BrewMarketplace operated by home-brew gizmo maker PicoBrew has just gone live, bringing with it a new way for craft brewers to raise their visibility. BrewMarketplace offers way for users of co's PicoBrew system (a sort of SodaStream for beer) to replicate their favorite craft beers with less muss and fuss and greater reproducibility, using so-called PicoPak ingredient kits that are adorned with brewers' brand graphics. (We wrote about launch of product last Oct in CBN vol 6, no 84.) PicoBrew cofounder Bill Mitchell said 30 PicoPaks are currently available and another 28 pending, at variable pricing that reflects the cost and amount of specific hops and grains employed in particular recipe. Website went live last night with entries like Harlem Brewing's Renaissance Wit ($22.99), Tallgrass Brewing's Buffalo Sweat ($24.99), Lucky Envelope's Mosaic IPA ($25.99) and red ale from Peru's Cerveceria Barbarian ($24.99). In the works are such well-known entries as Abita's Turbodog, Rogue's Dead Guy Ale and 21st Amendment's Brew Free or Die IPA. All told co has signed up 110 brewing partners and 500 homebrew partners, Bill said, tho it will take some time for them to traverse process of rendering brews in format.

Seattle-based PicoBrew was launched in 2010 by ex-Microsoft exec Mitchell and his food-chemist brother Jim, both avid homebrewers, along with an engineer named Avi Geiger. In 2013 they intro'd their Zymatic "all-grain beer brewing appliance," $1,999 unit which Bill said has sold 2K units to date, quite a few used as pilot system at craft brewers. More recently, following $1.4 mil Kickstarter campaign last Nov, they launched PicoBrew, compact counter system running $799 that brews 5-liter batches of beer in 2 hours using the PicoPak kits; drinkable product is ready to go in less than a week. Speaking last night at Pepcom's annual holiday gift media showcase in NY (with Harlem Brewing founder Celeste Beatty at his elbow), Bill Mitchell said co has sold 400 PicoBrew systems so far, with 1,600 to go to catch up with Kickstarter commitments and pre-orders. The machines are contract-produced at Flextronics plant in Bay Area. Launch of BrewMarketplace now extends range of PicoPaks from generic styles to name-brand beers.

Will craft brewers gravitate to concept? Mitchell offered 3 reasons why he's betting they will: PicoPaks generate royalty stream, offer brand-building vehicle and garner access to sales data revealing what beer styles, hop varieties, etc, are trending in given area.  

few West Sacramento residents working with city government to establish their small brewery bizzes in town taught Mayor Christopher Cabaldon and his staff important lessons about supporting small businesses, he explained during members meeting just ahead of Calif Craft Beer Summit in Sacramento last week. Language like "jobs" and "tax revenues" get thrown around a lot when discussing economic development. And those things "matter, for sure," he said. But "the creation of community" and "places that make it worth living in the city" is far more important. After breweries like Bike Dog, Yolo and Jackrabbit opened, "suddenly we had a craft beer district," Mayor Cabaldon said. And they were bizzes that "became meccas for community engagement of every kind," noting oft-cited "Third Place" concept, places where "you can be with your neighbors" and "create a real sense of place." And that "transformed a place, transformed a government."

Every city has the same idea at about the same time, Mayor Cabaldon quipped early in his talk before small brewers from all over Calif. They see boom industries and try to figure out how to attract some of it to improve their communities. But "real people, on the ground, create actual places," he found. So to help those people do that, he had to figure out how to "support them rather than throw up barrier after barrier after barrier." In the case of the breweries, that involved doing "whatever we [could] to waive as many of the rules" that blocked their plans as they could, choosing instead to figure out what regulation was needed. Like many communities across the US are currently finding, that involved a bunch of industrial zoning laws. "But this is not 1910," he said. Industrial use isn't always what it was and sometimes isn't a public health issue at all. So, "if nobody's going to die, do we need to have these strict rules?" Turns out, the brewing bizzes West Sacramento encouraged to open "didn't need very much regulation at all." The city didn't need to do all the big studies required like "when IKEA came to town." It just needed to get out of the way.

