BMI Archives Entry

BMI Archives Entry

Annual lists of Google's top searches always provide a noteworthy view into the zeitgeist. Even if it's not always clear exactly what these trends mean, this year's results are no different. The top beer search in 2015 was "Bud Light Mixxtail." Using Google Trends tool to dig a little deeper here, looks like that's largely due to major spike in May, after national launch, with very few queries after that. Instead, frequency of next 3 top beer searches grew much more steadily. "Gose beer" hit #2 on Google's year-end list. That's right, gose. Importantly, "these results show what brews had the highest spike over a sustained period in 2015 compared to the year before," according to Food and Wine's talk with a Google spokesperson. So "gose is still registering as barely a blip when compared to more traditionally popular beers like IPAs or stouts." But also steadily growing: #3 on Google's list, "Grapefruit beer." And don't think it's all about those grapefruit IPAs, as deeper look into that trend shows a ton of searches for imported Schofferhofer and Stiegl radlers.

Californians aren't just buying lots more Firestone Walker 805 Blonde, they're seeking more information on it too. "805 beer" is #4 search on this list. It's followed by another numbered craft brand that appeared in a bunch of new markets for the first time this year: "SweetWater 420." Google's #6 trending beer is "Blue Moon," perhaps boosted by the brand's promos around an actual blue moon that rose this past summer. Indeed, #9 "what is…" search in 2015 was "what is a blue moon?" Oddly, next 2 trending beer searches also on the color wheel: "Abita Purple Haze" (#7) and "Wild Blue Beer" (#8). Top ten rounded out by "Skol" and "Miller High Life." As a bonus: a coupla malt bevs appeared on separate trending searches list for top "calorie count" queries. The new Mike's FMB "Palm Breeze" was #2, while "Coney Island Hard Root Beer" came in at #9.  
Another contract brewing concept, Brew Hub, simultaneously announced it picked up work with two new FL-based brewers - JDub's Brewing Co of Sarasota and M.I.A. Brewing of Miami - as well as plans to expand its Lakeland, FL facility to 100K bbl/yr cap. JDub's and M.I.A. each saw fast-paced growth this yr, producing approx 4K bbls and 2K bbls respectively in 2015, per release. Yet new partnership with Brew Hub will allow each to multiply production: JDub's expects to increase volume to "nearly" 10K bbls annually and M.I.A. expects to increase volume to "nearly" 8K bbls annually. Currently both brewers only distribute in parts of FL, and now will be able to expand distribution statewide in FL and regionally. These new partnerships wouldn't be possible without capacity expansion, since Brew Hub's "brewing capacity has been sold out since July 2015." So Brew Hub will install new bright beer tanks in Jan and add 8 fermentation tanks in Feb that'll ultimately increase production capacity from 60K bbls/yr to 100K bbls/yr. On top of new additions, Brew Hub has signed on multiple brewing partners including Cigar City, BJ's Restaurants, Toppling Goliath, Green Man, Orange Blossom, Golf Beer, Brew Bus (just purchased Florida Avenue Brewing - see last issue).

This is first bit of news we've heard from Brew Hub in some time. Only new news in 2015 aside from this most recent announcement was partnering with acclaimed IA brewer, Toppling Goliath. Recall, just last yr Brew Hub officially got its Lakeland facility up and running, announced 2d facility and HQ in St. Louis (still being built) and has stated ambitious plans to open 5 locations spread thruout the country. In Sep 2014 co already claimed to be "actively in pursuit" of its 3d location in the northeast (see Sep 9 2014 issue); expected announcement by end of last year. At that point, it expected all 5 to be up and running by late 2018, early 2019. But so far, mums the word on when all that will come to fruition. Seems that Brew Hub has slowed its geographic expansion over the last yr, and is expanding its existing facility before starting another construction project for a new brewery.  

