Once again, industry members in Georgia are gearing up for an eventful legislative session. A draft of a bill that's currently circulating but hasn't yet been introduced sets the stage for some pretty significant changes to current law as well as what's sure to be some fiery debate. That bill reportedly seeks to make at least 4 key changes: 1) allow sales to consumers directly at small breweries and distilleries in state; 2) allow food sales at those locations; 3) allow those licensees to open up to 5 off-site "tasting rooms" where they can also conduct sales of their products; and 4) "end the stranglehold distributors have over manufacturers by allowing these smaller operations to opt out of contracts with wholesalers," according to the Atlanta Journal-Constitution. Recall, small brewers sought that first change last year, but were only granted the right to sell tours of their facilities and provide free "souvenir" beer to visitors after major changes were made to their original bill. Then, months later, the Dept of Revenue issued a bulletin further restricting the structure of tour sales, a move that local press tried to connect to influence from state wholesalers. An AJC columnist recently suggested a "massive overhaul" that included food sales as well as a look at current franchise laws. We've not seen mention of the 5 tasting room provision in Georgia before, but at least a couple of states have similar laws. Most recently California actually pulled back on a similar provision, limiting brewery-operated tasting rooms to six. Understandably, small Georgia brewers welcome these changes. They "need a modernized three-tier system," exec director of Georgia Craft Brewers Guild Nancy Palmer told the AJC. "It's become clear," she added, "that leaving important changes in the subjective hands of regulators is problematic." She notes the 48 other states that allow "common-sense direct sales," too. As it has done regularly throughout recent debates, the AJC reminds again of the significant donations both individual wholesalers and their association have made to political campaigns in the state. Pushing against that may again be an uphill battle for small brewers, but it also provides significant opportunities for conversation (heated or otherwise) and education around these issues.

Just next door in Alabama, small brewers are hopeful that they'll be able to begin selling their beer directly to consumers for off-premise consumption by the end of the year. Brewers in the state are already allowed to charge for samples of beer consumed on site. Though the Alabama Brewers Guild backed legislation that would have allowed off-premise sales at breweries, that bill didn't pass. But recall, the state did pass a law forming a one-time Alcoholic Beverage Study Commission, tasked with learning from industry members in and out of state and proposing reasonable changes. That 8-member commission voted this week on what those proposals would be. Among them: allowing brewers that produce less than 60K bbls per year to sell up to 288 ounces (or 1 case) to an individual for off-site consumption from their breweries, according to AL.com. The guild has been "pushing for that change for quite a while," exec director Dan Roberts explained to CBN. And there's still a long way to go, as bills still need to be written, then passed by the legislature. But Dan's confident they'll get through with "no significant push back," as the wholesaler assn is "on board" with these recommendations, he said. Alabama currently has 24 operating breweries, none of which near that 60K-bbl cap, and Dan knows of at least 10 more in-planning. Other Commission recommendations loosen restrictions on where brewpubs can open, allow brewers to deliver beer to charity events and allow distilleries to sell a single bottle for off-site consumption.

Elsewhere, debate over whether grocery chains should be allowed to sell full-strength beer continues in Colorado. A Florida bill would allow retailers like theme parks, which go through a very large number of kegs every year, to not pay deposits to distribs on every keg, but instead work under a separate "inventory and reconciliation process," Saint Peters Blog wrote. And Virginia seeks to attract more breweries to the state by making it easier for them to purchase state-grown raw materials. A proposed bill would eliminate the income tax on sales that Virginia hops and grain farmers make to breweries.  

North American Breweries (NAB - owned by Costa Rican co, FIFCO) has opted to close down Pyramid's final CA-based Alehouse located in Walnut Creek, reported San Francisco Business Times. NAB confirmed that 49 employees "were let go this week" with severance pay. Recall, last yr Pyramid decided to close its Berkeley location and previously closed its Sacramento location in 2013. Yet co simultaneously plans to focus more intently on its Portland and Seattle locations with more investments there. This is all part of NAB's plan for its west coast operations, per co statement: "as part of that process, NAB merged and increased production capabilities, reviewed and consolidated its retail location, improved innovation, and created a west coast leadership team with added staff to strengthen the Pyramid brand."

