Anheuser Busch InBev gave details of what it will look like post-ABI-SABMiller deal in still unnamed company it presently calls Newbelco.  The combined co would have generated $55.456 billion in revs and $21.054 bil in EBITDA based on calendar 2015 financials for ABI + SABMiller financials thru Mar 2016.  And ABI will easily become the most profitable CPG company in the world.  Proctor & Gamble way bigger in revs ($69 bil) but margins not quite as fat; it made $18 bil in EBITDA.  Nestle at $92 bil in revs, $17 bil in EBITDA. That  MegaBrew number of course doesn’t even include the approx $1.4 bil in synergies ABI expects to realize over the next 4 yrs.  So get this: ABI will have paid well over $100 bil (although there will ultimately be over $20 bil of divestitures) for what amounts to about $4 bil in incremental EBITDA, as ABI reported “normalized” EBITDA of $16.839 bil last yr.  AB in US got $5.477 bil in EBITDA or 32 share of total.  But that would drop to about ¼ of total for pro-forma MegaBrew.  Any way you look at it, that’s one giant co. 

A tense two days in Mass legislature for beer interests. Long-simmering tensions between Mass brewers and distribs erupted Wednesday when state Senator filed proposal that "would effectively repeal the state's decades-old beer-franchise law," as Boston Globe reported. Amendment provided that relationships between brewers and distribs "shall be governed by the parties' agreement, the law of contracts, and/or other generally applicable provisions and principles of commercial law." Recall, for yrs Mass craft brewers complained it's too hard to move brands; distribs countered brands move all the time and consumers have vast choice. All attempts to reform franchise law in legislature previously failed. Amendment scheduled for debate/vote on Thursday, but was put aside. Many had expected it would be postponed, including its sponsor and House Speaker. But instead, legislature passed different amendment that creates task force of brewers, distribs and official appointees that will "have until Dec. 31 to draft rules spelling out when and how a brewer is permitted to fire a distributor and switch to a new one," as Boston Globe reported. Proposal still needs to go thru reconciliation process and get Gov's signature. Assuming that happens, Senate staffer confirmed to paper that if task force can't agree, state senators will reintroduce their own bill: "if they can't figure it out, we'll figure it out for them," staffer said. Rob Martin, prexy of Mass Brewers Guild said "if it takes a piece of legislation to actually have [distributors] come and negotiate, I'm all for it." Important context here: both Mass governor and state treasurer have voiced need to reform "antiquated" alc bev laws and "reform bureaucratic hurdles" to increase choice/convenience for Mass consumers, even in already craft-friendly state. 

The beginning of 2016 "wasn't super exciting," Ninkasi CEO Nikos Ridge explained to CBN, echoing comments we've heard from plenty of other beer folks. But biz picked up as the summer selling season began. And with healthy off-premise trends and positive chain activity, including a couple of strong newer brands, Nikos expects Ninkasi to end 2016 up 8-12%. As a whole it was "up low single-digits" for the 1st half. That accelerated to double-digit growth by May and June, giving the co a good jump on the summer. It just finished sponsoring the US Olympic track and field trials in hometown Eugene, Oreg, often called Track Town USA. Recall, Ninkasi launched new Beer Run IPA, part of its Special Release Series earlier in yr. And the co just celebrated its 10th anniversary at the beginning of July and has a bunch of events coming up next month to keep up momentum.

But it's "tough out there," Nikos acknowledged. The co saw some "unnaturally slow months" early in the year before "momentum picked back up again." Package refresh the co rolled out earlier this year helped too, he said, and recent "reset cycle was good for us." That included more placements for newer brands like Helles Belles and Easy Way IPA as well as new 12-pk of Dawn of the Red. Further, new summer seasonal Maiden the Shade put its seasonal numbers up 30-40% over last yr. In the back half of the yr, it's moving Hop Cooler Citrus IPA into 6 pks for the fall, already some "chain partnerships" in hand to provide a "nice boost to year-end" on top of "the growth we're seeing." Hop Cooler debuted this yr as a Special Release and performed 50% better than last yr's offering. Considering the "natural evolution" of citrus-flavored IPAs, which riff on citrusy notes already added by many hop varieties, that sub-style "not going to be a one-and-done," in his view.

