Series of interesting clips rolled in this week that, surprise-surprise, further complicate craft branding. Some pretty big companies are developing relationships and limited-release brands with small brewers. So are celebrities, musicians and sports teams. Others seem less thrilled with small brewer brands they find encroach on their own brand or trade on their notability. Take HefeWheaties, new limited-release hefeweizen from fast-growing Fulton Brewing of Minneapolis, which worked directly with Minnesota-based General Mills. Lots of local ties between the big cereal co and small brewer that led to the cereal-branded beer. As Fulton has taken Twin Cities by storm, up from just over 1000 bbls in 2010 to near 17K bbls last yr, the Wheaties brand once held 10 share of the cereal mkt before shrinking to below 1 by early 2014, according to MSP Biz Journal. Just today, Southern Tier Brewing of NY announced new brand with bigger volume potential, One Buffalo. It’s result of partnership with Pegusa Sports and Entertainment (PSE), which owns a number of local sports teams, including NFL’s Buffalo Bills. Southern Tier brand hits the team’s home stadium for preseason game tonight, available on tap thru Western NY by end of the month and 6-pks in Sept. Number of craft brewer/sports tie-ups really picking up these days, with many specialty branded options across US.

But as it goes with trademarking, not everything so rosy as beers perceived to reference specific pop culture icons (even if unintentional or making broader reference) come under fire. Warner Bros may have something to say about trademark filing by Hogshead Brewery in Denver. Why? The entertainment co’s Wizarding World of Harry Potter park, of course. Potter-readers may recognize Hog’s Head Inn from books, replicated as a branded Pub in the Warner Bros-owned theme park, as Westword reported this week. Late last month, Warner Bros asked for an extension to file a notice of opposition to Hogshead Brewery’s name and logo mark. The co has ’til end of this month to do so. It’s not first major entertainment company eyeing a small brewer: recall Lucasfilms struck Empire Brewing for its Strikes Bock last fall. Earlier this month, musical duo LMFAO issued cease and desist to Pigeon Hill Brewing of Mich for stout of same name, the Muskegon Chronicle reported this week. Band’s lawyers suggest “LMFAO Stout may confuse the public to believe that the band somehow endorses or is related to the product.” That ain’t so, Pigeon Hill founder says, as acronym shortens “Let Me Fetch An Oatmeal Stout.” You might also recognize the string of letters as digital-age speak for “Laughing My F***ing A** Off.” As we know, a trademark suit can be no laughing matter, financially or publicly. And influx of small beer brands that really are endorsed by bands could add further complication.

Bloomington, IN-based Upland Brewing’s plans to build new next door 6,240 sq-ft storage and brewing facility are officially approved, reported Herald Times.  The facility is expected to cost “a few million dollars,” said Upland president Doug Dayhoff, targeting completion by Mar 2016.  Upland’s already placed deposits on “eight large wooden tanks” that’ll be able to “house about 500 barrels.”  Currently sour beers make up “less than 1 percent” of total volume, however “these beers…are a large part of our reputation nationally,” Doug explained.  Then too, Upland’s also fresh off of a 5,000 sq-ft expansion to its cellar space at its West Side Beer Bar operation and three added 150-bbl tanks “in the past month.”  All in, Upland’s up about “20 percent annually.” Recall, Upland reached regional status last yr; grew 17% to 15,112 bbls in 2014 according to Brewers Assn stats.

Confusion over which state agency has what kind of oversight over brewing facilities led to the Virginia Dept of Health calling on small state brewers, the Richmond Post-Dispatch and other state papers report. Inspectors tried “to enforce health codes written for restaurants on industrial brewing operations.” Among requests they made of brewers: asking for grain to be refrigerated and roll-up bay doors to be screened in. Such demands delayed construction of Coelacanth Brewing in Norfolk for about a month, according to the Virginian-Pilot. A hearing at the General Assembly before the Joint Commission on Administrative Rules cleared up the issue yesterday. The Health Dept does regulate breweries with restaurants, but those without them only fall under purview of the Dept of Agriculture and Consumer Services. A memo between those depts clarifies roles of each dept in the regulation of wineries. But amid fast growth of breweries in state (its up to 117 from 66 in 2012), no brewery-focused memo yet exists. That’s what the commission asked for and the likely result.

