Beer Marketer's Insights
Cleveland-based Saucy Brew Works already raised more than $200K from over 370 investors through its crowdfund campaign to open 3 add'l pub locations and a new production facility. Co previously noted those growth plans pre-Covid (CBN Feb 19), but looks as tho they're still lookin' to move forward. Funding page indicates they're hoping to raise a total of up to $1.07M with 84 days still to go, and accompanying video details their plans for add'l locations in Columbus, Pinecrest (which involves a coffee concept), and a 5,000 sq-ft pub in Detroit featuring pizza, beer, and coffee concepts. "The Big Pie in the sky" is the production facility, which is a "little bit further out," but co hopes that facility will make them a 50K+-bbl brewery. Saucy notes they're "embarking on a massive expansion phase," and funding page sez they're "expanding to 4 more locations by the end of 2021," suggesting an aggressive timeline (tho not clear last time page description was updated). Under "Reasons to Invest," brewer also touts "41% YOY barrel growth in 2019," official craft beer partnership with the Cleveland Cavaliers, and sez downtown Cleveland brewpub was "voted best Brewery in 2019, along with best Pizza in Cleveland 2017, 2019 and 2020." In the video, Saucy leadership notes "huge benefit" to grassroots nature of capital raised, and suggests they'll add 125 jobs across all 4 locations once opened.
Contract Concept Opens Outside Atlanta with Separate In-House Brand: Big Kettle, Ironshield
Another contract-focused facility opened this month eyeing same oppy as other such bizzes building out big books and helping small brewers scale up. Big Kettle Brewing opened in Lawrenceville, outside Atlanta, GA, the Journal Constitution wrote. Opening in a couple weeks, Ironshield Brewing will be in-house brand with same owners, Glen Sprouse and David Rice. Facility outfitted with 50-bbl 4-vessel brewhouse, kegging and canning capabilities (no bottling line at outset; sign o' the times). Brewery took a $10-mil investment, per paper, hoping to bring 60 jobs to area if co successfully scales up production to 80K bbls/yr over next 7 yrs. It expects to produce 25K bbls in 1st yr, Glen told AJC. Co joins growing group of such bizzes across US, following in footsteps of Two Roads in CT, Octopi in WI and Sleeping Giant in CO, among others. Ironshield focused on classic styles, opening large 4K sq-ft taproom, 6K sq-ft beer garden on July 11, separate AJC article notes.
Milwaukee-based Sprecher Brewery released its first beer under new ownership, a "ReFresh Button" juicy-IPA, "and yes, this is a sign of things to come," noted Chris Drosner of Wisconsin State Journal. Recall, founder and former Pabst brewer Randy Sprecher sold 35-yr old Sprecher Brewing to a group of local, mostly Milwaukee-based investors back in Jan (CBN, Jan 31). The brewery has a storied tradition as the "oldest Wisconsin craft brewery founded this century," that's been at the "leading edge" of mixing beer and non-alc bev trends. Its soft drink biz helped co become an original hard soda producer, so in 2015 Sprecher produced more than 23K bbls (beer + soda). That was peak of hard soda craze. Enough to make Sprecher WI's 6th largest craft brewer. In 2019, however, co was down to less than 6K bbls. So while it may be necessary, the "ReFresh" branding ain't exactly subtle.
After Brewers Assn made call to go virtual on its main money-maker, Great American Beer Festival, a little over one mo ago, BA was "forced…to make the difficult decision to make further reductions to our staff," org announced in letter from CEO Bob Pease. BA laid off an additional 9 employees, bringing total to 24 employees, affected since Covid hit. That's 35% of its workforce. Gotta note, BA revs are down nearly 70% including loss of its biggest $$ drivers in GABF and the rest of its 2020 events. Tho org is still hoping to monetize the virtual GABF event by offering a "nationwide passport program" from Oct 1-18 for $20 and/or $49 with a commemorative t-shirt. Plus, BA's allowing "deferred and monthly membership payment options." Last yr, BA revs dipped 5% to $27.77 mil in 2019, according to its annual stewardship report, tho operating income improved to $640K in 2019 vs operating loss of $590K in 2018. (A version of this article also appeared in sibling pub INSIGHTS Express.)