As for its flagship IPA Total Domination, it's "great in package and up" there, but suffering similarly to other "flagship draft products," Nikos shared. On-premise difficulty mostly due to slower velocity, an issue that's "two-fold": where Total Dom once was a permanent IPA handle, there's now "another five"; more rotation means it's less likely to be permanent or is rotating into an account with less frequency. That said, of Ninkasi's biz in its home territory, the "North West is strong," Nikos said. It's now about a yr and a half out from distrib changes it made following AB's branch acquisitions and "full steam" ahead. On the other hand, "California is super tough" and the co continues to "focus on the off-premise," there. But Texas is "pretty solid," while newer East Coast markets have been "a little bit mixed." So all-in-all, a "mixed bag," he said. And tho Ninkasi opened up a handful of markets in last yr or so, it's now in 14 states and Nikos and team "don't feel like we need to pull the [distribution expansion] lever" for growth right now.

Commenting on current overall craft picture, "we're getting to a slower slope on the growth curve," Nikos noted simply. "A lot of opportunity has rapidly been filled," he said, so somewhat natural that overall pace of the segment a bit slower. Indeed, "most people have had the opportunity to try craft beer at this point," he said. So may not be quite the same amount of whitespace in terms of consumer conversion as there used to be. Unlike some, he thinks "not everywhere" will become as well developed for craft as the PacNW. But across US, industry is "going to start or continue to see the rationalizing of the consumer," he thinks, "towards quality" and "reliability" and "not just locality." In that respect, Ninkasi is "trying to work from a customer-centric perspective," asking itself "what's the total value that we're bringing" to distribs, retailers and drinkers. And therefore, watching craft deal-o-sphere, Nikos maintains that his co's "fortunate to be in a position" where it doesn't need to do a deal. Yet, "is there something that makes us stronger and adds value?" With "so many emerging models," he said, "there's more options...from the structural side." So like many of his peers, he seems to be keeping his options open at the moment.  

Continued softness of Boston Beer brands in scans led Goldman Sachs analyst Judy Hong to lower volume expectations for second qtr and full-yr. But Judy still sees possibility Boston earnings will fare better due to "greater focus" on cost control. And she actually raised guidance for 12-mo price target. Still, total Boston volume -3.7% for 12 wks thru June 18 in Nielsen data cited by Goldman Sachs. During that period, Boston Lager down 15% and Sam Seasonals -23%, plus Angry Orchard -15%. So Judy lowered 2nd quarter Boston depletions guidance to -6% from -5%. Twisted Tea still "a bright spot," +12% in same Nielsen data and now up to 28-29% of Boston volume in scans. New brands represent another 6-7% of Boston volume, led by Coney Island Hard Root Beer at about 3% and Rebel Grapefruit at about 2%. They'll continue to help Boston as yr goes on, but Root Beer will begin lapping its August rollout last yr just as Angry Orchard may stabilize, Judy said. So she's forecasting total volume declines in 3rd quarter (-4%) and 4th quarter (-3%), leading to a -4.5% depletions trend for 52-wk basis or -2.7% for 53 wks (recall, Boston periodically reports on 53 wks, which it will in 2016). Boston guided to -4% to +2% on 53-wk basis.

Notably, Boston's share of craft in Nielsen "shows slow and steady bleed to ~9%," Goldman Sachs shows. Financially, SAM stock price-to-earnings ratio of 24.5X may be above average for Goldman's "Beverage group." But with NTM EV/EBITDA (next twelve months enterprise value to earnings before income taxes, depreciation and amortization) at 11.1X, SAM is "one of the cheapest stocks in the beverage and tobacco coverage universe." So Goldan Sachs remains neutral on SAM, but with "low expectations." At presstime SAM stock up 1% today to about $169. That's still over 10% below price early in yr and almost half what it was at peak in Jan 2015.  

