Bosco Lujan, a former FEMSA (Heineken) exec, “and now a Mexican craft beer advocate,” is making an effort to increase awareness of Mexican breweries based just over the border and becoming more available in San Diego, reported UT San Diego.  Cerveza Cucapá and Cerveza Tijuana founders both sat on panel with Ballast Point co-founder, Yuseff Cherney and Firestone Walker Calif sales director, Jesus Gomez discussing their stories and promoting craft beer at an event last night hosted by Mexican Businessmen’s Association, “a group promoting cross-border trade.”  This craft-focused event was first public forum for the San Diego branch of the assn.

However “recent proliferation” in Baja California “doesn’t always translate into more sales in the South Bay,” city resident and beer marketing teacher at San Diego State University, Gonzalo Quintero explained to paper in separate UT San Diego article, one day later.  On top of high import costs for Mexican craft cos, “to be honest....craft beer drinkers don’t care because it’s Mexican and Mexican beer drinkers don’t care because it’s craft,” said Gonzalo, tho there’s still oppys for “cross-border” brews in his eyes. 

San Diego County Cities without Breweries? Then too, San Diego County’s 2d largest city, Chula Vista, and National City oddly don’t have any breweries nearby self-proclaimed “Craft Beer Capital,” city of San Diego.  Tho some are preparing to pounce on the oppy, paper pointed out.  “You look at the number of breweries in Vista and the population there and then you look at us” and “you kind of scratch your head,” said Scott Donaghe, principal planner for the city.  Vista has 11 breweries with 2 more on their way, and “less than half the size (population).”  So whyzzat?  Some argue that heavily Hispanic population “won’t welcome” the craft trend, or that “city regulations are too restrictive.”  But “this place is ripe for opportunity,” said Gabe Gutierrez, a Chula Vista native and policy analyst for county Supervisor.  The city recently “revamped zoning regulations to allow more brewpubs and beer tasting rooms,” and now “two breweries (Bay Bridge Brewing and Otay Lakes Brewery) are on the horizon,” said paper.

While we’re waiting here in NYC ’burb for a new BJ’s Restaurant Brewhouse to open, we checked in on its latest financial report for yr-to-date thru Jun.  BA estimates BJ’s sold 44K bbls in 2013, up 14%, producing some of its beer in its own outlets, contracting it elsewhere (recall, it’s one of initial Brew Hub Fla brewers).  How’s biz?  Like most on-premise these days, especially casual chains, it’s tough.  For 6 mos thru Jun, revs up healthy $38 mil, 10% to $425 mil.  But all of gain, and then some, from incremental $46.5 mil pop from 17 new restaurants.  Same store revs off $8 mil, 2.3%, traffic flattish and avg check dipped 2%.  Meanwhile, higher operating and other costs squeezing profits/margins.  BJ’s operating income dropped 27% for 6 mos to $16.5 mil and margin narrowed from 5.8 to 3.9.  Net profits dropped 25% too.   Despite tuff environment BJ’s continues to expand, pretty quickly.  Now has 150 restaurants in 18 states that feature its “proprietary craft beers.”  Also has signed leases/land purchase agreements for 13 more locations it plans to open in fiscal 2014/15. Indeed, it expects total cap ex in fiscal 14 to be $90 mil for 11 new outlets and maintenance of current restaurants.  BJ’s also apparently got into 3-tier glitch in Tex.  Signed agreement with state alc bev comm in Jan this yr to end 3d party contract brewing arrangements and “transition production and supply” of its brands for Tex restaurants through a pair of licensed brewpubs it will complete by Jun next yr.  

That was fast.  Clown Shoes Brewing found itself victim of “a cavalier, unexpected and unethical shot in the chin. From a friend,” earlier in the week.  That’s how it first characterized a disagreement with its Georgia wholesaler Quality Wine & Spirits, which announced it was “getting out of the beer business” as of Sep 30, in letter early last month.  Clown Shoes then took to its company blog (for first time in nearly 2 yrs) Monday to tell fans in Georgia they won’t be seeing Clown Shoes anymore, claiming Quality tried to sell Clown Shoes brand rights, was unsuccessful and then refused to release rights to Clown Shoes’ chosen distrib.  But just two days later, all’s well that ends well it seems, as Clown Shoes posted: “surprisingly the owners and management of Quality Wine & Spirits took to heart our plight and have worked with us aggressively this week to resolve the conflict.  We no longer have any hard feelings toward Quality and ask that our customers follow suit.  They are real people over there.  They had other real problems to deal with that were unavoidable over the last two weeks, but once they understood how much this was hurting us it became a top priority to help us find a new home.  They have now done so in a reasonable and decent manner.”  Clown Shoes will move to General Wholesale possibly as early as next week.

