BMI Archives Entry

BMI Archives Entry

Big executive announcements out of SweetWater this afternoon.  The fast-growing craft brewer promoted cfo Kim Jones to ceo (she’s been with the co for 2 yrs) and at same time announced new cfo, Bill Waters.  Interestingly, Bill comes to SweetWater from global brewer Molson Coors, where he most recently served in a senior role as chief corporate strategy officer, in charge of M&A worldwide for co.  Meanwhile, founder Freddy Bensch now steppin’ away from more of the day to day activities, tho he will continue to stay on as chairman and “remain closely involved in setting strategy and promoting” SweetWater’s vision.  Earlier this yr, Lagunitas founder Tony Magee made somewhat similar move, hiring Maria Stipp as ceo.  Recall, SweetWater sold minority stake to private equity firm, TSG last September.  TSG also has sizable stake in Pabst.  More recently there have been rumblings about a potential IPO for SweetWater down the road. 

SweetWater one of the hotter craft brewers in recent yrs.  It more than doubled over just last 3 yrs, climbing 98,000 bbls to 193,000 bbls, and ranked #16 craft brewer on CBN’s list.  So far in 2015, SweetWater  remains one of the hottest craft brewers in scan data; up 36% and gained 0.2 share of craft segment $$ in IRI multi-outlet + convenience data thru Jun 14. Its flagship 420 Pale Ale (+33%) continues to climb up the top-brand ranks, currently at #18 ahead of Bell’s Two Hearted Ale, Sierra Variety Pk, Bell’s Seasonal and Kona Longboard Lager.  (Editor’s note: last year SweetWater sold over 41% of its total production in IRI-tracked scans, which was one the highest %’s among craft cos.) 

SweetWater also got added boost from several new mkts in the last year, as well as addition of several new canned pkgs.  It also got financial boost as it has asked for and sometimes gotten huge upfront commitments from distribs (reportedly as much as 4.5x GP in some instances).  SweetWater entered TN, OH and MS in 2d half of 2014 and TX, MD and Chicagoland area this year.  SweetWater will also add NJ with Peerless Beverage in Sep and plans to enter NYC soon and PA in November.  

After "pushing for years," this June Denver International Airport agreed to add kiosk that sells packaged beer, wine and spirits "well beyond" the security check. That allows customers to take home Colo-products in their carry-on luggage, reported Westword. Indeed, Denver's behind the times compared to other "beer hotspots" across the country, including "several places" in Portland, OR that sell bottles and growlers, as well as beer-to-go in "San Diego, St. Louis, Boise and Anchorage" airports. Denver's "Time 2 Toast" kiosk will start with "a limited number of options" of 4- and 6-pks from local cos like New Belgium, Great Divide, Coors' Colorado Native, as well as other local wines and whiskeys available to the approx "54 million people who pass through" every yr, DIA spokesman Heath Montgomery told paper. However gotta note, customers cannot consume those products in the airport. Recall, both Boulder Beer Company and New Belgium have previously established restaurants in the airport as well, paper added.

Just as there's lotsa flux in small brewing world, retailers are trying out all sorts of new options, including stepping into brewing themselves. For example, the Rhombus Guys pizza restaurant of Grand Forks, ND will soon be opening a brewpub nearby in the town's historic Metropolitan Opera House building, according to the Grand Forks Herald. Out in Bellingham, WA, The Local restaurant/bar will soon double its space to build out "a one-barrel beer lab system" it'll offer homebrewers to "try out recipes on a slightly larger scale to see if they have a viable product," the Bellingham Herald wrote. The brewery will be non-profit, with proceeds headed toward local charities. In Wisc, brewer Stevens Point plans to license its brand for a burger bar in Milwaukee, run by a local restaurateur, according to the Journal Sentinel. That's not unusual in Wisc (or elsewhere), as Sprecher and Ale Asylum also have similar licensing arrangements. Meanwhile, watch out for increased attention from major grocery chains. Kroger is going further with craft, with plans to install in neighborhood of 10-12 taps at 5 southwest OH stores by the end of August, the Journal News wrote.

Historical Breweries and Buildings RevisitedA new brewery is targeted for one of 2 historic buildings in Middletown, OH that are being developed by an Ill-based developer. Current plans require approval of State Historic Tax Credits, per the Journal News. The developer is talking to a number of breweries for the project, including Cigar City, according to the paper. Founder Joey Redner confirmed to CBN that he spoke to the folks developing the Middletown, OH site for a brewery, "but nothing concrete yet or even in the neighborhood of concrete has come from it so far," Joey said. Cigar City is "actively pursuing several expansion options both onsite and off."