 Dogfish Head's final 2015 volume growth trend "will be a single digit number this year for the first time [in] over a decade," founder Sam Calagione wrote in, yesterday. Chief among the "few big reasons for this," in his view, is that it sells all of its top 3 brands by volume (70%+ of DFH total bbls) basically "without discounting." Indeed, DFH "is the only top 50 brewery to sell our beers at full base price over 95 percent of the time," according to Sam. It also didn't open any new states this year, Sam reminds. Another reason for slower growth (though a less impactful one) is that "it took us a while to find the right VP of Sales." But now the DFH team is "very happy to have Todd Bollig on board." They're planning "to have another record year in 2016" and "return to more robust growth with a significantly amplified engagement commitment with our distributors and retail partners," Sam wrote. That includes launch of cans, next fall.

Namaste, the co's take on a Belgian white, remains its "fastest growing beer," +30% YTD, though "on a smaller base" than top brands 60 Minute and 90 Minute IPAs. Recall that brand moved into 6 pks for first time last yr. It now has 4th highest velocity among top DFH brands and in fact #2 brand 90 Minute turns fastest for the co, according to scans. It also has a price per case over $64. That helps push total DFH avg case price to $52.60, the second highest in top 25 craft vendors, Sam wrote, between two big SoCal cos, Ballast Point ($56.27) and Stone ($51.32). Sam reminds that "the remaining 22 breweries are all below $45" per case and that most of DFH's even higher priced specialty brands are sold in outlets that "do not contribute to scan data. Internally we believe our average CE prices pushes closer to $55 blended across portfolio-wide volume."

Peek Into IRI: +11% in Supers Thru Late Nov, Slower for 4-Wk Period Digging into DFH trends in latest batch of IRI scan data, both volume and $$ still up around 11% in supers yr-to-date thru Nov 29. Both those trends slowed to single-digits for 4 wks, when $$ +6%. Lead brand 60 Minute IPA no longer makes top 30 craft brands list, a consequence of inclusion of hard root beers and high-flying growth of brands like Founders All Day and Firestone Walker 805. But 60 Min 6-pks remain #28 craft package in supers and 90 Min 4-pks just behind at #30. Both packs up 13-14% by $$ YTD and about 8% for 4 wks. An earlier IRI snapshot showed those brands still over 3/4 of DFH biz in multi-outlet + c-store uniuverse thru Oct 25. For that period, Namaste $$ +50%.

Here's a first. A well-known Colo beer writer, Jonathan Shikes of Westword, actually compiled a list of the 10 Colo craft brewers that he thought would make "good buyout targets" and who likely buyers might be. Whether these are rank speculation, informed guesses or based on some actual knowledge of discussions is difficult to determine. Jonathan notes that tho there were lotsa craft deals this yr, in Colo, "the damage has been limited" but "there's a very good chance that more Colorado breweries will soon be gobbled up as well." His #1 choice is Breckenridge Brewery and "potential buyer" is ABI. Makes sense that AB will look for Colo craft brewer, since it controls vast majority of its distribution in state and has lost share more rapidly in Colo than nationwide. Each of the top 4 craft brewers in state (New Belgium-ESOP, Oskar Blues-sold stake to private equity, Odell-ESOP and Left Hand-ESOP) have done transactions in recent past, 5th is Avery, purportedly not for sale. So Breckenridge might be a good guess (or something more) on Jonathan's part. Jonathan's 2d choice is Wynkoop, which is owned by Breckenridge. Wynkoop of course was original brewpub of now Governor John Hickenlooper. His buyer: Oskar Blues. Reason: Breckenridge "could use some cash to help pay off the debt on its Littleton Campus." It recently opened a "twelve acre $36 million campus." His third choice: Great Divide, which is also amidst a $38 mil expansion project and his "potential buyer" is Duvel Moortgat or Heineken. From there, his other choices are less well known: Crazy Mountain, Fort Collins, Tivoli, Declaration, Dry Dock, Prost and Denver Beer Co. For each, he has his reasons that they would be "good targets" and likely buyers are usual suspects like ABI or MC or STZ. Will be interesting to see how many come to pass.  
Local craft beer scene is comin' on in CT, just like everywhere else, and two of the largest and fastest growing CT brewers are professionally run by two beer industry vets. Two Roads, founded and headed up by ex-Pabst cmo Brad Hittle, and Stony Creek founded by ex-Dichello Dist co-owner Ed Crowley and his wife Peggy. Both companies are at forefront of CT craft beer growth, and they are becoming increasingly important to their state. CBN took a day trip to check out what each of these brewers had cookin' as the yr comes to a close.

