The tide may still be rising, but more ships are being left behind rather than lifted. Sixteen of the 30 largest craft brands sold less yr-to-date thru March 20 in IRI's multi-outlet + convenience channel than the comparable period last yr. Yet craft still gained over 0.6 share of beer $$ to 10.8; $$ sales climbed 11.4% overall. Craft cases grew 8% YTD, got 6.8 share. And pricing still healthy, up over a buck per case, +$1.11 to $36.39. Shorter-term, 4-wk trends a bit slower, as craft $$ up just 9%.

But it ain't easy out there for some of craft's biggest brands. Top 30 brands represent 44.2 share of craft $$. They collectively grew $$ sales 4.7% YTD thru 3/20. So all other brands gained 2.8 share, +17%. Now 16 top brands dragging down overall craft and top 30's collective trends. These 16 brands collectively -9%, losing 5.2 share of segment $$ to 23.4. So still about a quarter of craft sales in IRI from a dozen+ down brands. Ten of them sold by 3 top indie craft brewers. All 4 Sam Adams brands in top 30 down. Seasonal ($$ sales -19%) actually sold less than Boston Lager (-11%) and Rebel (-9.5%) less than Variety Pk (-3%). Top Sierra Nevada brands down too, though Seasonal (+15%) making up for 2% dips for Pale, Torpedo and Variety. Total Sierra biz +3.6%. But New Belgium $$ -0.6% thru 3/20, as Fat Tire -3%, Ranger off 14% and Variety basically flat.

Yet some of more recent craft growth stories still being told. Lagunitas IPA $$ still up 20% YTD and its Little Sumpin' jumpin' 51%. In toto, Lagunitas nearing 0.5 share of all beer $$, +27%. Firestone Walker 805 still more than doubling, hit 0.8 share of craft $$, and Founders All Day up near 120% to 0.65 share. Firestone and Founders both up around 60% thru mid-March. Bell's Two Hearted Ale still super strong, up almost 40%, all New Glarus brands +18% and Stone IPA still solid, +11%. Top 30 also includes all-incremental Coney Island Hard Root Beer, now #16 on list at 0.86 share of craft $$. (For anyone counting: inclusion of CIHRB strengthens overall craft trend by about a point.) Tho it's got no brands in top 30 by $$, Deschutes up strong 24% YTD too. On slower growth side, Shiner Bock (#4 craft brand) and SweetWater 420 (#27) up 3-4%. Gambrinus flat overall, while SweetWater +7% and Dogfish Head +3%; each slower for 4 wks. Pair of CBA brands, Redhook Longhammer and Widmer Hefe, both down mid-singles as co refocuses on their home mkts.

Note that IRI craft data includes Blue Moon, Shock Top and Leinenkugel brands. Of those 16 big decliners, two more are Blue Moon brands (tho flagship Belgian White still up 8%), plus lead Leinekugel's brand, Seasonal Shandy. Original Shock Top also in top 30 craft brands, flattish so far in 2016. Together, all Blue Moon, Shock Top and Leinie brands shed about 2 share of craft $$ to 15.8 (see below for more). Factoring out those brand families, craft $$ up about 14% YTD.  

Boston Beer's Jim Koch explained a little of the financial nitty gritty behind private equity investments at our Spring Conference last year, pointing to the reasons why PE investments often come with limited timelines. He revisited that topic briefly at the Brewers of Pennsylvania's Meeting of the Malts last week (see last issue), explored in-depth by Forbes contributor Tara Nurin today. "PE investors aren't satisfied to collect off annual profits," she writes, so such a fund "has a finite lifespan of usually seven to ten years," after which "investors expect to get paid out. A lot." Of course, a number of craft investments have been made by or with family offices that don't come with the same limited timelines, as we've written before. But still, First Beverage Group's Townsend Ziebold predicts "a second wave of exits or liquidity events" and the article lays out what many of those might look like. Clearly, the current deal-heavy atmosphere won't end any time soon.

