Kurt Widmer Announces His Retirement

October 12, 2015 By Jay Brooks

Kurt Widmer, the older brother in Widmer Brothers Brewing, announced today he will be retiring at the end of 2015 from the day-to-day work with the business he founded with his brother Rob in 1984, 31 years ago.

Here’s the press release from the Craft Brew Alliance:

Kurt R. Widmer, 63, co-founder of Widmer Brothers Brewing, announced today that he will retire from Craft Brew Alliance, Inc. (“CBA”) and will be leaving CBA’s Board of Directors at the end of the year. At that time, he will assume the honorary title of Chairman Emeritus. Mr. Widmer has served as Chairman of the Board since Craft Brew Alliance was formed in 2008 through the merger of pioneering Pacific Northwest craft brewing companies Redhook Brewery and Widmer Brothers Brewing. Previously, Mr. Widmer served as President, Chief Executive Officer and Chairman of the Board of Widmer Brothers Brewing Company from 1984 until 2008.
Mr. Widmer will remain in his role through December 31, 2015 to support the transition as CBA’s Board of Directors engages in the process of selecting a new Chairperson.
“Since my brother Rob and I founded Widmer Brothers Brewing over 31 years ago, this extraordinary industry that we helped create has grown and evolved in ways I couldn’t even imagine,” said Mr. Widmer. “Many of us who set the foundation for today’s booming craft beer market are thinking about the next chapter in our lives, and my wife Ann and I have been discussing the fact that there’s still a lot we want to do. So while I’ll miss walking into my office at the brewery every day, I’m admittedly looking forward to more time with my family and doing more of what I love to do – whether it’s traveling around the world or home brewing in the basement.”
He continued, “In terms of timing, I feel really good about where CBA is today. Looking back on how CBA has grown from two craft beer companies to a powerful alliance of great beers, brands, breweries and partners, I couldn’t be more confident in the future. The focus, expertise, and vision of the leadership team, under the helm of Andy Thomas, are further proof that CBA, its people, and its shareholders are in great hands. People who know me will probably not believe that I’m stepping away from Widmer Brothers and CBA. As a Widmer Brother, I will always look forward to that next innovative collaboration or a chance to connect with Widmer fans over a pint of Hefe at a local account.”
Kurt and Rob Widmer co-founded Widmer Brothers Brewing in Portland, Oregon in 1984 with help from their father Ray. They are among a handful of brewers in the United States credited with creating a universally recognized new style in 1986 with Hefe, the original American-style Hefeweizen and the #1 selling craft beer in Oregon.
“I’ve been fortunate to meet a number of truly remarkable people in this industry, and Kurt Widmer is definitely at the top of the list,” said Andy Thomas, Chief Executive Officer, CBA. “From his role in creating the craft beer category, to his foresight and vision in bringing together CBA to secure his brands’ route to market — and the adversity he faced as a direct result — to the role he continues to play as an impassioned advocate of our industry, Kurt has made a profound impact on many of us. CBA wouldn’t be CBA without Kurt Widmer, and I am grateful for his support and confidence as we continue forward.”

Kurt (center) with Gary Fish and Fred Eckhardt at the Horse Brass for Don Younger’s memorial in 2011.

Labatt Breweries Buys Mill Street

October 9, 2015 By Jay Brooks

Mill-Street
This morning, Labatt Breweries, itself part of the family of brands owned by Anheuser-Busch InBev, announced that they were purchasing Toronto’s Mill Street Brewery.

From the press release:

Labatt Breweries of Canada today announced that it has purchased Mill Street Brewery, an award-winning craft brewer based in Toronto. The deal will allow Mill Street to deepen its traction with consumers in the fast growing craft beer segment, where it has an extraordinary variety of unique beers, as well as brew pubs in both Toronto and Ottawa. To help achieve this, Labatt will immediately invest $10 million in Mill Street’s Toronto brewery, which includes a state-of-the-art brewhouse and packaging capabilities.
“Mill Street has continually distinguished itself with its energy and success in innovation, and powerful commitment to great-tasting quality beer,” said Labatt president Jan Craps. “Our partnership and investment will accelerate its growth in one of the most dynamic beer segments, while fully preserving Mill Street’s creative character and pioneering spirit.”
“With the success of Mill Street has come the challenge of serving a growing demand for our brands,” said Irvine Weitzman, Mill Street CEO, who will continue with Mill Street along with co-founder Steve Abrams and famed brewmaster Joel Manning. “Our partnership with Labatt is a natural evolution in our growth that will allow more Canadians to enjoy our beer and secure the legacy of our brands by allowing us to remain focused on the authentic characteristics that have made Mill Street what it is today.”
Founded in Toronto’s Distillery District in 2002, Mill Street is an award-winning craft brewery and the largest producer of certified organic beer in Canada. It has won numerous beer quality awards including the Canadian Brewery of the Year Award in three consecutive years. Core brands include Ontario’s first organic beer, Mill Street Original Organic Lager, along with 100th Meridian, Tankhouse Ale, and Cobblestone Stout. The brewer is also renowned for permanent specialties including a strong golden ale Betelgeuse, an Irish-style red ale Bob’s Bearded Red and nitrogen-charged Vanilla Porter, as well as for several small-batch specialty beers.
“Throughout our history, our dedication to our craft and our passion for pushing the envelope have allowed Mill Street to make waves in Canada’s craft beer segment,” said Abrams. “We are excited about the prospect of working with Labatt to build even further on our successes and sharing our brands with more beer lovers across Canada.”
Mill Street brands will continue to be brewed under the expertise of brewmaster Joel Manning.
“This investment in a state-of-the-art brewhouse that Mill Street will run on a stand-alone basis positions us to reach the very top of our craft,” added Manning. “We couldn’t be more pleased by this fantastic opportunity to further entrench our reputation for innovation and quality, and bring more great brands to more consumers.”