Keep in mind, production of Pyramid brands have gradually declined over last several yrs, and as paper notes, "retail [property] prices are skyrocketing" in Bay Area. In fact, a 22K sq-ft retail property in downtown Walnut Creek "recently sold for around $15 million," which is "twice what the seller paid four years ago." So it's gotta be tuff decision to keep a retail location open outside home mkt as costs surge and trends decline.

Arvada Beer Co Closes Just Two Wks After Striking Alt Prop with Dad & Dude's Brewing Arvada Beer Co has closed its doors, and "if the closure is permanent, it would be one of the first times an independent craft brewer has gone out of business in the Denver metro area since Denver's Del Norte Brewing ended its five-year run in 2012," reported Westword. Oddly, just two weeks ago co-founder Cary Floyd told Westword that it "recently struck an agreement with Dad & Dudes Breweria in Aurora that would allow Dad & Dude's to make beer on Arvada's system and serve it" at Arvada's brewery. Neither Cary Floyd nor Dad & Dude's co-owner Mason Hembree commented on situation, but Mason "said he might be able to talk about it later in the week," according to mag. And "the company struggled over the years" after "losing its head brewer at one point and revamping its lineup of beers in an effort to bring in more business," it added.  

Following launches of Ballantine IPA and Old Tankard Ale, Pabst will brew a new brand, Rainier Pale Mountain Ale, "as well as other" Rainier brands at Craft Brew Alliance's Woodinville, Wash facility, starting this Spring, CBA and Pabst announced earlier this week. (A version of this article appeared in INSIGHTS Express on Monday.) "As part of the agreement, Pabst has been granted an option to purchase the Woodinville facility at any time during the next three years," according to joint statement. The deal is a step for both companies toward their individual goals. Pabst keeps working to launch or re-launch beers under the various beer trademarks it still owns, each of them playing at least somewhat in the craft space. And CBA continues to solve its capacity/supply chain puzzle. Recall, in the last 2 years it started contract brewing its own brands at Blues City in Memphis, contract brewing for Cisco and Appalachian Mountain Brewing at Portsmouth, expanding its Portland facility to 750K bbls per yr and building a new 100K-bbl brewery in Hawaii.

"This is the last domino that explains what we're doing," CEO Andy Thomas told Craft Brew News. CBA has a "very efficient" brewery in Portland which is "a couple of hundred miles away from Woodinville" which is "a very inefficient" brewery. So makes much more sense over time to brew its Pac NW volume in Portland. For its part, Pabst has struck several deals to import Tsingtao, to take over sales & mktg of Vermont Hard Cider brands and now this. This is seemingly a first step. Pabst "wants to have more control of its own destiny" noted Andy. But while Pabst needs time to "morph into it," i.e. potentially purchasing Woodinville, CBA needs time to "morph out of it."

Pabst has something good going on with its Rainier brand, which climbed 23% to 157,000 bbls in 2014. It was up another 26% in IRI multi-outlet + convenience thru Oct 25 last year. But Pabst will not brew main Rainier brand at Woodinville; rather Woodinville will serve as center of innovation for Rainier brand, reviving archival brands as Pabst plans to do at the location it recently acquired in Milwaukee. Recall that vast majority of Pabst volume, other than Not Your Father's Root Beer, brewed at MillerCoors' breweries. And AB owns 32% of CBA, but also sits on board which unanimously approved this deal. AB and CBA have "never worked more closely together," Andy told us, pointing to CBA inclusion in new voluntary incentive program and "increased exposure" at SAMCOM meeting with distribs, including at immersion booths and more.  

Fresno, Calif-based Black Ops Brewing's website is down this week, following a rare preliminary injunction granted to Brooklyn Brewery, which filed suit in Federal court against the co last Nov. That suit followed 2 separate cease & desist letters over the summer, according to ruling filed last week. Importantly, though the ruling takes Black Ops Brewing's word that it wasn't aware of Brooklyn's mark when it began selling its beers, continuing sales after receiving Brooklyn's letters did not help its case. Brooklyn has produced Black Ops, an aged Russian Imperial Stout, since 2007 and got a federal trademark for "Brooklyn Black Ops" in 2009. Black Ops Brewing opened its doors just last year and still only sells its beer in Fresno county, according to the ruling. The US Patent and Trademark office denied the co a trademark for its name in March. Black Ops Brewing argued that Brooklyn does not sell its beer in Calif, therefore limiting the likelihood for consumer confusion. Indeed, Brooklyn acknowledged that it doesn't yet distribute to the state and has received no evidence of actual confusion. But it plans on launching Calif sales this year, it argued, and it's these plans that helped Brooklyn show irreparable harm, key for any judge to grant injunctive relief.

