Not all fundraising is created equally. And, perhaps ironically, a few attempts at new, innovative equity crowdfunding campaigns have backed out and headed in more traditional investment directions. Intriguing take from MiBiz tells tale of coming Newaygo Brewing in namesake Michigan town. The co launched a campaign to raise funds by selling equity stakes online via one of newly-legal platforms for such transactions, Localstake Marketplace. But once approached by local investment group 5 GI LLC, Newaygo dropped campaign, choosing instead “to sell a 30-percent equity stake” to 5 GI, “an investment company formed by five West Michigan executives in early 2015 to invest in local companies,” according to Newaygo co-founder/prexy Nick Looman. The firm offers extra credit “at a lower interest rate,” plus “additional legal and marketing services.” Its agent and address connect the firm to Old Orchard Brands, a juice company, according to MiBiz research.

Another beer-related biz, Pilot Malt House, a new small-scale maltster, followed similar path, backing out of equity crowdfunding campaign and choosing instead to have “a small group of vetted investors” that bring “both money and experience to the table.” It’s still too early to write off equity crowdfunding, but in early days “it’s really been feast or famine,” Crowdfund Connect’s compliance director told MiBiz. Importantly, in both beer biz cases cited in article, the campaign led directly to smaller investment group coming forward to support the brewery and maltster. Separately, another brewery that used Localstake, Tecumseh Brewing, “met its goal of $175,000 largely because of a $122,000 contribution from an accredited investor from Ann Arbor,” the brewery’s co-founder said. It also included investments of as low as $250. 

Smuttynose is “up just under 25%” so far this yr, “on pace to do just under 59,000 barrels,” publicity and communications director, JT Thompson told CBN.  Smuttynose finished last yr up 11.5% to 47,408 bbls, so that’s a solid acceleration going into 2015.  “Some” of that growth is from the new markets opened in the last year and change (TN, TX, AZ, CA) but there’s still “a lot of growth in our core markets as well,” JT added.  Smuttynose is part of a growing list of mid-sized craft cos that’ve recently boosted production capacity significantly. It just finished new brewery at Towle Farm in NH; ultimately it has space to “max out at [around] 120,000 barrels” per yr, tho they’re “still adding tanks as we need them.”  Indeed, “opening the new brewery” has been “a pretty big cultural shift for us,” JT noted, as Smuttynose now “able to grow open endedly” and more willing to expand distribution both in US and overseas to “see if it’s something we can take on.”  This yr co expanded distribution in TN to Knoxville area signed on with Fabiano in Mich.  “Any other” distribution expansions this yr “will be filling out territory in states where we currently distribute,” JT clarified.  Overseas is still a “very small amount” of volume yet co now has limited availability in several countries including Canada, Germany, Italy, UK, Spain, Sweden and South Korea. 

Then too, Smuttynose just added cans to its repertoire for the first time this past mo with mobile canning co, Iron Heart Canning.  For starters Smuttynose will do two 2,200 case runs for two of its brands: Vunderbar Pilsner and Finestkind IPA.  “We’re just looking to these two to see how they do” before deciding if they’ll add more cans to the mix going forward, said JT.  Co also just launched its first year round Smuttlabs beer called Daily Brett to go along with several other experimental brews under this line (2-3 beers per month), as co’s able to freely experiment more with the extra space.  Smuttlabs line is “small and flexible enough to grow as it needs to,” JT noted, pinning this yr’s volume projection at about 1,200 to 1,500 bbls.

Release of top 50 craft brewer rankings by BA today – just the names, no numbers yet – together with figures we published in Jan for top 32, shows again that craft tail – small players and newbies – growing about 2X as fast as rest of craft.  Not that top 50 ain’t rockin’ it.  BA breakout – we exclude Yuengling and Minhas from our list – suggests top 50 up approx 1.6 mil bbls, 15% in 2014.  That’s all brewers 64K bbls or so and higher. Five years ago, BA’s #50 brewery for 2010, Ninkasi, shipped about 30K bbls. So cut-off to rank in top 50 more than doubled. In fact, just top 27 on 2010 list shipped more than 64K bbls that year (SweetWater, 2010’s #27 hit near 77K bbls).

