Boston Beer scored 9^th straight double-digit depletions gain in Q3: +21%.  Shipments up 23%, 7^th straight double-digit gain in that measure.  Boston will easily blow past 4 mil bbls for the yr, more than doubling since 2009.  Yr-to-date depletions +24% thru Oct 18, Boston said.  But CEO Martin Roper doesn’t expect that pace to continue, given tuffer comps and bump from new brands “will not be replicated” in Q4.  So Boston still guiding to 20-24% volume growth for the yr.  Beer, tea and cider all grew in Q3 and for 9 mos, tho Boston doesn’t break out segment trends. 

Boston’s gross margins about the same vs last yr in Q3 and for 9 mos at 52-53%, but outsized jumps in ad, promo and selling expenses made in Q1 and Q2 not repeated in Q3.  Indeed, Boston got 20%+ growth while those expenses up “just” 16% (had jumped 36% in 1^st half) in Q3.  So operating income zoomed 44% to $60.6 mil in Q3 and oper margin expanded from 19.5 to 22.5.  For 9 mos, operating income +$30.5 mil, 36% to $114.5 mil and margin widened full pt to 16.7. 

Lookin’ ahead to next yr, “our focus will be on second year growth of some of our successful 2014 launches, rather than continue our high pace of new brand launches,” said Martin.  Boston’s “preliminary assumptions” for 2015: 1) volume growth of 10-15%; 2) price increase of 1-2%; 3) ad, promo selling costs +$25-35 mil  (vs $37-45 mil pop this yr); 4) big bump in investments behind Alchemy & Science brands, from $3-$5 mil this yr to $6 to $12 mil, tho that could “change significantly”; 5) full-year capital spending of $80-$100 mil, a significant cut from $150-$160 mil this yr, tho could be “significantly higher” depending on need to meet growth.  Boston has finished several big “capital and efficiency projects” to boost capacity.  Now aims to “take full advantage of these increased capabilities” via improved training and supply chain improvements.       

The 21st Annual Beer Insights Seminar at the Waldorf=Astoria in NYC on Nov 9-10 has a stellar lineup, including top craft pioneers Deschutes ceo Gary Fish and Brooklyn co-founder Steve Hindy.  We’ll also bring you a provocative panel to explore one of the industry’s hottest topics: franchise law carve-outs for small brewers and other 3-tier issues.  Veteran industry attys Marc Sorini and Mike Madigan will be joined by Manhattan Beer’s chief operating officer Bill Bessette.  Expect plenty of craft talk too from panel on “Changing Landscape in Beer and Beer Distribution,” with Yuengling’s Dave Casinelli, Columbia Distrib’s Chris Steffanci and consultant Joe Thompson.  Execs from each of the top 4 US beer suppliers will present topical talks.  We’ll provide extensive q&a opportunities and plenty of networking time.  Sign up today; seating is limited. Click here for more info.  Click here to register.  

Wash State’s American Brewing Co, a “recent addition to the world of publicly traded companies” and “one of only 5 publicly traded craft breweries,” issued letter to shareholders to outline the yr.  So far co raised “approximately one million dollars” solely used for “expanding our brewing facilities and remodel of our tasting room,” ceo Neil Fallon assured. Expansion helped American up brewing capacity by 6x and begin shipping some beer across the border to Canada.  Co is fairly tiny; its revs up 5% thru Jun to just over half a million dollars, $508,394.  Yet co is ambitious nonetheless, listing “grow through acquisitions” as a main goal: “we will search for breweries which meet specific criteria of both revenue and geography for accretive mergers,” stated Neil.  

It’s no secret, “craft brewers haven’t perfected the crowdfunding formula,” reported Fortune Magazine in article titled “The Perils of Crowdfunding a Beer.” Stone Brewing campaign was latest example, ultimately raising $2.5 mil “in just six weeks…the second-most successful effort on Indiegogo’s website,” but not without challenges.  Recall “some people were infuriated by that [pre-selling future beers to help fund Berlin brewery project,” Greg Koch told Fortune.  So “Stone reacted quickly, altering its message and sticking to a promise of selling quality beer,” and “the negative online chatter faded away immediately.” 