Black Ops Brewing's opening and sales in Calif "have robbed Plaintiff of control over the reputation of the beer sold under the 'Black Ops' mark," Brooklyn argued, noting that if consumers "are unsatisfied" with Black Ops Brewing's beers, they're "unlikely to purchase" Brooklyn's Black Ops. And the judge agreed, citing case history that clearly states such reputation borrowing "is an injury, even though the borrower does not tarnish it, or divert any sales by its use." Merely "potential damage to reputation constitutes irreparable injury," the judge cites in ruling. Furthermore, case history also shows that federal trademark holders (like Brooklyn) are "entitled" to injunctive relief if they show even the "likelihood" that they will begin to use the mark in an area where an "intrastate user" (like Black Ops Brewing) uses the mark.

Tho Brooklyn brought no evidence of actual confusion in the marketplace, the judge agreed with the co and found likelihood of confusion across most of the 8 factors judges test in these cases. The judge based some of those decisions on individual facts of this case, but the ruling includes some considerations for beer and alc bevs generally worth remembering. First, even though Black Ops Brewing argued that it doesn't sell any aged beers or any Russian Imperial Stouts, the judge ruled that it's all beer, so the "proximity of the goods" is still close enough to possibly create confusion. Further, the ruling cites a prior case in spirits that found "the degree of similarity" between 2 alc bev marks "need not be as high as usual" considering on-premise environments when bottle labels may never be seen. So "similarity in sound and meaning" between 2 marks weigh more heavily that similarity "in sight" in cases concerning alc bevs. Finally, even though Brooklyn Black Ops is a relatively high-end product within beer, any beer is still a "common consumer item" that's purchased regularly without much careful consideration. (No, any extra attention paid by engaged craft consumers was not considered here.) And even a $29.99 bottle of Brooklyn Black Ops is "relatively inexpensive" in the grand-scheme. And since alc bev purchases can be "impulsive" and within a "'chaotic' environment," the judge found plenty of likelihood for confusion. So this injunction prevents Black Ops Brewing from using its very name in trade or otherwise.  

 Blue Moon and Leinenkugel brand families each posted similar mid-to-high singles gains in scans thru 2015. Combined they grew 910K cases and $40.2 mil to 17.3 mil cases and $532.6 mil. That's larger than both Mark Anthony Brands and Diageo Guinness USA on their own in IRI. Blue Moon Belgian White remains the main driver of growth. Kept up solid 10% volume gain, 12% $$ gain that accounted for more than all of total brand family growth. Only other Blue Moon brands that grew were new White IPA (incremental 306K cases) and new-ish Cinnamon Horchata Ale, $$ up 395%. The rest of the portfolio is declining. Most notably, Blue Moon Variety Pk down 22% and Seasonal down 4% for the yr; down 37% and 16% respectively in Q4.

Meanwhile, Leinie family got all its growth and more from new Grapefruit Shandy's incremental 369K cases. But even that wasn't enuf to save brand family from sharp Q4 declines. Leinie volume down 8%, $$ down 5% for 13 wks thru Dec 27. And trends shot down 19% and 16% respectively in last 4 wks. That was driven by Variety Pk's steep 50% plus decline and Lemon Shandy down 11% during period. A handful of other Leinie brands declined at steep pace for full year too, including Lemon Berry Shandy (-98%), Sunset Wheat (-19%) and Hoppin Helles Lager (-40%), offsetting most of other brands' gains.