With hopes to open in December, the new Terre Haute Brewing Co is under construction in the historic home of the brewery of the same name, opened in 1837 before closing around Prohibition, in the namesake Indiana town. Potosi, WI got back production of its hometown beer brand this spring after Potosi Brewing opened a facility, after contracting at Stevens Point since 2007. The brand pays tribute to original Potosi Brewing, opened in 1852, closed in 1972, and is run by non-profit Potosi Foundation, which operates National Brewing Museum in the small town of about 700. The new facility has 15-20K bbls of capacity on hand, outfitted with equipment from "a new brewery equipment division of Darlington Dairy Supply," the Wisconsin State Journal reported. Nearby, the Minnesota History Center offered St Paul Brewing History bus tours this summer, taking folks to old brewing sites of Schmidt's (not operational since 2002), Hamm's, a separate Hamm's headquarters, where Great Waters Brewing built its home in 1997, and of course Summit, the Star Tribune wrote.

Trouble for Indie Retailers in MN, NY; CO Brewers Against Chains, AgainIn the Twin Cities, Minn-based craft retailer Four Firkins announced it's closing this summer, citing difficulty offering competitive pricing for the independent stores against much larger retailers and added complication of traffic/construction nearby. Similar story in NYC, where a handful of Brooklyn craft beer retail institutions have all closed recently and longtime homebrew supply store Brooklyn Homebrew just announced plans to shutter too. Part of the reasoning pointed to by Grub Street is a huge uptick in competition, with high-quality beer being offered in many more locations and, of course, big rent increases in hip neighborhoods. These stories might offer Colorado brewers a little bit more ammunition in annual fight against folks hoping to bring high-point beer (over 3.2 alc by weight) sales to grocery stores. Small brewers in the state regularly push against attempts to bring more beer sales to chain stores and this year is no exception, with local efforts recently chronicled by the Greeley Tribune.

In the UK, the Society of Independent Brewers launched an export program that will ease connection between its 800 members and government resources set aside to boost UK exports. Meanwhile a "conglomerate of Scottish brewers called the Craft Beer Clan" said it's "heavily targeting Asia for expansion," according to craftbeerworld.co.uk.

Tho strange and sometimes troublesome, DC law famously allows retailers to import any beer they can find across the country for a nominal fee and that's "a good thing," a Washington Post writer wrote recently. It does open the door "for some bad actors" that "buy cheap and sell high," but the "benefits of the loopholes far outweigh any problems with overcharging." Meanwhile, nationally, other folks are creating a gray (well, dark gray) area in the trading world. Once just a hobby, beer trading is now increasingly "purely for profit," Daily Finance wrote. Beer traders can make hay with "lax enforcement" of sending beer thru the mail. Indeed, one SoCal trader told the paper that "very quickly it became a full-time gig for me and I was able to quit my job from the income I'm making."

Process of Alabama legislators studying alc bev laws continues apace and the Alabama Brewers Guild is offering up its suggestions, natch. The group's "having some very meaningful talks with our distribution partners about potential changes," and is "hopeful that we will have meaningful reform in 2016," exec director Dan Roberts told the Huntsville Times. In the guild's own post on albeer.com, it pointed out that "self-distribution is especially important in a state with strict beer franchise law like Alabama." Recall, the group supported a measure intro'd to make a small brewer exception to state franchise law. But guild post shifts focus and even notes that "for the distributor that is potentially signing the start-up brewery, there is high risk." A new brewery with inconsistent beer, little growth ambition and neither mktg nor biz savvy may not be worth the investment for a wholesaler. Therefore, self-distribution offers an oppy for a brewery to "test the market." The guild's offered plenty of other resources for the Alcohol Commission on its site, including info about direct sales.

The two largest Charlotte, NC craft brewers "both say they'll max out next year" just under the state's 25K-bbl self-distribution cap and refuse to brew more beer until that cap's changed, according to the Charlotte Biz Journal. "We just want to control our destiny," NoDa Brewing's Todd Ford told the paper. He's concerned with losing "control of the NoDa brand and potentially [getting] lost in a portfolio of hundreds of beer choices," the paper wrote. "I don't think I should have to make that decision because someone tells me so," Ford said.

Down in Tampa, FL, Cigar City's Joey Redner ticked off a trio of things he believes Fla could learn from NC for the Tampa Bay Biz Journal. Brewers spending time in taprooms to be visible and make personal connections would help, he said, as would greater training options for not just brewing sciences but go-to-market strategies and design. Further, he pointed to "exceptions to sell alcohol in dry counties," the TBBJ paraphrased, as well as options to "distribute their own beer and sell it at farmers markets." Those kinds of comments may back up NC distrib org director Tim Kent's argument that NC has the best laws in the Southeast for small brewers. Recall that NC brewers guild director Margo Knight-Metzger responds to that claim by saying it just ain't good enough to compete nationally and focus should instead be on having some of best laws in the country.

Meanwhile, growth of North Carolina breweries led to recent appearance of first craft-focused, NC-only bottleshop in Greenville, with 20 taps and 200 bottles, WNCT reports. In Charlotte, 20 breweries have opened since 2009 and "that figure should double within the next two years," according to the CBJ. New Blue Blaze Brewing recently found a site in Charlotte to build out a 15-bbl brewhouse, in an 8000 sq-ft spot adjacent to the historic Savona Mill, the paper wrote. Further, "a strong craft beer industry locally will help attract national brewers in the future," the city's economic development veep told the paper, adding "I think we're very primed for a large craft brewer to come to the area." Similar line appeared in Wilmington, where "at least one national brewer has eyed the local market for an east coast production facility," StarNews wrote. That paper headlined that "City's beer boom led by sophisticated sippers, legislative changes." Among expansions and new brewery plans in Wilmington: a restaurant, Hops Supply Co, will open a brewery downtown.

