A Look At The Craft Beer Industry Supply Chain

2013 was the year of the infographics, when I featured a new infographic each and every day, so I haven’t used too many lately. But this look at The Craft Beer Industry Supply Chain stood out as an interesting one. It was crated by Halobi, a company that specializes in supply chain and inventory management for businesses. Here’s their journey, “From Grains to Growlers.”


MillerCoors To Close North Carolina Brewery

Thanks to declines in sales volume, MillerCoors announced today that they will be closing their brewery in Eden, North Carolina, winding it down over the next year with plans to finally close in September of next year.

According to MillerCoors’ website:

Opened in 1978, the Eden facility was the first brewery to produce Miller Genuine Draft back in 1986. Today, it’s a state-of-the-art operation with more than 500 employees and an annual brewing capacity of 9 million barrels. The small, friendly community of Eden lies near Greensboro.

Here’s the press release:

“Today we made the difficult decision to close our brewery in Eden, N.C., in order to optimize our brewery footprint and streamline operations for greater efficiency across our remaining seven breweries,” said Chief Integrated Supply Chain Officer Fernando Palacios.

The decision to close the Eden Brewery was due to significant overlap in distribution between Eden and the Shenandoah, Va., brewery, which is approximately 200 miles away. Eden has been a strong performer over the years. However, Shenandoah is better suited geographically in relation to Northeast markets and is also the newest brewery in MillerCoors network.

The Eden brewery employs approximately 520 employees. In 2014, Eden produced 7.1 million barrels of beer, which were shipped to 280 independently-owned distributors. Brands include Blue Moon seasonals, Coors Light, Miller Lite and Miller High Life. Over the next 12 months, products currently produced in Eden will be transitioned to other breweries, including Shenandoah, Va.; Trenton, Ohio; Fort Worth, Texas; Albany, Ga.; and Milwaukee, Wis.

Since the creation of MillerCoors seven years ago, volume has declined by nearly 10 million barrels. This volume loss is due to a variety of factors, including economic challenges, an explosion of choice and fragmentation within the beer business, and a dramatic change in the way consumers engage with brands. As a result of declining volume, MillerCoors breweries are operating at an increasingly inefficient capacity. While MillerCoors is taking steps to strengthen its overall portfolio to drive long-term growth in volume and share, continued volume declines are expected each of the next few years.

“We take great pride in supporting the communities where we live and work,” Palacios said. “We’ve been proud to be part of the Eden community since we shipped our first products in 1978. We will work with community leaders to make sure we continue to support the community while we are brewing beer in Eden.”

The Milwaukee Business Journal added:

Blue Moon seasonal products will be moving to the Milwaukee brewery, which already produces seasonal varieties for Leinenkugel, said Marty Maloney, a spokesman for MillerCoors. Maloney said each brewery receiving work from Eden will evaluate its own hiring needs, but the shift could add jobs or at least support the existing jobs in Milwaukee.

But decreasing sales — volume has declined by almost 10 million barrels since 2008 and the company expects the trend to continue for the next few years — mean MillerCoors’ breweries are operating inefficiently, and future closures or reductions could be in the big brewer’s future.

The entrance to the MillerCoors plant in Eden, North Carolina, as close as you can get on Google Maps Street View.

MillerCoors Acquires Majority Stake In Saint Archer

saint-archer millercoors
Not quite as big news as yesterday, but certainly continuing a trend. This Morning, MillerCoors announced that Saint Archer Brewing of San Diego, California will be joining their craft division, Tenth and Blake, as they acquire a majority interest in the small brewery.

Here’s the press release:

Tenth and Blake, the craft and import division of MillerCoors, announced today an agreement to acquire a majority interest in Saint Archer Brewing Company.

