our time, anticipating" that it "should be working to explore new markets for its members," said Bob Pease. Now amid the "shifty landscape" for US craft beer mkt, as he put it, "I think the efforts for growing export" are "very timely." While they're "certainly working off a small base" (approx 446K bbls and $115 mil collectively in 2015) BA "anticipate[s] again pretty significant growth in 2016."

One of the "big efforts" remains to "just really hammer home" quality and "cold chain infrastructure" around the world. That's "one of our biggest vulnerabilities," but countries are learning that "if they want to do business with American craft breweries" they'll "need to be able to" ship, truck and store products cold. Currently there are about 80 outta 104 total export program members actively exporting and BA is tracking exports to 30 different countries around the world, Bob shared. The program receives a grant every year "to generically promote the export of American craft beer," which helps "fund their entries into international competitions" and beer/food events in various countries. And "it's not just IPAs that win" at these competitions; US brewers are winning "across the gamut of styles."

So all in, "our breweries are seen as market leaders not just in America, but internationally," said Bob. When asked about how BA views "continued rise of homegrown options overseas," he answered "we think that's great." He used UK as an example: there's been "an explosion of small locally independent owned breweries" there and "that really helps drive and build beer culture." Now there's "slower export volume into the UK" and that's likely "because of the rise of local" (he specifically referenced Beaver Town as a brewery that "can compete with any brewery in the US"). But "more people drinking 'better beer' helps everyone."  

Over 130 breweries opened in UK in 2015, putting total at 1,692, according to analysis by UHY Hacker Young, reported by Financial Times. That's up by over 650, +65%, since 2010. In broader European Union, brewery count up about 75% over 5 yrs, a bit behind the doubling in breweries we've seen stateside. But craft beer boom increasingly global (see above). As consumer taste worldwide shifts towards more flavorful (often, but not always, local) high-end products across food and drink sectors, small-scale brewers figure out how to carve out niches for themselves, even in locations where market structure makes for even tougher go of it for such small players. 

Entrepreneur in St. Joseph, Missouri already had building and brewing equipment to bring long-gone Goetz beer brand back to community. All he needed was deal to get recipes and trademark rights for 4 original beers from Pabst, which owns rights to Goetz and many other shuttered regional brands around US. But that deal between never materialized, local entrepreneur Erik Borger told St. Joseph News-Press this week. Note that Pabst has revived some of regional brands it owns, working to produce some at current breweries at or near original homes. But clearly work with Borger to take on Goetz revival not in the cards. Silver lining: Borger's already sold building to someone else and the brewing equipment to another budding brewer, natch. 

Minnesota has been one of fastest growing markets for craft, particularly in terms of brewery opening rates, over last few years, blowing up plenty of familiar questions about "bubbles" asked nationally. Those questions reviewed with specific look at Minn market, where brewery count nears 120, up 355% in 5 yrs, in lengthy article in local City Pages outlet this week. Note that production also quadrupled in that time and growth in breweries means that about 2/3 of Minn brewers didn't exist in 2011.

But when will it all collapse? Not so fast, writer generally insists, calling "bubble" a "lazy term," one cited as "worthless" by another biz writer. It may be one "we're all used to," a local alc bev/biz lawyer, Jeffrey O'Brien told paper, but "I think what's actually going on is a paradigm shift," he continued. Further, opening rate has slowed, founder of Surly Brewing, Omar Ansari, noted: "we're not opening 50 breweries a year in Minnesota anymore, we're getting to the right point." Current count's nowhere near what's seen on West Coast, or what writer calls "America's Beer Belt." And number of Minnesotans served per brewery in 2015 about half what it was before Prohibition. Longtime writer/local brewery owner Tod Fyten (of Fytenburg, Mantorville and St Croix Breweries) also "not convinced" of a bubble. He shares stories of 90s shakeout, reminding of equipment auctions, including one where he says Russ Klisch of Wisc's Lakefront Brewery picked up a German-made 50-bbl brewhouse in PA. "Some will struggle," Fyten told paper. Indeed, "there will be challenges, but the industry will evolve and work through it."

Of course, national data cited in article not exactly the most up-to-date, and piece doesn't consider that most recent retail trends considerably slower than 8% growth highlighted by Brewers Assn for 1st half of yr. And not everyone paints completely rosy picture. "Right now, we have a certain degree of arrogance from people who are making beer," Summit founder Mark Stutrud told paper, citing a "very short-term focus." He's concerned about brewers who think they'll build a biz with a "cool beer" and then "'flip it.' Like they're redoing blighted real estate." Mark shares some harsh words for young brewery owners oversimplifying biz with a "jazz" metaphor and notes return of "substandard beer" in market. Industry vet/Summit quality manager Rebecca Newman underlines insistence on quality and educated brewers. She expects "an implosion rather than an explosion," a perhaps more quiet, if still somewhat disturbing image.

Yet by and large, local scene in Minn made up of lots of very tiny, community-focused brewers with lots of optimism. "A lot of brewers I talk to don't care if they get big," said community manager at brand new Broken Clock Brewing Cooperative, Stephanie Hubbard. "They just wanna brew good beer and succeed in their community," she said. That co, a "co-op brewery" that's "funded and governed by member-owners," about to occupy new 750 sq-ft space in Twin Cities, taking over space being vacated by 56 Brewing. It may eventually grow into something bigger, if the market can sustain it. Or maybe not.  

By end of 2016, Brooklyn Lager will be produced for international markets in at least 3 different international breweries, tightening distance the beer needs to travel to satisfy global demand. Third agreement struck with Carlsberg to produce flagship Brooklyn Brewery brand in Sweden, starting next month, co-founder/chairman Steve Hindy wrote for company blog, posted this morning. Brooklyn's brewed the brand in Japan at Kiuchi Brewery, makers of Hitachino Nest brand, "for several years," Steve wrote, and began brewing Lager at Coopers Brewery in Australia in 2015. Recall, Brooklyn already works with Carlsberg as both distributor in some markets but also as joint owner of two smaller "sister breweries" in Scandinavia, E.C. Dahls and New Carnegie. The companies will soon "begin experimenting with producing" Brooklyn's Defender IPA and Sorachi Ace to bring fresher beers to those markets. Exports have been fastest growing piece of Brooklyn's biz for a few years now, particularly in Scandinavia. It also continues to sort out US production, as it preps new brewery/HQ in Brooklyn, while working towards larger NYC metro-area facility, Steve reminded. 

Oskar Blues further specified plans to expand into several new international mkts, lookin' to open 8 new countries/territories by early next yr, co announced (see Sep 28 issue). First it'll add Puerto Rico, Chile, Netherlands and Belgium by end of this yr, followed by Brazil, New Zealand, Japan and Ontario, Canada by "early part" of 2017, national digital media manager and Tex mktg manager, Dan Wiersema told CBN. Oskar's already established a presence in UK, Sweden, Norway, Australia and British Columbia and Alberta, Canada. "It's all about the cans," said Dan, since that's still "a whole new thing" on "global level." And cans provide an oppy to ship fresher beer overseas too, he added. Currently UK is heavier on Dale's Pale Ale but in general Oskar is primarily sending cans of all core lineup and some seasonals into these mkts, while experimenting with some draft as well. All in, Oskar feels it has "opportunities abroad" that "others can't take" and is "looking to be one of the leaders" in overseas craft mkt.