Usual lineup of diverse group of brewery folks from variously-sized breweries from all over the US presented snippets of stories alongside medal-winning beers at GABF media lunch last week.  The group represented wide variety of geographies and sizes, all growing and either expanding or just finished a facility expansion.  And most took the opportunity to thank laws that allow small brewers to serve on-site and/or self-distribute.  

Rural and Urban Breweries Planning Expansions in Mo, Wyo and Md  Co-founder Joleen Senter Durham repped smallest outfit on pair of brewer panels, Piney River Brewing out of Bucyrus, Mo, a farmhouse brewery she and her husband thought up almost 4 years ago looking to create “craft beer that celebrates the Ozarks.”  The pair opened the brewery with a taproom on their farm, which Joleen says has already become a destination even though it’s 2 miles down a gravel road.  It took a while to navigate some local regulations, but Piney River already has plans to expand with a new bigger barn taking over most production, leaving the original facility to take on specialty production.  Joleen expects the brewery to churn out 1800 bbls this yr and head toward 4000 bbls next, but could do upwards of 6-8000 if demand requires it.  She hopes to eventually distribute up to St Louis and Kansas City, but is focused locally now.

Similarly, Travis Zeilstra told the tale of Black Tooth Brewing of Sheridan, Wyo.  The small brewery and taproom faced “several growth issues” since its founding in 2010, but it’s “currently in the process of building a larger production facility” on site.  Black Tooth looks to grow 5-600% in the next few yrs, up from just over 2000 bbls last yr.  From his culinary background, Travis bounced back and forth between beer and food for a while before landing at Black Tooth.  Now he hopes to bring a focus on quality control with equipment that’s pretty rare in his area.  He also noted some of the difficulty the brewery’s had sourcing hops and grain, claiming it’s gotten “harder and harder to get hops.”

Out in Baltimore, Union Craft Brewing claims it’s 1st brewery to open within city limits in 30 yrs, co-founder Adam Benesch told folks last week.  While Natty Boh is “still kind of regarded as the hometown beer,” Adam said, he and his team at Union work to change that perception, especially as the Pabst-owned brand hasn’t been brewed in Baltimore for years.  Union just took on more space in its current building, going from 7000 to 11K sq ft and giving the brewery some “much needed breathing room.”  Union produced 2700 bbls last yr, its 2d.

Adding Production Facilities to Existing Operations in Oreg, NC and Colo  Pelican Brewery’s Darron Welch pointed to expanded self-distribution laws for its recent success.  At 3800 bbls last yr, the small brewpub was “bursting at the seams,” Darron said.  So it began construction of a larger production facility nearby in April, started brewing in August and is “already looking at a whole second wave” of construction.  Production will “roughly double” this yr, and the co’s targeting 50% growth next yr.  It still self-distributes in Oreg, but works with distribs in Ida, Wash and Utah.

It’s a similar story for Wicked Weed, of Asheville, NC, “currently a brewpub with big aspirations,” Abby Dickinson said.  See last issue for notes from our visit, but recall it’s a big (500-person) brewpub looking towards 5000 bbls this yr, with 3200 sold right at the pub.  Its sour/barrel-focused Funkatorium opens today and it’s building much larger production facility to open next fall.  Meanwhile, Dry Dock Brewing, based in Aurora, Colo, finished its production facility last yr, allowing it to hit 12K bbls in 2013.  It’s eyeing 15K bbls this yr and recently opened a smaller taproom at that site as co-founder Kevin Delange “missed that daily interaction with customers,” he said.  The co can still brew up to 3200 bbls/yr at its original, smaller site.

