Colo’s Avery Brewing officially opens its new production facility next Monday, Feb 16, reported The Boulder Colorado Lifestyle.  Due to capacity constraints at its current 20K sq-ft facility, Avery could only moderately grow its biz in 2014, up 4% to just under 50,000 bbls and $17.8 mil in revs.  However with new facility, expandable up to 95K sq-ft, Avery expects to produce 68,000 bbls and generate $25.6 mil in revs this yr, according to paper.  Recall, Avery’s capacity immediately will double to 100K bbls, and by the time construction is complete it has potential to reach 500K-bbl annual production (see Jan 22, 2014 issue).  Avery also “expects to grow their barrel-aging program to 3,000 barrels by the end of 2015,” and plans to release packaged barrel-aged beer series in “late spring” along with “popular tap room exclusive beer Liliko Keplo witbier-style brew in 4-packs of cans,” paper added.    

Diageo will “launch a new craft-like beer unit in the US, Thump Keg Brewing Co, which will produce ‘spirit-inspired’ beers,” reported Just-Drinks.  Co will release two brands to start: a “hop-forward” Rye IPA (6.2% abv) that “uses the same grains as Diageo’s George Dickel Rye whisky to create the mash bill,” and an Agave Amber Ale (5.8% abv) that “uses the blue agave from Peligroso Tequila, which Diageo acquired early last year.”  Interestingly, Thump Keg’s website describes its brands as flavored malt beverages, as “neither contain spirits directly,” paper notes.   For starters, “both brands are rolling out currently” to Nashville, Austin, and NYC metro area markets with suggested retail price of $9.49 per 6pk; “twenty litre kegs are also available.”

Thump Keg will likely be added bonus to an already improving DGUSA beer portfolio, after launching Guinness Blonde.  Since launch, DGUSA improved trends to -3% in 2014, up 6% in last 13 weeks thru Jan 25 in IRI multi-channel + convenience data.  Flagship Guinness Draught up slightly, Guinness Extra Stout up 10% and Guinness Blonde Lager already a top-100 brand (at #100) in foodstores YTD thru Jan 25.

As “New NAB” continues evolution from private equity past to “strategic leader” in future, as North American Breweries’ Kris Sirchio told distribs in Tampa earlier this week, craft entries and breweries in its portfolio a key part of that transition.  Magic Hat and Pyramid have not shared much in craft segment growth in recent years.  But NAB’s not backing off of the brands or investments.  Indeed, Kris pointed out that NAB added 20K bbls capacity to its Portland brewery to build PacNW biz.  It has also added 3 pilot systems to breweries to “generate innovation faster” and sped up intro of Magic Hat, Pyramid seasonals to stay closer to consumers when they’re ready to switch. Then too, NAB has new brands on tap for Magic Hat, Pyramid and has launched a Genny Brew House series to expand beyond legacy beer, Cream Ale, etc.  While NAB has always focused on 100% in-house brewed products, now moving to more of “hybrid manufacturing” approach.  And Kris not ruling out contract brewing elsewhere. Acknowledging importance of liquids/knowledge, sales veep Doug Smith noted NAB has 66 2d level Cicerones in sales force, claiming “the highest percentage in the industry,” and has 5 taking Master test in May.

At Magic Hat, tweaking timing of fall (Wilhelm Scream) and winter (Snow Roller) seasonals paid off with depletions +21% and +13% respectively.  New for 2015: Single Chair Golden Ale will move from heritage brand to spring seasonal and new Stealin’ Time will be summer seasonal.  Also coming: Electric Peel IPA (May 1 draft, pkg in Jun), plus variety 12-pk in cans. Meanwhile, 30-yr-old Pyramid battlin’ huge fragmentation in Pac NW, but depletions +12% in Oregon and steady in Seattle foodstore scans.  Outburst IPA is #1 imperial IPA in northwest, sez NAB, up 40 straight mos.  This mo, Pyramid IPA will intro, joining Outburst and Thunderhead in category.  Seasonal variety packs and IPA collection also coming.  Finally, as part of NAB’s attempt to revitalize “neglected” Genny brand, brewmaster Dean Jones intro’d Pilot Batch Brew House series with American Imperial Marzen, a Salted Caramel Chocolate Porter and a Winter Warmer.  Coming: Imperial Black IPA and a Scotch Ale.     

