Retailers in Texas recently barred from selling crowlers, aluminum (can) version of popular resealable glass containers (growlers). Recall, crowler package developed by partnership between Ball Corp and Oskar Blues last year. Recent ruling passed down by Texas ABC not because of container material but because crowlers, unlike growlers, not resealable. Texas rules claim growlers "similar to pitchers or large glasses because they are refillable by the retailer," so brewers barred from selling them. But retailers now barred from selling crowlers because they're "permanently sealed." And that's something the TABC believes state law allows only manufacturers to do. Indeed, TABC FAQ on growlers states that "the use of any machine or device which permanently seals a growler, such as a bottle-capping or canning device, is reserved for manufacturing-tier members or brewpubs, and is prohibited for other retailers." Brewpubs, which fit into both categories, are only licensees allowed to sell both packages. The agency maintains state law would need to change to allow retailers to operate crowler filling and sealing machines, according to Houston Press report today which notes that handful of retailers now out the $5000 those machines cost.

Four distribution expansions were just announced in the past handful of days. Largest brewer of the bunch, Ninkasi, will officially enter NY state with Sheehan Family Cos - Craft Beer Guild of NY, Union Beer, TJ Sheehan Dist, and Tri-Valley Beverage - starting late Sep. It'd previously been "sending one-off shipments to New York City for special events" thru Union since last May. Recall that Ninkasi's also entering Dallas/Fort Worth, TX with Andrews this mo. So even as co's growin' strong at home (see above), it continues to expand into new mkts this yr as well; TX and NY will mark co's 10th and 11th states, plus Alberta and Vancouver areas in Canada. Meanwhile, this mo Sun King has "re-engaged" with Monarch Bev to re-expand distribution into 18 counties in north central IN, co announced on its blog. Last December Sun King, which brewed 27,330 bbls in 2014 according to Brewers Assn, cut distribution in areas outside Indy metro last yr in order to stay under the (then) 30K bbl/yr cap for self-distribution in-state (see Dec 17 issue). Since then, IN passed a law this May that tripled cap to 90K bbls/yr, and now Sun King's expects to "be available statewide by Spring." Captain Lawrence will enter MA this October with Mass Beverage Alliance - Atlas, Burke, Colonial, Commercial, Merrimack - cos announced yesterday. Captain Lawrence will start with "limited quantities" of its "highly rated" brews on draft, followed by a full portfolio launch (package and draft) in Jan 2016. And San Diego's AleSmith partnered with Wirtz Beverage in 52 counties including Chicagoland starting Aug 31, Wirtz announced. Earlier in Aug AleSmith entered two other states - MN and VA. So co actively expanding distribution as its new 105K sq-ft facility, with potential capacity over 100K bbls/yr, is nearly ready for action.

Then too, in case you lost track of all the new markets craft brewers launched in the last mo, we've put 'em all together for you in one handy pdf. Organized by state, this list includes craft brewer distribution expansions with sales expected to begin in Aug 2015, as well as a preview for Aug 2015 expansions. While it may not be comprehensive, this list includes announcements made by the largest craft brewers and many expansions by smaller players.  

As Green Flash preps to open new Virginia Beach brewery next year, balances production of its own beers with acquired Alpine brands and expands recently-introduced 6-pks, the co will bring on experienced COO to help. Green Flash hired Chris Ross to fill new lead operations role, it announced today. Chris comes from 25 yrs in tech, telecommunications and electronics, with roles at Intrinsyc, Novatel, Ericsson and QUALCOMM. First day was yesterday. Recall, the co recently launched 6-pks for first time, expanding sales from just Calif and Va, (see Jul 10 issue). They'll hit the co's full national distribution soon. Also coming to 6-pks will be a "cult favorite" from Alpine portfolio, Pure Hoppiness, a one-time only release scheduled for Nov. Between Green Flash and Alpine production, the co expects to max out current brewery's 100K-bbl capacity this yr (GF alone about 65K bbls in 2014). Its East Coast facility still on target for next summer, with tasting room opening first.

