Craft growth just keeps on getting harder to categorize and harder to get as the segment fragments further. We've been writing it all year: total segment growth in off-premise scans slowed even more in most recent data. Craft $$ still up near 10% yr-to-date in IRI multi-outlet + convenience data thru Aug 7, cases +6.2%. But the segment up just 6% by $$, 2% by volume for 4 wks. In grocery, craft volume up less than 1% for 4 wks. Recall, IRI includes brands like Blue Moon and Shock Top in craft. Those and some of big indie brands not keeping up with smaller brewers. As always, success of those smaller players extends beyond scope of scans, with many brewers reporting strong on-site/taproom sales. And certainly possible that indie craft-centric accounts take sales away from larger chain retailers. But as buyers at those chains work this data, not hard to see why some recent and coming resets being called "brutal," particularly to some big, national (or close) players.

Look at striking variations in trends across time periods (all thru 8/7) in IRI MULC data for different groups of craft brands, shown in chart below. Top 30 brands (by YTD $$ sales) collectively grew $$ sales 4.7%, almost $82 mil, for 52 wks. Volume up 2.4%. But for last 4 wks, top 30 brands collectively down 0.4% by $$, -3% by volume. At same time, $$ sales of all other craft brands grew by near 13% for 52 wks. So brands below top 30 got over $300 mil in growth, or well over 3/4 of the segment's 52-wk $$ growth. But even this group's 4-wk trend slower, +9%, down from +11% for 12 wks and +12% YTD.



But don't forget that some top craft brands still killin' it, while others putting serious damper on segment growth. Only 11 of those top 30 craft brands grew by $$ and volume for both 4 wks and YTD. Yep, now 19 top craft brands declining for either short- or long-term in IRI MULC data. Those 11 "growers" include brands like Lagunitas IPA and Little Sumpin' Sumpin', Goose Island IPA, Firestone Walker 805, Founders All Day, Bell's Two Hearted and Seasonal and more, all up big or very-big. "Growers" group also includes New Belgium Fat Tire, which getting healthy spurt at least in part due to new territory. It's up 10% by $$ for 4 wks. Not so for Ranger though, which is among 19 "decliners."

A major factor in further softening of total craft trend is ongoing decline of some big brands. For example, biggest craft brand in IRI data-set, Blue Moon Belgian White, still up YTD but dipped into negative territory for 4 wks. Leinie Seasonal Shandy still struggling YTD, had a better 4 wks around July 4 holiday but then fell to double-digit decline for 4 wks thru Aug 7. Similar story for Blue Moon Variety Pk. Shiner Bock volume also soft last 4 wks and even SweetWater 420 $$ flat for 4 wks and volume slipping a touch. Trends for top Sam Adams brands also getting worse and now that Coney Island Hard Root Beer cycling last yr's launch, it's down for last 4 wks too, -36% by $$. Net-net, these 19 brands down 1.6% by $$ for 52 wks, -4.1% YTD, -4.7% for 12 wks and -10.3% for 4 wks. Volume trends softer, natch. Considering wide variation within just top 30 and even broader set of brands included in "all other" here, note that the difference between growers and decliners in that huge group almost certainly even bigger.  

Another fast growin' brewery outta the southeast, Memphis, TN-based WISEACRE Brewing is already in process of lookin' for location to build a second Memphis brewery, reported Local Memphis and Memphis Business Journal (among others) after co released statement. WISEACRE quickly ramped up biz, starting at 3K bbls in 2013, shooting up to 12,200 bbls by 2015 (per Brewers Assn stats) and now expecting to grow another 80% to 22K bbls in 2016. So "despite several rounds of equipment expansion," co already brushing up against capacity at current Broad Ave brewery "leaving the brewery no choice but to seek out an additional location."