At least one source of funding for Stone's True Craft project may have revealed itself. San Francisco-based Private Equity firm VMG Partners helped sell $89.5 mil in securities to 8 investors in so-called "VMG Stone Brewing Coinvestment, L.P.," according to a mid-June SEC filing uncovered by Brewbound yesterday. Details still scant and neither Stone nor VMG commenting publicly yet. But considering timing and players, this fund could represent vast majority (if not all) of that $100 mil that Stone co-founder/CEO Greg Koch cited when announcing the project in late April.

Recall, True Craft concept is Greg's "alternative" for small brewers seeking capital but uninterested in selling to large strategic buyers or PE firms directly (see our May 2 issue). True Craft model will eventually invest in brewer "partners," not forced into some kind of "consolidation play," Greg told us, which will also have "guardrails" to keep the investment co operating on its own. When announced, funds had been pledged by unnamed investors.

Last month, VMG Stone Brewing Coinvestment, a limited partnership, filed a notification to SEC that it sold $89.5 mil in equity and pooled investment fund interest starting on June 15. Managing members of VMG Partners and handful of that firm's existing funds ("VMG Partners II" and "III") listed on filing, but no other reference to Stone besides the name. This filing itself does not seem connected to a direct investment by VMG into Stone. Indeed, if VMG used part of the $500 mil it raised for its "III" fund to do that, it likely would not need to disclose that to SEC. Instead, this separate "Coinvestment" fund tracks closer to Greg's comments about True Craft.

Previous VMG "Coinvestment" Similar to True Craft; Strong Track Record in Consumer Goods Just one of multiple other SEC filings by VMG, filed late last March, uses similar "Coinvestment" language to this Stone-related filing. That "Voyage Coinvestment" disclosed $75 mil in securities sold to 4 investors starting on Mar 20, 2015. A second filing by same VMG principals shows over $150 mil in equity issued by separate "Voyage Holdings" just 5 days later. Just a couple weeks after that, VMG announced a partnership with TerraVia to launch TerraBrands. That new company would invest in or acquire existing cos or brands that could use TerraVia's algae-based food/nutrition products and benefit from VMG's "expertise" in developing consumer goods brands and its "investment capital," according to release. VMG and TerraVia brought on founder/ex-CEO of popchips, Keith Belling, to run the new company. No connection in name between Voyage Coinvestment and formation of TerraBrands, but close timing of filing and announcement of this different kind of investment by VMG certainly suggests one. Also note that, like True Craft plans to, TerraBrands paired a company already operating within a certain category (TerraVia) with an experienced financial firm (VMG) in order to invest in and expand small-to-mid-size brands.

And VMG does have expertise in developing consumer goods brands. Starting with its first PE fund, closed in 2007, the firm bought stakes in brands like KIND bars, Pirate's Booty snacks, Pretzel Crisps and Mighty Leaf tea. It sold its Pretzel Crisps stake to Snyders in 2012 for $340 mil, 8X what it paid 3 yrs prior after expanding the co's biz by 70%, the Wall St Journal reported. It got out of KIND in 2012, selling it back to its founder for $220 mil, 12.7X what it paid in 2008, again per WSJ. Just last yr it sold a $550-mil stake in Vega plant-based nutrition brand to WhiteWave, food co behind Silk, International Delight, Horizon Organic Milk and Earthbound Farm Organic produce, as reported in our sister-pub Beverage Business INSIGHTS.

What's Next? A couple months ago, Greg told CBN that partner breweries participating in True Craft concept would be announced later this year. Since then, Stone started selling beer brewed at its new, $75-mil Richmond, VA facility and inched ever closer to full opening of its Berlin, Germany location. At same time, Stone still searching for Greg's replacement as CEO. So here's just another wrinkle in particularly complex period for craft generally and for Stone specifically. 