Two Roads Hits 32K Bbls, Contract Biz to 65K Bbls; Adding Capacity, Territory In just its 3d full yr, Two Roads will finish with its own brands up 90% plus to 32K bbls in 2015 (organic growth up 65%), Brad told CBN. That's right around where co expected to be earlier this yr (see April 13 CBN), tho contract brewing biz slightly lower than originally expected - up 23% to 65K bbls. All in, revs will be about $21 mil. Two Roads has 90 full time employees (another 20 part time). Brad and co are fine with production mix shifting more toward its own brands, he said (mix shifted from 1/4 own brands to 1/3 this yr). Co brews over 125 different beers at the facility, so there's already lots to manage. Two Roads has a dozen different contract partners, said Brad, including 2 in Southeast. Its partners range from microbreweries such as Lawson's, Evil Twin, Stillwater to AB. Several Blue Point brands still brewed at Two Roads post-AB purchase. Recall, Two Roads capacity currently sits at 175,000 bbls, but it will be expanding to 250,000 bbls next yr in 100,000 sq foot building on 6.6 acres that formerly housed US Baird machine tool plant.

Two Roads is in process of expanding/upgrading nearly every aspect of facility space. It's doubling keg capacity, tripling size of its lab, just upgraded centrifuge, added cooler space, adding space for its tasting room, etc. This is no ordinary facility for a small craft brewer - sprawling right off of I-95 with room to spare, control room and lab capabilities with lots of sophistication similar to large brewers. Both its own brands as well as its existing contract partners have room to grow, plus there are plenty of other potential contract partners out there (especially smaller cos, tho still gotta be selective, acknowledged Brad). There's enough room on property for Two Roads to fit 2500 people and two bands on either side for its Oktoberfest this past yr. And Two Roads also squeezed in two pilot brewing systems for brewmaster Phil Markowski to experiment extra. Recall, Phil has long history as a brewer and literally "wrote the book" on Farmhouse Ales.

Two Roads still does 56% of its biz in its home mkt, CT, which grew at 65% clip in 2015. Its hometown distrib Gallo will sell over 100K CEs this yr. Two Roads up 100% with New London, CT-based F&F Dist too. Yet Two Roads also progressively expanded its footprint further thru northeast states. This yr it added VT in March, Philly, PA in Apr, NJ in Sep and most recently ME in Oct on top of NYC/Albany areas and Mass statewide last yr. Brad singled out Mass and RI as outside mkts where Two Roads has done very well; he called Mass mkt "unbelievable" and it's up 70% in RI. Next yr it'll add NH in Q1 2016, fill out further west in NY and rest of 5 counties around Philly. Then too, it's currently exporting "very small amounts" overseas (mostly Europe) to craft forward accounts to get the name out, and will look to ramp up in coming yrs too. Two Roads operates with sales force of 15 and one "brand ambassador" who acts as a hybrid sales/mktg rep in the local area. Co-founder and beer vet Clem Pellani heads that team. He worked with Brad on Rolling Rock while at Labatt USA and was Pabst consultant on its new craft portfolio intros, per co website. Next yr they'll add more brand ambassadors. All in, Two Roads plans are to grow its brands more modestly next yr, to 45K bbls. Brad expressed certain level of uncertainty for what future holds for this industry as it rapidly changes before us, and is seemingly taking more cautious outlook on growth. But 45K bbls would still be up solid 40%.

Revamped Stony Creek Expects 8K Bbls In Yr-1, 23K Bbls in 2016; "Natural Expansion Steps" Early this yr, Stony Creek officially opened its new 30K sq-ft facility, while simultaneously revamping its brand portfolio. And now co expects to finish 2015 at 8K bbls (10K bbls for 12 mos rolling), Ed Crowley Sr told CBN (Editor's note: Ed's son, Ed Jr, is president of the company). Previously it had done all of its production via contract brewing with Thomas Hooker Brewing. But now, after investing $20 mil to get the new facility up and running, and revamping its brands, Stony Creek already runnin' at full capacity in year 1. That's "three years earlier" than expected, said Ed Sr. New tanks comin' early next yr will bump capacity up to 40K bbls, and there's room to reach 60K bbls/yr. But Stony Creek expects to more than double production to 23K bbls in 2016. Co figures it'll have about two yrs of breathing room for capacity. Ed and co acknowledged that two yrs ain't that long, so soon enough it could be back to the drawing board for next cap expansion step(s).

