Tag: beer business

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Get the Gist

Good Beer Hunting has added another podcast to it’s line-up.  A line-up that is hit or miss not at the series level but at the individual podcast level for me.  The Gist is hosted by Kate Bernot and Beth Demmon who are covering a really important area, the business of craft beer.

Plus, it is short!  Readers of this fine blog know that I am a huge fan of the under thirty minute podcast running time.  The banter and topics in the first two episodes have been good.  Timely and topical in two words.

Check it out via your podcasting platform.

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Ducks and Bears

Beer business news broke earlier this month that I thought I should make at least a brief comment on….

A little twist on the acquisition front as Drakes Beer is the new owner of the brands only of Bear Republic Brewing famous for their Racer 5 IPA.  (which I now need to find to compare one version to the upcoming new one)

Rich Norgrove the leader of Bear Republic will join the Drake’s organization which bodes well for continuity. How many recipes will make the trip is a question.

I guess that means that Drakes must be doing OK or have brewing capacity and secondly, that there is now a brewing space open for a new brewery. Which is why I am usually only momentarily sad when a brewery shuts down, because I feel it is an opportunity for a new owner to make new beers.

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Past Breaking News (Part 2) – West, East and Far East

How’s this for beer business water cooler talk…

“Sapporo U.S.A., maker of the number one selling Asian beer brand in the United States, and Stone Brewing, one of America’s largest and most innovative craft beer brands, have reached an agreement for Sapporo U.S.A. to acquire Stone Brewing. Supporting both business’ long-term growth strategies in the U.S. market, the transaction is expected to close in August 2022. “

Could this work? Sapporo already controls Anchor and aside from can label designs that are a little plain, seem to be in the same craft brewing pecking order as they were before. But though Stone has slipped into seltzers and brand extending Buenaveza lagers, it is still primarily a hop house something Sapporo is decidedly not.

Sapporo does seem to have a California heritage brewery soft spot. Stone is a world brand despite the pullback from Berlin and having both a West Coast and East Coast brewing operation has benefits. Though if I signed on to brew at Stone and I was suddenly making Sapporo for a living, it might be stunting creatively.

For some, the past bold statements from Greg Koch and initiatives to keep craft independent will be “flip flop” fodder for semi-humorous tweets but to me…

The big question that I fall back to is that despite the relative security of a stable parent company, what happens if Stone doesn’t generate money at the clip required. What happens then? Or what if Sapporo decides five years down the road that they want out of a hyper competitive California and U.S. beer market?

As with Anchor Brewing, only time will tell if the two can work together. Maybe Sapporo, Stone and Anchor can do a Hoppy Holiday lager for Christmas.

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Past Breaking News (Part 1)- Figueroa Bend

Well, this news can be filed under BIG.  Figueroa Mountain Brewing will be taking over four brewpubs currently held by Tony Yanow.  Bluebird Brasserie, Broxton, Stalking Horse and the biggie Mohawk Bend.

You can read all about the changes coming HERE from Hopped which broke the news on the eve of L.A. Beer Week.

Per my usual operating procedure, I needed to sit with the news a bit before I commented.  I think that any time a medium/ large chain like FMB can add a stand-alone pilot and R&D brewery is a no-brainer.  I also like the idea of a lager centric brewery, a little less but if that craft lager train arrives in trend town, it will be a super smart play.

The other two, confuse me, Mexican styled lagers are big but that could have been rolled into the German lagerhaus plan.  The SoCal Cerveceros are in the ascendancy with members opening and running breweries across L.A. which makes that Agua Sante idea much less appealing.

As for Mohawk Bend, will it be FMB Presents Mohawk Bend?  Or Mohawk Bend a FMB Joint?  I don’t see how it furthers the brand.  The absence of Sunset Beer might help but it seems more restaurant play than brewing. And it gives me a bit off more than can be chewed vibe.

Time will tell of course and I will be most interested to see which of the four locations becomes the busiest.

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Sku’d

National Beer Wholesalers Association’s 2015 Distributor Productivity Report
National Beer Wholesalers Association’s 2015 Distributor Productivity Report

Two statistical tidbits from a recent post from Jason Notte about the proliferation of SKU’s (aka stock keeping units)

“Meanwhile, it’s starting to tax the people who have to bring that beer to retailers. Independent beer distributors were carrying an average of just 262 SKUs in 2007, according to the National Beer Wholesalers Association’s 2015 Distributor Productivity Report. Just last year, those same distributors were dealing with an average of 981, with a reported range between 600 to more than 1,600. They’re also dealing with an average of 35 breweries, compared with just nine two decades ago.”

Imagine that you are selling beer, or delivering beer or hell, being the data entry specialist at a distributor now? You are juggling a lot of balls now. You now should really know 35 breweries and their offerings where before you had to only keep 9 straight. There are multiple variants of multiple beers. And if you are in Los Angeles, you need to know the day-to-day traffic patterns too just to physically get a beer on a shelf to be bought. Then (if you are on the ball), you have to police retailers and get old product off the shelves in a timely manner.) The spreadsheets and customized computer programs would be mind boggling to the average beer drinking person.

“The burden of that increased SKU count isn’t just on distributors and stores. While the beer industry’s SKU count has increased 244% since 2008, total U.S. beer output has actually dropped 3.3% during that same span — from 213.3 million barrels to 206.3 million. While it’s true that craft beer’s production has nearly tripled in that time — from 8.4 million barrels to 22.2 million in 2014 — and its brewery count has soared from 1,500 to more than 4,000, there’s a catch.”

This stat is fun. Couple layers to peel. Back before craft (BC), it was a large amount of beer and little SKU numbers. Now that beer amount is down but there are now more breweries in the US than ever before. But nesting in that number is that the growth category of craft is well dominated by the major players of the Top20 list. So bigbig has fallen backwards but littlebig has grown. The intimation being that littlebig may well be on the way to being bigbig and how will they behave towards the little?

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Split Second Lag(unitas)

One moment Lagunitas Brewing is trumpeting their SoCal Azusa location and then as the ink dries on that deal, comes the news that Heineken will be a 50/50 partner with the outspoken and brash Tony Magee and his Petaluma based brewery.
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You could reasonably ask if these deals are coming more and more because people are now semi-used to them and the reaction isn’t as negative as when Goose Island changed hands.

But in my opinion, there are a crop of breweries that need access to cold, hard cash to grow. Adding more debt or going back into debt may not hold the appeal that it never did and with the big breweries seeing that their feeble attempts at “crafty-ness” were not flying, they are going after the next best thing.

You can read the brewery side of it HERE and then the more introspective and literature based version from Magee himself HERE.  I won’t add anything extra to either because the proof lies down the road.

Part One – If you trusted the owner and the brewer before and they do not change, then you should remain optimistic but watchful.  If I won a cash haul tomorrow, I wouldn’t change overnight.  I might change but I would hope that I would remain the somewhat snarky fellow that I am.  Keep the same thought for a company ’cause the Supreme Court says they are people like you and me

Part Two – As I have instructed before, now is the time to try Lagunitas beers and jot down your flavor thoughts. Then do so again in 3 and 6 months time. If those thoughts are similar, then worries were overblown. If it is drastically different, then tell the world. Just don’t go about moaning right now.
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