Recall, our top 32 were all 100K+ bbls last year. BA rankings and figures we’ve picked up since our earlier list suggest another 15 brewers in the 64K-99K bbl range. Only 3 within striking distance of 100K: Southern Tier (99K), Ninkasi (96K) and Flying Dog (87K), tho 21st Amendment (71K) ambitiously shootin’ for over 100K in 2015 too, co-founder Nico Freccia told CBN.  All the rest between 64K and 77K bbls last yr, with 8 of those bunched between 64K and 70K bbls.  Be interesting to see how many of them make serious run at 100K bbls as biz gets even more competitive.  Fastest growers last yr among that next batch: Uinta (+31% to 77K bbls), 21st Amendment (+25% to 71K) and Troegs (+28% to 69K).  Over last 5 yrs, lotsa these smaller brewers on fire, quadrupling or more: Southern Tier, Ninkasi, Left Hand, 21st Amendment, Allagash and Green Flash. But almost all at least doubled.

Back to the tail.  Brewers below top 50 shipped approx 6.8 mil bbls last yr, we figure, up 1.4 mil bbls (only 150K bbls less than top 50 collectively), +27%, including 550 new players.  That was close to 2X the growth rate of top players.  Similarly, for 5 yrs, top 50 up about 80%, while long tail +166%.  So tail fattened from 27 share of craft in 2009 to 35 share in 2014. 

16 Mid-Sized Brewers Gain Over 10K Bbls, Collectively Add 226K Bbls in 2014  Several mid-sized craft cos (under 100K bbls) grew sizably in 2014, both on and off the top-50 craft brewers list.  Of the mid-sized cos that shared their numbers so far, 16 cos under 100K bbls grew over 10,000 bbls last yr, ranging from Revolution (+24,500) to Two Roads (+10,000).  Revolution and Devils Backbone aren’t in top-50, yet grew most bbls of the bunch: Revolution nearly doubled to 50,000 bbls and Devils Backbone grew 20,000 bbls to 45,000 total. 

Rest of the list ranges all over, from top-50 brewers like Uinta (+18,100), Troegs (+15,000), 21st Amendment and Southern Tier (+14,000), to a chunk of brewers outside top 50 thruout the country: Terrapin (+13,500) and Cigar City (+11,000) in southeast; Karbach grew 14,000 bbls to 32,627 in Tex and Four Peaks grew 12,700 bbls in Ariz; Calif’s Golden Road (+15,000) and Oreg’s Hop Valley (+10,805) more than doubled, while Calif’s Coronado grew nearly 70%, +11,000; in Mich, Short’s Brewing grew 11,600 bbls; and in Northeast, Allagash and much smaller Two Roads both grew 10,000 bbls.  Please note, this list is not comprehensive.  We will share a chart including all of these brewers and more in this yr’s Craft Brew Guide coming out this Friday (see below), in a section that highlights and analyzes top “up and coming” brewers by region.

Boston Beer revs climbed from $250 mil in 2006, not $250 bil. As Maxwell Smart used to say on the tv show “Get Smart”: “Missed it by that much.”

Lotsa movement lotsa places. In Arizona, state House unanimously passed compromise bill raising microbrewery cap (therefore allowing small brewers to keep retail licenses, see Mar 16 issue), the AP reports. It heads to the governor’s desk. In West Virginia, the governor can now sign bill he proposed, which eases licensing process, opens up sampling at breweries and legalizes growler sales from more licensees, including brewpubs, per AP.

In Indiana, bill raising microbrewery cap from 30K bbls to 90K bbls passed thru first House committee after passing Senate over a month ago. It’s substantially the same as another bill that passed the House over a month ago but awaits Senate committee action. So both chambers have passed such a change at this point. In Iowa, the Senate okayed growlers to be sold by grocery and c-stores, according to USA Today; it heads to the House. In Oklahoma, Senate okayed sale of cold high-point beer, as current law requires all beer over 3.2 alc by weight to be sold at room temp by liquor stores, according to AP. Lawmakers still need to find some agreement between different retail entities as bill faces the state House, article notes.