Brewer on brewer trademark quibbles, squabbles and worse continue apace, not likely to let up as new brewers and brands keep coming on. But challenges to small brewer trademarks (or trademark filings) pop up from beyond (sometimes well beyond) the beer-o-sphere. This week, energy drink leader Red Bull took familiar hard line on defending its marks, this time corralling bulls, oxen and perhaps other bovines and branding them as theirs and theirs alone. The co filed challenge against TM registration for Old Ox Brewery, a small startup in Virginia. Why? Old Ox’s filing indicates its mark (pretty stark depiction of an “O” and “X”) “can be used in any color, including red,” and “an ‘ox’ and a ‘bull’ both fall within the same class of ‘bovine’ animals,” according to Red Bull’s filing. Further, since the animals “are virtually indistinguishable to consumers” (not to mention most everyone but a trained veterinarian, since “in addition, an ox is a castrated bull”), Old Ox’s mark is “likely to cause confusion.” The yuks come easy in this case (easier than yaks and other cow-like creatures at least), but remember Red Bull has long taken defense of its trademarks very seriously.  

In response to the opposition, Old Ox president Chris Burns provides peek at content of conversations with Red Bull folks prior to its filing. “Demands” included “never use the color red, silver or blue; never use red with any bovine term of image; and never produce soft drinks,” according to his letter. Since Red Bull filed its opposition “when we refused to succumb to your demands,” Chris and team “can only interpret your actions as one thing--bullying.” He offers promise that Old Ox will never “produce energy drinks,” but not more than that. We’ll see where this goes, but folks over at TM-focused Duets Blog ain’t convinced of Red Bull’s case. They also remind that in these cases, where identical or similar images or words aren’t in question, it’s “the similarity of the overall commercial impression of the marks,” that must be analyzed. Tho proving this “overall” likeness could be tricky in legalese, this kind of infringement can turn out to be just as damaging to the brand-owner.

In other TM-related beer news: a Minnesota brewer had to change the name of its Rated R brand after no less than the Motion Picture Assn of America sent along a cease and desist. So now a small Minneapolis brewery, 612Brew, sells an “Unrated” rye IPA after deciding not to fight the big Hollywood trade group. That could argue against playing on existing cultural phenomena when naming or marketing beers. (How many brewpubs do you know that sells a movie or music-referencing brand?) But “remember that the literal elements of the mark can sometimes outweigh the cultural references,” Law360 wrote in round-up of 2014 TM cases recently. Other lessons in its view: all alc bevs are treated equally and even non-alc bevs can be seen as competing (or “related”); descriptive words are hard to defend; foreign words can be challenged on the basis of translations into English as well as similar-looking words; and “family pride does not entitle you to a trademark.” (Here, Law360 notes ongoing dispute over Schlafly mark in beer, “currently suspended for settlement talks.”)    

Here’s a handful of quick notes to keep you up to date on many moving pieces of state legislation. The small brewer and beer distrib-backed bill Ariz passed thru its first committee, while ASWSA bill held. But legislators seem to be getting fed up with industry infighting. “Each side says the other side won’t talk. And as a lawmaker, I’m getting tired of it,” a committee member said during the meeting, according to AP report. “Who’s lying to me?” he asked.  . . .  A legislator in Florida also expressed frustration after one of bills to allow 64-oz growlers there amended last week. Amendment seemed to address that pesky “tourism exception,” but distrib advocates balked, so committee tabled bill. But “we’re going to move forward with a growler bill this year, we’re going to move forward with a tasting room bill and we’re not going to have any more lawsuits when it comes to this tourism exception,” one legislator said. Further, “this year it’s up to the distributors to come to the table and bring some reasonable proposals,” sponsor of growler-bill in question noted, according to WFSU.  . . .  Elsewhere, Iowa legislators look to increase upper limit of alcohol content allowable in state-defined “beer,” according to the Des Moines Register. Wyoming currently requires brewers to produce a minimum of 100 bbls per year and a bill intro’d there could lower that to 50 bbls, per AP report. Tennessee lawmakers could allow students age 18-20 participating in beer-manufacturing courses to taste their beer, WBIR in Murfreesboro reports.

