When it comes to brewery growth, what goes up must eventually slow down. But multiple cos that had been on a tear in previous yrs saw volume decline in 2019, according to BA. One of the more eye-popping slips is MA's Tree House, which declined 3% to 43K bbls in 2019, BA estimates, after rapidly ascending to over 44K bbls in 2018. Recall, Tree House expected to produce closer to 60K bbls in 2019, while selling virtually everything it makes out of its own brewery. Yet 43K bbls still likely sold at an extremely profitable rate, so Tree House likely still raking it in. Tho COVID-19 likely stifled co's ability to draw nearly 500K visitors annually.

At same time, there were several steep double-digit drops among mid-sized and smaller regional brewers in 2019. No brewer shed as much volume as UT's Uinta, down 40%, nearly 32K bbls, to 47,540 bbls total. At its peak, Uinta surpassed 90K bbls. Similarly, Shipyard shed nearly 25K bbls, down 25% to 75K bbls, according to BA, vs previous peak of 150K bbls. Recall, co recently agreed to sell FL brewery assets and brand rights in FL only to local contract brewing co, Brew Theory. Four CA cos, Green Flash (-26%), Anderson Valley (-28%), 21st Amendment (-10%) and North Coast (-15%) declined tuff double digits, shedding 10-12K bbls each, according to BA. And many familiar established craft cos continued to slip last yr as well, including Long Trail (-8%), Bear Republic (-11%) and Flying Dog (-5%) among others.

At least 22 more breweries crossed the 15K bbls/yr regional brewer threshold in 2019, according to stats and estimates posted in Brewers Assn's New Brewer May/Jun 2020 edition. Many cos leapt across the 15K-bbl marker, growing double-digits or better, as this group of 22 brewers collectively grew 66% to nearly 396K bbls, data suggests. Recall, total regional brewers grew just 1% to 17.92 mil bbls in 2019 (see Apr 16), an improvement vs previous couple yrs, tho clearly bolstered by new regionals. Yet plenty of established regional brewers continue to grow solidly too; ~70 different regional cos grew double-digits or better (including 19 new regionals). (Editor's note: keep in mind that several brewers' volumes are estimated by BA and some brewers do not publish their annual volume.)

Arguing that super high-end, "esoteric" craft beer requires special treatment did not successfully defend well-known import/craft supplier Shelton Brothers from claim that it violated Illinois franchise law. Scathing 30+-pg rebuke of Shelton by DuPage Cty judge, deciding in favor of and awarding over $2.1 mil in damages and attys fees to River North distrib, features repeated frustrations with Shelton Brothers' handling of the case and dismissals of its core arguments. Circuit Judge Dorothy F Mallen was not persuaded that the uniqueness of the beers in the Shelton Bros portfolio created any unique circumstances that allowed the co to skirt IL's Beer Industry Fair Dealing Act (BIFDA, the state's franchise law). Instead, that "irrelevant" side show seems to have done more harm than good.

Reopening American bizzes after 2+ mos of coronavirus-related restrictions is also opening doors to alcohol policy change across the US. Just as soon as temporary orders and legislative changes appeared to temporarily ease restrictions on alc bev bizzes, especially hard-hit on-premise outlets, folks wondered how temporary they would prove to be. As of this week, legislation has already been introduced in some states to extend or make permanent certain practices like delivery and selling drinks (including cocktails) to-go. Others continue to expand license privileges with new laws. Unique circumstances created by the pandemic provide both opportunities and arguments for some long-sought change. 

Permanence Bills Appear in NY, OH, MO, Signed in OK; Expanding Privileges in PA, CA  A bill introduced in NY would extend for 2 yrs the ability for on-premise licensees to sell cocktails to-go, while a separate proposal seeks to permanently clear direct shipping for in-state distillers in same way state allows for wineries. Ohio lawmakers intro’d bill that would permanently allow on-premise licensees to sell alc-bevs to-go, without current temporary restriction on just 2 drinks per order, per Cincy’s WLWT. A Missouri order allowing to-go cocktails was extended thru June 30 at same time lawmakers intro’d bill that would make the privilege permanent, Ozarks First reported. And Oklahoma’s governor already signed a bill to permanently allow curbside pick-up and delivery of alc bevs, according to KOKH. Governors of big states (and beer markets) Texas and Florida have made public comments in favor of permanently extending certain privileges, tho unclear if those off-the-cuff remarks will turn to serious support. 

At same time, Pennsylvania Gov Tom Wolf signed bill overwhelmingly passed by legislature that will allow on-premise licensees to sell up to a half-gal of cocktails to go. Bill will take effect immediately and last at least thru end of pandemic or when those outlets can once again serve food and drink on-site at 60% capacity. Reopening guidelines in California allow on-premise licensees to open only if they also sell food. But that requirement can be satisfied by food trucks or pop-up kitchens, paving way for brewery taprooms to once again offer some form of on-site service if operating in a county that’s reopening. Calif is also one of many states allowing on-premise licensees to expand service area into adjacent or nearby outdoor spaces, including parking lots and sidewalks, as LA Eater explored. 