Founded in San Diego in 2013 by a talented group of entrepreneurs, artists, skateboarders and surfers, Saint Archer brews an award-winning range of ales including Blonde Ale, IPA, White Ale and Pale Ale. Saint Archer expects to sell 35,000 barrels of beer in 2015, up more than 100 percent over 2014, making it one of the fastest-growing breweries in California. Tenth and Blake plans to support its continued growth under the ongoing leadership of Josh Landan, Saint Archer co-founder and president.

“We have always wanted to get great beer into more people’s hands,” said Landan. “We were fortunate that brewers big and small were interested in partnering with us, but Tenth and Blake was the clear choice. Tenth and Blake shares our passion for putting great beer first. Joining Tenth and Blake allows us to keep doing what we love right here in San Diego, but now with more resources to innovate and grow. With Tenth and Blake’s help, we hope to one day be a national brand.”

Saint Archer’s management and their team will continue to brew, package, ship, and sell Saint Archer’s outstanding portfolio of high-quality brands. Saint Archer will be run as a separate business unit of Tenth and Blake.

“We’re really excited about our partnership with Saint Archer,” said Scott Whitley, president and CEO of Tenth and Blake. “Saint Archer is consistent with our strategy of building our high-end portfolio while driving topline growth. Josh and his team represent everything we look for in a partner. Saint Archer brews award-winning ales across a variety of styles that are complementary to our current portfolio—including some outstanding IPAs. We’re excited at the prospect of working together to support the continued success of Saint Archer.”

Saint Archer picked up two gold medals at the 2014 San Diego International Beer Festival and a gold medal at the 2014 Great American Beer Festival.

Saint Archer joins other leading crafts in the Tenth and Blake portfolio, including Blue Moon Brewing Company, Jacob Leinenkugel Brewing Company, Crispin Cider Company and a minority equity stake in Terrapin Beer Company.

The transaction is expected to complete in October 2015. The terms of the transaction were not disclosed.


A Landscape View Of Beer For The Next Session

For 102nd Session, our host will be Allen Huerta, who writes Active Brewer. For his topic, he’s asking us to look at the big picture, the entire landscape of beer; yesterday, today, and/or tomorrow, or as he more fully explains what he has in mind for the August Session in his announcement, “The Landscape of Beer:”

SURPRISE, SURPRISE! The Landscape of Beer in America is changing. It has even begun influencing beer in countries all around the world. Everyone has their opinion on Local vs Global, Craft vs Macro, and Love vs Business. Those who were at the Beer Bloggers & Writers Conference in Asheville this past weekend had a brief talk about how “Small and Independent Matters”. Something that quite a few people say matters to them, but where is the upper limit? Does a purchase of another brewery still allow a brewery to fall into the Small and Independent camp?

Our topic this month is, “The Landscape of Beer“. How do you see that landscape now? What about in 5, 10, or even 20 years? A current goal in the American Craft Beer Industry is 20% market share by the year 2020. How can we get there? Can we get there?

Whether your view is realistic or whimsical, what do you see in our future? Is it something you want or something that is happening? Let us know and maybe we can help paint the future together.


So start painting your thoughts in broad strokes, and give us your take on the beer landscape. To participate in the July Session, leave a comment to the original announcement, on or before Friday, August 7.


Duvel Invests In Firestone Walker

duvel firestone-walker-long-cask
Earlier today Firestone Walker Brewing — in a carefully worded press release — announced that Duvel Moortgat and Firestone Walker “will combine their two companies in the USA.”

Here’s they said it on their website, at Firestone Walker news:


And this was the press release sent out:

July 16, 2015 – Kansas City, Mo., & Paso Robles, Ca. – In an agreement signed earlier this week, Firestone Walker Brewing Company and Duvel Moortgat will combine their two companies in the USA. The California brewery will continue to operate independently in Paso Robles under its current leadership of David Walker and Adam Firestone.

David Walker and Adam Firestone, joint founders of Firestone Walker said: “The Firestone Walker and Duvel Moortgat families have combined forces to broaden their capacity and scope as brewers. Long admirers of each other’s beers, culture and breweries, the two teams saw the perfect fit for an alliance. The partnership will allow Firestone Walker to develop our capacity across the US in a conservative and thoughtful way by consummating a life long tie with this family-owned international craft brewer, who continue their commitment to participating in the American Craft Revolution.”