“Brewing Some Pliny” a “High Honor” for Firestone Brewmaster, Brew Team  Largest co represented on panels was far and away Firestone Walker, with its highly decorated brewmaster Matt Brynildson.  “If the rest of the world dropped away and we were only making beer for the 805, we’d have a nice little business,” Matt said of Firestone’s current biz.  Pressed to talk about recent announcement his team will be brewing some Pliny the Elder for Russian River, Matt said “we don’t have a lot of capacity to share,” but when friend/Russian River co-founder Vinnie Cilurzo called, Matt agreed, calling the job “more of a high honor than anything else.”  Matt recalled being able to tell psyched Firestone brewers “hey guys, we’re gonna be brewing some Pliny.”  But it ain’t just an honor, because “no pressure: I gotta brew Pliny for crying out loud,” Matt said.

As Dogfish Head sales veep Adam Lambert was revving up distribs when he announced Aug was “the biggest month in the history” of Dogfish at its sales conf in Sep, few would have guessed that 19 days later he would announce he was leaving to take on same role for Mich-based New Holland Brewing.  Much smaller but fast growing New Holland was up 42% to just over 29,000 bbls last yr, up 54% in IRI multi-outlet + conv YTD thru Sep 7.  New Holland just confirmed on Tues that it will invest $10 mil to open a new taproom, brewing and distilling operation and restaurant in Grand Rapids, reported Grand Rapids Biz Jrnl.  Recall New Holland has also expanded its distribution footprint considerably in 2014.  Prior to Dogfish, Adam did a 6-yr stint at Rogue out West.  “I’ve worked for two of the most incredible craft breweries on either side of the country, and now I’ll be taking a role with a third craft icon, this time in the middle of the country,” said Adam in an email.

A search is on for Adam’s replacement at Dogfish Head, which at same time formally announced that “loud and loveable” coo Nick Benz, an 11-yr vet, has been promoted to ceo, allowing founder Sam Calagione to focus on “strategy, new product innovations, off-centered collaborations and events.”  Nick was also very well received by distribs at sales conf last month, especially when he jokingly yelled “F--- you, you can all do better” after review of red-hot Dogfish trends across its markets.  With Nick, “Dogfish has become a stronger, more operationally excellent company. I’m very thankful for what Nick is contributing to our journey,” said Sam.  He also noted Adam “has done a wonderful job helping us grow from a small microbrewery to a regional brewery producing over 200,000 bbls annually,” in his 7 yrs at Dogfish.  While seeking sales replacement, Dogfish also in hunt for veep of biz operations to handle all of its “non-beverage” bizzes including its restaurant, recently opened Inn and “expansion into other non-beverage businesses yet to be determined.”    

Strange times at the NY Times.  Not only has “gray lady” come out foursquare for pot legalization, (advocating passage of upcoming ballot measures in Oreg, Alaska and DC), but it sees looming apparition of a big beer monopoly in US and subsequent threats to craft brewers that are not really on horizon.  Earlier this week, NYT editorial fretted about potential ABI-SAB deal “Monopolizing Beer.”  Warned that such a deal shouldn’t be approved in US unless “Miller” brands divested.  But no one expects ABI-SAB to happen without SAB selling off its share of MC.  At same time, NYT concerned with top 2’s near-75 share of US biz, neglecting that they’ve lost 7 share since ABI, MC created.  Editorial also fretted about “higher prices and fewer choices” from big beer deals, as well as big brewers, big brewer branches and big distrib power “making it harder for smaller companies to get their products into retail stores, at restaurants and bars,” citing Brewers Assn; online version linked back to Mar op-ed “Free Craft Beer” that made same point.  But it neglected ongoing explosion of craft brewers and craft brands since those deals, and ignored fact that craft prices both significantly higher and rising faster than mainstream prices. 

Today, NYT published letter from NBWA prexy Craig Purser.  He did not directly dispute editorial’s charge that craft brewers “at the mercy of large wholesalers who cater to the industry giants.”  Instead, Craig emphasized that editorial “underscores the need” for independent distribs, who have in fact helped “fuel” craft growth.  And Craig agrees about branches, noting that to “ensure” small brewers get access, “more than 30 states restrict large brewers from owning distributors.”   Also today, original source for NYT’s concern for craft access in Mar op-ed, Brooklyn’s Steve Hindy, tweaked that perspective in quote to INC.  Indeed, Steve echoed Craig: “Big beer distributors from coast to coast are very aggressively pursuing craft brewers, and that’s a sea change.  Today any craft brewery starting up anywhere in America is going to have all the big distributors in their market trying to get their hands on the product because it’s the only segment of the American beer industry that’s growing.”

