At VIBE conference for hotel and chain restaurant beverage directors, Boston Beer chairman Jim Koch sounded somewhat sour notes on changing nature of craft competition. (Note this article appeared yesterday in INSIGHTS Express.) He "argues," wrote San Diego Trib Union, that sale of St Archer to MC and others like Ballast Point to Constellation are "already squeezing" craft brewers. "When Saint Archer goes to make a sales call at Vons, they are not some surfer in flip flops ? any more," said Jim (SA founders included "pro surfers, snowboarders" etc). "They are part of the second largest brewery in the world. They are going to get shelf space unlike your typical 18,000-barrel brewery." Jim stuck to his old line: "We are the tallest of the pygmies," and he contrasted Boston Beer with Ballast Point. "We are not Ballast Point showing up with Corona. Corona gives you a lot of clout, so Ballast Point has that same advantage." At the conference "there was a sense ? a vibe ? that something fundamental has changed in the craft beer industry," observed SD Union Trib.  

After 3 yrs of brushing up against capacity, Schlafly will spend $1 mil to double capacity of its Bottleworks brewery to 90K bbls/yr, reported St Louis Post Dispatch. It'll upgrade bottling line this spring and add six large fermentation tanks, expecting to complete expansion sometime in 2017, Schlafly announced. And it expects to fill that capacity in 2017. Each of the last 3 yrs Schlafly produced "just under" 60K bbls, but now "we're recalibrating for growth," ceo James Pendegraft told paper. "But we want to stay very local" and will stick to current footprint (15 states + DC) for now. Recall, Schlafly also has been searching for a location to build a 3d facility and "remains on the lookout," noted paper. In meantime co contract brews some of its volume out of state.

Separately, in midst of deal heavy craft environment, James plainly stated "we're not for sale." Majority of Schlafly is already owned by a combo of 13 local investors, led by co-founders and 3d member of Sage Capital LLC. If anything "we would definitely be on the buying side of the equation" and "if there's an opportunity, we'd look at it," James added.  

Add fast-growing Founders to the list of craft brewers expanding this year. Now that it's filled up an entire city block in Grand Rapids, the Michigan powerhouse has added another location to serve multiple purposes just a mile away. It'll help out with warehousing and take care of distribution needs, but will also be home to a full second brewery dedicated to Founders' broad range of specialty products, whether barrel-aged, strong or just experimental and limited. All of its one-off Backstage Series brands will come from this new facility. It won't have a taproom, but the space will be operational by the end of the month, with brewing kicking off this summer, the co announced.  

On a 2.6-acre plot, "just down the street" from Kona's original brewpub in Hawaii, CBA will break ground on a brand new brewery this spring. Slated to be operational by 2018, the 100K-bbl brewery will occupy about 30K sq-ft, CBA announced today. It's upping its planned investment by about $5 mil to a full $20 mil to open the space in Kailua-Kona, outfitted with equipment geared toward both efficiency and sustainability. Recall, CBA is doubling down on local focus by expanding capacity in Hawaii as well as at the Widmer Bros home in Portland, Oreg. Canning capabilities at the new brewery allows the co to expand the Kona brands available in aluminum on the islands. At the same time, CBA also announced that previous Kona prexy Mattson Davis will transition to an advisory role and will no longer serve as Director of Restaurant and Retail Operations. "Pleased" with the closeness of the new site to the original Kona pub, Mattson will "continue supporting Kona's growth as I build on my nearly 20 years' experience with the company to pursue a new consulting endeavor," he said in statement.  

Oskar Blues posted another strong yr of growth in 2015, with production up 29% to 192K bbls, co announced. That's just a bit below its earlier goal to hit 200K bbls for the yr, but don't think anyone's complainin' about that kinda growth: it's Oskar's largest single-yr bbl-growth ever, about 43K bbls. Production was pretty much evenly split between Oskar's two facilities. It brewed 90K bbls in Brevard, NC and 102K bbls outta Longmont, CO. Indeed, Brevard facility continues to grow, now in "second phase of its 17,000 square foot expansion project that will take capacity over 200,000 bbls" there. Also, Oskar acquired additional 60K sq-ft at Longmont facility and is expanding capacity there while also "developing an Oak Aging venue." And recall, Oskar in process of building 3d brewery in Austin, TX expected to come on line this Apr. It'll start with 30K bbls/yr of capacity that's expandable up to 100K.