Gordon Biersch Brewing operates a production facility in California that's run separately from the CraftWorks-owned Gordon Biersch restaurants in and out of the state. We've incorrectly combined volume stats for those two companies when reporting Calif state data, including in our last issue. Our table of In-State Shipments by Top California Craft Brewers, 2014-2015 should have listed Gordon Biersch at 59,357 bbls in 2015, up 62.6% from 36,495 bbls in 2014. The other approximately 6,000 bbls were reported for the CraftWorks group, representing beer brewed in Calif for the Gordon Biersch and Rock Bottom restaurants. As we wrote last issue, contract production may be included. Please be in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. if you would like an updated version of the table from last issue.  

While New England brewers such as VT's Alchemist and Hill Farmstead have gained natl acclaim with their coveted "hazy IPA" style brews for yrs, now nearly "a dozen" CO brewers are just "tapping into the hazy IPA hype," reported Denver Post. One in particular, Weldwerks' Juicy Bits, is already starting to get "a national cult following, thanks to internet beer traders," after only just debuting in March this yr. Indeed, one 15-bbl batch (3,700 pints) "will last less than a week in the taproom, which is usually the only place to find it," sez paper. Recently Weldwerks "drew a line of more than 300 people by 10 a.m. on a recent Sunday in June for beer releases," selling Juicy Bits out the door in crowlers. Then too, four CO brewers including Weldwerks, as well as Odd13, Fiction, and Cerebral, "recently collaborated on a hazy double IPA called Robot Librarian, now available in cans." Each of those breweries have their own individual hazy offering. And paper lists Odell's new yr round hazy Drumroll APA and Black Project's Hypersonic pale ale as other recent examples.  

There were several clips and announcements regarding different craft beer personnel changes just in the past week, as we were reminded how frequently these positions can change over.

MN Craft Vets Launching Local Incubator/Consulting Services Project, Bev-Craft A handful of MN craft beer vets recently joined forces to create Bev-Craft, a new MN-based incubator concept that will provide "consulting services on development assistance, brewhouse planning, recipe formation, ingredient selection, brand creation and sales strategy," reported Duluth News Tribune. After co-founding Fitger's Brewhouse in 1995, Tim Nelson has moved on to this new project, takin' the reigns as CEO. He brought along his old brewmaster, Dave Hoops (who also was "founding member" of the state brewers guild), Paul Christensen, who "most recently" worked at Fitger's, heading the sales program and Tim's brother Brad "serving as director of brands." Since "late last year" Bev-Craft has been gathering "clients in northern Minnesota and Wisconsin before" just making public announcement last week, paper noted. Its focus is on "craft beer in the Midwest" but there are "no geographical limits" to its clientele. Bev-Craft will also have a bar area that will open later this summer.

Ommegang Hires Ex-DGUSA Brand Director as New Prexy "Twelve-year beer and spirits industry veteran," Doug Campbell will join Duvel USA team Aug 1, taking over President role for Brewery Ommegang, co announced yesterday. Thruout his career, Doug worked as Brand Director for several Diageo beer and spirits brands, including DGUSA's beer portfolio, and "most recently" was Ketel One director, per release. Previous prexy, Bill Wetmore, is "leaving to pursue other opportunities at the end of September, following a transition period." Ommegang grew 5% to 49K bbls in 2015 according to Brewers Assn stats.

Longtime Sierra Brewmaster, Steve Dresler, to Retire Next Yr After 30+ years of serving as Sierra Nevada's brewmaster, Steve Dresler "plans to retire next year," co announced. "It's bittersweet," said founder Ken Grossman. "Steve is an iconic figure in our brewery and in the industry. His talent and personality are legendary, and he has set the tone in our production department for years." Sierra will "immediately" begin search for Chico head brewer position "in order to allow time for an extensive search, as well as for Dresler to help train the selected candidate," per release.

