Category: Beer Industry

my occasional rants and raves about what is going on in the industry.

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Tax Extension

I know that the words excise tax either cause sleep or sleeplessness.  The first due to mind numbing legalese that need to be carefully read to be understood and the latter because, well, no one likes paying taxes.

But stick with this post a minute.  One of the few good things in the Trump “Don’t Tax the Rich but I Won’t Show My Tax Returns” plan was that there was relief for small brewers as well as other alcohol producers and importers.  The bad thing, the tax was temporary. 

That temporary status is on the road for a one-year extension with the Craft Beverage Modernization and Tax Reform Act of 2019 which will be voted on by the full House of Representatives, then if all goes well, to the Senate and then for the Cheeto to doodle on before he realizes he has to sign it.

And if they do this enough times, maybe they can make it permanent.

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Four Corners – Interview

  1. Why come to Los Angeles in 2019?

Los Angeles has a thriving craft beer scene and one of the nation’s largest Hispanic populations, so bringing our flagship El Chingón IPA and El Grito Lager here is the perfect next step in the Four Corners Brewing Co. journey. We bring together the culture of craft brewing with Mexican-American bicultural heritage, creating flavorful craft beers accompanied by vibrant lotería-inspired branding. Four Corners is perched at the intersection of the growing popularity of traditional Mexican import beers and the innovative nature of craft brewing. This blend results in a craft brewery with the ability to appeal to L.A.’s wide range of culturally diverse beer drinkers.

2. Can you give us the origin story of Four Corners Brewing

Four Corners is our collective beer journey that has taken us from being better-beer enthusiasts and home brewers to launching and nurturing our brand in Texas for more than seven years. Four Corners was founded in 2012 in an effort to elevate craft beer culture in our hometown of Dallas. Our goal was to reflect the diversity of the neighborhood and bring together creative groups of people to celebrate a common passion.

Before founding Four Corners, Co-Founders Greg Leftwich, Steve Porcari and I had become enamored by the American craft beer movement and were inspired to share our passion with others. Our true beginning goes back to Porcari’s home garage where we gained a deeper appreciation of the styles, ingredients and brewing processes as home brewers.

We’re proud and excited that our journey now provides the opportunity to brew our bold, delicious beers in San Diego and raise a pint with the people of Los Angeles and Southern California.

3. What is the flagship beer for Four Corners and will it translate to the LA market?

We’re bringing two flagship offerings to Southern California– El Chingón IPA and new El Grito Lager. Both are available now throughout Los Angeles and San Diego in colorful seis-packs and on draft at popular bars and restaurants.

We believe our bold brews and Mexican-American inspired branding will appeal to Los Angeles’ bicultural beer drinkers as well as craft fans seeking new experiences. That’s what’s special about Four Corners — our beers hold their own against American craft brewers in terms of flavor and complexity and our vibrant branding attracts bicultural drinkers. 

4. What is the Dallas craft beer scene like in 2019?

When we launched Four Corners in 2012 in Dallas,there were only a handful of breweries in the state and only two in the entire North Texas region. These days, there are more than 250 craft breweries in Texas. We’re proud that Four Corners helped pioneer and shape the burgeoning craft beer scene in North Texas and added a unique dimension to the Texas craft beer landscape.

5. What has been the impact of Constellation for the brewery?

We’ve embraced our partnership with Constellation Brands. It has provided the opportunity to share our beer with more people, first throughout Texas and now in Los Angeles and San Diego.

Our standard of brewing has remained unchanged because our management team and employees have continued delivering the same innovative and fresh flavors consumers enjoy today.

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Fancy Design

Can design has come both a long way and in some instances devolved into IP copycats. And writer Joshua Bernstein has quantified a list of his personal best designs. To his credit, Brouwerij West is on the list for their Falling Water IPA.

Now, I will take the this list and pick my best, worst and almost there…(from left to right in the graphic below)

The Alvarado Street design mixes the font, design and name to great effect. It is also of a style that makes you lean in and look at it. The middle design is just flat out lazy to me. The font is as close to generic as possible and it just screams done in a few minutes. The final “close” one is a good idea but the art just doesn’t do it for me. This could be a fun series with different people in each box, heck even employees of the brewery might be fun choices too.

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Ariana & Moutere

From time to time, I try to keep the beer loving public up to date with new up to date regarding new hops that you might be seeing in beers in the future. Two more have come to my attention….

  1. Ariana – according to Crosby Hop Farms, ” One of the latest unique aroma varieties to come from the Hop Research Center in Hüll, Germany, this high-yield cultivar is a cross between Herkules and a wild male, and ranges in flavor from blackcurrant and grapefruit to geranium and vanilla. “
  2. Moutere – according to New Zealand Hops, “developed at New Zealands Plant and Food Research and released in 2015. The essential oil profile displays characteristics of intense fruit, citrus and resinous pine. Delivers intense fruity oils with top notes of baking spice and sweet hay.”
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TTB and Weed

No, that is not a new cop buddy movie. Though I will sell the title if wanted. It is re: a recent memo from the TTB, aka the Alcohol and Tobacco Tax and Trade Bureau.