Ballast Point and Stone Brewing tied for most new placements in Albertsons’ spring set this yr, according to Albertsons report CBN saw.  Ballast added Pale Ale 6 & 12pks, Grapefruit Sculpin, Even Keel, Dorado Double IPA and Imperial Porter 6pks.  No lost placements for Ballast.  Stone added IPA and Go-To Session IPA 12pks, Seasonal, Ruination and Cali-Belgique 6pks, and gluten-free Delicious IPA 22oz bottles.  Just 1 Stone SKU out of Alberstons, Oaked Arrogant Bastard 4pks.  A couple other San Diego brands got some local love too.  Green Flash and Pizza Port each added 3 new 6pks without losing any placements: Green Flash Soul Style IPA, Hop Odyssey and 30th St Pale Ale; and Pizza Port’s Swamis IPA, Session IPA and Chronic Ale.  Coupla Calif brewers further north, Firestone and Anchor, both got 3 new placements as well, while losing just one: Union Jack, Easy Jack and Privo Pils 6pks got in, while Seasonal 6pks were pulled.  And Anchor swapped out its flagship Ale for 3 newer brands: California Lager and IPA 6pks, and Variety Pks.  Lagunitas added a pair of 6pks, Pils and Sucks, without losing any placements.  And Karl Strauss, Golden Road, and Coronado also got a new placement each (Karl Strauss had two new, but one was swapped out). 

Meanwhile, a coupla larger Calif cos didn’t net any new placements: Sierra Nevada had seasonal 12pk and Keller Hefe 6pk swapped out for pair of new brands, Hop Hunter and Nooner 6pks; Lost Coast swapped in White Sessional IPA for Alleycat Amber 6pks.  Hangar 24 and Indian Wells each lost 2 placements. And a bunch of private label brands lost placements: 3 Metolious SKUs, and 4 Wingwalker SKUs. 

Mixed Bag for Outta Town Cos; NBB Only One to Gain More Placements  Not nearly as many new placements in SoCal Albertsons for brands based outside of Calif.  New Belgium faired best of all non-locals, adding a pair of 6pks without losin’ any placements: NBB Trippel and new Slowride Session IPA.  Boston Beer lost placements for a bunch of older brands like Latitude IPA, Noble Pils, Whitewater IPA, Tasman Red, and White Lantern Wit, as well as a lost Boston Lager 22oz bottle placement.  But in return got pair of new Rebel 6pks (Rouser and Rider), as well as Seasonal 6pks, Angry Orchard new Hop N Mad 6pks, and Curious Traveler Lemon Shandy 6pks.  Craft Brew Alliance lost 5 placements, including Widmer Rotator IPA Series and Seasonal 6pks, Redhook Audible 12pks, CBA Seasonal Variety Pk and Kona Longboard 10pks.  Only two SKUs, Kona Castaway 12pks and Omission IPA 6pks, got new placements.  And Deschutes swapped Fresh Squeezed IPA 6pk in for Inversion IPA.   

AB and MC brands in craft space didn’t net any new placements either.  Goose Island IPA was only new placement for Goose, while Goose Urban Wheat 12pks and bombers, and Honkers Ale 6pks lost placements.  Shock Top lost Honey Bourbon Cask Wheat 12pk placement.  Blue Moon swapped out flagship Belgian White and Farmhouse Red for new White IPA and Horchata Ale 6pks (MC also lost a couple Coors Batch 19 pks, and a Third Shift).  Then too, Flying Dog lost 3 placements, as co continues to focus most on local MD sales.  And both Alaskan and Full Sail lost a placement each.

Bell’s, the largest of the Michigan craft brewin’ bunch, expects to produce 410,000 bbls in 2015, sez Crain’s Detroit Business in lengthy review of flourishing Mich craft brewing scene.  That’d be about 29% growth, another 90K+ bbls, and would make Bell’s the 7th craft brewer to crack 400K bbls.  Bell’s also recently opened up its separate Upper Hand Brewing in November.

Lots more expansion $$ planned by other Mich cos as well, paper notes.  Third largest Mich craft brewer, Atwater, plans to invest about $25 mil in various expansions over next handful of yrs.  It’s finishing up Detroit brewery expansion that’ll up capacity to 100K bbls, and also “is investing $9 million in similar facility in Austin Texas, and in North Carolina.” (Note: CBN originally reported that Atwater expects to spend $15 mil on 80K sq-ft Austin facility back when expansion was announced one yr ago; still no details on NC facility.) After strong 50% plus growth to 40,000 bbls last yr, Atwater expects to grow another 55% in 2015, and double production in 2016 to well over 100,000 bbls as expansion projects continue to add capacity.  Austin and North Carolina breweries “should come on line by the end of 2016,” owner Mark Reith told Model D Media in separate article.  Next yr Atwater is “working to enter [more] Canadian markets, along with Colorado, California, New York, and New Jersey (just entered Ontario region end of Jan).  The goal is to hit 300,000 barrels of production within five years,” with around half of that volume out of Detroit.  It’ll also “launch new Atwater Spirits and Detroit Dry Cider brands this year and plans to begin offering 16-ounce can options for some of its beers,” noted paper. 