Stony Creek will get an extra boost from new neighboring mkts in 2016. It's taking "natural expansion steps" as Ed put it, into Mass this upcoming spring, and NY next fall, still lookin' at "all options" for distrib partners. Yet Stony Creek biz and growth so far is in CT (some in RI too) where there's still room to run. "Connecticut is the right market" said Ed. There are now just over 30 breweries and as a relatively "young craft state," consumers are lookin' for local brands that're from "professional operations" with "consistent" beers. To that end, Ed also went out and hired vet brewer and experienced salesperson to head his team along with Ed Jr. Brewmaster Andy Schwartz has worked with a wide range of craft brewers since mid-90's including most recent gig with Craft Brew Alliance as senior innovation brewer at its Portsmouth, NH brewery. And sales director Jamal Robinson was previously Blue Point's New England sales manager. Prior to that he spent 4 yrs with Hartford Distributors Inc as its craft beer manager. Both were instrumental in the process of revamping Stony Creek brands.

Then too, co is leaning into its local roots, natch, with its flagship IPA series and company logo modeled after indigenous Blue Heron bird, also commonly referred to as "Big Cranky." So its "Cranky" IPA series is driving growth for Stony Creek. Flagship Cranky IPA, along with Big Cranky Double IPA and Little Cranky session IPA are available in cans and on draught while rest of the portfolio is packaged in bottles and draught. Interestingly, while IPAs are driving most of its growth, its Dock Time Vienna lager is "biggest seller" at its taproom, where there's a diverse mix of visitors, anywhere from millennials from nearby Yale college community to older folks in the local boating community and lots in-between. There's always a variety of brews on tap including seasonal line, a nitro brew, always somethin' "weird and crazy," and two CT guest taps as well. The brewery is located right on the Branford River (it's the only CT brewer located on the water), and during the summer it could sometimes get up to 1,000 people on Saturdays. So they continue to expand their space to have plenty of outdoor area, as well as lots of games and tables to keep folks occupied (i.e., corn hole, bocce ball, ping pong, foosball, etc.). Stony Creek currently has 20 full time employees.

While CT craft scene still relatively behind compared to other states, it's starting to get some significant growth from both Stony Creek and Two Roads. Together Stony Creek and Two Roads brands will have grown over 50K bbls to ship combined 68K bbls by end of next yr if all goes according to plan. In a state that sells less than 2 mil bbls overall and which Yuengling entered in 2014. Gotta be tuff for mainstream brands. Stay tuned.  
Another burst of bad publicity yesterday for AB's new distrib incentive program. Fast growing barbecue chain Queen City Q in Charlotte is getting coverage with its decision to stop selling any beers associated with AB in any of its 4 locations or any future outlets. (Note that this article appeared in INSIGHTS Express yesterday.) The restaurant cited recent Wall St Jnl article which "suggested AB InBev is rewarding distributors who focus on its beers while limiting supply from craft brewers," (meaning AB's VAIP, or voluntary incentive program), according to Charlotte Observer. ABI is "'intentionally and willfully' harming the craft beer industry," managing partner Bryan Meredith said, and Queen City Q won't do biz with cos who "act like bullies." He added: "In the grand scheme of things, I'm sure Anheuser Busch could care less about me. I don't sell enough to even be a blip on their radar. The message I hope they get is if 100 other people like me do this, they're going to notice it at some point." Craft is currently about half of the 44 taps at its uptown location and Queen City Q plans to exceed $1 mil in beer sales in 2016. Queen City Q started up in 2012, has already announced its 4th location and next yr will have 2 concession stands inside Time Warner Cable Arena where Charlotte Hornets play.  
Following Kurt Widmer's retirement from Craft Brew Alliance's board of directors at the end of this year, David Lord will take over as chairman, the co announced this week. David's been on the CBA board since 2008 when the co formed, following a 5-yr tenure on Redhook's board. He spent over 20 years in leadership roles at Pioneer News Group and still serves on that co's board as well as that of Wick Communications, both publishers of largely community newspapers.  