Several breweries lookin’ to settle in West Side of Chicago nearby where Goose Island brewery resides, and “several blocks west of the Randolph Street restaurant row in the West Loop’s Fulton Market district,” according to recent Crain’s Chicago Business article.  Not much detail here, but one of those breweries-to-be is Great Central Brewing, at 1745 W Walnut St, a block from Goose’s taproom and brewery.  Great Central plans to be “a turnkey, production-scale brewing facility, business incubator and accelerator and craft culture destination,” as described by one of the investors who purchased $1.7 mil property, David Avram of general contractor Avram Builders.  It’ll also have its own line of brews and a tasting room, tho has yet to disclose the eventual size of the facility and expected completion date.  The property was purchased in Feb 2015. 

Meanwhile, Like Minds Brewing “is moving its operations from Wisconsin to a 10,500 square foot warehouse it has leased” right nearby at 1800 W Walnut St.  Like Minds launched in “early 2014,” contract brewing outta “the Green Bay, Wis., facility where Hinterland Beer is brewed.”  Now it expects to begin brewing at the Chicago facility “within the next month and begin distributing” by September, co-founder Justin Aprahamian told paper.  And “other breweries are scouting out space in the area,” according to brokers who were involved in both Like Minds and Great Central deals.  Stay tuned. 

Nine brewers of varying sizes made Inc. Magazine’s 5000 fastest growing privately held companies list in 2015.  Recall, list is not all inclusive since it requires cos to apply in order to make the list.  It looks at 3 yr growth rate to determine who’s grown fastest. 

Eye-popping number was Stone Brewing’s annual revs, which were largest of any brewer on the list by far.  In last 3 yrs it grew revs 121% to $185.7 mil thru 2014.  In that time Stone added a whopping 536 jobs to a total of 955 employees.  Recall, Stone gets a big extra boost in revs from its restaurant biz, and also has distribution bizzes in both Calif and Hawaii (also boosts total jobs #).  The next closest on the list were Oskar Blues and New Glarus, which grew to $43.9 mil and $41.1 mil respectively in 2014.  Each were right around the same volume last yr too; Oskar Blues shipped 149K bbls and New Glarus shipped 162K bbls.  That goes to show just how impactful Stone’s restaurants and distrib outlets are on its revs.  Stone was about double the volume of both New Glarus and Oskar Blues at 287K bbls in 2014, yet its revs were 4X the size.  Oskar added 116 jobs to 172 total and New Glarus added 48 jobs to 93 total in last 3 yrs. 

Many of the remaining breweries on the list were founded around the same time, between 2008-2010.  That includes fastest growing brewery over the last 3 years that made the list, Calif’s Figueroa Mountain; its revs shot up 893% in 3 yrs to $6.2 mil in 2014.  Similar to Stone, it gets an extra boost from its several taprooms thruout Calif where it can sell directly to customers.  Figueroa Mtn built shipments 65.5% to 11,500 bbls in 2014, according to Brewers Assn stats.  Next fastest growth rates were from similarly sized brewers from south/southeast region.  Ala’s Back Forty Brewing (8,440 bbls in 2014) grew revs 385% to $2.1 mil and NC’s Olde Mecklenburg Brewery (14,500 bbls in 2014) grew 256% to $5.2 mil.  Interestingly, another slightly larger NC brewery that made the list, Lonerider, had lower revs ($3.2 mil) than Olde Mecklenburg while selling nearly 3,000 more bbls in 2014.  And rounding out the list, Sun King Brewing outta Indianapolis, IN nearly tripled revs in 3 yrs to $9.8 mil.  Narragansett Brewing grew 89% to 11.8 mil same period. So Narragansett shipped over 50,000 bbls more than Sun King (27,330 bbls) in 2014, yet only made $2 mil more in revs.  