“There are 23 breweries actively raising money on Kickstarter today,” noted Fortune.  While there’ve been “more than 800 beer-related projects…launched on Kickstarter,” with a success rate “slightly exceeding” the site avg, there’s instances where “backers aren’t always seeing beers hit bar taps and retail shelves,” sez mag.  One, Kansas City-based Wilderness Brewing, “raised $41,000 from 372 backers in 2011,” yet more than 3 yrs later “backers are still waiting to taste their first beer.”  Wilderness’ most recent contact with its backers was thru a blog-post this Aug explaining “they still haven’t nailed down a location to build a brewery – an update that infuriated backers.” Texas-based Brewery Incubator “raised more than $36,000 last year,” with concept to build a facility for other capacity/capital-constrained brewers.  After opening in late 2013, it closed this summer “after the new business faced eviction from its landlord.”  And Wisconsin-based Brenner Brewing “raised nearly $26,000 more than two years ago” for pre-sold merchandise, and “is still hearing from people who backed the project and want to cash in.”  It probably wasn’t worth the money, Founder Mike Brenner told mag, but he still sees benefit of crowdfunding, since he could “impress” other investors by demonstrating how many individuals were backing his project.  “Communication and transparency is very important,” chief executive of Indiegogo, Slava Rubin told mag, advising cos to provide “regular updates” and “keep in touch with backers after the campaign has ended.” 

Stone’s building a 125,00 sq-ft “distribution center for its national clients in Vista” Calif, expected to be open by November, reported San Diego Business Journal.  Recall, that’s Stone’s 4^th building project announced this yr, as 1^st project was Maui-Stone Craft Beverages distribution center in Hawaii, followed by announcement of its Berlin brewery, Virginia brewery, and now Vista Dist Center.  “This will be our second distribution center and handle our national accounts,” while continuing to use Escondido distribution center for local distribution, spokeswoman Sabrina LoPiccolo told paper.  Stone currently distributes 35 brands.  Just this week “total employment ballooned to 971.”  Its brews are available in 41 states, Wash D.C, Puerto Rico and two Canadian provinces.   

Another somewhat left-field, yet intriguing addition to Brew Hub’s portfolio announced, that shows just how far co can reach to find brewing partners.  The latest brand is called “GolfBeer,” made by three top pro-golfers – Freddie Jacobson, Keegan Bradley, and Graeme McDowell – with Brew Hub’s help.  Each golfer helped develop his own beer under GolfBeer Brewing Co name: a Celtic Style Pale Ale, New England Style Lager and Scandinavian Style Blonde Ale.  Each beer is in 4.5% - 5% ABV range, aiming toward sessionable, “easy drinking” craft beers, noted USA Today.  To start, brands will be available to Fla mkt this mo on draft “at select golf courses and on-site restaurants and country clubs,” followed by “cans in December and bottles during the first quarter of 2015.  Distribution will (then) expand to grocery stores, bars and other restaurants in Florida and then to other regions.”  Florida was a top choice to debut the brews ‘cause of recent “craft beer surge and the huge volume of golfers and courses,” noted Tampa Bay Business Journal separately.  “GolfBeer” getting plenty of free publicity, with tv profiles on CNBC and the Golf Channel.

As Cigar City searches the Southeast for a 2^nd brewery location, founder Joey Redner offered some extra details about brewery-to-be to NC paper Mountain Xpress.  Likely would be “investment around $25 million” that’ll include “brewhouse in the 50-100 barrel range…canning line, a large format bottling line, a smaller pilot brewery and a tasting room,” and “likely employ about 75 people,” reported paper.  “We’re still looking at Florida too…[but] Western North Carolina as an area has always appealed to me,” Joey told paper, who’s been visiting the area most of his life.

Georgia Craft Brewers Guild is ramping up efforts to change state law to allow in-state breweries to sell beer directly to consumers.  In preparation for upcoming legislative session in mid-Jan, Guild recently hired a lobbyist and launched a website, GABeerJobs.com (with help from SC Brewers Guild, which knows a little something about changin’ state law), to promote economic impact of craft brewers in-state and attempt to obtain 30,000 signatures in support of “modernized” beer laws, reported Atlanta Magazine.  Recall, 3-tier talks in Ga heated up earlier this yr, but previous bill (HB 314) ultimately “tabled last spring” as state senate determined that “in Georgia, producing, distributing and retailing beer must be handled by three separate entities (see Feb 20 issue).”  Still no bill, tho hoping to have one by November or December.  So no specifics yet regarding extent GCBG lookin’ for brewers to be able to direct sell.