Indeed, WISEACRE has "been planning this expansion for nearly a year," said co-founder Davin Bartosch in statement, tho originally "we thought we'd be lucky to outgrow it in 10 years," brother/co-founder Kellan Bartosch noted. Earlier last week, WISEACRE presented "potential redevelopment plan" to Memphis City Council for Mid-South Coliseum as its new location, noted Memphis Biz Journal. Plans call for "60,000 square feet of leased space on the first floor of the Coliseum" that could produce 100K bbls, while other businesses such as "restaurants, a bowling alley, climbing walls, a wrestling museum and Civil Rights homage" and more could "rent the remaining space," reported The Commercial Appeal separately. And unlike many out-of-state breweries building second locations in new states, WISEACRE "not asking for any city money - although it could tap federal historic redevelopment credits."

As of Aug 10, 87% of 1200+ respondents were in favor of the project via Commercial Appeal online poll. Yet "some strong detractors" want the Coliseum to "return to its original use for concerts and community events." Construction would need to begin by early 2017 "or else we'll just have to go somewhere else" said another co-founder, Frank Smith. City council is currently "investigating the idea's feasibility."

Either way, "the Coliseum remains just one of several options that WISEACRE is exploring," since "there are many many factors to consider" and "many great options in Memphis," said Davin per release. Once WISEACRE settles on a location and completes its new facility, it'll look to fill pent up demand that co clearly feels has some reach beyond its home roots. "Right now there is tremendous demand for WISEACRE in markets like Philadelphia, Chicago, across the Southeast, and beyond," said Kellan. And regardless of where new location ends up, co will hold on to current brewery location as well.  

While some of Terrapin's top management stayed on when it decided to sell additional stake to MillerCoors earlier this year, co-founder John Cochran opted to take a different route. That route now clear: he bought Asheville-based Altamont Brewing, the city's Citizen-Times reported late last week. The 5-yr old company grew to around 4,000 bbls in 2015, the Brewers Assn estimates, after opening about 5 yrs ago. John will change name to UpCountry Brewing, a name that Altamont had already used for a May rebrand of an adjacent restaurant space it took over late last yr. Clearly, terms of John's departure from Terrapin allowed for this next move.  

Suit filed in late 2014 by trio of small Texas brewers, Live Oak, Peticolas and (notably) Revolver, against Texas Alc Bev Commission got hearing Monday to lay out arguments. Brewers seek elimination of language that specifically prohibits them from selling territorial distribution rights to distribs. Live Oak claims it did just that prior to enactment of law with that language two years ago, according to Dallas Morning News. Barring sales of distrib rights "enriches distributors at the expense of craft brewers," an atty with Institute for Justice, firm arguing case for brewers, said at hearing. "The state has no legitimate interest in prevent craft breweries from selling their distribution rights," another IFJ atty argued, per Austin Monitor. Yet "the government's interest is in preserving the integrity of the three tier system," atty for TABC insisted, claiming that payments from one tier to another jeopardize separation of tiers as Austin American-Statesman wrote. Though no money at stake, in some ways very "core" of beer policy at issue, as veteran alc bev atty Drew Jaglom wrote when suit first filed (see CBN vol 5, no 84 and 85, from Dec of 2014 for our initial coverage). Judge promises a decision in 2 wks. Sit tight.  

After announcing the project a little over 3 years ago, Green Flash is finally comin' down the home stretch for its Virginia Beach brewery project. Green Flash set Nov 13, 2016 as the official grand opening for its 58K sq-ft, 100K bbls/yr VA brewery, following a ticketed event that'll be hosted one day prior, co announced. The brewery will feature a tasting room with "as many as 30 Green Flash beers on tap" as well as "a vast beer garden, food trucks, retail store, extensive brewery tour program and large private-event room and garden." In the meantime, brewmaster Erik Jensen and team will be working to ensure "consistency for the end product" using "exact replica of the equipment used in the San Diego brewery." Four more brewing team vets will be "relocating permanently" to Virginia Beach, and co in the process of hiring "upwards of 40 locals."

Mike Hinkley, ceo and co-founder repeated message that "the new brewery will allow us to offer East Coast consumers fresh Green Flash beers at West Coast pricing starting January 1st 2017," per release. Savings could be anywhere from 2-8% depending on which product and which mkt, communications manager, Natalie McCain told CBN. And Alpine brews will also be produced here for east coast production as Alpine gradually expands into more of the country. Recall, well before this brewery was even close to completed, Virginia already became Green Flash's #2 market, Mike told us back in Jul 2015 (see vol 6, no 51 issue).