“The relationship I have built with David and Adam made Firestone Walker the perfect fit for future growth,” said Michel Moortgat, CEO of Duvel Moortgat. “We share the same values; have a great mutual respect for each other’s achievements and a deeply-held belief in exceptional quality as a platform for long-term success. Bringing Firestone Walker together with Boulevard, Ommegang, Duvel and the other craft breweries in our family creates a stronger platform in the USA for us both and allows us to collaborate on brewing in different locations across the USA”

“The most important thing that we can do for Firestone Walker is to help David and Adam manage the exponential growth that their team and their brewery is experiencing right now by providing financial and production capacity to support them,” said Simon Thorpe, President of Duvel Moortgat USA. “We are not integrating our organizations. Both Boulevard and Ommegang are also enjoying tremendous success and we still have much to do in realizing our dream for both these breweries.”

The transaction between Duvel Moortgat and Firestone Walker is expected to close later this year. It is an agreement between two private, family-owned companies, so no financial or contractual details will be disclosed.

It will be interesting to see how this is the same or different from the deal Duvel did with Boulevard Brewing almost two years ago, from which Boulevard seems to have emerged unscathed and doing well, both in terms of quality and public perception. At this point, it appears it may be similar, with very little changing in terms of day to day operations of the brewery and with all the key people remaining in place.


Nielsen Beer Numbers Show Where Growth Is Happening

Earlier today, Bart Watson, the BA’s economist, tweeted a chart from Nielsen entitled “Craft Beer is a Staple Out West and Growing Across the Country.” The chart is from a new report released yesterday, called Tapped In: Craft and Local Are Powerful Trends in the Beer Aisle. It shows three columns of data, including dollar share, percentage change of dollar volume versus last year and changes in dollar share versus last year. This is for “craft beer,” which Nieslen defines slightly differently than the BA, if memory serves.


The top five markets for share of craft beer are on the west coast, three of them in California: San Diego, San Francisco and Sacramento. The bottom five are all midwest and east coast, though only Washington DC is a particularly large market, with the other four being somewhat smaller. The top five each represents market in which craft enjoys roughly one-third of all beer sales, which is amazing to me given where we were just ten or twenty years ago.

In terms of change, Birmingham, Alabama is the surprise winner with an astonishing 63.1% growth in volume over last year. Although equally surprising is San Diego who despite being the third largest market for craft, also grew 22.5% more on a large base, and was the fourth highest in volume growth.

Of the categories Nielsen tracks, cider is the one most on fire, with volume up 43.2%. Next is craft beer with 10.2%, tied with Mexican beer, although craft has the edge in percentage change in value, though I’m not entirely sure how that’s calculated. Super Premium, Premium, and Sub Premium are all trending down, with negative numbers, though not by much. Sub Premium is losing the most ground, down 3.5% by volume.

In addition, Nieksen surveyed beer drinkers about how much they care about their beer being local.

Newswire template

If you’re unfamiliar with Nielsen, they track sales data in primarily larger, chain outlets like groceries, convenience stores, liquor and drug chains, etc. as opposed to beer stores and more independent or unique sales avenues. But because they’ve been collecting consistent data for a number of years, their information is usually pretty reliable and a decent snapshot of what’s going on across the country. Here’s some more of their analysis regarding where people are buying beer.

At the end of June 2015, craft beer accounted for 11.9% of the total dollar volume of the beer category in the U.S. It’s worth noting, however, that craft’s market share varies significantly by channel. For example, it has a much larger share in the grocery channel (20.1%) than the convenience (4.6%) and drug (8.7%) store channels, largely because grocery stores have significantly more floor space available, which allows for greater assortment and options for consumers. That said, however, the convenience channel holds the title for being the leader for overall beer sales, and craft is making a strong run there, growing at a faster pace in the convenience channel (+21.4%) than in grocery stores (+13.7%) for the 52 weeks ending June 20, 2015.

