MillerCoors Buys Hop Valley Brewing

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MillerCoors announced today that they’ve acquired a majority interest in Hop Valley Brewing of Springfield and Eugene, Oregon.

Here’s the press release:

Tenth and Blake Beer Company, the craft and import division of MillerCoors, announced today an agreement to obtain a majority interest in Eugene, Ore.-based Hop Valley Brewing Company. Hop Valley is known as a leader in the IPA space, producing a wide variety of acclaimed beers including Alphadelic, its flagship IPA, Citrus Mistress and Alpha Centauri.

“We are very proud of what we have achieved to date, and even more excited about the future for our company and our employees,” said Charles “Chuck” Hare, Hop Valley Brewing Company co-founder. “From the get-go, it has always been about the beer, and we are looking forward to working with Tenth and Blake to get our beers – made right here – to even more consumers.”

Since opening their original brew pub in Springfield, Ore. in 2009, Hop Valley has stayed true to its name producing award-winning IPAs throughout the Pacific Northwest region. The brewer has since added to its production with a 30,000-square-foot brewery and tap room in Eugene, Ore. and currently distributes in Oregon, Washington, California, Idaho and Vermont.

“We’re thrilled to join forces with the Hop Valley team, to add an incredible roster of brands that complement our portfolio perfectly,” said Scott Whitley, president and CEO of Tenth and Blake. “I’m looking forward to working with Chuck and his team to support the continued growth and success of their innovative IPAs and award-winning beers.”

“This is a great opportunity for us and our brewery,” said Trevor Howard, Hop Valley co-founder and brewmaster. “We will continue to craft all of our core brands and innovate with seasonal and small-batch brews like we always have – with the same commitment to quality, taste, and creativity.”

Hop Valley Brewing Company joins other leading crafts in the Tenth and Blake portfolio, including Blue Moon Brewing Company, Jacob Leinenkugel Brewing Company, Saint Archer Brewing Company and, following an expected closing in August 2016, Terrapin Beer Company. For more information on Hop Valley Brewing Company and its portfolio of brands, visit HopValleyBrewing.com.

Hop Valley Brewing Company will operate as a separate business unit of Tenth and Blake. The management team at Hop Valley will continue to lead the business and will retain an ownership interest. The transaction is expected to complete in the third quarter of 2016. The terms of the transaction were not disclosed.

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This is actually the second acquisition this month for Tenth and Blake, MillerCoors’ craft division. Back in 2011, they bought a minority stake in Georgia’s Terrapin Brewing, but last week they acquired a majority stake.

Lagunitas Announces Several Big Changes & New Ventures

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Damn. Go big or go home, I guess. Tony Magee never does anything small … or halfway. Today Lagunitas Brewing announced a number of big changes and new ventures they’ve undertaken. Here’s the first part of the press release, laying out the general idea.

The Lagunitas Brewing Company of Petaluma CA is excited to announce that we are expanding the way we participate in some of the great communities that have helped us learn and grow as brewers. We believe that beer is the original social media and we know that the best way to connect with beer lovers is face to face, over a beer.

Today we are announcing a set of intense local alliances with very special local brewers whose work we admire and are proud to partner with. They are four completely different partnering situations and in concert we will learn from one another and help build our breweries together culturally and geographically.

We don’t live in a world of either/or, our world is both/and. Drawing from the best of the best to find new possibilities is the most thrilling way forward.

The why and how differs from one cultural region to another but the intention remains the same: Connect with, learn from and support our communities. “We expect to be surprised by the things that we encounter as we grow these relationships. This will be a big learning experience for us” says Tony Magee, Founder of Lagunitas.

And here they are, though I’ve re-ordered them in order of importance to me personally. Not exactly scientific, but hey, this is a personal blog, so there you have it. By far, the most surprising, though exciting one, is a joint venture with Brian Hunt and his Moonlight Brewing Co.

Moonlight Brewing Company (Santa Rosa, CA)

We’re thrilled to be entering into a joint venture with Moonlight Brewing Company. We will work alongside Brian and his people to expand the reach of a genuine national treasure. Moonlight opened in 1992, (the year before Lagunitas) at a time when the term “craft” didn’t even exist. Over the years, we’ve long enjoyed a great friendship with brewer/owner Brian Hunt and have huge respect for is people, the beers he brews and the reputation he has created. We’re looking forward to learning together and having a blast doing it.

Brian Hunt (Moonlight)
Brian Hunt.