How do you quantify the local love for craft brewers we know so well? Here's one way. Distribution beyond 250 miles from even relatively large craft brewers takes a big bite out of sales velocity, according to analysis by Bump Williams Consulting. BWC looked at IRI data for 20+ top craft brewers in grocery channel in 60+ US mkts. Exceptions exist and lots more factors to consider, but "on average, sales velocity declines over 80% in markets that are over 250 miles from the primary brewery location," Bump wrote in client letter yesterday.

Overall, these 20 craft vendors averaged almost $34K per point of category weighted distribution (a measure of velocity) in mkts 250 miles or less from home, thru Aug 9 in IRI food channel. But between 251 and 500 miles, that average velocity dives 84% to about $5500. It drops another 30% to about $3800 in mkts 501-1000 miles from home, then another 22% to near $3000 in mkts beyond 1000 miles.

BWC found 3 patterns when analyzing relationship between velocity and distance for these craft companies, illustrated by case studies of anonymous vendors X, Y and Z. For "Vendor X," avg velocity still drops off by almost 60% in mkts 251-500 miles from home, compared to those less than 250 miles away. But in some closer mkts sales velocity about even with mkts 750, 1500 and even over 2000 miles away. So distance beyond 250 miles doesn't have as big an impact on these brands, which may be "possibly too big to be considered 'Local'," Bump wrote. Over 20% of the breweries analyzed by BWC fit this pattern, the group told CBN.

Rest of brewers analyzed split about evenly between each of remaining 2 groups, BWC told us. These patterns may be similar, but not identical. Both show a "distinct drop-off in velocity" beyond 250 miles. Velocity varies a bit more after that threshold for one group, while it largely declines the farther a mkt is from "home" for the other. For example, sales for "Vendor Y" remain significantly faster in closest mkt, over 3.5X its velocity in any other mkt. But strong performances on the coasts boosts velocity in even very-far mkts for this brewer. Again, average velocity drops by over 80% in mkts 251-500 miles away from "home" for a third brewer, "Vendor Z." But drop-off beyond 500 and 1000 miles even bigger than average: velocity cut by additional 50% in mkts past each threshold. "Markets within 250 miles of 'Home' account for around 40% of total YTD 2015 dollar sales" for this brewer.

Avg Portland Consumer Buying 4.6X Craft Volume as Avg American, 2.3X in San Diego, 1.7X in Raleigh Letter from BWC also showed ranking of 60 different US mkts by Product Development Index (PDI) for craft in foodstores thru early Aug. PDI basically measures how much more of a product or category consumers within a specific geography buy compared to average US consumers (so a different kind of per capita measure). For example, in top mkt here, Portland, OR (natch), avg consumer bought 4.6X the craft volume that the avg consumer across total US (in BWC's chart: PDI for US=100, Portland=460.4). In Seattle/Tacoma, #2 here, it's over 4X. Only other mkt anywhere close is in New England, near 3.8X. Avg consumers in 5 more markets bought 2-3X the craft volume of total US: Spokane (2.8X), Boise, San Diego and Des Moines (all about 2.3X) and Grand Rapids (2.2X). Both Sacramento and San Francisco come in at just under 2X. Folks in Columbus, OH and Albany, NY buying about 1.8X the craft cases as avg American. That's just ahead of measure for a few North Carolina mkts, including Raleigh/Greensboro, 1.7X, and Charlotte, 1.6X. Further down list, Chicago just barely below national average. In big LA mkt, avg consumer picks up just over 0.8X the amount of craft as avg US consumer, slightly lower than those in Baltimore/DC and Orlando, about the same as in Dallas/Ft Worth.