AB-InBev Buys Pioneering Brazilian Brewery

Cervejaria Colorado was one of Brazil’s first small breweries when it opened in 1995. I met founder Marcello Carneiro in Argentina when I was there for beer judging in 2011. He’s one of the most fun-loving people I’ve ever met and I’ve since seen him in Brazil and also stateside a few times. He announced earlier today on Facebook that AmBev would be acquiring his brewery. Here’s the Google translation of the announcement:

Dear friends of the bear, we are very happy to formalize you that now the Colorado it becomes part of the group Ambev, along the breweries beer! In 1995, our founder, Marcelo Carneiro, started his journey in the country and put the breweries Colorado on the international market, solidifying a company that today bill around $18 million per year. 20 years ago we work with dignity and fight for the cause brewery, we gain strength and tread a path of large awards, authenticity and it will now be even better! We will continue to develop Brazilian genuinely revenue, our DNA. The Union of the brands will make it possible to increase the capacity of distribution of Colorado and, of course, to our dear Marcelo to devote even more to research of ingredients. Our commitment to the lovers of good beer is still strong and the dream that unites the two pubs is the recovery of the Brazilian beer, with ingredients Brazilians and produced for consumers from north to south of the country. Unite is to make this dream a reality, the dream of the Brazilian school of beer! A toast and hug from bear.

AmBev, you may recall, is the Companhia de Bebidas das Américas, a Brazilian brewing company, and the largest in Latin America and 5th worldwide. It was established by a merger of Brahma and Antarctica in 1999. After more business dealings, mergers and acquisitions, today is owned by Anheuser-Busch InBev. AmBev makes Antarctica, Brahma, Bohemia, and Skol, and in addition has a controlling interest in the popular Argentine brand Quilmes.

AmBev also released a statement, which I’ve used Google Translate to make more understandable as my Portuguese is worthless:


Breweries unite the passion for beer and the search for innovation

The dream of creating a Brazilian school of beer, based on the valuation of culture and national ingredients, joined our Brewery Bohemia Brewery and Colorado. The mark of São Paulo is now part of our team, bringing their tradition, quality, passion and daring.

“I am very excited about the opportunity to achieve my dream with Cervejaria Bohemia. When I founded the Colorado 20 years ago, always wanted to give a national touch to recipes and create a Brazilian school of beer, as there is the German and Belgian. I know that together we will make it happen, “says Marcelo Cerneiro, founder of Colorado.

Wakswaser Daniel, director of marketing for Cervejaria Bohemia, also celebrates the partnership: “It’s a time of celebration for the Brazilian culture. Our union allows further spread the knowledge brewing across the country. Consumers will have more choices, varied beers, unusual income and undisputed quality. ”

The Colorado follows with manufacturing in Ribeirão Preto, São Paulo. All labels will be maintained and the union with Bohemia Brewery will bring innovation to the portfolio. With the alliance, the distribution of power increases, enabling the brand to bring more beer enthusiasts throughout Brazil.

So it appears that the acquisition will merge Colorado with AmBev’s premium division headed by Cervejaria Bohemia, just as Wäls did in February, when AmBev bought them, as well. Also, in May, they acquired the Bogotá Beer Co., which is/was Colombia’s largest craft brewer.” So it appears there’s some long term plan for Latin America, just as we’re seeing here in the United States, too.

Marcelo’s also announced what his role will be going forward. “My job is international consultant, for a minimum of five years. My task will be to open new roads for Colorado, talk to business partners, represent the brand that I fought for 20 years. My fight has always been and will continue to facilitate the consolidation of a typically Brazilian brewing school, and it will never be abandoned.”

Bia Amorim, me and Marcello after a beer dinner in São Paulo in 2011.