Independence Brewing Company (Austin, TX)

Lagunitas will combine resources with the great Independence Brewing of Austin TX to help them grow their brewing capacity and do more of what it is that they already do so well. Independence Brewing founders Amy and Rob Cartwright, along with their great people, will continue to lead their company and will help us deepen our own connection to Austin and the Lone Star State. We’re looking forward to learning from each other and sharing our local connections.

A Non-Profit Fund Raising Community Room #1 (NE Portland, OR)

On August 1st, Lagunitas will open the doors to our first Community Room, dedicated 100% to supporting non-profits with their fundraising efforts. The beer and the space will be completely donated to any bona fide Non-Profit organization so that they can focus on raising the funds they need to carry out their respective missions. A Lagunitas team and live music will be on-hand to ensure turnkey execution of the event and most importantly that all of their guests have a great time!

A 2nd Non-Profit Fund Raising Community Room (San Diego, CA)

Our 2nd Community Room will open January 2017. This space will also be made available exclusively to Non-Profit groups for fund raising.

A Lagunitas Taproom & Beer Sanctuary (Historic District Charleston, SC)

Lagunitas is under contract with the beautiful Southend Brewery and Smokehouse of Charleston, SC to convert the long time brewpub to a new Lagunitas Taproom and Beer Sanctuary in the heart of Old Charleston on famous East Bay Street. This turn-of-the-century landmark will be a cornerstone location for Lagunitas in the Southeast, offering small batch beers that are exclusive to the Charleston Taproom and brewed in the existing 10-barrel brewhouse. The Taproom also offers two different floors of event space which we will make available to local non-profits for their fundraising efforts. A Grand Opening party and more information to come in the near future.

Here, I’ll pick up with the remainder of the press release, giving more explanation.

This new thing for us represents our way forward into the brave new world of the brave new world of beer’s brave new world. I say brave thrice because it is exactly that; We don’t know exactly how this will unfold over time or what unforeseen paths forward it will reveal.

These new relationships will be learning experiences for all four of us. We all know that we love beer, we all know that we love brewing and the community that gathers around its fire. We all know that we all want to grow and make new connections. We know we all want to be productive and learn. We know we all want to earn a living and make a home for our employees who’ve put their chips down on the table alongside our own.

As we all learn and begin to grow together in this new paradigm I believe that we will find more partners in other parts of the country that we can also share with and cultivate regional relationships through. If we can get this first step right then it is just the beginning for all of us.

Lagunitas is the lead in the relationship because we gained adequate scale to be able to borrow the money it will take to be the lead and to help, but scale is not insight and money is not creativity. Insight and creativity are everything. They are the cornerstones of small brewing. That is the space where our four teams of brewers and marketers and managers are all standing eye to eye, playing together to try to make magic happen, and I for one am very sure it will. What form it will take will be ours to find out.

One thing is for certain, the future will not be like the past! Furthur….

Cheers all….!!

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And, of course, Tony weighed in with his own take on the changes, though this was originally meant to preface the above information, but I wanted to lead with the news first.

Greetings Fellow Travelers,

Over the last 23 years of running-off the mash and filling the kettle we have come to understand that the new world of small brewing is less a ‘thing’ than it is a ‘journey’. A point on a curve. Jack Joyce, founder of Rogue Brewing in Newport, once said that we’re not in the beer business, we are in the ‘change business’. Ask any brewer older than 5 years and they will tell you that in 2010 small brewing was a whole other place. Ask one older than that and they will tell you the same about 2005, and 2000, and especially 1995. And so it is that 2020 will be unrecognizable to the brewers of 2016.

One thing that hasn’t changed though is the personal connection that beer lovers want with the people that make the beer they take into their bodies in the hope it will thrill their tastebuds as it enters their blood enroute to their brains to make it do tricks. This is pretty personal stuff and as brewers our job is to make that connection.

Last September we announced our own way of relating to the world outside of the United States through a joint venture with the last of the largest family-controlled (meet Charlene De Carvalho-Heineken..!) brewer in the world. Most U.S. beer lovers don’t know too much about the family and I really didn’t either until I began to meet them and understand them and their company and grew to love them as people and a company.

There is an old expression friends sometimes use when the go to lunch, ‘Let’s go Dutch’, meaning let’s split the bill. That expression, I’ve learned, comes from a place and a people. You haft’a wonder how it is that a small, mostly flooded, lowland country ever became a global colonial superpower? Most know that New York was once called New Amsterdam but most also don’t know that Brooklyn and Bronx and other local names are actually Dutch names too. The answer to the question is pretty straightforward: The went Dutch. The cooperated, collaborated, shared risk, partnered, co-invested and joint ventured. This is what we built with Heineken, we are pulling on the rope together.