Ain’t no stoppin’ the IPA train, but other styles with clear (if not quite as big) volume potential are comin’ on for the hop-weary. But gotta start with style that’s on path to be to 10X what it was in 2008. That’s when “IPAs accounted for less than 8% of the craft category,” Brewers Assn economist Bart Watson wrote, citing IRI data forBA blog. “Today they are 27.4%,” he added. IPAs got near half of total craft $$ growth, flying up 45% in IRI multi-outlet + convenience data thru Jul 12. The style’s still gobbling up 4.5 share of both craft $$ and volume. Bart estimates IPAs at well below a mil bbls in 2008 and at current rate they could hit 7 mil bbls by yr-end, adding “more than 6 million barrels in absolute growth.” At the same time “we’ve seen a trend toward the IPA-ification of everything,” Bart wrote, so American love affair with hops not fading anytime soon.

But other styles “certainly have the potential to drive volume growth in the coming years,” according to Bart. He points to 2 broad groupings of styles here: Blonde/Kolsch/Golden Ales and Sours/Gose. The point: styles that “still pack flavor into lighter, more sessionable styles.” The former group is up 60% in IRI data, largely driven by Firestone Walker 805 success. Add in pilsners (more than doubling) and we’re talking about beers that bring craft “into more occasions” and may be “attracting light lager drinkers into the category.” Folks have suggested “sour” as the new “bitter” for a while, but Bart’s “not convinced about the growth potential of the category as a whole,” for a number of reasons on both production and sales side. Attention on one “potential breakout star” within wide family of beers on tart/acidic/sour spectrum growing bigtime: Gose. The historic German style, usually balancing acidity and salinity, has piqued the interest of many, at least as far as Google searches show: once queried at about the same frequency as “sour beer,” but peaking at about twice the rate recently. That’s likely aided by a slew of new releases from small brewers, often seasonally or for limited periods. As Bart notes, even if Gose doesn’t “break out of its summer seasonal niche,” that’s a pretty big niche.

Brewery Ommegang’s annual “Belgium Comes to Cooperstown” is the “beer festival to judge all others by,” touted GM Bill Wetmore at last Friday night’s VIP Dinner for 750, a cocktail hour plus 5-course extravaganza (each featuring a different Ommegang/Duvel beer, natch).  That was a prelude to the next day’s tasting, which featured 73 brewers from San Diego to Portland, Maine, each serving an average of about 3 beers, some featuring plenty more. Between ticket-holders, 500 brewery reps/pourers and 300-500 volunteers, many of whom camped on the brewery’s property over two nights, enjoying not only beer but, movies, fireworks, live music and more, the crowd swelled to about 3000.  CBN hasn’t the experience to support or contradict Bill’s boast, but BCTC was surely a blast and a professionally-run event. Oh, and the beers were amazing….

A “pivotal” set of coming off-premise resets; lack of interest in “a short-term war chest”; fan-bases “becoming hollow.” That’s just a few of eye-catching views from members of Duvel Moortgat USA’s executive team shared during survey of craft landscape that covered a lot of ground last weekend. DMUSA ceo Simon Thorpe reiterated his parent company’s goal to “always stay the top of the pyramid and think fifty years out.” From that perspective, he and his team dug in with Craft Brew News during final prep for the co’s 3000-person outdoor tasting, Belgium Comes to Cooperstown at Brewery Ommegang.

Craft Consumers Looking More Mainstream?  Sure, the geeks “love the complexity,” do the research, Simon said. But many other consumers “enjoy” craft but require “simplicity.” “Tell me what’s in the bottle,” they ask brewers, and “don’t overcomplicate it.” Simon sees “no intellectual snobbery in this group at all.” And by the way, it’s “where a lot of the growth is.” They’re the “green fields for craft beer,” Bobby Dykstra, DMUSA sales veep said. That’s why “name recognition and word of mouth is still so important,” added Jeremy Ragonese, Boulevard mktg director: “they’re not always looking deeper than ‘oh, I’ve heard of that.’”