In uber-competitive Portland, OR, Fred Meyer outlets have tons of craft specials in weekly ad at multiple price points. Close to a buck/bottle: Redhook and Full Sail twelvers for $12.99, Deschutes, Widmer, New Belgium, Bridgeport and Blue Moon twelvers for $13.99 (craft available at $13.99 in many mkts tho rarely this variety). A step up (in price per bottle): Lagunitas, Sierra, Laurelwood and Hop Valley sixers at $7.99. Next: Kona/Leine sixers at $8.49, Elysian, Cascade Lakes at $8.79 and then Ninkasi and 10 Barrel at $8.99. But hot Deschutes Fresh Squeezed will run you $9.99. Meanwhile, Bud, Miller and Coors suitcases are $17.99 in same store. Similar step-up offers in Detroit Krogers: $13.99 twelvers of some Bell's, Founders brands (same price as premium 20-packs), then $14.49 for Sam, New Belgium, and $15.99 for Short's.

Way down west coast, in hot San Diego craft mkt, lots less craft in Vons ad. Sierra, New Belgium and Blue Moon 12-pks for 13.99, Kona for $12.99. Sixers of Firestone and Lagunitas also in ad for $7.99. And if you didn't grab your "premium" 30-pack for $17.99 last week, you have to pony up $2 more this week for Labor Day stash. Consumers can still get a good price on Corona, Heineken and Sam twelvers at Vons tho, $10.99.

San Fran Safeway ad features on 3 key price points mixin' across segments. $12.99 will get you pick of several craft twelve packs (Sierra, Kona, Sam, Blue Moon, Shock Top), plus Corona or Stella. At $13.99 you get choice of Lagunitas, New Belgium or Lost Coast twelvers, or a Bud, Miller, Coors suitcase. Step up to $14.99 for strange bedfellows of Bear Republic, Anchor 12-pks, or a 30 pk of Keystone Light, all pictured together.

In Chicagoland Jewel Osco, coupla crafts now included in penny madness. That's when you buy a 12- or 24-pack of beer then get another bev or food item for just a penny. Sam brand twelvers goin' for $13.99 with hot dogs for a penny. Goose 312 and Oktoberfest just $11.99 for 12 pack with hot dog deal. Same price will get you a 12pk of Dos Equis plus a case of water for the extra cent or Heineken with sausage. Spend in-between $12.99 for a suitcase of Bud or Miller brands with chips/soda on the side. [Same store has penny deals for Tito's vodka (w/lemonade), Bacardi rum (Coke, natch), Dewars (ginger ale).] Twelvers of Founders, Lagunitas, Sierra and Bell's goin' for $15.99 in same Jewel Osco, New Belgium for 2 bucks less. But you gotta pay full freight for hot dogs.

Slimmer craft pickins in Dallas Kroger: $12.99 twelvers of Shiner, Blue Moon and Leinie, a buck less than Corona, Sam and Dos Equis. Not a lotta choice in Tampa Winn Dixie ad either: Sam Adams and Blue Moon twelvers on sale for $13.99. A 15-pk of Founders All Day IPA on special for same $16.99 as Bud, Miller, Coors suitcases. But you can get a free Leinie sixer if you buy one.

Tennessee prices a bit higher than most mkts we check, with suitcases of premium bands at $19.99 in Nashville Kroger with 12-pks going for $10.99. Sam and New Belgium twelvers goin' for $14.99 in same store, a buck more than Blue Moon and Leinenkugel. A handful of craft 6-pks available for $7.99: Yazoo, SweetWater, Wiseacre and Blackstone.

Numbers have fluctuated a fair amount mo to mo, but Oreg craft brewers (and small amount of cideries) collectively grew 12% to over 313K bbls sold in-state thru Jun 2015, according to Oreg Liquor Control Commission report on taxable bbls sold. Good enuf to snag another 2.1 share to 22.4 of total malt bev shipments there. That's right. In-state craft brewers alone have over 22 share of shipments in Oreg. OLCC published figures on 218 breweries/cideries in-state thru Jun, up from 197 in Jun 2014 and 155 in Jun 2013. Gotta note, some breweries are counted multiple times for their multiple locations, such as McMenamins (6), Deschutes (2) and Hop Valley (2). Also, these numbers get a slight boost from 15 cideries that reported 10,471 bbls thru Jun 2015 vs 10 that sold 6,643 bbls thru Jun 2014 (plus Craft Brew Alliance's Square Mile Cider, which is roped into co's total in-state shipments). Total malt bev shipments were up modest 1% thru Jun 2015, according to state.