Meanwhile, depletions outpaced production by a little over 1 pt, +30% for the yr. Its flagship Dale's Pale Ale finished up 43% in scanned foodstores, and still remains "nearly 50%" of Oskar Blues total brand mix. Dale's Pale 6pk remains the largest canned craft 6pk in scans, up 40% for the yr in IRI multi-outlet + convenience data. New brands, Pinner Throwback session IPA and Oskar Blues IPA, also provided major lift to 2015 production. They already make up a combined 18% of total brand mix, just under 35K bbls. Recall, Oskar IPA wasn't released until later in the year. CANundrum variety pack grew 75%.

Separately, co has several "brand extensions" that've proven successful thus far, between Hotbox Roasters coffee brand, its in-house REEB Cycles bike company and full service bike shop at CyclHOPS Bike CANtina (up 46% vs last yr) and various restaurants. Oskar will open an additional CHUBurger location and its first Hotbox Roasters location, both in Denver's RiNo district. And Oskar's non-alc "B. Stiff & Sons Old Fashioned Soda Pop" line grew 56% "on distribution increases of Root Beer in Colorado." Interestingly, it will include several new flavors this yr, all that have been recently launched in the alc-soda sub-segment: "Ginger Beer, Black Cherry and Orange Cream along with distribution additions in North Carolina and South Carolina in 2016." Additionally the Crowler, Oskar's collab project with Ball Corp, did real well. It grew 1000%, "selling nearly 400 All-American Can Company seamers and over 1.3M cans in 2015."

All in, lots goin' on and lots goin' right for Oskar Blues headin' into 2016. Co plans to fill out natl footprint by first half of this year, with only ND, SD, OK and MT to go (just entered UT this mo and MS in Nov 2015). Thruout last yr Oskar also entered AR and WV in Aug, LA in Apr, both IA and NE in Jan and MO in Nov 2014. So it'll get solid incremental boost from Oskar IPA for good chunk of the yr, as well as several newer mkts, with plenty of new capacity comin' on.  

In one of craft's most developed markets, San Diego, CA, many top craft suppliers continued to gain share in scanned retail, even as the surrounding area is now home to well over 100 breweries plus their taprooms and goo-gobs of craft-centric accounts. A full 6 of the top 10 beer suppliers by $$ sales were craft in IRI multi-outlet data for 13 wks thru Dec 27 in San Diego. (Note this does not include convenience, where craft typically less developed.) These 6 craft suppliers collectively gained 1.6 share of $$ to over 18. That's a little more than the 1.55 that AB lost in the mkt to 24.5. But that collective look obscures their pretty disparate stories. Ballast Point was easily the largest craft supplier in San Diego scans during this period, +39% and 1.26 share to 5.14. That's almost 2 full share points ahead of Stone, solidly up 12% in its home market. Stone passed Boston Beer (including tea and cider), which dropped by over 15% for 13 wks and lost 0.67 share to 2.8. Lagunitas got close to Boston in SD too. Up 54% and gained 0.8 share to 2.4. That's slightly ahead of Sierra Nevada, which lost a little share but still grew $$ sales about 1%. Craft Brew Alliance got stronger 12% growth in SD, rounding out list as #10.

But look at how powerful a combo Constellation Beer Brands Division and Ballast Point are in this market. Constellation is a strong #3 in SD, up 15% alone. And Ballast actually gained even more share than CBBD did. Together they gained 2.44 share to near 18.3. That's less than a point behind MillerCoors, -6% for 13 wks. Top Calif craft cos benefitted from strong lead IPA brands. Original Ballast Point Sculpin IPA grew 18% to be #11 brand in the mkt, while the Grapefruit variant almost tripled to be #20. Together the 2 Sculpins represented almost 2/3 of total Ballast growth and neared 2.7 share of beer $$ together. Similarly, Lagunitas IPA represented a full 2/3 of Lagunitas growth, +73%. It passed Stone IPA which still grew by 18%. Those craft brands are all over 1 share in the mkt and gaining.  

On top of the continuous stream of clips about new breweries opening and/or existing breweries expanding in the US to start 2016, various stories appeared about craft's development overseas in several parts of the world.

Crazy Mountain Sets Up UK Importing Company Starting This Feb CO-based Crazy Mountain Brewing "will open a beer importation company in the United Kingdom with distribution beginning February 2016," co announced earlier this week. London-based American Craft Beer Company "will be the brewery's operating partner on the ground." Indeed, "without the three tier system, or anything close to it in the UK, we are able to enjoy the flexibility that the market offers," said American Craft Beer Co founder, Mark Smith. That includes "far more control" on quality standards and "far more support to customers than many of the other imported brands in the market." Recall, Crazy Mountain is still relatively small - it grew an estimated 29% in 2014, just crackin' 15K-bbl mark, per Brewers Assn stats. Last yr it took over Breckenridge Brewery's old Denver facility as its own. And while it's still tiny in tracked US scan data, sales were up 250% in 2015 IRI multi-outlet + convenience data as recently as thru Oct 25. However, as US craft landscape becomes increasingly competitive and overseas markets develop increasing appetites for craft beers, perhaps more US craft brewers will turn further attention and resources outside the US, regardless of size. Crazy Mountain is currently available in 19 states as well as Sweden, Norway, Ireland and the UK.