Now, the city is reaping the rewards with more engaged citizens and businesses with which residents want to spend time and money. It's helped revitalize a "signature industrial" space called The Barn, a "big new artistic thing on the waterfront," Mayor Cabaldon said, where public events are already held. The new Drake's Brewing production facility will be the lead tenant of the space when it opens in the Spring, right on the river across from Sacramento, at one end of the River Walk Trail. With the city, the growing group of brewing bizzes are "building the demand infrastructure," not just for their beer but for potential residents, particularly younger adults who tend to favor walkable or bikeable communities.  

After Remarkable Liquids listed as 36th fastest growin' co on Inc 5000 fastest growing cos for 3 yrs thru 2015 (see Aug 19 issue), co keepin' up strong growth pace in 2016. With a constantly growing roster of suppliers and expanding warehouse space, Remarkable Liquids expects sales to grow another $5 mil this yr to over $12 mil in its 4th year, co-founder and general manager Spencer Noakes told Albany Business Review. That's not quite same trajectory as 6000%+ growth in its first 3 yrs, but it's still strong nonetheless.

Some may remember Spencer from his days with Premier Beverage, which he started in 1998 before selling to Sheehan Family Cos in 2006. Six years later, Spencer, his sister Maria Brand and business partner Matt Hartman started Remarkable Liquids with 12K sq-ft warehouse and just one supplier, 12 Percent Imports outta Brooklyn, NY. And ever since the biz has taken off. "We put systems in place and outgrow them three or five months later. It really hasn't slowed pace," said Spencer. Now Remarkable Liquids has 59K sq-ft of warehouse space and covers majority of the state, from Buffalo to New York City, paper noted. It's up to 52 suppliers (and counting), according to company website, including fast growing mid-sized brewers Jack's Abby and Two Roads, locals Captain Lawrence, Evil Twin, Grimm Artisanal Ales (among others), several other highly regarded microbreweries from across the country, and even a handful of imports.  

While craft segment sales continue to slow, largest and fastest growin' craft style, IPAs, are makin' up more of total category sales and much much more of category growth. IPAs' collective 3.97 mil case gain (+26%) YTD thru Sep 4 is now larger than total craft segment's 3.86 mil case gain (+5.6%) in IRI multi-outlet + convenience data (we're expanding on Bump Williams analysis in his Sep letter, see Sep 6 Express). Over 100% of net total craft growth is from IPAs! Staggering number considering that from 2011-2015, IPAs made up just 36% of total craft growth in IRI, and just a few mos ago IPAs accounted for 95% of total craft growth thru Jul, Brewers Assn chief economist Bart Watson shared during Calif Craft Beer Summit last week.

So IPAs dominated most recent periods. For 4 wks IPA volume growth is nearly 7X(!) the size of net total craft segment growth, +430K cases vs +65K cases. They gained 4.7 share of craft volume and 4.8 share of $$ compared to 4.3 share (of both) YTD; up to 26.8 share of volume and 29.1 of $$, even as total IPA trend slowed for 4 wks. Gotta note, sudden lift could be comin' from infamous craft Fruit Veggie Spiced style. It's the 2d largest craft growth style YTD, but it's actually down 19% for latest 4 wks and up just 2.5% for 12 wks. Largely due to sales of its largest contributing brand, Coney Island Hard Root Beer, plummeting 77% and 45% in same periods. Other Coney hard sodas not nearly enuf to make up for drop either, since total Coney Island brand family down 67% in IRI for 4 wks, one source told CBN. (Editor's note: keep in mind, IRI includes Coney Island hard sodas in its craft segment but counts Not Your Father's and large brewer offerings in FMB category. Not Your Father's brand family volume down 49% for 4 wks.) Just a couple weeks ago IRI's Dan Wandel showed impressive growth of "infused" beers over multiple years and looked at prominence of infused spirits to show their potential runway (see Sep 6 issue). But looks like that growth could be stifled, at least in short term, as large alc soda entries unable to cycle.  