Ninkasi (+30%), Craft Brew Alliance (+11%) and Hop Valley (+53%) are adding most new bbls in state to-date. It seems expanded capacity at Ninkasi's new facility has helped co get back to fast-paced growth at home. CBA continues to push Widmer in particular in Oreg. (Recall that this report measures CBA shipments from its Oreg brewery that stay in Oreg; CBA can shift production between its PacNW breweries as needed. CBA still barely up across US.) Hop Valley continues to shoot up the Oreg ladder; now 6th largest supplier in state ahead of Bridgeport and 10 Barrel. Indeed, AB's 10 Barrel cooled off to +3% in-state, compared to 85% gain same time last yr. Then too, Full Sail and Boneyard have seen a resurgence in home-state trends this year, up 23% and 44% respectively YTD thru Jun. And several other top Oreg brewers up double-digits in state, including some smaller cos comin' up quick. Rogue's up 11%, Hopworks Urban +12%, Worthy +84%, Breakside +96%, Fort George +11% and Oakshire +9%.

Yet some larger Oreg cos are havin' a tuffer time at home this year. Particularly Deschutes, shipments down 10% thru Jun in state, per report. Recall that Deschutes is up 5% all in (see Aug 18 CBN) and is still searching for an east coast location to build a 2d brewery. Other long-standing Oreg brewers continued to decline: Portland Brewing (Pyramid/NAB) and Bridgeport (Gambrinus) down 7% and 17% respectively thru Jun.

A big day for pay-to-play in Mass. As state Alc Bev Control Comm (ABCC) opened its previously postponed hearing into charges vs Craft Beer Guild (CBG) distrib for providing payments or "things of value" to Boston retailers to carry its brands and/or exclude others and for price discrimination among customers, it named names of 5 of Boston's biggest retail groups (that own dozens of retailers) who accepted such payments from CBG, reports Boston Globe. Paper got hold of ABCC report that charges:

• CBG paid one retailer $20/keg to carry its beers for "about three years." CBG sales mgr told ABCC "payments were a 'kickback' in exchange for committed tap lines, and that his company would then bill the brewer of each beer for the kickbacks." Invoices masked payments as "menu programming," "brand allocation" and "marketing support," report sez. One invoice showed payment to retailer of $4,700, implying 235 kegs and detailing how many kegs of which brands sent to retailer who had multiple locations.
• Other CBG employees told ABCC that CBG paid another retailer group $20K per yr in "marketing support." But in another instance, same retailer group asked for payment representing 10% of what it owed CBG, approx $50K, and CBG "balked." Retailer "then refused to carry any beer" from CBG at its outlets.
• CBG allegedly paid co that owns bar near Fenway and others $12K in 2013 "to carry Yuengling beer in its restaurants" ABCC charges, "among similar payments." (Yuengling did not enter Mass until early 2014. No other brands/brewers named in Globe article.)

Our report that follows on today's hearing is by an atty/beer writer familiar with the situation, Andy Crouch. Craft Beer Guild stipulated to the facts the ABCC had uncovered with substantial documentation supporting at least 15 payments of up to $12,000 per tap line. The ABCC detailed the lengthy investigation, which involved interviews with dozens of wholesale and retail employees, and candid acknowledgments and details of the payments, often made to marketing shell companies with no employees or physical offices. After the stipulation, CBG's attorneys tried to argue that it's a relatively new company (founded in 2002 - though it is a Sheehan-owned subsidiary) that was confused by an ambiguous and unclear law. They further argued the pay to play problem existed in MA long before CBG came into business and they had to do it to compete. Finally, CBG made a lengthy argument that due to a decades old change in Massachusetts law it is not actually illegal to engage in pay to play in MA. They also noted that the ABCC had never before enforced the inducement law.