The TTB looks to be warning those who are pushing the leading edge of beer and cannabis. Maybe in part to recent business acquisitions of and by marijuana companies. Maybe due to the fact that labels are showing up that cause red flags to raise up. Either way, my guess is that limited runs of these beers and probably not in to-go packaging is in the future.

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Stylin’ 2019

So the annual revision of “styles” is out from the Brewers Association and this year I have a couple of questions…

Rotbier? Breslau-Style and Dark Schoeps? Those are some really deep cuts. Maybe it is just housekeeping but I do not think that beer geeks were clamoring for obscure European wheat beers to be consolidated. And speaking of the obscure, Rotbier? Yes, that is the second time I have put a question mark on it. I cannot think of any beers available in that style to me here in SoCal. And I don’t think it is something you can readily pick-up in any beer store around the country. Is it the next new thing? Is it hazy?

The Twitter Machine will probably make hay with the Ice Lager removal for days but it and its brethren the malt liquor were really out of favor with the sometimes pop-up of ironic releases. I would be more concerned that there were not MORE consolidations and removals.

What will the effect be on the GABF awards? Minimal. I don’t see a rush to enter into those (4) new styles since the hazy strong will probably steal entries from the other two hazy categories, Gueuze might grow in later years but has too few current practitioners in the US. IPL’s like regular lagers are the Houston Rockets of the beer world, threatening to take over but then don’t and complains about it afterwards.

Now where is my DDH Rotbier?

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Money, money

Money.  You need it to grow and to pay off how big you have grown.  Two California beer brands have taken different paths in many different ways and have done so again when it comes to raising cash in 2019.

Cerveceria Calidad who I have interviewed in the past have one beer, they contract brew and they are in the starting phase of getting their beer out into distribution.  They have gone the investor route.  Bringing in 20+ new people from former Dodgers to restaurant founders to an internet underwear CEO to bring in money to increase production and fund more sales and marketing.

On the other side is San Diego’s (Anaheim, Portland and LA’s) Modern Times which has turned to crowdfunding to raise more than $1 million.  Expansion to multiple locations probably being one reason for looking to the internet and fans for funding.  The money received would be earmarked for operations, “minor efficiency projects” and equipment purchases.

I am on record as saying that crowdfunding has lust the luster.  It was fun in the beginning to get a shirt or pint glass for a small donation but then I heard that some of the funding was done as a form of advertising (as well as operational money).  And as a growing niche, craft beer needed to get moving by all sorts of financial means.  But craft beer is grown up now, it is not easy but raising the cash for your brewery can be done via the traditional route of banks, or financial partners (silent or loud). 

Finding an equity partner for a secondary, tertiary round of funding may not have the ESOP cache for Modern Times but it would have brought much less scrutiny from the internet for sure.

Calidad has always been a puzzle to me.  It seems to be a piece of a beverage company profile but it seems built for the Fyre / Coachella influencer set as opposed to beer geeks.  Personally, I think the beer is good enough to be set in front of beer geeks but now more marketing seems to be where the money is going even though for a well branded beer, a tap room or bar would seem the play to make.  Putting them next to the Alfred coffee shops might be one idea.

How this money gathering plays out is part of the fascinating economic portrait being drawn.

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For the Price of 1

It seems like once a year, I advocate for a shared taproom.  Kind of like a food hall but with beer.  Now comes news from Chicago about a 3-Way agreement that is new to their city.

One brewery, with two co-tenants.  They each get 10 taps and can stay as big or as small as they need to, to make their economics work.  I can think of a newly free space in DTLA that would be perfect for a situation like this (minus the self-pour, still not sold on that). 

Call it an incubator or co-working space or contract but the point being that this can (if the breweries involved communicate well) be a great way to lower the entry cost and maximize the marketing.  In big cities where rent is high it can really work.  And if the barrier to leave is at a reasonable spot, it allows for new blood to be added on a rotating basis.

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Let’s Do the 2018 Numbers

Let’s break this into (2) parts….

The two numbers that most people are going to obsess over are the big 4% and the 7% (Slightly more hidden) but since Bart Watson and the Brewers Association put a number at the top of the graphic, I wanted to focus on the .1 2016 to 2017 was .5% share of the market and 2017 to 2018 was .6% If you are looking for a silver lining then that is the big one. In a down market for beer overall, craft is still picking up share of mind.

The number that I find most important are the opens vs closes in this section of the graphic. We need to follow this number and see when column A dips below 1K and when Column B goes up and over the 500 mark. I won’t guess at what is the perfect number of breweries for the US but if pressed, I would say around 7K seems good with some churn still going on.