“This industry is not keeping up with the demand for product in the state of Georgia,” recently appointed president of the Guild, Nancy Palmer told mag.  “We’re consuming 6.2 million cases of craft beer, but we’re only making 2.2 million of that.”  Ga currently has 34 breweries but “based on population average we should have 75,” she pointed out.  Then too, it’s also about attracting out-of-state breweries to come in and build.  Several breweries, including Sierra, New Belgium, Oskar Blues, all were “looking at Atlanta because of transportation” for their 2^nd facilities but ultimately chose NC, and breweries like Stone and Cigar City “didn’t consider” Atlanta at all.  “Such an update would put Georgia in line with just about every state in the union (yes, even our neighbors in the South),” mag stated.

An “impromptu debut” of Ballast Point’s new, large and “rather stylish” tasting room at its new facility in Miramar neighborhood of San Diego had no problem “becoming packed to capacity” on opening day, reported San Diego Reader.  Current capacity is over 250 people reportedly, but “when the dust is settled” and the kitchen and outdoor bar are finished, Ballast will have capacity for 573 people in 21,000 sq-ft of space, cco Earl Kight told CBN.  That’s more than double the size of their restaurant, and over 10x the size of their other tasting room.  “In short, it’s a stunning venue,” sez paper, with 78 Ballast beers on tap and 37 additional taps on their way “once the outdoor bar opens.”   

Ballast has been brewing beer at Mirarmar since late Jun, steadily working its way to eventual 300K-bbl cap space.  Most recent additional fermenters arrived last week, sez Earl.  It “should be a safe bet” to reach 125-130K bbls for the yr, as co projected earlier this yr.  Co still up 58% yr-to-date in San Diego metro with Crest Dist, now “a little north” of 1/3 of their biz, still on pace for over 600K cases in 2014.  Ballast also recently added distribution, as co re-entered Colo with Elite Brands, and just switched distribs in NC from Freedom Beverage to MC network (Mims) to service the in-state chains.  Right off, Ballast got placement in Harris Teeter chain, Earl noted.   Ballast remains one of the fastest growin’ craft brewers; up 140% in IRI MULC thru Sep 7.  Jumped to the 28^th highest selling craft co, just behind Uinta, FX Matt, and Anchor.  Its Sculpin IPA nearly tripled its sales thru Sep 7, and leapt from 119^th to 62^nd  best-selling craft brand (and countin’) this yr.

Rounding out Q3, craft segment up 19% for 13 wks thru Oct 5, slightly slower than +21% trend yr-to-date, in IRI Multi-Outlet + C-Store data.  Craft still managed to grab a full share of $$ to over 7 to-date.  Trend “slowed” a bit further to +17% in latest 4 wks.

So it’s same ol’ story for top craft cos 3Qs thru the yr.  Nearly everyone’s trends slowed for 13 wks, with Sierra (+15.5%), Bell’s (+36%), and Stone (+42%) the only slight exceptions -- up a couple points higher for period.  Boston Beer (including ciders & teas) up 23% for 13 wks, causing YTD trend to dip below 30% (just barely, to 29%) for first time this yr.  New Belgium up 35% YTD, yet slowed to +24% for 13 wks, and +18% for 4 wks as co faces tuffer comps toward end of the yr from late 2013 new mkt entries.  Gambrinus (+6%), Craft Brew Alliance (+7.5%) Lagunitas (+60%), Deschutes (+9%), and SweetWater (+36%) round out top-10 cos for 13 wks.  Gotta note, scanning down a little further Duvel USA the only top 20 craft co down for 13 weeks, -4%.  That’s driven by tuff Boulevard Wheat trends, down double-digits thru Sep 7.

Sierra Variety Pk Makes Top-30 Scan Brands Sierra Variety Pk now a top-30 scan brand at #30 spot that’s previously been rotating nearly every mo between Lagunitas Seasonal and Ninkasi Total Domination IPA.  Now both of those off the list as Sierra Variety Pk snagged half a share of craft $$ to-date in the process.  Recall, while Rebel IPA grabbed limelight as largest craft brand intro in history this yr, Sierra Variety Pk also managed to break previous sales record for intro brand in scans, at least in last 10 yrs (see Aug 28 issue).  Just under half of its total sales in scans for the yr in last 13 wks.  Variety packs reached nearly 7% of Sierra’s total scan biz during the period.  More like 5% of Sierra’s biz yr-to-date.