It’s slow-going in Florida, though one more in seemingly endless line of committee hurdles passed this week. House-version of bill to legalize growlers passed latest subcommittee “with little fanfare,” Sun-Sentinel wrote. Much broader bill brought by Rep Steube (see Jan 13 and 22 issues) also passed, though only after controversial “barrier” provisions amended a bit. Perhaps more importantly for CBN readers: unique language Rep Steube included in original bill to adjust franchise law in the state does not appear in latest version. Both bills still face full committee and then full House, chamber where both originated. Up in Maine, “fair pint” bill got initial approval by House, AP reported today. And in California, bill intro’d to allow beer tastings at farmers markets (as wineries currently can).  

Meanwhile, Alabama wholesalers making clear their opposition to bill that would allow brewpubs to sell limited amounts for off-premise consumption. “I knew that the distributors were not going to be real keen on the idea,” state Rep K. L. Brown told the Anniston Star, tho he hasn’t lost hope. But with wholesalers insisting on no deregulation of 3-tier laws and small brewers insisting they do not seek to dismantle that system, Brown has some serious work ahead of him. So “he hopes to have a meeting” with 2 sides, according to paper: “If nothing else, I hope we can open up some dialogue,” Rep Brown said. Seems likely the meeting might also touch on some other issues too (see above).

At same time, brewpubs issued a bit of a blow in neighboring Georgia as original brewer-backed Beer Jobs Bill amended again. Recall, full Senate passed much-amended version of bill earlier this month (see March 16 CBN) and today, full House passed newly-amended version, according to the chamber’s live Twitter feed. Latest changes occurred in House subcommittee earlier this week. Amendments removed section that would allow brewpub patrons to take home “partially consumed” growlers. Instead, latest version of bill allows brewpubs to package and sell beer to distribs, which they also sought. It also expands amount of beer production breweries can offer as “souvenir” to visitors that pay for tours from 64 to 72oz, “a six pack, essentially,” according to Atlanta Journal-Constitution. Distillers now included too: a “souvenir” for them can be up to 750ml.

State distrib org lobbyist Martin Smith spoke in favor of unique tour structure at subcommittee hearing this week. “When you allow producers to have access and allow retail, you allow that slide into what happens in the rest of the world where large producers own everything,” he said according to the AJC report. “In Mexico, 90 percent of the market is controlled by one entity. It allows the manufacturer to own the retail.” While that’s not strictly accurate (a pair of companies, not one, owns the vast majority of the Mexican beer market), the fear of such “a slide” is refrain that’s worked when fighting 3-tier exemptions in many states already. The current bill is certainly not in the form Georgia brewers hoped it would be. But one committee member told Creative Loafing Atlanta that he expects it “will pass favorably out of committee and on the House floor.”

A new proposal to carve small players out of current franchise protections provided to beer wholesalers appeared in Alabama this week. Just-intro’d bill creates new designation of “small supplier” in state laws governing malt beverage suppliers’ relationships with distribs. ’Bama followed lead of Mass: “small suppliers” make up less than 20% of a distrib’s biz in prior calendar year. New proposed set of rules for such suppliers gives priority to individual contracts between wholesalers and brewers, opening up room for those contracts to include provisions not in code. But, if bill passes, a “small supplier” can terminate at “any time,” give 30 days notice that also IDs “successor wholesaler” that’ll pay FMV. If FMV not agreed upon, parties enter “final binding arbitration.”

Recall, this is the same state where bill intro’d to codify 6-mil-bbl limit for new “craft brewer” license. The Alabama Brewers Guild (ABG) backs the bill, written with genl counsel Eric Getty “and a firm out of Washington DC,” according to AL.com blog entry announcing intro. Getty claims moving brands is “impracticable if not impossible” for small brewers under current law, written when big brewers “had a decided power advantage over smaller wholesalers.” But “a new power imbalance has emerged” along with entry of many smaller brewers. “Most brewer-wholesaler relationships are positive,” Getty notes, a sentiment echoed by Back Forty Beer CEO and ABG prexy Jason Wilson. His co “will probably not directly benefit” from bill, author writes, since it “has positive relationships with its wholesalers.” But ABG chose to go for franchise reform “with the support of the US Brewers Association,” according to article.