I have seen that one way they achieved their own goals of growing Heineken was and is now to co-invest in local brewers around the globe, not to ‘consolidate’ or dominate or reduce competition, but to expand and nurture the opportunities to the benefit of themselves AND their partners. They do this with big brewers and with brewers far smaller than ourselves in all 24 time zones.

If one were to take a line drawing of a map of the borders of the 50 United States and lay that line drawing over the continent of, say, Europe, it would look a lot like, well, Europe. There’d be spaces the size of France and the UK inside of Nevada and Illinois and there’d be a Rhode Island like there is a Monaco and so on. In Europe nationalism matters and each country has historically meaningful brewers that are important to those individual countries. All over the world, beer is local. It’s gradually becoming more so here too. But Americans still like to think of us all as Americans and we have liked having 50-state nationally distributed brewers.

In the past, before and just after prohibition this wasn’t really so, but it became that way over time. Now it is going back the other way. Small brewing has played a role in re-igniting regional pride the way music and locally-sourced food is doing the same.

Having said all that, it’s no secret that the U.S. is a whole lot of places stitched together by a constitution, right? I mean, good people from Florida are very different from good people from South Dakota and Oregonians would never mistake themselves for Texans. Even Wisconsinites sometimes call Illinoisans ‘Flatlanders’ while some Minnesotans still think that grave-robbing is called date-night in North Dakota (it’s an old Johnny Carson joke….all apologies to North Dakota). There will always be nationally distributed brands and I sincerely hope that Lagunitas can continue to find a place in peoples hearts irrespective of geography by working to be something close to the bone, rooted to a fundamental human experience that actually does cross borders fluidly. But local matters, and will matter even more in the future.

This is very cool actually, because it means that if we can be genuinely local we can be part of the future. When we became genuinely local in Chicago we found lots and lots of new friends that we might not have by just shipping it in from the Left Coast. We’re already feeling the same vibe in Southern California even as we construct our new brewery there. It’s a great thing to be able to do. However we can’t do that everywhere. But….we can go Dutch everywhere, and that’s exactly what we are doing right here right now.

The Downside To Working Long Hours

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A few months ago, Anheuser-Busch InBev head honcho Carlos Brito was quoted as saying that “every employee should behave like an owner-entrepreneur, committed to building the company.” That bullshit mantra favored by corporate leaders, known as “DWYL” (do what you love), is just another way to exploit workers, in the same way “monarchs used to tell about being ordained by God help us get through the day not by easing our pain, but by increasing our capacity for suffering.” As I noted at the time, I hate that way of thinking, and it completely pisses me off that they think anyone should fall for it. AlterNet had an interesting pice at the time that refuted that way of thinking, called Don’t Feel Like a Failure for Not Loving Your Corporate Job Enough.

Curiously, though not exactly a surprise, a recent meta-study published in the British Medical Journal (BMJ) entitled “Long working hours and alcohol use: systematic review and meta-analysis of published studies and unpublished individual participant data,” found that the more you work, the more at risk you are to drink too much. Anybody shocked to hear that? The study looked at 63 different studies, and in the aggregate reached the same conclusion. Too much work will drive you to drink. Here’s the abstract:

Objective To quantify the association between long working hours and alcohol use.

Design Systematic review and meta-analysis of published studies and unpublished individual participant data.

Data sources A systematic search of PubMed and Embase databases in April 2014 for published studies, supplemented with manual searches. Unpublished individual participant data were obtained from 27 additional studies.

Review methods The search strategy was designed to retrieve cross sectional and prospective studies of the association between long working hours and alcohol use. Summary estimates were obtained with random effects meta-analysis. Sources of heterogeneity were examined with meta-regression.

