Not a great week for holding onto beer for a couple larger craft brewers. Theft of 2 trailers full of SweetWater beer from its parking lot became a hot topic far and wide this week after the co alerted folks via blog and social media. The trailers held about 3300 cases of the co's Summer Variety Pks that hadn't yet been mixed (so each case only had 1 of 4 brands). The co and police found about a third of the beer later in the day, but of course none of it can be sold now, Atlanta Journal Constitution reports. "This was basically our entire inventory in Atlanta" of the Variety Pk and Goin' Coastal pineapple IPA, SweetWater wrote on its blog. So it'll "have to work overtime to keep these beers on the shelf," spokesperson Tucker Berta-Sarkisian told AJC. That was just a couple days after a railcar of Rogue's beers toppled over in Montana due to high winds, that co shared on its blog. Though nobody was hurt in the derailment, does mean that a shipment of at least 9 top Rogue brands headed east ("believed" to be "headed to Kalamazoo," per blog) had to be replaced. Accidents happen and not every beer lover is above theft, clearly. But this kind of loss isn't the kind of news any brewery wants to be dealing with as summer selling season heats up right along with craft competition.  

Over 700 breweries call California home these days, the Calif Craft Brewers Assn announced late yesterday. That's more than twice the number open in 2012. The US passed 700 brewers in 1995, according the Brewers Assn. In the Bay Area alone, SF Eater counted 7 breweries or "beer gardens" (tho most brew on-site) that opened already in 2016 with 12 more on the way. So, sure doesn't seem like brewery opening rates slowing much in Calif, even in long-time craft-centric markets. Meanwhile, Russian River owners Natalie and Vinnie Cilurzo sealed the deal on space in Windsor, CA earlier this month, prepping to build new production facility and brewpub (see CBN from May 13). Brewery will eventually be able to brew up to 50K bbls, but initial capacity target in 25-30K bbl range, Natalie explained on company blog. Groundbreaking at 15-acre site scheduled for next spring with hopes to complete construction in summer of 2018. "This will allow us more flexibility with taking on some new accounts/markets in California and providing more beer to our current wholesalers (all 5 of them!)," Natalie wrote. And limited accounts in Oreg, Colo and Philly likely to get more beer too, but no promises yet that anywhere else will get Russian River's highly acclaimed beers (its Pliny the Elder was named Best Beer in America by American Homebrewers Assn members for the 8th yr running just last week).

Oregon's Pelican Pub and Brewery announced opening of another coastal brewpub this month too, in Cannon Beach. The 10-bbl system at the new spot adds to original brewpub in Pacific City and larger brewing facility with about 10K bbls of capacity in Tillamook. At same time, Public Coast Brewing also just opened in Cannon Beach and elsewhere in coastal Oreg, Reach Break Brewing plans to open in another couple months, according to Oregon Live.

Across the country in Mass, Boston-area's Night Shift closed deal on $3-mil loan to expand its facility at the end of last month. It's on track to brew 10K bbls this yr, 20K bbls next yr, Boston Magazine reports. That's as Austin-based Hops & Grain took different fundraising route, recently announcing $1-mil equity crowdfunding campaign, per Austin Biz Journal. It's raised over $443K in its WeFunder.com campaign since June 9, selling shares to 257 investors for at least $100 each. The campaign requires Hops & Grain to pay out 10% of gross revs til investors make twice initial investment. The co will use funds to build a new brewery with 20K bbls of capacity.

It isn't just existing breweries expanding, as always: central Virginia winery Chateau Morrisette considers getting into beer production too, but will add house-made cider to its offerings first. It plans to roll out 3 new ciders in August, fermented on site but bottled by Chaos Mountain Brewing, about an hour northwest. It's already applied for a license to brew too, but sees that as a year or two away, Roanoke Times reports 

Three financial analyst reports in last day or so zeroed in on new environment for craft as well as continued robust strength of Ballast Point even amidst slowdown (2 reports on Constellation). "The Dramatic Slowdown of Craft Beer Continues," headlined Bernstein's Trevor Stirling in report on Nielsen data for last 3 mos. Craft "continues to slow," he noted, adding that the top 12 craft brewers only up 1% collectively in last 3 months. Trailing 3 mo growth rate for top 12 decelerated rapidly. It was at almost 25% for 3 mos thru Mar 2014, chart shows. Now down to 1%. Three biggest craft gainers in last 12 mos, according to Trevor, are Ballast Point, Lagunitas and Goose Island, "all owned or part owned by big brewers."