Kona Hits Brazil Thru ABI Subsidiary, AmBev This won't be the last time we hear about a craft brand associated with ABI expanding reach overseas. Kona's Longboard Island Lager and Big Wave Golden Ale began sales in Brazil last mo thru ABI subsidiary, AmBev, co announced. Interestingly, this is CBA's first distribution partnership with AmBev. Remaining 26 countries that CBA exports to are "through a partnership with craft export company CraftCanTravel," as exports grew 91% in 2014 off small base. "We're excited to continue building on our long-standing partnership with AB InBev through forging this pioneering new relationship with AmBev," said CBA ceo Andy Thomas. "We think the opportunity for Kona in Brazil is massive, especially with the great synergies between Hawaiian and Brazilian culture, with their amazing beaches and strong water lifestyles."

Calif-Based VC Firm Invests in Indian Craft Brand; Craft Beer in Nepal; Beer "Emerging" as Top Alc Bev in South Korea CA-based Venture Capital firm, Sequoia Capital, known for involvement in tech industry, recently invested in an Indian craft beer company, Bira 91, reported The Times of India. Bira 91 "was formally launched in February last year" and quickly penetrated several cities, selling about 20K cases a month at present, according to founder Ankur Jain. The $6 mil investment will be used to boost marketing and build a production facility by March, added paper. Separately, Brooklyn Brewery founder Steve Hindy authored piece about tiny Nepal's tiny but "rising" craft beer movement, via Vice Munchies article. "Earlier last year," Steve heard about a Nepali law that passed "to make it easier for microbreweries." This was "an indicator" that craft movement "is clearly spreading to the far reaches of the world," wrote Steve. He spoke of Nepal's first craft brewery, Sherpa Brewery, tho it's owned by Carlsberg. And mentions local Yeti Distilling Company plans to open beer line in 2017.

Lastly, beer "has emerged as South Korea's most popular" alc bev "by sales, preference and market share, edging out soju, long considered a 'national drink,'" reported Korea Herald. However most of that spike is from European imports. Article references "sheer diversity of beers that have become locally available in recent years" thanks to "Korea's free trade agreement." And one local Seoul resident says "for similar or even slightly higher prices, I would choose to drink foreign beers over Korean beers any time, because they simply taste better than local beers." Yet recall, just last mo Mich-based Northern United Brewing (Jolly Pumpkin and North Peak) partnered with South Korean Playground Brewing (see vol 6 no 95). You can bet there will be more local Korean beers comin' to mkt too.  

The folks at 21st Amendment have never entered a new year feeling so good. The co had an eventful 2015 that turned out very strong for several reasons. First, shipments flew. Up 45%, catapulting the co over 100K bbls for the first time. It opened its first production facility in San Leandro, CA. And one of its 2 new brands had a fantastic first year while the other was an internet sensation and won a GABF medal. A year ago, the co "limped into 2015," co-founder Nico Freccia told Craft Brew News. Now it's getting ready to launch 2 new full-time 6 pks with plans to dig deeper in Calif during the Bay Area brewery's first full year in operation. If 2015 involved scrambles to finish that project and ended so strong anyway, 2016 will be a "year of execution," prexy Dave Wilson said.

Pulling previous session option Bitter American may have been tough for Nico and co-founder Shaun O'Sullivan, but replacing it with brighter Down to Earth Session IPA turned out for the better. In just 9 months after its launch in April, Down to Earth rocketed into the market, selling more than twice what Bitter American did during all of 2014. So the new brand certainly contributed to 21A's biggest year by absolute bbl-growth ever, up about 32K bbls overall to almost 103K bbls. But its lead brand, Brew Free or Die IPA, had a strong year too. It grew at more than "double what the national IPA trend" was, Nico said, implying very strong growth. Similarly, the co's seasonals also grew "north of double" the average national trend, but that, of course, was significantly slower. Both Brew Free or Die and 21A's seasonals represent just "north of 30% of our volume" each, Dave said. In 2014, Bitter American and Back in Black (a black IPA) were about 20%. But last year, Back in Black was flat ("we're okay with that," says Nico). So as it dipped a bit as a share of total volume, Down to Earth "chewed that up," said Dave, and the co was left with "a really healthy pie chart."