Results Cross sectional analysis was based on 61 studies representing 333 693 participants from 14 countries. Prospective analysis was based on 20 studies representing 100 602 participants from nine countries. The pooled maximum adjusted odds ratio for the association between long working hours and alcohol use was 1.11 (95% confidence interval 1.05 to 1.18) in the cross sectional analysis of published and unpublished data. Odds ratio of new onset risky alcohol use was 1.12 (1.04 to 1.20) in the analysis of prospective published and unpublished data. In the 18 studies with individual participant data it was possible to assess the European Union Working Time Directive, which recommends an upper limit of 48 hours a week. Odds ratios of new onset risky alcohol use for those working 49-54 hours and ≥55 hours a week were 1.13 (1.02 to 1.26; adjusted difference in incidence 0.8 percentage points) and 1.12 (1.01 to 1.25; adjusted difference in incidence 0.7 percentage points), respectively, compared with working standard 35-40 hours (incidence of new onset risky alcohol use 6.2%). There was no difference in these associations between men and women or by age or socioeconomic groups, geographical regions, sample type (population based v occupational cohort), prevalence of risky alcohol use in the cohort, or sample attrition rate.

Conclusions Individuals whose working hours exceed standard recommendations are more likely to increase their alcohol use to levels that pose a health risk.

working-hard

Unusually, the entire study is available online if you want to read the entire study, their methodology, the data sets and their analysis. But you probably don’t need to in order to come to the same conclusion. Being worked too hard by companies trying to squeeze every ounce of labor out of their salaried and even hourly employees is not good for them. People need to balance their work life with the rest of their lives. It may be a cliche that nobody every says on their death bed that they wished they’d spent more time at work, but that doesn’t make it any less true. As the class divide continues to widen, people are feeling increasing pressure to work longer hours just to keep their jobs, and employers are exploiting, encouraging and even requiring such behavior. In my own experience, my last corporate job required 60-hour work weeks, and I had to work from home a few hours every single Sunday, vacation, sick day, holiday or not. One of my biggest regrets was after having taken a week off to fly back to Pennsylvania to be with by father on his deathbed, he begged me to stay a few more days. The pressure to return to work was so great that I felt that I could not, and reluctantly I flew back to California. He died in his sleep while my plane was still in the air flying home to San Francisco. Our society is unhealthy when we’re expected to put our companies — which in reality care almost nothing for our loyalty and hard work, and would fire each and every one of us in an instant if it helped the share price or the bottom line — ahead of our personal lives. The more that becomes normalized, the worse off we’ll be as a nation. Working too long and/or too hard is not good for people.

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Jackson Family Wines To Build Sonoma County Brewery

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You know the brewing industry must be doing something right if one of America’s largest producers of wine has decided to jump in with a new brewery. Brewbound has the scoop, with Jackson Family Wines Proprietor Launching Sonoma County Craft Brewery.

It’s certainly not the first time. Does anybody else remember Sonoma Mountain Brewing? And more recently, Carneros Brewing built a brewery on the grounds of their Ceja Vineyards. And don’t forget that Korbel Winery once launched their own small brewery, hiring a young brewer to make the beer. After a short time, they decided to get out of the beer business, and brewer Vinnie Cilurzo obtained the name and moved Russian River Brewing to downtown Santa Rosa, and with his wife Natalie Cilurzo, built it into a destination brewery that’s undoubtedly helped put Sonoma County on the map for beer, as well as wine. So some have worked great, others not so much.

This one at least seems off to a big start. It’s not officially a project of the Jackson Family Wines, but Christopher Jackson, who is the son of winery founder Jess Jackson. Of course, most start-ups don’t have the resources to start by “constructing a 25,000-barrel craft brewery” with “an initial brewing capacity of 8,000 barrels.” Most start-ups don’t have $8 million as their initial capital, even though Jackson states that “[i]t is a passion play” and I “am the sole proprietor and it is my project going forth, but we are employing a lot of similar philosophies from my wine background.”

The new brewery will apparently be called Seismic Brewing Company, which name Jackson bought from San Diego’s Rough Draft Brewing. The new brewery will be located at 2870 Duke Court, Santa Rosa and plans to open in late summer.

It sure seems like Sonoma County is indeed becoming a “craft beer Mecca,” as Jackson called Santa Rosa. I think that’s truer of the whole county, but certainly between Santa Rosa and Petaluma the county’s doing pretty well. Sonoma County currently has 31 licensed breweries, at least according to the latest number from the CCBA, which means we’re nowhere near the 100+ that are now open in San Diego County. Still, I think Sonoma probably has more than most counties.

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ABI Buys Birra Del Borgo

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Anheuser-Busch InBev announced yesterday that they’ve notched another brewery, this time it’s Italy’s celebrated Birra del Borgo. Under the terms of the deal, Birra del Borgo will become a wholly-owned subsidiary of AB InBev, though the price was not disclosed.