Indeed, "Ballast Point still a winner as craft shakeout occurs," noted Goldman Sachs Judy Hong this morn. Ballast Point "volume continues to double," she added, "with growth of over 120%" in Nielsen for 12 weeks ended 5/21. It's now up to 17% ACV, surpassing Founders and Deschutes, but "still sizeable distribution opportunity in regions outside the Pacific and East North Central." Plus "new round of capex ($48 mn) for a brewery in Virginia should enable Ballast Point to ramp up capacity to meet demand on the East Coast, although the project will likely take 1-2 years to complete." Judy estimates Ballast Point will add 5 points to Constellation's total volume in current fiscal year. Ballast Point has "consistently grown over 100% since 2013," noted RBC's Nik Modi, citing Nielsen data in another report on Constellaiton. It's "closing in on Sam Adams on sales per point of distribution."  

No question that overall craft category growth has slowed. Its 10% $$ sales gain thru May 1 in supers is "really their lowest percentage increase" since "going back to about 2005," IRI's Dan Wandel shared during Beverage Industry webinar in presentation dubbed "Navigating through rough waters." And craft "may be hard-pressed" to grow double-digits for the full year. Craft also typically has been largest $$ growth category across all bev alc segments in IRI multi-outlet (MULO) channels, but so far this year $11-15 table wines have "edged out" craft as #1 YTD, with FMBs as a closer 3d (fueled by alc sodas). What's more, Dan found that craft actually saw "downtick in the volume sales velocity" in the latest 4 wk period ending May 15 in supers. That's the "first time" there's been a "downtick in craft's overall sales velocity" since "as far back as I can go," in 2010. Turns out that 11 of the top 15 craft foodstore mkts saw case sales velocity decline, including craft meccas like Portland, OR, Seattle/Tacoma, WA and San Fran/Oakland, CA. So Dan raised the question: is this "a blip on the radar" or adding "fuel to the fire" of craft slowdown? Despite all these signs of craft slowing down, Dan stressed it's "not all doom and gloom" pointing to IPAs, cans, flavored beers, and innovations in general as encouraging areas for craft that can help "sustain" sales growth.

Craft Can Sales Outgaining Craft Glass; Gained 4.1 Share to Over 13 of Craft $$ in Supers Craft can sales are accelerating again in 2016; $$ up 58% and gained 4.1 share to over 13 share of total craft sales in IRI supers thru May 1. In fact, now craft cans total $$ gain is larger than craft glass gains, which slowed to just +4.9%. So cans up $34 mil vs glass up $27.8 mil despite huge size disparity. While standard craft 6pk bottles are up solid 8.4%, 12pk bottles are down nearly 1%, which "concerns me," said Dan. That's certainly the main drag on total glass sales, but 4pk bottles also slowed to just +3% and 24-26oz single bottles down 6% too. Meanwhile, craft 6pk cans (+65.6%) moved ahead of 22oz single bottles (+7%) to 3d best-selling craft pack format, tho they're still about 1/7 the size of 6pk bottles. And there's "more creativity" around cans with new package size formats coming out in the last couple yrs too. All in, before their peak selling season even came around, cans are on the move again in craft-land as a "healthy contributor." Stay tuned.

Flavored Craft On Pace for Over 10 Share of Craft; "Nearly Half" of Top-15 New Brands; Too Dependent On Innovations? "Flavored craft beers continue to increase their share within total craft dollar sales and are on pace to exceed a 10 share this year," Dan shared. Indeed, flavored craft already at 9.5 share of $$ YTD thru May 1. And flavored craft share peaks each year during summer mos, Dan's chart demonstrated. Also keep in mind, this is excluding seasonals, variety pks and special releases, so flavored craft number likely a bit higher.

Then too, "nearly half" of the top-15 new craft brands in supers are "flavored," as defined by IRI, including each of the top-4. And all are from larger craft cos. Recall, New Belgium Citradelic IPA (see May 26 issue) leads the pack and Sam Adams Rebel Grapefruit not too far behind. Then Sierra Otra Vez and Ballast Pineapple Sculpin IPA are next largest new brands on this list. And both Ballast Watermelon Dorado and Mango Even Keel make the list. Keep in mind this list doesn't include any brands that had sales in any part of 2015, so none of Coney Island soda brands included despite still gettin' all incremental gains (IRI defines Coney Island and other smaller cos' alc sodas as craft, tho removed Small Town and other larger cos' offerings from craft segment). However, Dan raised concern that craft is potentially becoming "too dependent on new products" for growth. New products introduced in 2016 account for 32% of $$ sales growth thru May 1 in supers, compared to just 18% of total sales growth in 2015 thru same period, he shared.