That's one of the reasons we've added the topic (and additional time) as a focus for our 2016 Spring Conference in Chicago. Join us there to hear from experts in the beer deal-o-sphere, including Townsend's colleague at FBG Bill Anderson, consultant Joe Thompson and Paragon Bev Advisors' Mark Hall and Randy Jozwiakowski. Jim Koch will be back too. And we're sure the topic will come up during a discussion with Stone's Greg Koch, who's repeatedly insisted on his co's independence, Dogfish Head's Sam Calagione, who last year made a small deal with a PE firm, and Victory's Bill Covaleski, who more recently joined-up with family-office backed Artisanal Brewing Ventures with Southern Tier. Seats (and rooms in our block at the beautiful RItz Carlton Chicago) are going quickly, so reserve your spot today. We hope to see you there.  

Actor Kelsey Grammer is in "initial stages of planning" for a new brewery in Margaretville, NY, in Catskills region, disclosed Paul Leone, exec dir NY State Brewers Assoc. Announcement came via Facebook with picture of Paul and Kelsey, who was holding up a New York State Brews Assoc T-shirt. Kelsey plans on opening Faith American Brewing Co. (named for his youngest daughter) on his own property, where "he wants to rehab an amazing barn on it, grow hops and barley," wrote Paul. He already has a brewer, tho brewery is likely a year or more from startup. "He's being very thoughtful about this project and making it all about the quality of the beer," added Paul.  

Biggest Carnival Cruises ship yet will include its own on-board brewery when it embarks on its maiden voyage this May. Run by Miami-based Concrete Beach Brewing, one of Boston Beer subsidiary Alchemy & Science's small urban breweries, the RedFrog Pub & Brewery will start pouring on the near 4000-guest capacity Carnival Vista this spring, Carnival announced this week. "Carnival Vista has taken the concept of local, and applied it to the decks of their ship," Concrete Beach brewmaster Jon Carpenter said in release. He's worked with Carnival to create 3 beers just for the ship: ThirstyFrog Port Hoppin' IPA, ThirstyFrog Caribbean Wheat and FriskyFrog Java Stout. Some A&S brands brewed on land already served on board Carnival lines, including Coney Island Hard Root Beer and 1609 Amber, Concrete Beach Rica Wheat IPA and Angel City Pilsner.  

Correction: (printed in Vol 7 #26, 4/1/16)

Last issue we wrote that Boston Beer subsidiary Alchemy & Science's Concrete Beach will "run" the on-board Carnival Cruises brewery, but the "unique partnership" that Carnival touted was essentially advisory on the part of Concrete Beach, which has no operational or financial stake in the brewery.

Five years after Anheuser Busch made its first major craft purchase and bought Chicago's Goose Island, a handful of the co's large brewing facilities around the US now make multiple Goose brands, deep-dive from Chicago Tribune explains. Scaling up batches ain't easy. So too for move from 50-bbl system at Goose's brewery to 1000-bbl brewhouse in AB's Baldwinsville, NY plant, for example. During process to match first beer that AB scaled up, 312 Urban Wheat, then brewmaster Brett Porter "vetoed five batches," he told the Trib: "We ended up dumping more beer than every frat house in America could have drunk in a single year when we started making 312." Those five 1000-bbl batches were also equivalent to more than at least 90% of US breweries produce in a year. Now, AB brews 312 as well as Goose IPA, Honker's Ale, Green Line Pale Ale and Four Star Pils year-round, plus a handful of seasonal offerings (see the Trib article for writer Josh Noel's reviews of AB-brewed brands: "very solid beer," all-in-all, "if only occasionally exciting"). AB's currently working to scale up a pair of well-known Elysian IPAs, The Immortal and Space Dust, to be made at its Fort Collins brewery, and almost certainly more brands from other acquired breweries.  