Start of July brought start of new beer laws in a handful of states. Georgia breweries can now sell tours that come with "souvenir" beer and local news stations outlined the excitement that came with the change. Some Atlantans lined up waiting for a taste of the newfound freedom when midnight struck, though some acknowledged the limits of the law change, WXIA reported. 

The 64-oz growler became legal in Fla and excitement over years-in-the-making change led to a big July 4 weekend for many brewers, chronicled by the Orlando Sentinel, Tampa Bay Tribune, the AP and many others. Cigar City founder/CEO Joey Redner told CBN that "the buzz about growlers certainly had something to do" with a big uptick in sales at his co's tasting room. It doubled sales on July 3rd, the biz's busiest day around the holiday. "The days leading up to the 4th were all way up for us starting on the 1st," Joey shared. 

Breweries in Iowa too "have been waiting" for oppy to sell more draft beer thru growlers, Lion Bridge Brewing owner Quinton McClain told the Daily Iowan, especially since many state breweries don't package. The state opened up sales of growlers in more retail outlets on July 1. Iowa has 55 breweries, up from 22 just five years ago, according to the Ames Tribune. There are 30 more in-planning. Ames alone has seen 2 new breweries open this year and other communities have asked Iowa Brewers Guild leader J. Wilson "we want to make our town a brewery-friendly town. We want to attract a brewery. What can we do to change the zoning language to make it workable?" he told the paper. Elsewhere, owners of a couple Des Moines bars plan to turn a historic warehouse, rehabilitated last year, into the Iowan Craft Beer Hall, pouring from 150 all-Iowa taps, scheduled to open late this year or early next, according to KCCI. 

Since beginning of July, a slew of stories sound off on a number of consistent craft themes: growth (natch), changes to regulatory structure and involvement of economic development groups or other governmental support for craft breweries, particularly when it comes to redeveloping historic sites or downtown districts. Read on for tastes of many of these stories. In the age of the internet content machine, where clicks mean revenue, the steady stream (and indeed increased flow) of these stories must say something about readers' interest in them. Note the wide array of folks lookin' to get a piece of the action. It seems we ain't seen nothin' yet. 

"Two major changes" helped propel craft beer movement in Mexico to next level, according to intriguing Wash Postarticlethat highlights recent success of Mexican craft beer biz. Recall, in 2013 Mexico's Federal Competition Commission ruled to limit "exclusivity deals by the big brewers to a quarter of their points of sale." That followed "legal challenge" by Minerva and Mexico City-based Primus Brewing "teaming up" with SABMiller, which ultimately "opened up space for small beer-makers to sell in restaurants and bars." Other main reason for craft success is that "industry titans have warmed to their pint sized competitors" as global cos purchased "dominant Mexican brewers" (i.e. Heineken purchased Cuauhtemoc Moctezuma and ABI purchased other half of Modelo). To deal with new realities, Mexico's brewers' association has since "opened up two seats out of the eight for micro-beer makers," after craft brewers met with Grupo Modelo and Heineken Mexico chief execs, noted paper. "Goliath stomping on David is not a good public relations strategy, but foreign Goliath on Mexican David is worse," quips the Post.

Mexican Craft Beer Still Under 1 Share, But Poppin' Up All OverMexican craft beer is still under 1 share, but growing quickly, with 50-100 "microbrewers" there now. And how is this for US-like picture of the fast-developing scene: "From trendy rooftop beer gardens to grungy punk bars to 100-label tasting rooms, Mexican micro-beers of all kinds are flourishing," wrote the Post. ABI has website called Beerhouse "to sell their line, plus dozens of other artisanal and import beers, via home delivery." Emerging Mexican craft-beer scene is yet another sign that craft is going global. However chain grocery and convenience stores are still difficult for craft brewers to breach in Mexico, including largest c-store chain, Oxxo (owned by Heineken) and "other Wal-Mart-style retailers."

Modelo/ABI Offered $60 Mil for Minerva Brewery; Other "Rumors"With craft beer hotting up south of the border, no surprise that ABI looking at potential craft acquisitions in Mexico too. This year Grupo Modelo reportedly made $60-mil offer to purchase Minerva Brewing, but offer was turned down, owner Briseño told paper. Meanwhile, Minerva has grown from 3 to 52 employees. There are also various "reports in the Mexican media" that claim Modelo "plans to purchase craft beer brands such as Tijuana and others," however at this point it's just "a rumor" that it's even "interested," said Tijuana sales manager, Israel Acevedo de Anda. Recall, ABI's Latin America unit recently purchased Colombia craft brewer, Bogotá Beer Co.