Then too, recall Founders is investing $40.4 mil in expansion that’ll boost production cap to 900K bbls/yr; Arcadia Brewing finished $7 mil expansion in May to boost capacity to 26K bbls.  Short’s and New Holland (not mentioned in Crain’s) each expanding/adding capacity/upgrading equipment last yr.  And several smaller craft cos in Mich are expanding too.  Crain’s highlights Northern United Brewing in particular, combo of brewpubs including Jolly Pumpkin, North Peak and Grizzly Peak which sold 7,500 bbls in 2014 and generated $10 mil in revs, up 40% yr over yr.  Gotta note, that’s $3 mil more than Atwater revs last yr with 32,500 fewer bbls (tho revs likely include its brewpubs and craft spirits biz too) according to Crain’s.  Jolly Pumpkin will open up a third location in midtown Detroit this yr, paper added. 

27 New Craft Breweries to 158 Total in 2014; What Happens When the Music Stops?  By end of 2014, Mich had 158 craft brewers, as 27 new breweries opened their doors according to BA stats, paper notes. (That’ll get slight tweak, recall, as 30% stake in Founders picked up by Mahou San Miguel takes co outta BA stats.) In Mich as elsewhere, “the hot market is for small breweries and neighborhood pubs,” sez local attorney, Joseph Infante.  Yet “the big money is flowing, private equity, investors, etc., is flowing into the industry and there’s too much access to money right now,” Bell’s founder, Larry Bell said.  “It’s rapidly changing the feel of the industry, and there’s going to be a plateau; when the music stops and you don’t have a chair, it gets dicey and a bank or brewer is going to get buried.”  Ultimately “small brewers will continue to grow, but at the top, it’s going to consolidate…and those of us who were at the beginning of the craft brewing industry, we’re looking for exit strategies,” he said.  “Bell’s will eventually be run by his children,” Crain’s added.       

Chicago’s Revolution Brewing doubled production to “just over 50,000 barrels in 2014,” co said alongside announcement of big expansion project to keep up with remarkably fast-paced growth.  Recall, in 2013 co tripled production to 25K bbls, according to Brewers Assn stats.  Revolution will add “a 120-barrel brewhouse, several 800-barrel fermenters and other equipment” into “neighboring space within the same building” that’ll ultimately boost capacity to 300,000 bbls/yr, per release.  Then too, “the expansion will also allow Revolution to add more variety to its lineup including” new pale ale, Fist City, which “hits shelves in 12-ounce cans in April.” Co received “small business loans form First Midwest Bank and SomerCor 504” to help finance the project.

Revolution is #4 Craft Supplier w/ #2 IPA in Chi IRI Foodstores  Revolution tripled its biz in Chicago IRI foodstores last yr to become 4th best-selling craft supplier in hometown supers.  That put sales ahead of Bell’s, Sierra, Two Brothers, and Craft Brew Alliance.  Co’s Anti-Hero IPA actually outsold Lagunitas IPA here, tho still behind Little Sumpin’ Sumpin’ for best-selling IPA spot (at #6 craft brand in mkt).

In annual consumer research of beer brand popularity, more beer drinkers in big US cities report taking craft route overall and Blue Moon continues its rise. Just over 15% of legal age beer drinkers across the top 10 US metro markets reported choosing any craft or microbrew brand in the 30 days before taking Scarborough Research’s annual survey. That’s up almost a full point from the survey last yr and up 5 points over the last 5 years. The graph below shows the percent of beer drinkers that reported “any microbrew/craft” consumption in the top 10 US markets. Note that number dipped a bit in more than half of these markets, but remember that these survey results do not indicate volume or sales, only the percent of drinkers that had at least one craft brand in the last month. Craft sales growth remained robust throughout the timing of this survey.