Jeremy Warren Leaving Knee Deep

Knee Deep Brewing Co. founder Jeremy Warren announced earlier today via Facebook that effective August 3 he’ll be leaving the brewery he started five years ago. Here’s what he’s saying so far:

The past 5 years has been a great ride with Knee Deep Brewing. From my half bbl home brew in my garage to 11,000 bbl in an 18,000 sq. ft. warehouse! I want to thank each and every one of you for your support and encouragement.

Your constant kind words and criticism keeps us Brewers on our toes in making the best beer possible.

With that said, it is with a bittersweet feeling that I’m announcing my separation from Knee Deep Brewing effective August 3rd.

Don’t freak out! I will be announcing my new project soon!

I will not disappoint!!

So it sounds like he’s already cooked another project and will leave Knee Deep intact, which is great. Join me in wishing him well on his next adventure.

UPDATE: The Sacramento Beer published a follow-up yesterday about Jeremy’s resignation that includes speculation that he’ll be opening his own brewery, which naturally is what we’re all thinking. But co-founder Jerry Moore, who’s also apparently the majority owner of Knee Deep, states “he was not surprised by Warren’s decision and he insisted that Knee Deep will not skip a beat.” He then adds this:

“Knee Deep owns those recipes and I own Knee Deep,” said Moore, noting that Warren has been a minority owner. “Knee Deep will continue to make all of the beers we’ve been making. We have four full-time brewers who have been making these beers.”

I don’t want to read too much into that statement, especially since I don’t know Jerry Moore, but it’s hard not to see it as inferring an issue or issues that led to Warren’s departure.

Jeremy Warren from a recent article in Sacramento Magazine.

Lagunitas Announces Third Brewery

I’ve been traveling most of this week, so I missed the announcement Wednesday by owner Tony Magee when he unveiled plans for a third brewery on Twitter. When I interviewed him for a profile piece in in Beer Connoisseur magazine in 2012, he was already thinking about a third location after Chicago was up and running, but at that time was leaning toward New Orleans. But it turns out the new brewery will be in Southern California in the town of Azusa, which is in the San Gabriel Valley and is part of Los Angeles County, about 25 miles east of the city of L.A. This third brewery is a whopping 178,000-square feet and will reportedly have “an initial capacity of 420,000 barrels” which can be raised to one million barrels over time. By contrast, Chicago, when completely finished, will be able to brew 1.2 million barrels a year, and when an expansion in Petaluma is done, they’ll go from a capacity of 450,000-bbl to 750,000-bbl.

Tony teased out the new space on Twitter with this blueprint.

It’s location is also “spittin’ distance” from the Miller facility in Irwindale. Construction has apparently already begun and is expected to open by early 2017. The decision was prompted by nearing capacity in Petaluma, which is expected to be at 85% in about 18 months. Magee said the L.A. space will be “similar in scale and operation to their Chicago brewery,” so that’s pretty promising. If it’s anything like the Chicago brewery, which I just visited Monday, it will be spectacular.

UPDATE: Lagunitas posted some photos of the ongoing construction which has already begun in Azusa.





First Time Craft Beer Drinker’s Slow-Motion Reactions

sour-face bitter-face
This reminds me quite a lot of those BuzzFeed videos my wife and kids are always showing me of people trying different national or ethnic foods for the first time, although this one is showing the reactions of various people trying different styles of beer for the first time. Each person is shown naked (or at least as far down as we can see) and we’re also shown the style they’re trying and then their reaction is shown in slow-motion. It was created by Bierdeluxe, a German online beer store. From a main page of craft beer, there’s a picture of each person representing the broad styles from the video, which has as its title “If you’ve never tasted Craft Beer, then you’ve never tasted Beer!,” and clicking on each takes you to a page where the beers they have for sale in that style are displayed for purchase. It’s an oddly effective way to shop, if a little weird on several levels, but it’s also kind of funny, displaying that German knack for knowing what’s funny and/or odd but still not being able to work out which one it really is in the end.