The Beer Industry of Florida (BIF), assn of mostly MillerCoors distribs plus others in state, aims to separate the legalization of 64-oz growlers from any other industry reform in the next legislative session, it announced this week.  New consumer-friendly video from BIF lays out goal to bring together industry stakeholders in support of a “clean” growler bill in 2015.  Recall, attempts to legalize the half-gallon refillable package spiraled into “a seemingly irreconcilable tug-of-war,” as the Orlando Sentinel put it mildly.  The BIF explains its belief that Florida “needs to update our alcohol laws” and find ways to provide “smart, modern oversight that will keep craft brewers growing, continue expanding consumer choice, but most importantly keep the public safe.”  While the Sentinel describes BIF’s move as a peace offering from “Florida’s powerful beer kingpins,” recall the other Fla wholesaler assn, mostly of AB distribs, sought “broader reforms” to how the state regulates small brewers, rising out of “fear of losing control,” the paper wrote.  That org, Florida Beer Wholesalers Assn, repeatedly insisted it sought to close up “loopholes” it perceived as aiding small brewers in state.  But the paper’s comment echoes one we heard last week when discussing similar legislative debates elsewhere: that “fear of losing control” could in part be tied to the family nature of many beer bizzes, this source suggested, as earlier generations worked hard to achieve and maintain status in both business and state government, putting extra pressure on current family biz-owners.

Richmond, Va officials welcomed Stone Brewing yesterday, as it announced official letter of intent to build Stone’s East Coast facility in the state capital, tho it comes at substantial cost to the capital, the Commonwealth and the co.  Stone plans to spend $74-mil all told, including new 200K sq-ft brewing facility expected to open in Greater Fulton Community late next yr or early 2016, “subject to the city’s approval,” per prexy/co-founder Steve Wagner with plans to brew over 120K bbls in yr 1.   A 30K sq-ft restaurant/gardens will follow a yr or two later.  Remember Stone just announced plans to spend $25 mil to build a brewing and retail/restaurant operation in Berlin, Germany, expected to finish around the same time.  That’s about $100 mil in a short order.  

But Stone won’t be investing alone, as combo of city and state spending on the project nears $40 mil, according to report in Richmond Biz Sense.  The city plans to issue $23 mil in bonds to develop the site for the brewery, followed by another $8 mil for the restaurant.  It’ll also offer $2 mil in grant money to the project.  And the Richmond Economic Development Authority will be Stone’s landlord.  Stone’s rent will cover the city’s debt service, said RBS.  On the state level, two separate funds will pitch in a total of $5.25 mil to get Stone up and running.  “We put all in to get this project,” Gov Terry McAuliffe said during yesterday’s press conference, according to the paper. 

“This competitive, high-profile project really puts Virginia on the map and cements our standing as a serious player in the craft beer industry,” Gov McAuliffe crowed via Stone statement, adding “the far-reaching economic benefits of this operation are innumerable.”  Those include expectation to employ 288 eventually.  Those jobs and city’s likely upgrade in craft destination status picked up by Legend Brewing’s Dave Gott for RBS too.  “If I worked for the department of tourism, I would be dancing in the streets,” he said.  But “I think it would be nice for them to reach out to the brewing community in Richmond to see where they can help out,” he added in reference to the money the city’s willing to spend to bring in the much-larger small brewer.  A Norfolk brewer similarly recognized the pros and cons of larger breweries building facilities nearby.  Curious about what Norfolk offered to Stone in its bid, “if they gave them discounted water or discounted electric, we would have wanted (the same) for us,” a spokesperson for Smartmouth Brewing told RBS.  At the same time, she pointed to the “wealth of information” these larger breweries offer, not to mention possibility they “could lend clout to lobbying efforts for brewery interests at the state level,” the paper wrote. 