All in, Virginia Beach is opening up just in time. Green Flash is brushing right up against 100K bbls/yr capacity at its San Diego facility after it grew to 82K bbls in 2015. Stay tuned.  

After a loaded mo of craft deals for MillerCoors, Saint Archer expansion plans are now starting to unfold. It added Las Vegas, NV with Breakthru Bev (one of the largest unconsolidated MC mkts in US), available thruout the state as of Aug 15, co announced. Recall, earlier this yr Saint Archer entered Reno, NV, its first ever mkt outside of CA, but since then it's been quiet on mkt expansion front. Previously, "every time we've wanted to expand outside of our home market, we've been constrained by capacity," explained founder Josh Landon via release. Now Saint Archer primed for new mkts after most recent cap expansion bumped it to 65K bbls/yr. Indeed, Las Vegas is just the beginning, "the first of many markets we're looking to launch in the next 18 months," said Josh.

Just a little over halfway thru the yr, Saint Archer volume up 68% in IRI multi-outlet + convenience data, and that certainly has potential to ramp up with new mkts comin' soon. Last yr Saint Archer produced 35K bbls, so while 65K bbls/yr capacity seems to be plenty for this yr, it also seems likely that co will already need another round of cap expansion in fairly short order to keep growin' at current facility.  

Both total brand and SKU counts are notably below 2015 totals just a little over halfway thru the yr in IRI multi-outlet + convenience data; 83 fewer brands and 344 fewer SKUs tracked YTD to 8,226 brands and 13,313 SKUs respectively. In fact, other than cider and FMB segments, brand and sku counts are down across the board, including craft! Could this be signs that SKUmaggedon has peaked?

It's not a perfect comparison because there can still be plenty of new brand and SKU entrants in the system thru the latter half of the year. Yet even if brand and sku counts end up passing last year's totals, the rate of net new brands and SKUs has clearly tapered this year. Craft is the biggest culprit since it's the brand/SKU leader by a longshot, after adding crazy amounts to the system even in just the last two years. About 900 more craft brands and over 1K more SKUs were counted in both 2014 and 2015, reaching total of 6,181 craft brands and 8,784 craft SKUs by the end of 2015 in IRI MULC. Compare that to 6,170 craft brands and 8,711 SKUs so far this yr. So seems impossible for craft to reach anywhere near net new brand/SKU additions from previous yrs.

Yet interestingly, craft continues to become a larger % of total brands and SKUs tracked in IRI database as other segments tapering off at faster rate. Imports in particular saw brand/SKU totals retract most; 63 fewer brands and 147 fewer SKUs tracked thus far this yr. Subpremium and premium (as defined by IRI) have been cutting back on SKUs. Just four fewer subpremium brands and one less premium brand tracked, but down 48 and 28 SKUs respectively. Superpremium brands (-11) and SKUs (-33) are both notably down. So net-net, craft brands now 65.4% of total SKUs and 75% of total brands; up from 74.4% and 64.3% in 2015. Next question - how is shelf space evolving?  

Founders Brewing announced a pair of new distribution deals this week, both in the US and overseas. It'll expand to WV with AB network in late Aug: Proud Eagle, Northern Eagle, Mountain Eagle and craft/wine/cider subdivision Mountain State Beverage. So far this yr Founders also added SoCal in Jan, MD in May and expanded reach in MI's Upper Peninsula, MN, NorCal and KS in Mar.