How High Can Fruit/Veggie/Spice IPAs Climb? Already 6 Share of IPAs in Supers (We presented a longer version of this section during "Express Live" session at BMI Spring Conference last month, based on IRI data similar to that presented during webinar.) Lookin' closer at craft's most established style, when you break down IPA growth by different sub-styles, American IPAs and Imperial IPAs still make up the bulk of total IPA sales, but Fruit/Veggie/Spice IPAs have taken the category by storm. Out of nowhere Fruit/Veggie/Spice IPAs are up 877% in IRI supers thru May 1 and grew to nearly 6% of total IPA sales while American IPAs and Imperial IPAs collectively lost nearly 7 share of total IPA sales in just 4 mos. That's getting an extra boost out of NBB Citradelic and Sam Adams Rebel Grapefruit launches. But either way, the last couple years it was session IPAs that looked like the next big thing within IPA. And suddenly Fruit/Veggie/Spice IPAs are nearly as large as the session style, up 40% and gained 0.7 share of style to 6.4. As many suppliers continue to rush to the scene to add their own take(s), could it be that Fruit/Veggie/Spice IPAs have more leg room for growth than session IPAs?  

Just as Bell's Brewery did early last year after expansion of Reyes operation in Florida, the Mich co moved more of its Fla distribution to Cavalier, a craft/import house with other ops in Ind and Oh too. Bell's added territory in close to 30 Fla counties across state to area covered by Cavalier, moving it from over from Brown Distributing. Recall, earlier this year Brown sold off about 600,000 cases of its statewide craft ops, including Bell's and handful of other big craft brands. About half went to Reyes' Florida Distributing and the other half to assortment of AB distribs (see April 8 issue of CBN). 

Lots of flux still in Colorado following much-discussed departure of some top in-state craft brewers from Colorado Brewers Guild over the weekend. Today, AB's High End biz unit prexy Felipe Szpigel and prexy of recently-acquired Breckenridge Brewery, Todd Usry, weighed in with joint op-ed published on Porch Drinking, seeking greater unity. The pair "respect" both Brewers Assn and state guilds for their work and views, "support beer and local guilds" but also want Breck "and any partner brewery within the High End, to be welcome in state guilds." Tho they "are not asking for the right to vote." Felipe and Todd see "drawing a line in the sand" as "divisive rhetoric and a distraction" from chief concern: "driving beer forward." Working with brewers across Colo and US to maintain and improve beer quality and share best practices for worker safety within breweries are two primary areas where these leaders believe all brewers can find common ground. The co "employs approximately 1,600 Coloradoans" across all its Colo operations, which includes AB's Fort Collins plant, Breck's Littleton campus, newly-expanded wholly-owned distribs and couple of Breck brewpubs/restaurants. So Felipe and Todd seek "an open dialogue" to help serve those employees and beer in Colo generally, while acknowledging a period of "heightened angst in the marketplace."  

Just as a blue moon can be 2d appearance of full moon in single mo, US District Ct judge Gonzalo Curiel in Calif just dismissed plaintiff's lawsuit vs Blue Moon for 2d time in less than a yr. (If that name sounds familiar, he's the judge being attacked by Donald Trump over latter's "university.") And this time, Judge Curiel closed off plaintiff's ability to amend. Indeed, "amendment would be futile," he concluded. Just as he tossed Plaintiff's first set of arguments that MC misleadingly labels, advertises and markets Blue Moon as "craft," judge similarly rejected 2d round of arguments, ruling that: 1) "reasonable consumer" would not be misled by Blue Moon ads; 2) MC not liable for 3d parties "representing" Blue Moon as craft; and 3) Blue Moon pricing itself not a "representation" that it's craft. As he has all along, judge refused to define "craft."

Specifically, Judge Curiel found 3 internet ads which portray history of brand and profile brewer/creator Keith Villa to be "non-actionable puffery" that did not misrepresent Blue Moon. Then too, since plaintiff didn't show MC had "unbridled control" over distribs or retailers, including concert/sports venues, to require Blue Moon to be sold as craft, MC can't be liable for their actions. Finally, pricing "cannot constitute a misrepresentation," he flatly ruled.  

Craft scene in Los Angeles metro area, IRI's largest mkt, continues to develop, even as total beer strugglin' here of late. While total beer $$ down 0.3%, volume off 4% in IRI multi-outlet + convenience data for latest 13 wks thru Jun 5, LA craft $$ grew solid 13% and gained 1.2 share to 10.7 of total beer sales in that time. So LA craft right around natl avg for craft $$ share for period. Indeed, domestic premium (-8%) and subpremium (-9%) segments declining at rapid clips here, shedding majority of share to dominant imports (+2 to 43 share of $$) and craft. Craft avg price per case up strong 5% to $36.32 too, easily largest increase among segments here.