Deals in PacNW for both distribs and small brewers over last couple years eventually led to brand trade just executed between two big Portland, Oreg distribs. Following trade, Elysian finally aligned with AB distrib network in key craft market, handled by independent Maletis Beverage. In exchange for giving up Elysian brands, big PacNW distrib Columbia will take on Firestone Walker and the Duvel Moortgat USA family of brands including Boulevard, Ommegang and import portfolio. This was "part of a long journey to transition our brands to Columbia and out of the AB network," Firestone Walker sales/mktg veep Dave Macon told CBN. Recall, it left that network in Seattle following AB's acquisition of K&L in 2012. He took a moment to "thank Rob Maletis and his entire team," as changeover "extremely amicable" and, in his view, "everybody wins" following trade. Folks at AB seem to agree: "our preference is to have our brands distributed by our equity wholesalers where possible," the co's High End prexy Felipe Szpigel explained. "With that, we're glad that Rob and the Maletis team were able to finalize an agreement to distribute Elysian in Oregon as one of our wholesaler partners."

Duvel USA also offered praise for Maletis, but "when this opportunity was presented, we felt it was the right move," sales veep Bobby Dykstra told us. His co's looking forward to Columbia partnership "to elevate awareness of our beers and our overall presence in the Northwest," he added. Indeed, PacNW markets not as big for Boulevard, Ommegang and Duvel brands as for Firestone. But Elysian much bigger in Portland. Top 8 Elysian brands had almost 1 share of craft cases in Portland, Oreg foodstores for 52 wks thru Dec 27 in IRI. It was #19 craft brand family by $$ in IRI supers there last yr, +28%. That's as Firestone Walker and Duvel Moortgat were not quite a quarter of a share of craft cases in Portland in 2015. 

Craft brewers exported over 446K bbls last year, +16.3%, the Brewers Assn reported yesterday. So craft exports grew about another 62K bbls. But that's not quite as much as near 100K bbls of growth in 2014, when exports +36% in total. The BA's Export Development Program, which supports craft brewer exports in part by a Dept of Agriculture grant, highlights volume growth in 5 key regions and these relatively small numbers meant some pretty big trend swings. In 2014 export trends in each of those regions topped 30%. In 2015, only Western Europe maintained such a fast pace. Craft shipments to Western Europe grew 33% in 2015, fastest-growing export region for US craft in the world, as BA's Sylvia Kopp noted last week (see last issue). That region's home to 3 of top 5 export markets for US craft: Sweden, Ireland and the UK. Each represent about 10% of craft exports, BA reports. So no surprise established craft brewers like Lagunitas and Stone putting energy there (see above).

Biggest craft export market, Canada, still just over half of all craft exports, +11% last yr to about 225K bbls. The craft export market in Canada alone grew by about 50K bbls in 2014 and grew another 20K bbls in 2015. Other top-5 export market was Australia, which received about 4% of all craft exports. Biggest swing in trend showed up in Brazil, where exports had grown by over 60% in 2014. Growth slowed to +4% in 2015. Growth slowed to single digits in Japan too, +5%. Total craft exports +12.5% in other key region, Asia Pacific, where Thailand and Taiwan were among "fastest growing markets" highlighted by BA.  

Lagunitas ain't the only CA brewer set to ramp up European distribution in fairly short order. Stone's Berlin facility, set to come online in comin' mos, is "at the center of a much larger marketing push into the European markets," reported Fast Company. Current plan includes distribution in Germany, France, Finland, Netherlands and Spain, for starters. And "they're also bringing a very specific combination of American beer culture and marketing savvy," sez paper. "A lot of people out here have an outdated mindset" about American beer in general, and "it's cool to know that we're going to be a major part of a shift in European awareness of American craft beer," said Stone CEO and co-founder Greg Koch.

Interestingly, Stone takin' a slightly different approach to its Berlin operations. "We're not holding ourselves to perfect flavor matching," said prexy and co-founder Steve Wagner. "We would like to use more local ingredients," particularly with malted barley grown in Germany and other parts of Europe, he explained. "The hops will be identical and imported from the United States." Also recall, Stone will primarily can its packaged brews outta Berlin, tho it's only just launching first canned packages in US this May (see Mar 18 issue). Berlin brewpub is expected to open this summer and both Stone's Berlin and Richmond, VA facilities will open right around the same time. But that's "not how we planned it," said Steve. Indeed, "age of the facility made renovation more of a challenge than the company expected," while Stone saw "faster-than-expected progress" in Richmond, noted paper. One more recent Berlin setback was "an asbestos-lined pipe found underground that wasn't shown on any maps and had to be safely removed" co-founder Greg Koch explained. All in, renovations cost "more than $25 million" and will include a brewpub/restaurant experience that's become synonymous with Stone's operations, located "10 blocks from the nearest U-Bahn stop."