Thruout 2015 AB's high end biz in craft space had two divergent paths. Its craft acquisitions all posted solid gains while Shock Top brand family increasingly declined as the yr went on. Shock Top volume down 8% and $$ down 9% in 2015 IRI multi-outlet + convenience data, and down 13-15% in Q4. That's 477,500 cases and $14.6-mil dip for the full yr. Gains by AB's acquired brands more than made up for Shock Top decline. Goose Island alone up 33-34%, 418,500 cases and $13.4 mil. All that and more was from Goose IPA. Goose IPA more than tripled sales in scans: up 423K cases and $14.1 mil. A handful of smaller Goose brands also posted solid gains, like Variety Pk (+34%), Seasonal (+9%) and separately counted Oktoberfest (+211%), tho these were offset by 312 Urban Wheat (-4%), Urban Pale Ale (-23%) and Honkers Ale (-40%) declines.

Meanwhile, Blue Point (+57-59%) finished up 88K cases and $3.5 mil; and 10 Barrel (+32-35%) up 83K cases and $2.9 mil. And while we don't have final yr numbers for Elysian, and don't include later acquisitions in AB's 2015 number, we know Elysian $$ were up 38% thru Oct in scans, and Golden Road up 24%, Four Peaks up 44% and Breckenridge up 4% (not a full picture as not much of Colo volume scanned) thru Oct. So although Shock Top still a far larger brand family at this point than AB's acquisitions, it's gradually becoming less important to AB in terms of growth. However, gotta note AB still plans on spendin' some notable dough behind Shock Top this yr with ad spot during Super Bowl and new canned 15pk intro, as it continues to use Promo-Opti pricing in various parts of the country too.  

Even as AB and MC keep expanding their high-end portfolios, majority of their growth in craft space was from just a select few brands. Goose IPA, Blue Moon Belgian White and Leinie Grapefruit Shandy all individually accounted for more than their respective brand family's total growth for the yr, while several other brands declined within their portfolios. And Blue Moon got another solid incremental lift from its White IPA. How Goose IPA, Leinie Grapefruit Shandy and Blue Moon White IPA cycle in 2016 goin' up against sizable rollouts will have a significant impact on total brand family performance this yr. Recall, Leinie Grapefruit launched in March and Blue Moon White IPA launched in April. And Goose IPA gradually accelerated thruout the yr with its peak growth rates in Sep, Oct and Nov. So each has a bit of a headstart this yr, with largely incremental trends early in yr. Yet for MC, flagships Blue Moon Belgian White and Leinie Lemon Shandy will still have most impact on total trend, natch. Belgian White had another solid year in 2015, but Lemon Shandy declined at accelerated rate thru Q4 (see below) and just eked out 1% $$-gain. Meanwhile, AB seems to have extra leeway with several other craft acquisitions to roll out further, regardless of how Goose IPA sizes up to its breakout year. Stay tuned to see MC's approach to Saint Archer's growth strategy.  

Sierra Nevada shipments jumped 154,000 bbls, 14.6% to 1.221 mil bbls in 2015, founder Ken Grossman told Craft Brew News. That's slightly faster pace than depletions, which jumped about 13%. But whether you're talking shipments or depletions, Sierra got its biggest bbls growth in 1 yr ever. New items drove most of Sierra's growth, noted Sierra's mktg and sales director Joe Whitney. Hop Hunter almost 1 mil cases and Nooner Pilsner about 650K cases. They were the #1 and #2 new items respectively for craft in IRI in 2015, added Joe. Its variety pack was #2 in 2014 (behind only Rebel-biggest craft launch ever). And variety packs enjoyed another strong yr in 2015, up 35% to 1.2-1.3 mil cases, with all of Jan and most of Feb incremental. Hop Hunter, Nooner and Variety Pack drove lion's share of Sierra's growth in 2015.

Sierra Pale Down Slightly; Core Brand Focus On-Premise But flagship Sierra Nevada Pale Ale under pressure. Down 1.8% to a little under 600,000 bbls, almost half of Sierra's biz. Off premise "real healthy," said Joe (Editor's note: up 4.6% in IRI multi-outlet + convenience yr-to-date thru 12/27) but the problems were on-premise, as they were for other large established craft brands. Sierra's total draft biz dropped 2% in 2015. Sierra needs a new solution for continuing growth of rotator bars, Joe explained. So in 2016, Sierra will emphasize all its core brands in the on-premise channel. Sierra concluded that it placed "too much emphasis" on Pale on-premise, said Joe, in attempts to "shoehorn" it into places where it wouldn't play. So Sierra will offer a broader range of options for retailers as well as more concentrated resources from sales force devoted to on-premise.