The Commissioners seemed skeptical. One told the CBG's attorney: "It looks like from where I'm sitting that they went to a tremendous amount of trouble to hide what is going on." Another said: "This goes beyond self-policing. They've engaged in a ruse and subterfuge to thwart the statute and regulation." The commission took the matter under advisement and will later issue a decision. Hearings for the violations for the five bars will take place November 3.

CBG said in statement that while it stipulated to facts in ABCC report, it also "filed a legal brief outlining CBG's position that its conduct did not violate existing laws and regulations as well as detailing the current regulatory scheme's lack of clarity and guidance." At same time, CBG "cooperated fully" with ABCC all along, it sez, and "opted not to go through a prolonged hearing process challenging unclear and confusing regulations and has instead chosen to wait for the Commission's decision on the matter and renew its focus on providing craft beer to the Boston market." Mass Beer Distribs assn also put out a statement: "Our member companies are committed to an open and competitive process in which the highest quality malt beverages get to consumers. Given the booming craft beer industry in Massachusetts, we believe we have succeeded in fostering that open market, with a highly competitive environment. We respect the ABCC's need to look into allegations, and the ABCC has received the utmost cooperation every step of the way. We expect and look forward to a balanced and fair result that brings clarity to the marketplace." (This article appeared today in Insights Express.)  

How many hops can be replaced by heather or chamomile? Can spice without a boozy buzz be just as nice? Use of herbs and botanicals in malt beverages clearly on the rise, according to Men's Journal, which contends "you should be drinking beer made from flowers." Using other plants to balance malt's sweetness goes way way back, of course, so historically-minded brewers re-visiting botanical blends/gruits isn't exactly new or surprising. And volume potential may be small, but a niche is a niche and this one's getting more crowded by the day. At same time, "we're living in the golden age of American ginger beer," Eater headlined. Without touching on alcoholic versions of the spicy, fermented beverage and it's sweeter cousin ginger ale, the site tracks growth of ginger-based bevs from coast to coast, focusing on small craft producers, aided by "craft cocktail boom." Lotsa overlap. And hard sodas not sticking with just root beer: one of first Henry's Hard Sodas coming from MillerCoors' Henry Weinhard's brand extension will be a ginger ale. And "the enthusiasm for ginger beverages has likely yet to hit its tipping point, as sippers continue to desire spicier and spicier flavor profiles," Eater wrote.  

Reusing is better than recycling. So in big state with a small population, small brewers banding together to do just that. Montana doesn't have a glass recycling program, as it's not cost effective. So Missoula-based Bayern Brewing "purchased an industrial bottle-washing machine and many of the surrounding breweries have switched to using glass bottles compatible with the washing system," AC Shilton writes for Yes Magazine. The relatively small system cost Bayern $300K in 2013, washes 5000 bottles at a time and has so far kept about 2.5 mil bottles from 6 different MT brewers out of landfills. Yellowstone Natl Park just announced it'll send its empties up to Bayern too.  

Founders will be forced to remove the image of a baby eating oatmeal from its Breakfast Stout label in its home-state Michigan, co announced on Wednesday. "State alcohol regulators took issue with the picture" since law rules that "minors" should not be depicted or referenced "in any manner," and the label "has not actually been registered with the state for many years," according to MLive article. Last November, a Mich Liquor Control Commission investigator "discovered the Breakfast Stout label was not actually registered with the state despite the beer having been sold on shelves for about a decade." Founders was then fined $300 "and removed all bottles of Breakfast Stout from its taproom…last fall." Founders co-founder Dave Engbers responded: "we look forward to working with the MLCC in the future to see if bringing back the original label is an option," but "in the meantime, it's still the same delicious Breakfast Stout that fans have come to love." Recall that Founders still awaiting decision in NH for label approval as well, which is expected to happen sometime in September.

Meanwhile, Founders is havin' some fun with this. "The baby of Breakfast Stout is taking some time away from his crib," co said on its website, "however you'll continue to see that familiar face in all other states within our distribution footprint - and soon!" Then too, in July co created cheeky new label that invites fans to leave phone messages for the Breakfast Stout babe.