Stone Enters AR with Ark Craft Distributors and O'Connor; Natl by End of Yr After bloggers spotted "coming soon" posters around Arkansas mkt, Stone officially entered Ark on Mar 28 with Arkansas Craft Distributors and O'Connor Dist, co announced. This marks Stone's 42nd state + DC, along with Puerto Rico and 14 countries. And with added help from Richmond, VA brewery, Stone plans to have natl distribution "by the end of this year," per release.  

Lagunitas continues to grow well above 20% in 2016, the only top-5 craft brewer in double-digit growth mode. Neither its deal to sell 50% to Heineken nor a significant segment slowdown have sharply curtailed its trend so far. And now Lagunitas is getting ready to grow globally and get deeper into much-anticipated international moves with partner Heineken at the same time as it strives to deepen local US connections even in mkts where it doesn't have a brewery.

This Spring Lagunitas will launch in European countries like Italy, France, Denmark and the Netherlands, CEO Maria Stipp told Craft Brew News. Tho already sold in mkts like UK, Sweden, Ireland and Canada, Lagunitas looks to expand "dramatically" there. Six more countries "soon to follow," including Mexico and Spain. Lagunitas hired Richard Dillon, formerly of Red Bull, as sr veep of intl. His experience "building the brand by connecting with consumers," said Maria, is very much "in line" with Lagunitas approach. Lagunitas in process of filling out an international team of 10-12 people, including its "ambeersadors" and mkt managers.

In each country, Lagunitas works with Heineken's local operating co. Early learnings are that Lagunitas brand "translates across cultural lines," according to Maria. Heineken "can help accelerate our entry into the market" and "we are showing them the nuance of craft" and what's worked in US, dealing with differences like "the cold supply chain" and "the importance of quality, freshness and caring for hop forward flavors." And Lagunitas still going about things its own way, particularly "personal connections to seed the brand" on premise with aforementioned "ambeersadors," said Maria. Lagunitas sees "high demand" internationally as "we are known in many areas of the world." But Lagunitas will take it slow. "We would much prefer seeding the brand, creating roots in local markets and building from there."

Even with all that "export focus," Lagunitas "looking to go more local" here in US. "We have leased space for a non-profit community center in Portland," said Maria. It's expected to open late Spring 2016. Lagunitas also has "several other cities in mind," she added. The center will be available to non-profit organizations to host events. This is a "choice to give back" to communities. "This model takes after" what Lagunitas "learned from our current taprooms" in Petaluma and Chicago where "we dedicated 2 nights a week" for non-profits.

Here's peek at Lagunitas performance thru Feb in scan: $$ sales up 28% YTD to $25.6 mil in IRI multioutlet + convenience. Seven of its top 8 brands growing at double-digit pace. Flagship IPA is a little less than half of Lagunitas biz in scan (47%) and it's up 22%. Little Sumpin' Sumpin' still up 55% and it's almost 20% of Lagunitas $$. Each of Seasonals, Maximus and Hop Stupid $$ sales up 16-18% YTD. Only session IPA Daytime Fractional down a bit so far in 2016. But Lagunitas Pils more than doubled, up 119%.  

Founded in 1985, it took Bell's 8 yrs to get to a total of 3,000 bbls, founder Larry Bell told distribs at its 3d ever distrib sales convention (called "Crafting the Journey"). Now it sells 3K bbls on avg in less than 3 days. Bell's has "advanced on so many fronts," Larry noted "from our very modest beginnings. We are a very modern company" with "modern technology," "modern laboratory equipment," etc. Seeing is believing.