Toaster Pastry and El Sully Coming to 6 Pks Soon Recall, the co's other new brand came in just at the tail end of 2015 to celebrate its new facility. Toaster Pastry, a red IPA, references the building's history as a Kellogg factory that produced Pop Tarts once upon a time. That story garnered tons of media attention last fall. So the brand, only available in 19.2 oz single serve cans, "added more talk value than bottom line value," Dave explained. That may change in 2016 when 21A moves the brand into 6 pks of 12 oz cans, already approved for Safeway sets this Spring. It's targeting the higher-end of 6-pk pricing for it too, upwards of $14.99. "God bless Ballast Point," Dave said, which "opened doors" for these more expensive packages. At the same time, 21A's gonna "hit 'em high, hit 'em low," Nico said. While Toaster Pastry's the high, El Sully Mexican lager is the low. Made at the co's San Francisco brewpub for years now, a canned version of the easy-drinking beer appeared in the co's first variety pack last fall. Now it's getting its own standalone 6 pk, currently being brought into NorCal Safeway stores ahead of other markets. El Sully "drinks like a Modelo," according to Nico, just the "freshest, most vibrant version of that you can get," with a bit more hop presence.

Calif Brewery Mirrors Cold Spring; Up in the East, Digging Deeper at Home With San Leandro on line, "now we get to play," Nico said, for the 1st time in its own playground. But it's maintaining its relationship with Cold Spring too. "Beer is expensive to ship," Dave reminded, so "we're not in a rush to run away from Cold Spring." In fact, the new Calif brewery's system mirrors that of Cold Spring, considering all 21A's invested in getting to know that system. And "as long as we can continue improving that relationship," Nico said, they'll stick with it. Just as the new facility will help 21A serve its recent expansion into SoCal, which it entered just last Spring and is already a top 4 market before chain authorizations, Cold Spring helps 21A head east. It sent some beer to Jacksonville, Florida for the first time in November and begins to fill out the rest of the state later this month. One or two more markets may come on line this year, but nothing's finalized yet. Plus, with eastern markets like New Jersey up 80%, Boston +40% and Manhattan, DC and Philly all strong too, keeping Cold Spring brewing 21A's beers makes sense.

Still, Nico and Dave want to go deeper at home. Northern Calif was upwards of a third of its volume entering last year and addition of SoCal brought the state to about 40% of 21A volume. Even though the "21st Amendment brand travels extremely well," Dave noted, "we need to strengthen our home market." He'd "love to have half our business" in Calif. And for the "first time," Nico said, "we've entered a year with the capacity we need to grow."  

Moves to consolidate Ballast Point distribution started to become public this week. Ballast Point already moved in NYC and some parts of upstate NY. Manhattan Beer began delivering it yesterday, reported Brewbound. Manhattan Beer got about 60,000 cases in 5 boroughs and Long Island, CBN understands (a version of this article appeared in INSIGHTS Express). In Hudson Valley, Craft Guild of NY kept Ballast Point, because Ballast Point is more than 3% of its biz there (in NY, a brewer can move for fair market value if brand less than 3% of distrib's volume and brewer under 300,000 bbls). At least a couple of other Constellation distribs already got Ballast Point from other Sheehan entities in Western NY. But Ballast Point stays with Sheehan Family Cos' Hunterdon operation in NJ and moved to go statewide with Sheehan in Md, said Ballast Point chief commercial officer Earl Kight, who sez he is making the calls. Sheehan Family Cos sell BP in other states too. Ballast Point also moved from Wirtz in Wisc, going almost entirely with Constellation's Gold Network of distribs there. These moves total over 125,000 cases, or a little more than 3% of Ballast Point volume. While there could be other activity down the road, already clear it's not a one size fits all solution.

Meanwhile, Ballast Point also expanding to several new mkts, said Earl, including Indiana with Indiana Bev and Monarch, as well as K&L in Alaska. It's also rolling out the rest of Montana with Cardinal Distributing. Recall, Ballast Point currently in about 40 states and will become national.

Gold Network Considerations? The move to Manhattan Beer is not surprising in a sense, since 45-mil-case distrib sells an enormous amount of beer from Constellation Brands Beer Division. In spirit of developing a Constellation-centric Gold Network of distribs, tuff to split the network in nation's largest metro area. On the other hand, Lagunitas said it will be keeping same distrib network it developed when it sold 50% to Heineken, rather than moving to HUSA network. So far, that has happened (networks could potentially be consolidated if/when Heineken gains control of Lagunitas). But Constellation playing out differently.