Brewers report to TTB volume sold for "premises use," or sold directly to consumers on site, which totaled about 6.3% of US draft sales in 2015 or just over a million bbls. That's up from just 2.5% in 2010 and 1.8% in 2005, in a total draft market that's grown, but only barely. But those draft numbers don't include imports, Bart Watson, chief economist at Brewers Assn, noted during talk at Calif Craft Beer Summit last week. So he "adjusted up for what I think is underreporting" of taproom/brewpub sales (likely counted as just draft volume, not necessarily premises use). He thinks it was more like 8.3% of the broader draft market in 2015 and almost certainly growing further. Again, he estimates total craft on-site sales hit 1.75 mil bbls in 2015. So "you can see why retailers around the country are starting to push back," considering taprooms are becoming a "huge percentage of a high-margin business." Notably though, a smaller percent of US brewers sold 100% of volume on site last year, Bart showed. In 2014, well over a third of US brewers reported that all of the volume was sold for premises use. In 2015 that dropped to about 27%. But still 38% of brewers sold over 80% of volume on site.

He showed comparable stats for Calif, which also tracks volume sold on-site (as we wrote in our July 7 issue). Beer sold by breweries in brewpubs and tap rooms nearly doubled from 2014 to 2015, Bart showed, from about 60K bbls to about 110K bbls reported to the state. That's still well under 1 share of beer volume in largest US beer market. However, lots of folks reporting that volume "as kegs," so he "wouldn't be surprised if the number that's sold at the brewery" is "a lot higher," perhaps "as much as twice as high." Either way, "the vast majority of California breweries make less than a thousand barrels," Bart noted, over 3/4 of the 600+ brewers reporting in-state production to Calif last yr. At same time, 90% of volume produced in state is produced by just 4 breweries, each over 1 mil bbls. Most small brewers only sell in-state too: almost 95% of Calif breweries "sold every drop they made in California," Bart said. "A lot of people, I think, have pulled back" he added, noticing that it's "hard to compete out of state now."

In-State vs Out-of-State Brewers in Calif and Non-Calif IRI Scans He demonstrated difficulty of competing out-of-state by cutting up national IRI craft data into Calif brewers and non-Calif brewers, measuring their growth trends in state, out of state and overall. The difference between Calif brewers' and non-Calif brewers' performance in the state is most striking when just looking at BA-defined craft cos. In-state BA craft brewers collectively grew volume 12.9% in Calif yr-to-date thru Aug 7 in IRI's multi-outlet + convenience channel. But the same group declined by 1.1% out of state, averaging 5.4% volume growth nationally. Meanwhile, non-Calif BA-defined brewers grew a little faster across the US, +7.5%. But not in Calif, where the group's volume dipped 1.8%. Looking at broader IRI craft definition, Calif brewers grew slightly faster in total IRI universe as a whole, +12%. And their in-state trend YTD was a little faster too, +16% (note this group would include both Lagunitas and Ballast Point, which continue to outperform). But non-Calif brewers still not getting as much growth, up less than 5% in the state YTD, even tho they're collectively up almost 9% nationwide.  

Brewers Assn-defined craft brewers now sell over 1 in 10 of all alc bev drinks in 8 states, the org's chief economist Bart Watson showed during presentation at Calif Craft Beer Summit in Sacramento last week. Craft now at over 30 share of beer volume in 4 states and at about 20 share or more in another 6, based on Bart's analysis. Pennsy stands out as biggest volume-share state for BA craft, natch, as measure includes Yuengling. Bart estimates craft brewer volume at about 19% of total alc bev sales in the state. That's about 1/3 of just under 60 share of alc bevs held by all beer. Craft close to 40 share of beer volume in Colo. About 17-18 share of total alc bevs there. And total beer well under 50 share of alc bevs in Colo. National average for beer was almost 51 share in 2014 (when latest data available), we estimate. That's down almost 6 points in 10 years. Craft brewers outperform in two more underperforming beer states: Oreg and Mass. BA craft at about 13-14 share of total alc bevs in each state. But beer at about 46 share in Oreg and 42 in Mass. That puts craft at just over 30 share of beer volume in PacNW craft epicenter and homestate of Boston Beer/Sam Adams.

Craft tops 10 share of alc bev volume in 4 more states, Bart showed. Two of 'em no surprise: Vt and Wash. Craft brewers at about a quarter of beer in each (and 12-13% of total alc bev sales). Other two are neighboring Mountain states with relatively small populations but near hot spots in Colo and Oreg/Wash. Craft at about 13 share of alc bevs in Idaho, 12 in Montana, so over 20% of beer volume in each, according to Bart's estimates. Looks like craft at about 1 in 5 beers (and just under 1 in 10 drinks) in a few more states. BA craft nears 10 share of alc bevs in Maine and at about 20 share of beer. In New Jersey and New Hampshire, beer way underperforms, at less than 40% of alc bev sales. But craft still about 20% of that.