Coast to Coast, One Acclaimed Brewer to Another; Mike Sardina Leaves Societe for VT's Hill Farmstead Mike Sardina, "a former lawyer who came to Societe Brewing in 2013, taking on many of the business responsibilities," resigned late last mo only to join another acclaimed brewer on the opposite coast, VT's Hill Farmstead, reported San Diego Union Tribune. (Editor's note: Mike was listed as Assistant Exec Officer on co's website). And that's just six mos after Mike was appointed president of the San Diego Brewers Guild. "This was an opportunity I couldn't pass up," Mike told paper, who grew up in upstate NY. Now newly appointed guild prexy, Pizza Port western sales manager Jill Davidson, faces newfound "challenges," as she put it, after two of its members - Ballast Point and Saint Archer - completed deals late last yr. "Right now, as the landscape of craft changes, it's important to make sure everyone is informed and supporting local breweries," she added.

Well-Travelled Barrel-Aging Vet Joins OR's Logsdon as New Brewmaster; Logsdon Deal Never Went Down Eric Ponce, most recently Goose Island's Senior Brewer for its Barrel Program, was hired as Logsdon Farmhouse Ale's new head brewer, reported Brew Public. Eric's bounced around a lot in his young career, starting with Alaskan Brewing before leaving to study brewing in Belgium and Berlin, returning to home-state CO to work for Crooked Stave, followed by Lost Abbey, Goose Island and now Logsdon. Recall, Logsdon's previous brewmaster left co at same time founder David Logsdon reportedly sold stake of his biz last yr to Uptown Market, a retail-brewer combo (see Aug 5, 2015 issue). However "this deal was never finalized," according to paper. Never got past "negotiations."  

Louiville, KY-based Goodwood Brewing is expanding distribution into 3 new states - AL, IL and NC - plus Aruba as "it nears the start of construction on its second brewery," reported The Courier-Journal. Goodwood is known for its barrel-aged brews, producing "about 20,000 barrels per year" at current facility. And 2d facility will add another 75K bbls/yr of cap, ceo Ted Mitzlaff told paper. The new brewery will be located in Paristown Pointe neighborhood, which is in the process of going under a major $28 mil renovation project that's "already been approved for a state tax credit and is intended to turn the area….into an arts and cultural district," paper noted. Goodwood also distributes in KY, IN, OH, TN and VA. 

Following recent controversies among members within several state brewers guilds (such as neighboring VA or CO), MD's brewers guild, Brewers Association of MD (BAM) "announced a change in bylaws to restrict voting memberships and board representation to craft brewers," late last week. Indeed, MD is the first state guild to make this distinction prior to any craft deals involving large strategic cos in-state. But "given the changing nature of the beer industry and the predatory behavior our members are noticing from mega-beer, the membership has voted unanimously to support a change to BAM's bylaws to keep the organization focused on local craft beer," said executive director Kevin Atticks. Currently there are 50+ licensed brewers in MD and as of last yr only Flying Dog, Heavy Seas and DuClaw were regional or larger (15K+ bbls/yr).

What's more, MD guild "for now" is stickin' strictly to Brewers Assn definition of "craft" brewers as "a really good guideline," BAM prexy and Flying Dog cmo Ben Savage separately told CBN. Tho they "always have the option" to "reevaluate," he acknowledged. Recall, earlier in the yr Calif Craft Brewers Assn decided to keep Lagunitas, Ballast Point and Firestone Walker (still included in BA def'n) as voting members, while nixing Golden Road and Saint Archer's voting rights post deals. In CO several craft brewers split off from their state guild for continuing to include both private equity (majority) owned Oskar Blues and AB-owned Breckenridge. That story continuing to evolve, with older Colo Brewers Guild "considering a new structure," and even hopeful prospect that groups will reconcile, according to Denver Post report. So there's no set way to go about it, but you can bet on more state guilds coming up with their own versions of revised voting rights for members with plenty of potential deals still on the table as "craft" definition debates continue to heat up.