Bell's offered tours of its immense brewery complex in conjunction with its convention. The facility already has capacity to brew about 600,000 bbls but will max out at 1 mil bbls. It has some very sophisticated machinery, including robots, a new bottling line that does 750 bottles a minute, a new canning line at 500 cans per minute, a new bottle filler that fills a case every 2 seconds, a vast largely unfilled 110,000 square foot warehouse with 16.5K feet of cooler space and much more. Bell's is priming the pump for future growth.

And Bell's is looking for a lot more growth, having already more than doubled in last 5 yrs from 154,000 bbls in 2010 to 373,000 bbls last yr. It expects 20% growth in 2016, 25% in 2017 and 20% growth in 2018, which will put it at 650,000 bbls or so. By 2020, Bell's expects to be in the lower 48 states, said Larry. Bell's also has a very rich new product pipeline coming this yr. (Details of growth, innovation and expansion plans below.)

To keep up with growth in recent yrs and get ready for the future, Bell's added 41 people and nearly doubled its sales force in just last 2 yrs, said sales director Marty Compton. Has about 100 folks out there selling. And Bell's has taken mktg team from 3 people to 30 in last 3 yrs (including tour group). Both marketing and sales under purview of vp Laura Bell, who represents 2d generation of Bell family. She is already taking a significant leadership role; "meeting put on by the sales and marketing team," led by Laura. These days, Bell's is basically a more "grown up" company, said Larry, with a corporate strategy and data analytics dept for example. Bell's is "sticking to our guns" on the "Bell's way" but "things are a little more codified," said Larry. Thank you Laura," he added. Larry and others also repeatedly thanked distribs for what they do for Bell's.

"We're an independent company and we're going to to stay that way," said Larry. "I can't imagine ever sitting in front of all of you," added Larry and saying "I sold the company." Paperwork's already done so that Larry can "pass this company on to the next generation in good shape." That includes daughter Laura and son David. Laura noted that Larry started brewery when she was 2 months old and it's always been part of her life. Going forward, Bell's seeks no less than to "define the model of what an independent brewery looks like as craft continues to evolve," said Laura. Bell's will "set the standard for how an independent brewery is run," she added, and it will show that "this is what Bell's stands for. This is what my name stands for." For "quality," "independence" and "fun…. We're going to continue to build that equity," noted Laura. And "we're going to do it on our terms," concluded Larry.

Opening New Mkts and "Diving Deeper" into Existing Mkts; Ramping up Investments Some of Bell's growth over these next few yrs will certainly come from new territory, said Laura. This year it'll open 7 new states - LA, MS, AR, SD, NE, KS and WV - to 30 total + DC in US. Then in 2017 "we'll see a big new market for us," Laura hinted (TX?), and "most likely" will fill out some "smaller markets" in 2018. But Bell's also "diving deeper" with current footprint, she assured.

Two Hearted Ale to 220K Bbls in 2016; 45% of Biz On-Prem; Oppy with Oberon Two Hearted Ale remains Bell's bread and butter brand, essential to its growth. A handful of years ago it wasn't even Bell's largest brand, but last year it accounted for just over 50% of total product mix, around 190K bbls. And this year Bell's expects Two Hearted to reach 220K bbls. Since it launched 12pks last year, Two Hearted has been 4th largest IPA in the country, director of business insights Matt Moberly shared. What's more, it's at top pricing tier with "lowest distribution" among top-10 IPAs. And vast majority of Two Hearted volume is not tracked in syndicated data channels, Matt pointed out. Two Hearted still does 45% of its biz on-premise (approx 85K bbls last year) and a good portion of off-premise biz is in indy stores too.

Bell's also feels it has "great opportunity" to sell Oberon alongside Two Hearted in same accts, said Matt. After last yr's Oberon launch, Bell's Seasonal jumped to #6 total beer brand by $$ in MI foodstores, ahead of Busch and Corona Extra among others. All while Two Hearted volume and weighted distribution continued to rise and velocity stayed the same. Those two brands jumped from 16.5 share in Q1 to a whopping 38 share of BA defined craft volume in MI foodstores during Q2 last yr. Interestingly, they typically draw different types of consumers, Matt pointed out. Only 11% of customers purchased both Oberon and Two Hearted in same basket, data showed last year. So Bell's developed "double tap challenge" to get both on tap in same accts. Last year it intro'd initiative and actually found that sales doubled when both were on tap. "Every single month they got this premium" from Apr thru Aug. So 1+1 = 3, he quipped. All in, 63% of Bell's draught accounts still only pour one or the other. Matt's ask: "give us 30 days" with both on tap and "if they're not successful you can take them off." Gotta note, Two Hearted was up 24% thru first 6 wks of 2016 and Oberon reportedly off to another strong start after recent launch, especially in MI.