Then too, Founders just "struck a new distribution deal with family-owned Bedfordshire brewer Charles Wells," to bring its flagship All Day IPA to the UK by mid-Aug, reported Imbibe. Co already has some existing distribution in some UK "specialist retailers" that will continue, but "Charles Wells will take responsibility for all national account development in the on- and off-trade, focusing on independent free trade in London and the south-east for core Founders beers," working together with its importer Vertical Drinks. Vertical Drinks will focus more on seasonals (expected to be added "in the near future") as well as specialty brews. Indeed, "as American craft beers continue to grow in popularity globally, we see the UK as an important hub for distribution," said Founders vp of international business, Brian May. "We're now in a position to expand our distribution and accelerate the opportunities available within the UK market," added Founders UK market manager, Tim Traynor.

Meanwhile, CA's AleSmith Brewing is expanding distribution into Australia starting end of Sep with Experienceit Beverages, according to release via Full Pint (among others). Experienceit Bevs has natl coverage across Australia and currently distributes over 30 craft brewers from Australia, Europe, New Zealand and the US. AleSmith's currently distributed in 24 states and 6 countries.  

After more than six years of planning, Stone Brewing will finally see Stone Hotel project materialize after coming to an agreement with San Diego-based Untitled Hospitality to build, own and manage the hotel "through an exclusive license agreement," co announced. Recall, Stone originally announced this project in 2011, tho perhaps got sidetracked in midst of sizable growth and several other projects such as now completed Berlin brewery, Richmond brewery (started brewing IPA in early Jul) and Napa taproom slated for 2017. "We had put the project on permanent hold due to our core obsession of brewing," said co-founder Greg Koch. But "when Robert [Cartwright] and Untitled Hospitality approached us with the idea of them taking the ball and running with it, we found a partner who was fully engaged in the idea of executing on the Stone ideals, ethos and creativity."

The $26 mil project is expected to be complete by Q1 2018. It'll be "located on thirteen acres of land adjacent to Stone Brewing World Bistro & Gardens - Escondido," where all guests will have "priority seating." Indeed, Stone will look to capitalize on its "nearly 1 million" annual visitors, second only to San Diego zoo within the city, skift.com article noted separately. Plans include a 100K sq-ft building with 99 "oversized guestrooms," "a bar-style lobby check-in" an 8K sq-ft ballroom and 10K sq-ft "rooftop garden" for events and "nearly an acre of outdoor event space," fitness center, walking trails, pool and more, per release. There'll be three on-site bars with "wide array" of Stone brews including special releases and casks "periodically tapped." Keep in mind, Dogfish Head entered the hospitality biz with its Dogfish Inn in 2014, tho that project's far smaller, including just 16 rooms total.

"The craft beer drinkers aren't the only people who will stay here," CEO of Untitled Hospitality Robert Cartwright told skift.com. There'll also be oppy for "plenty of group and wedding business, in addition to appealing to independent business travelers." Robert believes the hotel will be "right within the wheelhouse of an Ace Hotel or a Design Hotel" and plainly stated "we don't think there's a need to be associated with any of the big brands."  

Ninkasi expects to be "probably somewhere in the 110 thousand barrel range. Maybe a little under that," said Ninkasi CEO and co-founder Nikos Ridge in joint Brewpublic interview with brewmaster and co-founder Jamie Floyd, highlighting cos' 10th anniversary. Recall, Ninkasi in-state shipments were actually slightly down in homestate OR earlier this yr thru May and sales in Portland, OR foodstores were flat thru Jul 10. Yet Ninkasi volume up 6%, $$ up 7% in natl IRI foodstores thru Jul 10, still getting boost from outside mkts. There are "no specific plans yet" to add to their 13-state (and parts of Canada) footprint, "but we are starting to talk about that and take a look to see what might make sense," said Nikos.

The interview spans several topics, ending with a question regarding thoughts on Hop Valley's recent sale to MillerCoors. "We already kind of had our sort of initial shock to the system here in the Northwest with 10 Barrel and Elysian. So I don't know how much of an impact it's going to have," said Nikos. Tho "for the Eugene market there is definitely a dialogue going on around for what's important to people and their choice of craft beer," he acknowledged. "It will be interesting to see if it has an impact on the Eugeneians," Jamie added, noting that "expected impact" of 10 Barrel sale "was probably not the expected outcome" since many people that were "upset" are still supporting the brand, he thought.