From the press release:

Birra del Borgo is happy to announce that it has decided to partner with Anheuser-Busch InBev (AB InBev). The partnership will give Birra del Borgo, one of the leading craft brewers in Italy, a unique opportunity to make the necessary investments for expansion while continuing to independently manage its business and define how to grow.

AB InBev will provide the support to allow Birra de Borgo to expand its brewery know how and infrastructure, continue to innovate and bring new great beers on the market through its distribution system. Founder Leonardo Di Vincenzo will continue to lead Birra Del Borgo as CEO of the company.

In 2005, Birra Del Borgo was founded by Leonardo Di Vincenzo in Borgorose, a small town in the province of Rieti on the border between Lazio and Abruzzo in Italy. Leonardo started brewing beer at home for enjoyment while at University studying biochemistry. He traveled frequently throughout Europe to explore the traditional beer styles; getting to know the German and Belgium master brewers was crucial to his education. One of Leonardo’s most formative experiences was brewing at the Starbess brewery in Rome, which later led to his conception of Birra del Borgo. Leonardo’s initial inspiration comes from English & Belgian beers, but he then reinvented the styles to root them in the Italian gastronomy culture. Leonardo currently produces ten beers year round, some famous such as ReAle, Duchessa, DucAle. Other Birra del Borgo products include 4 Seasonals inspired by local ingredients and several unique beers brewed with original techniques, under the “Bizzarre” family. Leo’s inspiration is dictated by the moment and seasonality related to the main ingredient, with a passion to reinvent styles and push boundaries.

Leonardo will remain the CEO of Birra Del Borgo.

Leonardo Di Vincenzo said: “Our voyage since we started in 2005 has been a great adventure. Today the beer sector has become very competitive and it necessary for us to make a next step to ensure that we can continue to evolve in terms of brewing techniques and in terms of the complexity and taste variation we can offer to consumers. We believe partnering with AB InBev is a great opportunity to do exactly that: it will allow Birra del Borgo to grow in a sustainable way while staying true to our unique identity and the philosophy that we have followed since the very beginning.

The partnership with AB InBev will bring us many advantages, from technological improvements and access to scientific research to the possibility to grow from a commercial point of view. Moreover, this partnership also means that we will be able to focus much more on what we enjoy most and do best: creating and experimenting with exciting new beers and pushing the boundaries of beer evolution in Italy.

He added: “We will continue brewing all of our beers in Borgorose, which will allow us to grow by continuing to invest in our local community, as we have always done. At Birra del Borgo, we have a great team with enormous enthusiasm and love for what we do every day. It is with this team that we start this exciting second chapter in Birra del Borgo’s history. The heart and soul of Birra del Borgo will remain unchanged and it is with the very same passion and love for beer that we will continue Re(Thinking) Ale”.

Simon Wuestenberg, Country Director for AB InBev Italia, said: “We have been very impressed by what Leonardo and his team have built since 2005. They have been at the forefront of redefining beer in Italy, bringing a unique mix of inspired innovation, quality and consistency. Leonardo’s vision for beer and his passion for brewing will be great inspirations to our whole team, and we’re very excited about partnering up and growing together. As a challenger on the Italian market, we have been successfully developing our business with a great portfolio of premium and specialty brands in the last few years. Today, that portfolio becomes even stronger with some of the best of “Made in Italy.”

del-borgo-2016

Indian Gov’t Issues Arrest Warrant For Mendocino Brewing Owner Vijay Mallya

mendocino
Those of you who’ve been in the beer world for a few decades will no doubt remember the tumultuous period around 1997 when Vijay Mallya, and his UB Group, which also owns the Indian beer Kingfisher, started buying up breweries. They picked up Nor’Wester Brewing first, along with a few others, and UB Group consolidated their U.S. holdings under the name “United Craft Brewers, Inc.,” or simply “United Craft.” The first five included Nor’Wester Brewing Company of Portland, OR; Aviator Ales of Woodinville, WA; Mile High Brewing of Denver, CO; Bayhawk Ales of Irvine, CA; and North Country Brewing of Saratoga Springs, NY. United Craft later added Mendocino Brewing Co. of Hopland, CA and Humboldt Brewing of Arcata, CA, and then Carmel Brewing of Carmel, CA. United Craft lists a Sausalito address, which is coincidentally where owner Vijay Mallya also built a multi-million dollar home. But essentially only Mendocino Brewing remains of the breweries as a viable brand, although Humboldt was sold off.