Evolution of Craft-Centric Distribs Amidst Waves of Craft Deals It's not the first time Sheehan Family Cos has faced potential loss of brands amidst waves of craft deals. Sheehan Family Cos is one of largest distribs in the US at well over 30 mil cases with 19 distribs in 13 states plus DC. While its main supplier is AB, it is also one of biggest craft distribs, often selling big % of a craft brewers' volume in small craft centric distribs across multiple states. But that leads to increasing number of potential conflicts as the landscape changes. For example, AB moved Elysian from Sheehan's craft-centric Hunterdon in NJ. A still-unresolved lawsuit ensued over valuation. Meanwhile, AB still unable to move Blue Point in key metro NYC mkts where it has branches, 2 yrs after purchase. Then too, Sheehan Family sells Breckenridge across multiple states.

Sheehan changed the game and was far ahead of the curve in craft beer distribution over the course of the last decade. But now game is being changed again before their eyes. Sheehan Family Cos still reportedly got strong growth in 2015. But with so many deals, more consolidation headaches are likely down the line.  

Turns out when a couple breweries/brewpubs close, another several open and/or expand.

Yards Looks for New Philly Location Yards Brewing is on the lookout for a new brewery location in Philly area, co announced. It grew 10.5% to 42,000 bbls last yr and is running out of space at its current location in Manayunk neighborhood of Philly. Indeed, "crowded" is the term used to describe the 40K sq-ft facility that holds 22 200-bbl fermenter tanks, cold storage, a loading dock, research lab and tasting room/restaurant, per release. So Yards lookin' for 80-100K sq-ft of space, ideally in Philly, to fuel its next phase of growth. "We hope to start building in six to 12 months" and move in by 2018, said president Tom Kehoe.

Urban Chestnut Plans Pilot Brewery for Consumer Research St. Louis-based Urban Chestnut Brewing announced plans to open "The Urban Research Brewery" (U.R.B.), a 3500 sq-ft 2-bbl brewhouse pilot brewery located "directly across the street" from main 70K sq-ft production space. It will take a more consumer research heavy approach with its new space, offering "test flights" of 4 two-ounce samples for $1 "with the one requirement that the 'surveyee' provide feedback via an interactive digital platform." Once survey is complete, customers are able to order a "regular sized pour…offered at standard price…if there is ample supply," per release. Last yr Urban Chestnut grew production "by several thousand barrels," according to St Lou Post-Dispatch, up from 11,000 bbls in 2014. It was up 80% thru May 2015, co told CBN (see vol 6 no 41).

Small MI Brewer, Rockford Needs New Production Site; "We Need Investors," Sez Founder MI-based Rockford Brewing is "maxed out at 800 barrels" annually and lookin' for "a good size facility that is 5,000 square feet and (create) a 30-barrel brewhouse," co-founder Seth Rivard told MiBiz paper. "We might look for investors instead of going to banks," he added, stating "we have a great relationship with a bank we've used from the start, but there's only so much money they'll lend you. We need investors."

11 New Breweries (and 1 Cidery) Plan to Open in Atlanta Area; Other Newbies Comin' Soon "At least 11 new breweries" and Atlanta's first cidery intend to open in Atlanta area in 2016, as "rate of new projects in development is only speeding up," reported Atlanta Magazine. Mag points out that the cidery, Urban Tree, will be able to sell its products on-site since it's licensed the same as a winery and quips: "if that sounds inconsistent with regulation policies, it's because it is," quipped mag. See list of new breweries here.

Then too, Dark City Brewing just opened in Asbury Park, NJ - the town's first craft brewery, noted newsworks.org. Bond Brothers Beer Co plans to open its 4600 sq-ft brewery at the end of Feb in Cary, NC, along with a restaurant next door, reported New Observer. In NYC area, Bayside Brewery in Bayside, Queens will launch in July, according to Metro US. It also plans to launch a separate location "in either Flushing or College Point area of Queens or in Plainview, Long Island." In OR, Wayfinder Beer was touted as "Portland's most ambitious and highly anticipated new brewery of 2016," by The New School. Wayfinder is "the previously secretive new brewery project" of ex-Double Mountain Brewery owner/founder Charlie Devereux, along with "GABF gold medal winning brewer Kevin Davey" as brewmaster and "collaborating with" two experienced local restauranteurs.

Other Expansions Coming Soon Several other brewery expansions coming too, natch. OR's Ordnance Brewing is moving to 50-bbl system (from 7bbl system) that will raise annual cap to over 50K bbls, reported Statesman Journal. In Hamilton, NY, Good Nature Brewing will open $4 mil new brewery and tasting room late this summer, according to Syracuse.com. And in MO, Springfield Brewing purchased 6k sq-ft space that will triple production capacity, reported Ozark First.