Craft at 5-10 share of alc bev volume in about half the states, according to chart Bart showed. That includes trio of big states, Calif, Tex and NY. Tho beer not as strong, at about 44-45% of alc bev sales in both Calif and NY, beer has over 60 share in Tex, so craft share there lower. Bart noted that Calif has "huge absolute numbers" for craft volume and brewers, but per capita, it's just average and "probably still has room to grow." Craft still at only about 6 share of alc bevs in both DC and West Virginia. But in nation's capital only 3 in 10 drinks are beers. In West Virginia, it's 7 in 10. In fact, craft has some of lower share in some of best states for beer, all grouped in Southeast. Craft at only 2-4 share of alc bevs in Miss, SC, Okla, Ala, La, Ark. But beer at well over 50 share in each state and over 60 share in Miss. This suggests, at least theoretically, that craft still has plenty of room to run there as well.  

Craft segment growth slowed again in latest period putting total craft $$ up 9.2% and volume up 5.6% YTD thru Sep 4 in IRI multi-outlet + convenience data. But that's not thru full Labor Day weekend, so don't wanna put too much weight into these latest 4 wk trends (spoiler, they're not pretty). Craft still gainin' 0.6 share of $$ to 11 share of total beer YTD amid the slowdown. Imports keep pullin' away with largest segment gain by far, now up 1 full share to 17.7.

Blue Moon ($$ down 3%), Leinie (-5%) and Shock Top (-10%) YTD declines gettin' steeper yet, putting extra pressure on IRI defined craft. Without those 3 brand families, craft $$ would be up 13%, volume +10% for the yr; up 0.8 share of $$, tho category would then only be 9 share total. Top 4 Sam Adams brands (Seasonal, Boston Lager, Rebel IPA, Variety Pk) collectively still down tuff 14% by $$ YTD, while several innovation brands able to curb total brand family decline a bit; last we saw, total Sam Adams family down 7% thru Aug 14. Sierra Nevada $$ -2%, unable to make up ground. And both Gambrinus (-4%) and Craft Brew Alliance (-3%) trends worsened. Altogether these cos ceded 6.2 share of IRI craft $$ and now make up under 39 share of total segment. That includes share losses of over 1 pt from Sam Adams (top-4 brands -1.8) and Blue Moon (-1.1), Shock Top and Sierra each off 0.8 share, Leinie off 0.7, and both Gambrinus and CBA shed 0.5.

Meanwhile, Lagunitas ($$ up 24%), Goose Island (+34%), Bell's (+30%), Founders (+62%), Firestone (52%) and Boston's Alchemy & Science remain largest gainers YTD, collectively snagging additional 2.3 share of craft $$. But Alchemy & Science rapidly declining in latest periods with soda not cycling (see below). Stone (+15%) and Deschutes (+16%) gained 0.1 share each, the only other notable share gainers among top craft vendors in scans (keep in mind Ballast Point is included in total Constellation biz for this report; last we saw Ballast $$ up 96%, gaining 0.7 share of craft $$ thru Aug 14). So that leaves a whole lotta craft share on the table for the longer tail. New Belgium now up 3% YTD, tho still shed 0.3 share of segment $$. SweetWater and New Glarus each up 10%, more or less holding share. And Dogfish (+4%) losin' a bit of share.  

Brooklyn Brewery utilizing different kinds of partnerships with a coupla major global brewers for deeper access in various parts of the world. Brooklyn and Kirin partnered "to produce and sell" Brooklyn brews "in Japan and Brazil starting next year," making Kirin "the first major Japanese beer company to make foreign craft beer," reported Nikkei Asian Review. "In Japan, the two companies plan to set up a joint venture next January, with the Kirin Holdings unit expected to take a majority stake." A single bottle is expected to be priced between $3.90 - $4.90, "sold exclusively by Kirin through high-end supermarkets and liquor stores as well as restaurants and bars." Kirin has already partnered with largest Japanese craft co Yo-Ho Brewing and "aims to boost its share" of Japanese craft mkt from current 25% to 50% by 2021, sez paper. While Japanese beer declined for 11 yrs straight, craft keeps growin' and is expected to nearly quadruple by then (tho still tiny).