After Initial Scramble, Russian River Got Scrappy; Now Back on Track for 40K Bbls in 2020
Russian River went from one of the more negatively affected regional craft brewers by Covid-19 to one of the better recovery stories in a matter of mos. Initially, Russian River furloughed 142 workers, which then represented the vast majority of its staff. Prior to Covid, its sales mix was 52% retail vs 48% wholesale, and 41% draft vs 59% packaged in calendar 2019. But after initial state of "panic" that lasted 48 hrs or so after shutdowns were implemented in CA, co went into survival mode, got scrappy and figured out how to make biz work, co-founder and CEO Natalie Cilurzo shared with CBN. Now it's back to brewing nearly at capacity, currently "on track" to reach 40K bbls in 2020 again. While Natalie acknowledged things could quickly change again, that's "the plan…if things stay status quo" from here.
Neighborhoods with breweries are about 10 percentage pts more white than neighborhoods without breweries, while, regardless of income, monthly craft consumers skew white. Those are 2 (perhaps overly simplified) takeaways from 2-part post by Brewers Assn economist Bart Watson, delving into 2 huge datasets. The first examines national Scarborough data on the demographics of craft consumers. The second digs into US Census tract data, looking at the demographics of neighborhoods, districts or tracts where breweries are located. At the outset, Bart reminds of the difficulties of working with demographics, "one of the social sciences where the data is the best and the causal inferences are the hardest." Even without examining potential cause/effect or other relationships, Bart's analysis reveals striking facts about who drinks craft and where breweries have been built, both of which carry huge implications for next steps and new oppys.
Rogue Launches Low-Cal CBD Seltzer
Rogue is launching Rogue Recreational CBD Seltzer Water, further diversifying its existing portfolio of beer, spirits and canned cocktails, co announced yesterday. The non-alc seltzers are naturally flavored, gluten-free, and include “30 milligrams of nano-emulsified CBD, L-Theanine and Apple Cider Vinegar while coming in at only 20 calories,” per press release. Available in Passion Fruit Blueberry, Lavender Mint Lemonade, and Ginger Yuzu, “all three flavors come in sleek 12 oz cans and will be available in Oregon for $3.99 per can.” This is latest foray by brewers into non-alc CBD space, which also includes Left Hand, Long Trail, and Ska, among others. “We helped start the craft beer revolution over 30 years ago, and since then we have continued to explore different categories and create interesting new products,” says Dharma Tamm, Rogue prexy.
Wiley Roots produced just 860 bbls last yr after declining in 2018, but co is now on pace to more than double to 2,000 bbls by end of this yr thanks to some quick pivots, porchdrinking reported. In recent mos, co benefited from well-timed canned releases in Jan as well as swift set up of drive-thru and beer-to-go operations once pandemic hit. But even before that, Wiley Roots founders Kyle and Miranda Carbaugh found that "traditional model wasn't working," so they pulled back distribution and began rethinking production strategy.
Elevator Brewing, one of the oldest breweries in OH, is up for sale, Akron Beacon Journal reported among others. The 5,800 sq-ft brewery and brand assets are listed for sale at $750K on ProBrewer.com, including a 15-bbl brewhouse, with various fermenters, bright tanks, a bottling line, 3 walk-in coolers, 400 ½ kegs and 200 1/6 bbl kegs and "numerous other items." Another 5,800 sq-ft is available to lease in the building located in downtown Columbus. Tho the Elevator Brewery & Draft Haus restaurant located a few blocks away from the production brewery is owned separately and not for sale, according to paper.
Monday Night Brewing got the go-ahead to open its $1.5 mil taproom in Birmingham this Aug, reported Birmingham Biz Journal. Recall, 10K sq-ft brewery and taproom was initially slated to open back in April, but got postponed by pandemic. Co also furloughed sales and mktg teams along with taproom employees back in March. But brewer's alc license was approved by Birmingham City Council on Tues, and new taproom will employ 20 people. This will be co's 3d location, 1st outside of GA. Last yr, Monday Night grew 15% to 22-23K bbls.