New news from New Belgium this week, another brewer that has coming pilot brewery project in RiNo district, but this is about its Asheville facility. NBB just began test brewing its first batch at the Asheville facility, and still expects "to be making brew for sale in early 2016," reported Asheville Citizen-Times. "We're not going to rush that process," explained spokeswoman Suzanne Hackett. Then too, "much of the construction is finished at the brewery…but the company has not yet received a certificate of occupancy," she added. There are currently 50 NBB employees workin' in Asheville, which will grow to 80 by March. And 10 employees will work for NBB's distribution center to start, expected to double by end of 2016.  

Founders named Reyes Bev Group yesterday as its distrib in most of SoCal, also naming AB distrib Pacific Bev Group of Santa Barbara. RBG got brands in San Diego, Orange County, East LA, San Bernardino, Riverside and interestingly in downtown LA, thru RBG's Unique Craft Solutions arm, that is selling outside RBG's MillerCoors territorial footprint. Recall, in Oct Founders entered NorCal with mostly AB network (see Sep 17 CBN). Founders also added distribution this yr in NV, NM, ND, SD, Western MN.  
Couple of recent news stories showing signs that local beer scenes in different parts of the country are getting tuffer. Florida Avenue Brewing reportedly "has been purchased by Tampa-based beer tour company Brew Bus," Florida Avenue founder Bruce Talcott told Tampa Bay Online today. Bruce is 68 and "it's time for me to get out and enjoy things," he said, adding "it's an opportunity for the brand to continue to grow," since "we have 17 distributors, and they're counting on us." That's part of the story, but lookin' at IRI data, this yr Florida Avenue is down 29% in multi-outlet + convenience stores thru Oct 25 (tho still very small in these outlets: $60K in sales to-date). Growth ain't as easy as it used to be. The tasting room closed yesterday, "as Brew Bus prepares for renovations," on track to be open to the public again in mid-Feb. "We're lookin' at a complete transformation," with raised ceilings, new "windows that look into the brewery," and "looking at adding a patio," Brew Bus founder and president Anthony Derby told paper. Brew Bus will "continue producing its beer" at Brew Hub in Lakeland "for now," before eventually moving production back to the Tampa facility. Last yr Florida Avenue was up 35% to 3,375 bbls according to Brewers Assn stats.

Then too, PA-based Gamble Mill microbrewery and restaurant "is scheduled for a sheriff's sale Thursday," but turns out co has found a buyer that they're working with and "the bank feels comfortable with" too, co-owner Dave Fonash told Centre Daily Times. "We are working quickly to put something together in the very near future," he added. "Restaurant faces foreclosure by Kish bank, which placed liabilities against the mill's owners at about $573,000 plus interest and fees," noted paper citing court documents. Earlier in the yr Gamble Mill closed its doors for the month of Jan hoping to reopen after slower mos, but ultimately never did. Both owners "pursued different career opportunities," as Dave puts it. The Mill was listed at $1.3 mil in Nov 2014, tho that price has dropped to $1 mil on Kissinger, Bigatel and Brower Realtors site.

Blue Ridge Closes Brewpub in Preparation for Full-Scale Brewery Opening this April Meanwhile, Blue Ridge Brewing based outta Greenville, SC "will be closing its doors on North Main by the end of this year," reported The Greenville News. Yet this is not a marking of tuffer times, but rather a marking of growth, since Blue Ridge is preparing to open full-scale brewery in downtown Greer this April, and is actively searching for a new downtown restaurant location. Blue Ridge "couldn't reach a lease agreement with the landlord," and "the disconnect was over the length of the lease," rather than "the cost of rent," owner Bob Hiller told paper. Now co is "actively pursuing spaces in Greenville's central business district to open a restaurant with the Blue Ridge name." Yet it won't have an in-house brewery attached.