Keep in mind the survey’s methodology when analyzing these stats. Scarborough asks thousands of 21+ adults in each market about their beer consumption in the 30 days before taking the survey. Those results are then projected out based on each market’s total population. The results here represent answers to surveys taken between Aug 2013 and Aug 2014. Scarborough asks respondents if they drank beer brands on a provided list as well as “any” domestic regular, domestic light, import or “microbrew/craft.” But it doesn’t define those terms. So a greater portion of respondents regularly reports drinking the biggest craft brands than “any craft.”  For example, in Dallas/Fort Worth, almost a quarter of respondents said they had a Shiner Bock in the last month, up from about 19%. But just under 10% of respondents said they had “any microbrew/craft.” It’s the same in Boston where over 35% of beer drinkers had at least one Sam Adams in the last month (+3.5 pts), even tho just under 19% of beer drinkers said they had “any craft” (-1 pt).

Whether or not they consider it a “craft” or “microbrew,” lots of beer drinkers pick up a Blue Moon at least every once in a while. Just 3 brands make top-10 brand list in all top-10 markets: Bud Light, Coors Light and once again Blue Moon. It made every list in 2012 too, when about 15% of beer drinkers in these mkts said they had one in the last month. Just under 16% said so last yr, about half a pt more than reported “any craft.” Blue Moon’s the #2 most-reported brand in San Francisco, just behind Bud Light. It’s #3 in Chicago and DC and #4 in LA, Boston, Atlanta (where it returned to top 10) and Houston. More drinkers reported choosing a Blue Moon in DFW than previously, about the same said so in Boston, but its popularity dipped a little in Chicago, more in NYC and a lot in LA (where Shock Top snuck into top 10).

Samuel Adams appeared on all but one top-10 list (DFW) back in 2009-2010. But it has since dropped off a couple more lists, including SF last yr. Still, it’s #2 brand in DC behind Bud Light and gained ground in Atlanta and Chicago. Sam Adams Light returned to Boston’s top-10 list at #7. Fellow Boston brewer Harpoon continued its steady ascent there, now at #5 reported by about 13% of beer drinkers, up 5 ranks and 2 pts in 2 yrs. Just under 19% of beer drinkers in Boston reported having any craft in the last month, but that’s down about a point since last set of surveys, when that number grew 4 pts.

That pattern shows up in a number of cities: big growth in the number of beer drinkers reporting “craft” in 2013 surveys and then a drop-off in 2014. DC stats almost identical to Boston and same story in Chicago. These are also the markets with the highest percent of craft drinkers. Both Stella Artois and Leinenkugel appeared in Chi’s top 10, reported by about 12-13% of drinkers at #7 and #8. Leine pushed back Goose Island, at #8, reported by 10% of beer drinkers, -0.8 pts. Dip in number of beer drinkers reporting craft also seen in Philly. There, over 30% of beer drinkers had a Yuengling sometime in month before survey. That overall pattern is exaggerated in San Francisco. Tho the number of beer drinkers reporting “any craft” jumped 8 pts there previous set of surveys, it dipped back down almost 7 pts to about 17%. That’s slightly more than the portion who had a Sierra Nevada, which ticked up about a pt, pushing brand up 2 ranks to #4. Anchor Steam also appears on SF list, down 1 slot to #9, reported by 10.5% of beer drinkers there.

As graph shows, cities with lowest percent of beer drinkers reporting craft consumption saw biggest increases in those measures. It grew 2 pts to just under 13% in Atlanta, even tho top local craft brand SweetWater fell back 4 spots to #9, just behind Sam Adams. Look to NYC and big Texas markets to see biggest gains.

Join us for BMI’s annual Spring Conference May 11-12 in Chicago, another deep dive into the High End of the US beer biz, the engine of growth and opportunity for the last many yrs.  Just added: AB’s prexy of its new hi-end unit Felipe Szpigel.  The conference will also feature an all-star panel including other key leaders of the high-end; Constellation prexy Bill Hackett, HUSA prexy Dolf van den Brink and Boston Beer chairman Jim Koch.  The panel will be moderated by BMI’s Benj Steinman.  Mike’s founder Anthony von Mandl, a leading innovator in flavored malt bevs, will also present at the conference.  We’ll feature Firestone Walker’s David Walker, one of the fastest growing craft brewers and Scott Whitley, who just took the reins of Tenth & Blake at MillerCoors.  Dan Wandel and Bill Pecoriello will dig into the off- and on-premise trends, probing the extensive IRI and GuestMetrics databases.  BMI publisher Benj Steinman will provide his annual detailed review of the segment.  More speakers will be added.  Once again, we’re returning to the centrally located and appropriately high-end Ritz-Carlton in Chicago for a full day of thought-provoking presentations, Q&A and plenty of networking time, including two receptions.  Click here for more info.  Click here to register.