What Else Will Be on Docket? Finding Balance  Reports of SKU limitations by either certain wholesalers or retailers re-raise some old questions for craft brewer advocates and quickly become ammunition in new takes on familiar policy debates. Are limits on self-distribution and especially direct-to-consumer shipments back in the crosshairs? Time will tell. In the meantime, “selling beer to go during the pandemic has given breweries, brewpubs and taprooms a lifeline during Covid-19,” Brewers Assn prexy Bob Pease told us. “The temporary orders and the demonstrated ability of state regulators to enforce them have also shown that beer to go can be done responsibly. As the nation’s economy comes back on line, the beer drinkers’ return to the on premise is uncertain at best. Knowing that the beer drinker may be reluctant to visit the on premise to purchase beer we will all need to work together to find responsible ways to get beer to the beer drinker so that we help sustain thousands of small businesses and jobs.”

Indeed, enormous pressure on small brewing bizzes during pandemic created oppy for free-market thinkers and advocates to pile on with op-eds against existing alc bev market restrictions. But while many of those folks may be hot to trot, some experienced participants in alc bev policy debates urge caution. Count NBWA prexy Craig Purser among ’em, as he reminded CBN that “legislative bodies, regulators and citizens need time to reflect on how any changes will impact their local communities.” However, one natl trade org that isn’t shy about oppys it sees to expand alc bev privileges, especially sale of cocktails to-go, is Distilled Spirits Council, trade org for large spirits producers. It’s already mobilizing groups of supportive consumers in some states as the org sees the privilege as key form of revenue replacement for bars and restaurants as they recover, prexy Chris Swonger told VinePair for deep-dive this wk. (Note Diageo was angel investor in VinePair, but is no longer listed as such on pub’s website.) On other side of the debate, public health researchers and advocates remain very troubled by loosening of restrictions on alc bevs during pandemic and are also raising alarms about harms they expect to show up over many years, including alcohol dependency and domestic abuse. So in some ways, the normal policy push and pull. But new backdrop sets the scene for quite the show.

A handful of new beyond beer brands from craft brewers are launching amid pandemic. St. Louis-based Urban Chestnut Brewing launched new Urban Seltzer in Passion Fruit & Citra Hops and Lime & Salt flavors, with 4% ABV, under 2g carbs, co announced earlier this week. Both flavors will be available in a combo 12pk of 12oz cans in greater St Louis bi-state area. Recall, Urban Chestnut already dabbling in non-alc seltzer space, launching non-alc Sparkling Hop Water in 16oz 4pk cans last summer. Urban Chestnut again utilized separate Urban Research Brewery and taproom for additional testing of 3 flavors, including consumer survey to give input on "preferred flavor as well as name suggestions." Grapefruit was the odd flavor left out for now, but co promises "many flavors to come." Indeed, "hard seltzers are not going away" and represent "a new path for us as a brewery," brewmaster Florian Kuplent stated. Particularly in midst of "reduction in operations" during the pandemic.

As extent of COVID-19's impact on biz as usual and especially large-scale gatherings stretches deeper into 2020, perhaps inevitable that Brewers Assn canceled this yr's Great American Beer Festival yesterday. The 39th annual fest, scheduled for late Sept in Denver, will become an "immersive online experience" held Oct 16-17. Executive order issued this wk by Colo Gov Polis drove announcement, BA wrote. That order creates temporary alternative care sites in CO, including at Colorado Convention Center, where GABF usually held. Emergency hospital beds constructed at the site starting early last month, Colorado Politics reported. Unclear how long the site will be in use as emergency care site specifically for COVID-19 patients. Makes holding GABF there in Sept "infeasible," according to BA. (This article appeared in sibling pub INSIGHTS Express, yesterday.)

After rapidly growing to ~30K bbls by 2019 with sales largely focused on draft, Oreg's Breakside Brewing biz model is as heavily affected as nearly any regional craft brewer in the country. Sales are "getting crushed," since nearly 70% of sales were on draft and "that's down to zero," co-founder Scott Lawrence and Ben Edmunds detailed in interview with OregonLive. Even with shift to bottles, sales declined ~50% month-to-month, Scott shared. There were some real "panic moments" early on as COVID-19 hit the US.

Whirlwind period brought package shifts for core brands, big launch for new yr-round hazy IPA and important pivot for sizeable on-site taproom biz for Pennsy-based Troegs, co-founder/veep Chris Trogner shared with CBN. Major themes same as those echoed repeatedly over last couple months: "devastating" loss of on-premise biz while off-premise kicks into higher gear. "Our draft is down 95%," Chris wrote, so Troegs "very much looking forward" to helping on-premise operators "get back in the game," already working towards supporting those accounts "as things roll back." Yet co's also "seen off-premise customer behavior that indicates how much people still depend on reliable favorite brands." For instance, Troegs flagship Perpetual was already top IPA in PA for 52 wks in IRI multi-outlet, Chris reports, "growing throughout early 2020." Like so many other beer brands, Perpetual's off-premise trends accelerated after on-premise shuttered.