I remember when UB initially bought Mendocino Brewing and Mallya began visiting their distributors. He would attend distributor meetings with an actual entourage, including bodyguards, which was not exactly endearing to anybody. Within a short time the Mendocino brand, which had been very successful locally, began to fall precipitously. It’s never really recovered, though they do quite a bit of contract brewing out of their Ukiah facility. Mallya has a fairly ruthless reputation for his business practices, and I’ve spoken to at least two people who’ve done business with him in other industries who’ve had nothing flattering to say about the way he conducts himself, so the news being reported by the Drinks Business came as no surprise, except perhaps as to why it took so long. Undoubtedly, there, as here, the rules for billionaires are different than it is for you and me.

According to Drinks Business report, “Indian authorities have issued an arrest warrant against Vijay Mallya, the former head of United Spirits, just days after freezing his passport.”

The warrant was issued on the “third strike and out” practice of the Indian Enforcement Directorate (ED) when the colourful former tycoon failed to appear at the third time of asking at a Mumbai court to answer allegations of misuse of funds loaned to his Kingfisher Airlines by a state-owned bank, IDBI.

This is one of 17 Indian banks seeking to recover some $13 billion from Mallya. Last month they rejected his proposed scheme to repay $600 million.

It is alleged that Mallya used part of the $134m loan from IDBI to buy properties overseas. The airline, which was never profitable, collapsed into bankruptcy in 2012 with debts approaching £1bn.

Mallya has consistently denied impropriety and his private holding company, UB Group, said that the full loan, including up to $65m alleged to have been diverted to Mallya’s personal use, had been “used for legitimate business purposes only”.

The statement said that the arrest warrant was “erroneous and unjustified”.

Mallya, who is thought to be in Britain, has been ordered by India’s supreme court to disclose all his assets to the authorities.

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Inside the newer Mendocino brewery in Ukiah.

Asahi Buys Grolsch, Peroni & Meantime

asahi grolsch peroni meantime
Business Insider is reporting that Anheuser-Busch InBev, who’s in the process of closing the deal for SABMiller, agreed to sell off Grolsh, Peroni and Meantime Brewing, which is part of SABMiller’s portfolio, most likely in order to smooth the regulatory approvals necessary to close the transaction. In fact, this deal in contingent on the other one, so that if the ABI/SABMiller deals fall apart, then this one won’t go through either and they’ll remain part of SABMiller.

SABMiller posted a short press release today:

SABMiller plc (“SABMiller”) has been informed by Anheuser Busch InBev SA/NV (“AB InBev”) that following its announcement on 10 February, it has accepted the binding offer from Asahi Group Holdings, Ltd (“Asahi”) to acquire certain of SABMiller’s European premium brands and their related businesses (excluding certain US rights), following completion of the relevant employee information and consultation processes applicable to the sale of these brands and businesses.

The acquisition by Asahi of these premium brands and related businesses (comprised of the Peroni, Grolsch and Meantime brand families and related businesses in Italy, the Netherlands, the UK and internationally (“the Business”)) is conditional on the successful closing of the recommended acquisition of SABMiller by AB InBev as announced on 11 November 2015, which itself contains certain regulatory pre-conditions and conditions, and the approval by the European Commission of Asahi as a purchaser of the Business.

SABMiller-minus-GMP

NBWA Brewery Count Over 4,800

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Some very interesting analysis from the NBWA, and their economist Lester Jones, about the number of breweries in America. Lester’s analysis uses slightly different metrics from the TTB and doesn’t define craft breweries as narrowly as the BA, and also the TTB doesn’t distinguish exactly what mat beverages are being made, if they’re licensed as a brewery then they’re included in the data. Those difference in calculating show the NBWA’s number for how many breweries there in America is 4,824, or over 550 more. But even more remarkable is that based on the number of “permitted breweries on record” at the TTB by the end of last year, that number could swell beyond 6,000, which seems absolutely crazy. The number is California alone, at 788, is just shy of 800. Sheesh!

Here’s the entire analysis below since the whole summary is worth reading:

Each year, the NBWA requests data from the TTB on tax paid withdraw volumes by size of brewery. Once again, this year’s TTB data provides some interesting brewing industry insights into the dynamics of the U.S. brewing industry. This data also is helpful for us to supplement the Brewers Association data on overall independent craft beer growth and brewery count. According to the BA, craft brewer volumes grew by 13 percent to 24.5 million barrels in 2015. The BA also reported 4,269 total operating breweries for 2015. As with all statistics, how the numbers are collected and reported can vary across organizations. In our industry, the numbers also change quickly.