That doesn’t mean forget the uber-craft consumer. But this kind of decision-making looks a lot more mainstream to us. There’s more. Attention on freshness (and consequences of not delivering it) may be “below the surface,” said Bill Wetmore, Ommegang genl mgr/mktg director. It’s a bigger issue for “scale beers,” (inlcuding IPAs); “that’s where a lot of the competition is as well.” So, many drinkers may be “speaking with their dollars,” he suggested. Not blogging about it. That is: “there’s a lot of out of code beer,” Bobby said, “it’s real.” Some liquor stores “authorize everything.” “Taking it back costs a lot of money,” Simon added. “There’s more beer being pulled off the shelf,” he thinks, but there’s a ways to go.  

“Pivotal” Resets Coming, Rotating the “New Normal”  Off premise, the “next three shelf resets” will be “pivotal,” Simon believes. “Retailers are going to make decisions for us,” he said, over the “next 18 months.” And the result could be “really different.” On premise, rotator bars are the “new normal,” Bobby suggested, even if some have “started to segment a portion of handles to have some consistency.” That’s driven by consumer demand tho, he noted. DMUSA’s wide portfolio can be a “swiss army knife for a lot of craft beer bars,” he thinks. But in Rotation Nation, bartenders “hold the keys to the kingdom,” Simon said.

Distribs Adding “Touchpoints,” Value; the Long and Short Terms of Commitment  A brewery is “only going to have so many touchpoints” at retail level, Bobby said. So telling their story needs to be “combination” of brewer and wholesaler effort. To that end, Simon asked: “if it’s not the wholesaler, then what is the role of the wholesaler?” Distributors add value and build brands thru this local service. Without it, the middle tier “just becomes a delivery channel,” Simon suggested, and to some extent, the 3-tier system is “called into question.” And that’s not what DMUSA seeks from its 255 wholesalers (at last count), which is “dead simple,” he said. He asks 3 questions: “do they get it,” (i.e. craft), have the “ability to service” accounts “in the right way” and are they “prepared to invest in us for the long term?”

Tuff Q’s Get Tuff A’s: Up-Front Payments and Vulnerable Brewers  What of up-front commitments some craft brewers seek from distribs? There may be “short-term deal-making going on,” Bobby commented. But “they’ll be just that.” The co seeks “long-term commitment,” not “a short-term war chest,” Simon said.

Competition’s stiff for brewers, so who’s vulnerable, we asked. Look for regional brewers that “didn’t lock down their backyard,” Bobby told us. Look for where the “center has become vulnerable,” Simon said. Where an “inner core of people that love them is becoming hollow.” Popular brewers may “rise up and disappear.” Some will be national and there’s a “segment of craft beer that’s always going to be very local,” Simon noted. But “longevity, consistency” are key for the “super-regional” level, “where we want to end up with Boulevard.” That requires finding growth that “maintains that magic that everything we produce is beautiful.”

In 2010, Duvel-Moortgat USA’s craft portfolio included just one American brand: Brewery Ommegang, at about 25K bbls. Since then, it’s added 2 of largest US craft brewers in pair of biggest deals seen in the segment. All told, Firestone Walker, Boulevard and Ommegang shipped over 440K bbls last year, about 2.3 share of craft volume, by our count. But that’s actually down since 2010, when combo was closer to 2.4, as Boulevard grew “only” about 25% in that time while Firestone Walker more than doubled. But this group could gain share this yr. Boulevard’s picked up pace a little, recall, with new brands, including canned packages produced at Cold Spring in Minnesota, and new mkts at end of last yr/early 2015. Firestone Walker still going great guns and after DMUSA deal has a bit more flexibility in terms of capacity further down the line. Recall that Ommegang too launched new IPA, Nirvana, being produced at Boulevard but sold in pretty tight territory. So volume between ’em likely to come in well over a half-mil bbls in 2015, with growth rate near 20% that’s still largely driven by fast FW growth and above that of segment.

Yesterday, pioneering writer about beer, craft beer and homebrewing Fred Eckhardt passed away in his Portland, Oregon home. Figures in Portland beer scene shared memories and thoughts of Fred, collected and printed in the Oregonian today. It was one of Fred’s many columns for that same paper that inspired Kurt Widmer “to take up home brewing 36 years ago,” Kurt shared. “The cosmic giggle of beer,” as publisher of Celebrator Beer News Tom Dalldorf described, will be sorely missed by many within the craft community and beyond.