Impressively, three large calif brewers, Lagunitas (+29%), Firestone Walker (+77%) and Stone (+31%), make up 3/4 of segment growth. Collectively they gained 0.9 share of $$ to over 3 share of total beer, each about 1 share a piece. Lagunitas $$ jumped ahead of Mark Anthony Brands, Pabst and Sierra to #7 supplier in the area, nearly as large as total Boston Beer. And Firestone and Stone were 10th and 12th largest beer suppliers by $$. Then too, Alchemy & Science (+148%), counted separately from Boston Beer, already shows up as a top-20 beer supplier here led by Angel City. And All Other suppliers outside of top-20 (mostly craft) growin' at 20% clip and gained 0.3 share. However each of the big-3 craft cos now strugglin' here. Boston Beer excluding A&S (-9%), and New Belgium (-3%) had already been declining in this mkt for last couple yrs. But Sierra now gettin' hit hard in LA too; $$ down 8% and volume off 13% for 13 wks thru Jun 5. Also gotta note, IRI includes Blue Moon and Shock Top (among others) in craft numbers, and both flagships saw tuff declines: Blue Moon Belgian White $$ down 9% and Shock Top Belgian White down 15%. Separately, Craft Brew Alliance stabilized in LA mkt, $$ flat, volume up 2%.

Firestone 805 is Largest Craft Brand in LA (Besides Blue Moon) Firestone Walker virtually got all its growth from red hot 805 brand, which is more than doubling biz again in LA, up 130%. In fact, that makes Firestone 805 Blonde the largest craft brand in the city area (#2 IRI defined craft brand aside from Blue Moon), just ahead of Lagunitas IPA (+21%). Its $$ sales shot past 20 different beer brands to #20 overall compared to same 13 wk period last yr, ahead of Natty Light and Pabst Blue Ribbon (among others) and only just behind Modelo Especial Chelada. Nationally 805 is just about a top-100 brand, still mostly sold in home-state.  

Late last fall, the Brewers Assn reported a record number of operating breweries in the US. Less than a year later, the USDA reports the possibility of a record high in hop acreage in the US. And importantly, the agency only reports on the biggest region for hop farming, the PacNW. In total, over 51K acres strung for harvest in Washington, Oregon and Idaho, up 17% over harvested acres in 2015. That gain driven by Washington, where over 70% of hop acreage located and farmers strung 16.5% more land for the 2016 hop-growing season. Acreage up 16% in Oreg too and even bigger 23% in Idaho, which is catching up to Oreg in terms of acreage. A complete picture of US hop growing would also include growing number of often (much) smaller growers across the country. Recall, farmers working with small brewers and universities across the US to track viability of growing the key beer crop in commercial quantities. So far, most of those operations still in experimental or testing stages and plenty more knowledge, investment needed to significantly expand acreage outside of PacNW. Interestingly, while spectre of "shortage" raised numerous times in last few years when looking at surge of craft brewers and their hop-heavy beers, this brighter macro outlook on hop acreage lies in stark contrast with recent concerns that craft slowing overall. 

The two, unrelated but always colorful founders of iconic craft brands with the same last name struck again in pair of interviews published this week. Boston Beer's Jim Koch had quick chat with Chicago Trib, which largely covers Jim 101 with a couple notes about his pre-beer days and fun moment when Jim found out Sam Adams beer name-checked by smash hit Broadway musical Hamilton ("Love it!" And "that's kind of the story of Sam Adams. People saying you can't do it. You shouldn't do it. But I said I'm going to do it anyway.") Jim also provided new, topical tweak to his familiar charge that large international brewers mostly bankers that happen to make beer. Now, they're "private equity companies that happen to make beer."

Separately, extensive interview with Stone's Greg Koch in Marketwatch runs the gamut, including lots of talk about way Stone currently spinning off Arrogant Bastard to its own brand family, under which new Wussie pils will live. Also includes new nugget on True Craft concept: the investment concept looking to hear from brewers over 25K bbls. True Craft will take partial stakes in strong brewing brands, but is "not the right kind of company to help a 2,500-barrel company go to 10,000 barrels or something. Fortunately, there are a lot of resources out there for companies that want to do that," including "a lot of banks that want to help out brewers" with strong financials. Earlier, Greg added to growing list of apt music metaphors for small beer biz. Some longtime, diehard fans are "going to want us to not change" and "come out with our second album again." But "we don't want to come out with our second album again."