“Join us to bring freedom of contract to Alabama’s beer industry and support an independent three-tier system,” ABG exec director Dan Roberts writes in open letter “to the individual beer wholesalers of Alabama.” After describing current “unfair” franchise law that “undermines free market principals [sic] and criminalizes fair business competition,” Dan argues that “it is also detrimental to those distribution companies that provide superior service to their suppliers and retail customers.” Under current law, distribs that “do great work” for small local brewers “cannot ‘beat the competition’ by acquiring brands sold by poorly performing competitors.” No official response yet from wholesaler association, though debate already mounting online, including some familiar arguments we’ve seen elsewhere. They include suggestions that carving out small suppliers 1) opens up law to Granholm-like challenges from large out-of-state brewers and 2) disincentivizes wholesalers to support small brewers’ brands at all, thereby devaluing those brands. Oddly, this second argument and Dan’s assertion that the proposed law helps “good distributors,” as he told AL.com, represent claims that one side is looking out for the best interest of the opposing side. Regardless of how true they may be, unclear how persuasive either argument will be.

(This article appeared yesterday in sister-pub INSIGHTS Express.) Molehills can quickly look like mountains under the kind of scrutiny currently paid to small brewers, particularly in thorny trademark dispute dept. But everything is not always what it seems, even in govt trademark filings.  For example, there’s no real dispute between Fort George Brewing in Oreg and Sierra Nevada, despite lengthy report in Law 360 and elsewhere.  In fact, Fort George and Sierra Nevada working on finalizing “coexistence agreement” to live and let live. “We’re working on a coexistence situation, mutually beneficial to both,” Fort George co-owner Chris Nemlowill told INSIGHTS. “Sierra Nevada is great to work with.  There are no issues whatsoever.”  And Sierra Nevada spokesman Ryan Arnold said: “Here’s the gist: there isn’t a dispute and goodwill prevails.” 

Here’s what generated the buzz: over weekend, small Oreg brewer Fort George filed an opposition to Sierra Nevada’s application to trademark “4-WAY IPA,” as Law360 reported. But behind scenes, the two co’s have been working together for months to figure out how Fort George’s 3-WAY IPA and Sierra’s 4-WAY variety pk can co-exist. The 2 applied for respective trademarks within months of each other; Sierra’s was approved first in late Sept. So Fort George had 30 days to either file an opposition for an extension of time to oppose, in order to keep its own application alive. It got first 90-day extension just within that 30-day limit, then filed for another, final 60-day extension.  That’s what lapsed over the weekend. Fort George filed “opposition” as a “federal formality since we didn’t finalize the agreement within a certain time frame,” said Sierra’s Ryan Arnold.  So seems like everything is gonna work out fine.

In recent speech to Pennsylvania craft brewers, First Bev’s JB Shireman had some choice observations about what he called a craft beer “gold rush”:  “These are the ‘gold rush’ days,” said JB. “Countless types of people are entering the craft space. Look at the ‘bonanzas’ of the past, they attracted miners, farmers, town builders, freighters, shop keepers, gamblers, card sharps, hookers, down-right whores and plenty of politicians…all looking to make a buck. They all imagined their place in it. What we have today is a competition of imaginations, with many tiers looking to capitalize on a piece of it.”

“I’ve been fired by every company I’ve ever worked for,” begins Alchemy & Science’s Alan Newman in tv ad that broke this week and currently in heavy rotation, including Major League Baseball.  “So what did I do?”  Alan continues: “I started the Traveler Beer Company.”  This funny ad depicts Alan as inimitably himself. It’s almost surreal for those who have known him going back to the original craft beer co he founded, Magic Hat.

Traveler shandies are first project to go big from Boston Beer’s brand incubation unit Alchemy & Science. Recall, Boston’s putting “significant TV media investment” behind it, and believes it’s a “promising opportunity,” Boston ceo Martin Roper said on last conference call.  Alchemy and Science will get $10-15 mil in investment, Boston also said in 4th qtr report, having upped that number from $6-12 mil at end of 3d qtr.  At Alchemy & Science, Alan Newman has spearheaded several other startups/rebrandings, including Angel City Brewing, Coney Island, Concrete Beach.  Traveler line of shandies is already getting good distribution and enthusiasm from trade.  Now with tv ads breaking and big push, will be interesting to see how much it sticks.