As of April 2016, the U.S. domestic brewing industry had 4,824 reporting breweries according to the TTB. As with the BA’s brewery count of 4,269, this number is expected to change as additional new brewers are counted that may not yet have been fully recognized and/or reported by either the TTB or the BA data. The data presented below is for all types of malt beverage manufacturers and recognizes only the individual facility, not the ownership or control group.

Highlights from the 2015 TTB brewery count data include:

  1. The small brewer group (making less than 7,500 barrels) accounted for less than 2 percent of all domestic volumes yet accounted for 93 percent of all breweries. The smallest of this group has 566 breweries reporting less than one barrel of production each in 2015. These super small brewers can thank the contracting brewing industry for helping them sell almost 100,000 barrels – a figure well beyond their reported production capacity.
    The medium brewer group (making between 7,501 and 60,000 barrels) is a much smaller group consisting of 246 breweries, but these few breweries account for 1.6 times more volume than the 4,475 breweries in the small brewer group.
  2. The large brewer group consists of only 82 breweries making between 60,001 and 1.9 million barrels. This is a unique group within the industry as they pay the mixed rate federal excise tax of $7 for the first 60,000 barrels and $18 on each barrel over 60,001. While a much smaller group of only 82 breweries, they collectively produce more than four times the amount of beer as the medium brewer group. The large brewer group also has the largest range of production volumes and saw the fewest number of new entrants (17 breweries) into its ranks in 2015.
  3. Finally, we get the extra-large group. This is a group of only 21 breweries that produce more than 84 percent of all domestic beer – more than five times the amount made by all 4,803 combined. The closing of the MillerCoors brewery in Eden, North Carolina, will reduce this class of brewers by one in future reports and will take a significant-sized brewery offline for the first time in many years.
  4. The industry added around 1,500 new breweries in 2015 – that is equivalent to four new breweries a day entering the marketplace. As a highly capital-intensive business, starting small is the name of the game. Growing a beer brand takes a long time, and economies of scale are earned over decades. The largest U.S. breweries have been in operation for decades, and economies of scale should help maintain the beer volumes even in the face of declining per capita beer consumption.
  5. With more than 6,000 permitted breweries on record at the end of CY 2015, 2016 is set to be an even more competitive year for the brewing industry. Just as economies of scale drive the brewing side of the industry, logistical expertise and local market insights drive the efficiencies inherent in beer distributor networks. Working together and maximizing their comparative advantages, brewers, distributors and retailers will deliver unprecedented choice and value to American beer consumers in 2016.

Brewery counts by size 2015_Page_1

Brewery counts by size 2015_Page_2

ABI Buys Devils Backbone

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In what’s becoming almost routine news, Anheuser-Busch InBev announced this morning the acquisition of Devils Backbone Brewing of Roseland, Virginia.

Here’s the press release:

Today, Anheuser-Busch announced an agreement to acquire Devils Backbone Brewing Company, the leading and fastest-growing craft brewery in the state of Virginia. Devils Backbone will be the latest partner to join the diverse portfolio of craft breweries within The High End, the company’s business unit comprising unique craft and import brands.

“I am extremely pleased to announce the partnership of Devils Backbone Brewing Company with Anheuser-Busch. While we are joining a creative group of craft breweries in the division, Devils Backbone will retain a high level of autonomy and continue its own authentic DNA within The High End framework,” said Steve Crandall, co-founder and CEO of Devils Backbone Brewing Company. “The existing management team plans to stay on board for many years, while continuing to innovate and bring locally crafted Virginia beer to the nation.”

In 2008, founders Steve and Heidi Crandall opened the doors to Devils Backbone Brewing Company in the Virginia Heartland, after being inspired by a ski trip to northern Italy in 1991 where they had their first taste of Germanic style beer. After success with the first brewpub, Basecamp, the decision was made to break ground on the Outpost facility, in Lexington, Virginia. Originally projected to produce 10,000 barrels of beer in its first ten years, the Outpost produced almost 45,000 barrels in its first three. Steve credits much of this early success to the excellent network of distributors within his system, which is weighted heavily towards Anheuser-Busch.

“I congratulate Steve and Heidi Crandall and the entire Devils Backbone team as they partner with Anheuser-Busch,” said Virginia Governor Terry McAuliffe. “Through the strength of Anheuser-Busch’s network of distributors, Devils Backbone’s award-winning craft beer will soon be available throughout the country and beyond. I want to thank Devils Backbone for their immense contribution to Virginia’s world-class craft beer industry, and I look forward to the additional exposure for Virginia as a leading state for craft beer lovers.”