Then too, everyone wants an IPA on premise these days, Joe noted. Sierra's #1 IPA Torpedo grew shipments near 18% to about 3 mil cases, about 17% of Sierra's biz (depletions up 7.5-8% last yr). Solid growth of brand even amidst major new IPA launch, Hop Hunter viewed as a plus. Sierra expects growth from Hop Hunter and Pilsner in yr 2 too. And its new spring seasonal is a Tropical IPA that just hit the market. Sierra got its Seasonal program back on track last yr, with its rotating Octoberfest and spring seasonals based on Beer Camp. Seasonals shipments up 20% last yr.

"New World Order" in Craft "Kind of Daunting"; Camaraderie the "Backbone" of Craft Changes in craft's competitive landscape are "kind of daunting," said Joe. "There's a new world order in 2016." Now craft brewers are "competing against global brewers" with a "heightened focus on competition" and "less camaraderie." But for "most of the 35 years we've been around, craft brewers have had to work together to claw and scratch our way toward respectability and critical mass," Joe noted. "What I hope doesn't get lost with all the changes in ownership that are happening is that camaraderie has been the backbone of craft."

Despite "new world order," Joe still sees Sierra Nevada growing a solid 9.5% in 2016 (altho initially it will be going up against 30% growth last yr in 1st qtr). If Sierra achieves its objective, that would be near 120,000 bbls of growth again. Recall, Sierra's significant new launch for 2016 is a big departure, a gose-style beer called Otra Vez. Still very early days, but so far "it's doing all the things we want it to do," said Joe. And recall, Sierra will intro its first media program ever. Then there's the new on-premise plan to focus on "all core brands." And Sierra will bring back Beer Camp Across America 2.0, a series of 6 festivals, again inviting hundreds of brewers (including the global giants), and variety packs that will collaborations with multiple brewers on each of 6 individual beers. It's not a moneymaker, acknowledged Joe, but "nobody else can do that program" and sense of community is an "important thing for craft to preserve. When we all come together at festivals there's a cultural element that's more like music than it is CPG because at our core, we're all just fans."

With "heightened focus" on competition, Joe expressed his hope that craft "doesn't turn into a zero sum game" and that "we still work together to expand the segment." He noted that with "cultural aspect" of craft, brewers take "great pride" in their beers and in "being part of a community. But he hopes that the "sense of community doesn't take a hit" with all the deals and intense competition. And craft brewers have gotta "preserve" that, because "it's a big part of what makes craft cool. If the community doesn't thrive, it's hard to imagine the segment generating the types of growth we've seen in recent years," Joe cautioned.  

Turns out not every craft-loving Coloradoan appreciated being told to "relax" about AB's deal to buy Breckenridge Brewery by the Denver Post editorial board late last year (see CBN vol 6 no 101). Craft industry promoter Marty Jones gave voice to the so-called "purists" in a letter the Post printed last week, proudly accepting the name. The original editorial "reveals a lack of understanding," Marty wrote, arguing that "our fans want great character in their beer and the companies that make them." Of course, he's got all kinds of colorful language for AB, "craft beer's biggest adversary" and a "macro fox" that "finally [bought] its way into Colorado's craft beer henhouse." That goes for the "sellouts" too, which "leave their longtime peers and customers feeling duped by macro wolves in microbrewery clothing."

Around the same time, a staff columnist teed off on Georgia's "dated," "anti-business" and "absurd" beer laws in the Atlanta Journal-Constitution. Following up after a second legislator spoke out against the Dept of Revenue's reading of the Beer Jobs Bill passed last year (again, CBN 6.101), the AJC columnist claims "legislators shouldn't have stopped there last year." In his view, "the law already tilts the playing field steeply" towards wholesalers, who "won't stop overreaching until legislators do more than slap them on the wrists." The "major reform" he suggests has 4 components: 1) allow brewers of any size to "sell as much beer as they can, packaged in any way, from their manufacturing premises," (yes, he includes AB); 2) "let them sell food," the prohibition of which "is not just anti-business, it's anti-public safety"; 3) repeal the "nonsense" prohibition of breweries informing drinkers "where their products are actually available for sale"; and 4) reform franchise laws that keep brewers from changing distribs "for all intents and purposes." We can't think of too many industry members that would be thrilled about all of these components. But these are the kinds of somewhat radical suggestions we're seeing more often as non-industry members increasingly participate in similar debates across the US.  