Recall, after request for proposals released early this yr, Stone received veritable onslaught of attention from various municipalities vying to become its East Coast home.  After sources leaked prospect that Gov McAuliffe’s late-announced press conference for Thursday concerning a “major economic development announcement” had everything to do with Stone, news outlets in Columbus, OH spilled much disappointed ink.  Indeed, Stone’s process has proven just how attractive brewing companies of a certain size can be to local economic development groups looking to spur local activity.  “Today is an achievement of great magnitude,” the governor concluded in his prepared statement.  

Va Laws Don’t Offer Same Oppys as Calif, But Planned Stone Ops Good to Go  Stone’s biz model in Calif, where it runs its own distrib biz, carrying its own and competing brands, and multiple retail outlets around the state, will need to be scaled back a bit for Va.  No problem with planned big beer garden at brewery.  State still has a “Busch Gardens exemption” that allows in-state breweries to run a retail operation (beer garden, tap house, etc) “on or adjacent” to its brewery premises, Walter Marston, Atty for Va Beer Wholesalers Assn tells us.  That operation can obtain license to sell all alc bevs and products to be consumed off premises.  But beyond that, Va currently does not allow further self-distribution to off-premise retail accounts as Stone does in Calif.

Craft beer in Germany has been slower to catch on, but it’s beginning to turn a corner as more German brewers look to US craft for inspiration, reported Bloomberg.  Oliver Lemke, owner of a Berlin brewery, has been making frequent trips to US to learn more about US craft.  “We Germans were convinced we’re making the world’s best beer but meanwhile, beer diversity suffered,” he said, noting “craft brewing is a lucrative and interesting niche and it was a mistake not to do it earlier.”  Now there are more instances of high-end specialty craft products in the mkt such as Germany’s largest producer, Radeberger Gruppe AG, selling some specialty beers for “24.99 euros a bottle.”  It’s ultimately “positive for the German market, which has been suffering from price pressure, as it [increased craft varieties] will increase the perceived value of beer,” said Stefan Huckemann, a Munich-based partner in the consumer business at consultancy Deloitte.

Then too, Germany’s craft beer scene will get an added boost from Stone’s Berlin brewery once that project is up and running.  More US craft beers are marketed internationally as “American craft beers,” Stone founder Greg Koch pointed out to Fortune Magazine in recent article.  “All of its nine year-round beers meet the Reinheitsgebot (Purity law) requirements,” and “for the beers that don’t meet the requirements, Stone says it can still sell them, just not label them as ‘beer,’” Fortune added.  

Most German craft beer abides by Germany’s “purity law” that prohibits a product from labeling itself as “beer” if it adds any non-traditional ingredients, noted Bloomberg.  There are currently about 670 microbreweries in Germany, up just north of 30% since 2005.  Those make up only 1% of the mkt, according to the DBB (German brewers assn), and while it’s possible for that number to reach “as much as 3 percent, the craft beer boom won’t reach U.S proportions because German consumers already get their beer, even if mostly pilseners, from small-and-medium-sized breweries that often sell locally,” added Stefan Huckemann.  Another challenge, per capita consumption has dropped at an alarming rate in last 20 plus yrs; “the average German drinks about 107 liters (28.3 gallons) of beer a year, down from more than 140 liters (over 37 gallons) in 1991, according to Barth Group.”

Boston Beer founder Jim Koch celebrated the 30th year he’s been bringing his Sam Adams brands out to GABF at this year’s festival and took the opportunity to reflect on what’s changed in that time.  “In those 30 years,” Jim said during Friday media brunch, “craft beer went from nothing,” a little category created by “fringe, lunatic people, most of whom didn’t make it,” to 8% of mkt.  And “after 30 years of working my ass off,” Sam Adams “finally got to one-percent” of the total US beer.  But, as typical for these kinds of events, Jim downplayed his co’s size and growth potential, adding that “maybe if I work my ass off for another 30 years, we’ll get to two-percent.”  

He also took a moment to reflect on American brewers’ effects on beer styles.  The “motivating animus of craft beer for a long time” was recreating classic European styles, Jim said.  But no longer, as more and more brewers have taken view of folks like late beer writer Michael Jackson (with all due respect), that “they were purists.  F--- ’em.”  Because “that’s what Americans do.”  They’re “loud,” “presumptuous” and “do cool things that the rest of the world eventually follow.”