Today, the Outpost Brewery & Taproom in Lexington serves as the primary production brewery while the Basecamp Brewpub & Meadows in Roseland, serves as a visitor destination. Devils Backbone takes full advantage of the scenic 100-acre Basecamp property surrounded by the Blue Ridge Mountains, offering a variety of opportunities for guests to enjoy the outdoors. In 2015, the two locations hosted more than 500,000 guests.

“Devils Backbone has captivated beer drinkers in Virginia since opening its doors eight years ago,” said Felipe Szpigel, President, The High End. “From the beginning, they have shown creativity and talent with the great beers they brew, and they’ve been able to use the authentic offerings at Basecamp Brewpub & Meadows to cultivate a fun, outdoor lifestyle that resonates with everyone. Pair these qualities with dynamic leadership and a dream to do something bigger, and you have the recipe for an even more promising future.”

While best known for its flagship Vienna Lager, which accounted for nearly 60% of Devils Backbone volume in 2015, the portfolio also includes other award-winning year-round favorites like Eight Point IPA and Schwartz Bier. Developing beers with personality and individual integrity of flavor has helped enable Devils Backbone to win four National titles: 2014 Great American Beer Festival Mid-Size Brewery & Brew Team, 2013 Small Brewing Company & Small Brewing Company Brew Team, 2012 Small Brewpub & Small Brewpub Brewer, 2010 World Beer Cup Champion Brewery, and the Virginia Craft Brewers Fest Best of Show medals in 2015, 2014, 2013 and 2012.

First Beverage Group acted as financial advisor to Devils Backbone Brewing Company. Anheuser-Busch’s partnership with Devils Backbone is expected to close in the second quarter, subject to customary closing conditions. Terms of the agreement were not disclosed.

devilsbackbone-coaster

Scranton Media Family Buys Flying Fish

flying-fish
I somehow missed this news, which seems to have come out without too much fanfare a few days ago. Maybe we’re becoming desensitized to brewery M&A? Certainly Twitter wasn’t abuzz with the news. Flying Fish Brewing, one of New Jersey’s earliest small brewers, was bought by the Lynett and Haggerty families, who own Times-Shamrock Communications. They own a dozen newspapers and eleven radio stations. On April 8, they announced that they’d bought a controlling interest in the Somerdale, New Jersey brewery, though the deal was quietly done a month earlier, on March 11.

Flying Fish was founded in 1995 by Gene Muller. They started in Cherry Hill, but moved to larger quarters in Sommerville four years ago.

According to the Scranton Times-Tribune (one of the papers owned by the family), this is how it went down.

The family’s expertise in marketing, events and promotions will help the brewery continue to grow and expand its footprint, said Bobby Lynett, manager of L&H Brewing Partners, the entity that now holds a majority interest in Flying Fish. They declined to disclose the cost of their acquisition.

“Flying Fish is a nice brewery with good people and a great product,” said Mr. Lynett, a publisher of The Times-Tribune. “We want to help it grow.”

Flying Fish currently employs 33 people who produce about 24,000 barrels of beer each year.

Gene Muller, founder of Flying Fish, said he began looking for new partners when some initial investors began to cash out on their investment in the company. He joked that the Scranton family emerged as a good fit “because they are Irish.”

Mr. Muller, 61, believes Flying Fish will benefit from events and other business interests of the Lynett-Haggerty families, whom he refers to as “The Scranton Guys.”

“There are obvious synergies,” he said. “We saw an opportunity to inject some enthusiasm into the company and take care of our initial investors. The Scranton Guys are part of a 100-year-old company. They understand the long-term horizon.”

The capital for L&H Brewing Partners came from some individual family members and Elk Lake Capital, set up by the family to invest in non-media companies to add diversity to the family’s holdings beyond Times-Shamrock’s media holdings of newspapers, radio stations and outdoor advertising. Elk Lake already owns a land-surveying company and water-testing company.

Toasting the Class of '96: Greg Koch, Mark Edelson, Bill Covaleski, Tom Kehoe, Gene Muller & Sam CalagioneAt a Philly Beer Week event celebrating the Class of '96: Greg Koch, Mark Edelson, Bill Covaleski, Tom Kehoe, Gene Muller & Sam Calagione.