Optimism abounds, it seems, as folks in many cities and states opined about what a fabulous year for beer 2015 was and that 2016 is sure to follow suit. In Philadelphia, Joe Sixpack columnist Don Russell looks forward to a pair of new breweries in Philly proper: a 10-bbl brewpub from folks behind Earth Bread + Brewery and another 10-bbl brewery with tasting room opening in South Philly. He expects another 6 or so to open in the suburbs, specifically pointing to Iron Horse's 12th brewpub, a production facility for Chatty Monks, a new brewpub from Conshohocken Brewery and more. He also calls out expansion of Fat Head's into the mkt this month as well as the 10 Barrel brands next month.

Up the coast, the Boston Herald chronicled the major expansion of "cult-favorite" Trillium Brewing into a 16K sq-ft space immediately ready to produce 10K bbls this yr and scalable up to 35K bbls eventually. This suburban Canton facility builds on top of the co's much smaller Fort Point brewery sized to brew about 2500 bbls. In closer-in Brookline, new Castle Island Brewing recently moved into its near 20K sq-ft facility, Banker & Tradesman wrote out in Chicago. Between last fall and this summer, a quartet of new breweries all led by well-known or award-winning chefs will have opened, according to DRAFT. Mostly brewpubs serving high-end, culinary-inspired beers, these 4 locations are doing even more to link the beer and food worlds in Chi-town.

Looking for more breweries in other urban areas? New Orleans could see 2 more breweries open in town this year as well as some more beer-dedicated retailers. Louisiana is now home to 21 breweries, according to Best of New Orleans, after 5 more opened in the state last year. In and around Austin, it won't just be the new Oskar Blues facility opening this year. Live Oak will soon open its new, much larger production facility, new brewpub The Brewer's Table should open by summer, Hops & Grain is adding a barrel-aging/sour facility and 3 new small breweries already have locations secured in town, the Austin American-Statesman reports. Just outside of town, Whitestone Brewery opened in a 4000 sq-ft building with equipment to brew 5000 bbls/yr tops on New Year's Day, according to Austin 360.

Back up in the Midwest, a handful of Columbus, Oh brewers insist their bizzes won't slow "anytime soon," the Dispatch wrote, headlining that "craft beer expected only to expand." A couple area breweries added canning machines or additional capacity recently, while largest city brewery, Columbus Brewing brewed in the neighborhood of 12K bbls last yr and is prepping its new $4-mil facility. And recall, big new BrewDog facility there should be open this summer (see above). Centerpoint Brewing is launching in Indianapolis with a 30-bbl brewhouse in a 17,500 sq-ft warehouse, the Indy Biz Journal reported. They're targeting initial capacity around 3000 bbls but that sized system in that size space suggests much bigger plans. On the other end of the spectrum, a brewpub, Ozone Brewhouse, plans to open in Old Town Lansing in Michigan this spring. It'll be the first brewery in Old Town, but the 10th in the Lansing area, per the Lansing State Journal. Meanwhile, a full dozen breweries opened in Iowa last year, bringing the state's total to 60. Another 2 dozen are in planning, Iowa Brewers Guild leader J. Wilson told the Gazette.

How about new breweries or expansions in well-developed craft markets? Got those too: Portland, Oreg welcomed the "long-awaited" Great Notion Brewing (which took over the location of Mash Tun Brew Pub); Seattle hailed "one of the most highly anticipated openings in recent memory," of Cloudburst Brewing (founded by Elysian alum Steve Luke); and Asheville, NC's Burial Beer announced it'll spend $1.8 mil building a second brewery, scaled for 10K bbls annually on a 20-bbl system. Those 3 stories appeared in just the last 2 days.