Then too, Brooklyn and Carlsberg broadened their overseas relationship with new deal for Carlsberg UK's "exclusive distribution of the Brooklyn Brewery beer portfolio in the UK" starting Dec 30 this yr, reported The Drinks Business. "Carlsberg UK will manage the Brooklyn Brewery portfolio through its newly-launched brand and sales division, House of Beers," lookin' for Brooklyn to "complement" its "existing premium beer and cider portfolio." For the past 15 yrs Brooklyn partnered with UK craft and specialty distrib James Clay. But James Clay agreed to transfer brand rights to Carlsberg, allowing for "the resources to invest and support expansion from our existing and potential new brewery partners from across the world," said James Clay in statement. James Clay also distributes US brewers Flying Dog, Left Hand, Victory, Anchor and Two Roads, according to co's website.

"This move is an extension of Brooklyn's relationship with Carlsberg throughout Europe and we look forward to working creatively with Carlsberg UK on the continued development of the Brooklyn brand in the UK," said Brooklyn CEO Eric Ottaway. Recall, prior to this Brooklyn and Carlsberg Group already had an 11 year relationship including distribution of Brooklyn products in "over a dozen international markets" and partnerships to build and operate New Carnegie Brewery in Stockholm Sweden and EC Dahls Brewery in Trondheim, Norway. Currently Brooklyn Lager up 54% "over the past year in the UK [Nielsen]" Carlsberg UK VP of Marketing Liam Newton shared, "and we will ensure it thrives well into the future, like it has in the past."

All in, Brooklyn Brewery's global biz is increasingly essential to co's growth overall as Brooklyn digs deeper in already existing mkts. Last we heard, its export biz was "roaring" up 30% thru May 15 as US biz improving against easier NYC comps in 1st half (see May 16 issue). No signs that exports are slowin' down and Brooklyn's added a few new states in US that could boost the back half of the yr a bit. Recall, Brooklyn just hired Dave Duffy as VP of Business Development for both "US and global sales with focus on corporate strategy, sales & marketing and special projects" (see Sep 1 issue).  

Still nothing official, but update out of Alabama this week, as state ABC Board considers proposed rule to collect names, addresses, phone numbers and birth dates of anyone buying beer for off-site consumption directly from a brewer (see Aug 3 issue). It got lots of push back from consumer groups and state brewers guild, which argued there's probably a less intrusive way to enforce a 288-oz limit on purchases per person per day. ABC Board Chairman Bubba Lee "expects the rule to be changed," AL.com reported, and won't ask for phone numbers or birthdays. But he still wants brewers to collect names and addresses, "part of the state law," he thinks. So ABC may not pull back further, even if folks still concerned about privacy implications or potential to deter sales. "If I purchase liquor from an ABC store," (AL is control state with state-operated liquor stores) "and hand them $20 cash, they don't take my name," Nick Hudson, prexy of Free the Hops consumer group said. Further, original sponsor of bill that opened up off-premise sales at breweries also finds the rule a bit of an overreach: the ABC Board "is trying to fix a problem that doesn't exist."  

Left Hand "is recalling at least 20,000 cases" of its flagship Milk Stout Nitro beer across its 37 state footprint due to "a foreign yeast" that got into these batches, causing hard pours to overflow, reported Denver Post among others. Beer is safe to drink, but "it is definitely not to our specifications," Left Hand spokeswoman Emily Armstrong told paper.

"Affected bottles" have Oct 16 to Feb 28 best-by dates and co also pulling variety pks "with codes ranging from 13-B to 242-A." Left Hand asks for consumers to return any affected brews "to the point of purchase" tho "still working out replacement details" since "alcohol regulations vary from state to state," paper notes. It'll be between 4-6 weeks "before replacement bottled Nitro Milk Stout is available," Emily told paper, but kegs will be available since "the packaging procedure is different." Earlier this year Left Hand was up "low singles" (see May 2 issue) after pulling a coupla brands out of its year round lineup, but expected to get a nice boost from new Extrovert IPA. And Left Hand $$ up 6%, volume up 4% in IRI multi-outlet + convenience data thru Aug 14, tho keep in mind that doesn't capture a lot of CO mkt (among other non-scan states).