Beer Marketer's Insights
On-premise sales velocity continues to improve at double-digit clip from week-to-week in tracked US accounts, tho remains down 39% vs pre-COVID norms, according to latest Nielsen CGA report thru May 30. Recall, just two weeks ago, velocity was down 54% for week ending May 16. So once again, it's movin' in the right direction. But big states like NY and IL still have weekly on-premise sales velocity down 3/4 vs pre-COVID norms. And Calif not much better, down 64% vs pre-COVID, tho improved by 34% from May 23 to May 30. Southern states like TX are driving overall improving sales velocity trend, down just 29% vs norm for week ending May 30 and up 11% vs May 23; Houston improved at slightly faster rate (+14%) than Dallas or Austin. FL improved by 15 pts for the week to down 39% vs pre-COVID, led by Tampa and "strong recovery" in Orlando. Then too, more folks did still go out for key holidays of Mothers' Day and Memorial Day, even in Calif and NY.
Even before all the new off-premise initiatives (see last issue), Allagash's off-premise sales grew 50% YTD thru May, sales director Naomi Neville told CBN separately in follow-up conversation. That includes +62% growth since COVID-19 hit. And it's safe to assume, co expects that growth to ramp up significantly as new Allagash 6pk bottles, 12pk cans of River Trip, North Sky Stout and Little Grove series sparkling session ales come to mkt, she assured.
Pressures added by the COVID-19 pandemic forced important change on many US craft brewers. For Bay Area-based 21st Amendment, that includes split up of joint sales platform it formed with part-owner Brooklyn Brewery and sister-co Funkwerks (see yesterday's issue) and retooling planned launches. Now, after a 2+-mo delay, 21A is gearing up for broader launch of new SOMA hard seltzer line, co-founder Nico Freccia explained to CBN. SOMA Seltzer was "supposed to come out April 1" with spring resets at Safeway. But those resets initially delayed to June 1, then more recently "paused again" due to ongoing protests in area and new curfews. Currently available for pick-up from 21A's San Leandro brewery, SOMA Seltzer still expected to hit more shelves "in the next week or two," Nico said.
After an "overly aggressive expansion process," for which parent co of well-known craft-centric HopCat on-premise retail chain took on large debt load, COVID-19 shutdowns created "untenable" situation. So BarFly Ventures, which owns and operates 17 HopCat locations, Grand Rapids Brewing and other bars, filed for Chapter 11 bankruptcy protection in fedl ct yesterday. "This is not unique to us," founder Mark Sellers told a Michigan House of Reps committee during hearing on bill aimed at providing relief to on-premise operators, according to the Detroit Free Press. "There's going to be a giant wave of bankruptcies coming very, very soon," he promised.
North High Brewing will team up with co-working startup COhatch once again to open new Cincy taproom location, expected to open this fall. "Helping to meet the demand for community…COhatch will re-purpose and re-energize the 13,000 square foot, three-story brick building" as "coworking and event space," with plenty of beer to go along with it, co announced this wk. The two cos already shared back in Jan joint plans for additional taproom/work space in Dublin, OH, (not far from brewer's Columbus home base). And North High is also centerpiece of COhatch's 20K sq-ft co-working space and food hall in Springfield, OH.
About 5½ years after opening in Rochester, NY, Lost Borough founders will move on, sell all of the brewery's assets to new brewing entrepreneurs. Founders of planned Heroes Brewing, Marlene and Greg Fagen, will acquire Lost Borough's equipment and intellectual property then lease its space from current, separate building owner in hopes of opening under new brand this summer, Greg told the Democrat & Chronicle. Lost Borough opened in late 2014, soon expanding from a 3- to a 7-bbl system. As more breweries opened in the area, founders' lives went in different directions and co sought a buyer for the biz. Heroes, named for Greg's prior career and commitment to area firefighters, plans to use some of Lost Borough's recipes under different brand names. It also anticipates emphasizing charitable contributions.
Hot off deal to take over Florida production, sales rights and pubs for Shipyard and Sea Dog brands, the Brew Theory contract-focused concept based in Orlando has more up its sleeve. Founder Jeremy Roberts is already considering ways to expand those Maine-based brands in Fla, a longtime key market for them (see May 18 issue). That could include more in-state pubs or taprooms, tho he'll "have to be real strategic about" that, he told CBN. "I think there's still a lot of juice left in" the Shipyard brand in the state, he said, and is looking forward to "get creative and see what works for it." At same time, he's signing on new contract clients to fill up around 20-25K bbls of annual capacity at current Brew Theory facility, while already building out a 2nd site.
Firestone Walker Pulls Outta MA, CT, NH
Firestone Walker is pulling outta MA, CT and NH and furloughing 9 employees amid challenges presented by COVID-19, Chief Sales Officer Dave Macon confirmed with CBN following Brewbound report. Firestone was with Sheehan Family Cos prior to retrenching. This marks 2d set of New England states Firestone pulled back from in recent yrs, following VT, ME and RI in 2018. Co continues to sell beer in several other east coast mkts. But reality is, everything east of the Rockies is "so on-premise heavy for us" that it's "not sustainable to continue that way" in some of its smaller mkts amid COVID-19, Dave told us. Also gotta note, east coast has become less significant for Firestone following the emergence of 805 Blonde. Firestone Walker sold 406K bbls in home state of Calif alone last yr, which made up more than 3/4 of its total volume (see May 1 issue). Firestone is "working diligently to try and find these folks a home" and "if we can we will," Dave added. Meanwhile, Firestone sales continue to accelerate in off-premise scan data this yr (see last issue), with $$ sales now up 34% YTD thru May 24 in IRI multi-outlet + convenience data. But co's sizable draft biz is taking a sizable hit at same time.
Allagash biz model was entirely flipped on its head by COVID-19 shutdowns, as typically 71% of sales are made on-premise including 65% on draft. Co essentially turned its keg line off over the last couple mos. But Allagash using disruption as a "silver lining," taking this new-found time to "really focus" entirely on bringing several new off-premise initiatives to mkt in time for Fall shelf resets, founder Rob Tod, sales director Naomi Neville and brewmaster Jason Perkins shared during press briefing earlier today. Over the next few mos, co will launch 6pk bottles of flagship Allagash White (to join recent 12pk 12oz cans and 4pk 16oz cans), 12pk cans of River Trip starting this July, and three new core year-round brands - North Sky Stout and low-ABV Little Grove series featuring two Sparkling fruited session ales each below 4% ABV and at 100 calories per can. These initiatives have been in the works, and were all set to roll out over the next couple years as part of its continued incremental build in off-premise channels prior to COVID-19. But co essentially "taking what was initially going to be a 2-3-4 year effort and compress it" into 3 months, said Rob.
New craft brewer-branded locations keep on a'comin' as June brings warmer weather and more biz reopenings across US. For some regional breweries, that means taking oppys for licensing agreements rather than taking on additional costs of opening owned outposts. Denver-based Great Divide among latest sizeable craft players to take that route in home state, announcing opening of new Great Divide Brewery & Roadhouse in Castle Rock, CO yesterday. Location operated by Vibe Concepts, new name of Roadhouse Hospitality Group, which operates a number of CO restaurants. Site in Castle Rock, between Denver and Colorado Springs, south of town, sprawls across 8,000 sq-ft, per release, including large outdoor patio, originally sized to host 400 folks. So even at restricted capacity, spot can host plenty of beer drinkers. Full food menu plus Great Divide beer, other beer, wine and spirits available in location connected to larger mixed-use development, featuring residential and commercial spaces.