"Big Year" for Innovations; Cans 22% of Mix and Counting; Subtle Packaging & Logo Redesign this Fall Bell's ramping up focus on innovations this year with several new packaged offerings coming to mkt. That starts in Apr with new Oatsmobile session pale ale, Bell's first new yr-round addition in last 5 yrs, noted director of mktg Scott Powell. It also already announced plans to package "pub favorite" Quinannan Falls ("Q-Falls") pilsner for the first time in 12oz can 6pks starting this Jun. Bell's planning to launch several other new brands thruout 2016. In May it'll launch Hopsoulution double IPA as a specialty release, followed by Oracle double IPA in Jun. Poolside, a Belgian wheat ale with cherry juice will also launch in canned 6pks this Jun. Octoberfest is comin' back in 6pk and 12pk bottles in Aug. And Roundhouse India Red Ale will launch in canned 6pks in Sep. Only Two Hearted Ale sells more than Roundhouse at its Eccentric Café taproom in Kalamazoo, said Scott.

Another way Bell's has upped innovation is with several new canned packages. Cans were 22% of total production mix last year after installing new canning line. Recall, in January Bell's switched Hopslam over to cans and is up 17% YTD (see Mar 18 issue). Indeed, there are "a lot of opportunities for that can package," Larry Bell acknowledged during Q&A. However "can lead times are much longer than bottle lead times," said Laura. So, for example, Hopsoulution package launch happens to be in bottles because of "timing." Bell's will continue to use cans on "case by case basis."

Lastly, as many craft brewers have decided to update packaging and logos in recent yrs, Bell's will launch redesigned logo and packaging this fall for the first time. These are subtle changes. Logo is updated to make letters "easier to read" and the bells to look "more like bells." Then too, since Bell's uses different artwork for each beer, it "isn't always easy to identify each of our beer brands as Bell's" on the increasingly crowded shelves. So packages will add mini Bell's logo with "same color" and "same location across each of the 6 packs," said Scott. It will also make text pop more, sharpen images with darker outline and include name of beer style on the bottom of each brand. Two Hearted Ale has grown this much "without telling people on the package that it's an IPA," Scott pointed out.

Expects 20% Growth On Prem; Increased Chain "Focus"; First Network-Wide Program Bell's continues to outperform many top craft brewers in tuff on-premise environment and expects success to continue in 2016. It sold 37.6 mil pints (over 150K bbls) on premise in 2015 and expects to grow nearly 20% in 2016 to 180K bbls, shared natl field services manager, David Munro. Key is "education" on quality for accounts "without being the beer police," he said. "Education is not an obligation, it's an investment in your people."

Meanwhile, in Bell's 30th year "we wised up" and decided "we need some focus," quipped natl sales operations manager, Tina Anderson. So "we did our first program" across Bell's network. In Q1 it was Two Hearted Ale display program that completely exceeded expectations. For 6wks Two Hearted packages were up 35%; "going forward" programs will be 8 wks. Bell's will focus on driving distribution for new Oatsmobile brand in Q2. In July, co lookin' to ensure "good ending to the Oberon season" and to get "Best Brown off to a really good powerful start." And in Q4, "focus" on Stouts (as well as winter white) with displays, points of distribution and sampling. Bell's is also increasing local partnerships, "leveraging specialty brands" and lookin' to utilize increased investments in data, said natl key accts manager, Tori Shires. And it's "just starting to make inroads" with on-premise chains. That includes placements at baseball stadiums and other large venues such as Detroit Tigers (where it's #1 revenue booth), Pirates and Cubs ballparks, sales director Marty Compton said.