Labatt and Mill Street Brewery announce purchase agreement
From left to right: Irvine Weitzman, Mill Street CEO, Jan Craps, President of Labatt, Joel Manning, Brewmaster at Mill Street, and Steve Abrams, Co-Founder of Mill Street. (CNW Group/Labatt Breweries of Canada)

SABMiller Rejects Buyout Offer From A-B InBev

October 7, 2015 By Jay Brooks

abib
SABMiller released a statement this morning rejecting the latest takeover offer from Anheuser-Busch InBev. You may, or may not, be able to read the statements released by SABMiller on their website, and there are some fairly scary disclaimers including language that, depending on your jurisdiction, claims that the publicly available information may not be legal to read, and in such case advise you to “exit this web page.” Which while I’m sure is required by some law, probably UK law, also feels fairly ridiculous. At any rate, quite a few news outlets, such as the Wall Street Journal, Reuters and the New York Times are all reporting on it, so it must be okay for the likes of me.

The gist of it is the SABMiller board unanimously rejected ABI’s latest takeover offer, for the primary reason that they believe ABI’s offer “substantially” undervalues their company (currently the offer values SABMiller at $104 billion), among a few other technical reasons having to do with the timing, regulatory issues and others. The current offer is for roughly £65.14 billion, which is $99.76 billion dollars.

The Wall Street Journal helpfully created a graphic showing the recent history of the potential deal as it’s been unfolding.

SABMillerHomepage

There’s little doubt this is not the end of it, but there will continue to be a back and forth as this high-stakes game unfolds. And it really is a game, sad to say. Apparently negotiations have been tense, which really should not come as a shock to anybody, yet you see statements like this. “AB InBev is disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement.” The absurdity of that reveals the gamesmanship involved, as it plays out in the media. It’s going to be an interesting few weeks.

Asahi Buys Mountain Goat

September 30, 2015 By Jay Brooks

mountain-goat-red asahi
So larger breweries buying smaller ones is not confined to the U.S., or even the Western Hemisphere. Australia’s Mountain Goat Beer announced on “Monday that Asahi Holdings (Australia) had taken a 100 per cent ownership stake in the company.” Co-founders Dave Bonighton and Cam Hines will be staying on although an Asahi employee, Matt Grix, has been “named as the new Mountain Goat general manager,” but they also added that “Mountain Goat will continue to operate as a stand-alone business.”

I first met Dave Bonighton either judging in Japan or in the U.S. at the World Beer Cup, although we also judged together in Australia last year at the AIBA. Dave’s a great guy and his beers are some of the best I’ve had from Australia.

The Australian magazine Beer & Brewer has the full story.

Dave-Bonighton-au
Mountain Goat co-founder and brewmaster Dave Bonighton.

World Beer Market: Opportunities & Forecasts 2014 – 2020

September 30, 2015 By Jay Brooks

world-map-3
Allied Market Research, an international research company with seven offices around the world, has started selling their latest report, the World Beer Market – Opportunities and Forecasts, 2014 – 2020. If you want to buy the report it will set you back anywhere from $4,515 to $10,680, for a global user. While here at the Bulletin we’re not sufficiently well-heeled to buy our own copy, there is some information revealed to entice potential buyers on the report’s website.

For example, this chart gives several data points from the report.

Global Beer Market

And here’s the “Report Overview:”

Beer is a yeast – fermented alcoholic drink prepared from malt, and flavored by adding hops. Popular in Neolithic Europe, its production dates backs to as far as 2050 BC. By, 7th century AD the alcoholic drink was being produced and marketed by several monasteries in Europe. This drink is majorly brewed from ingredients such as yeast, water, hops and malted barley, although many fermentable carbohydrate sources or natural additives may be included. Likewise, fermentable carbohydrates like wheat, rice and maize are added to produce different styles as well as flavors. Beer style categorizes this alcoholic beverage by factors including flavor, production technique, ingredients, color, and origin etc., of which ale and lager are the two commercially popular types. Ales use top fermenting yeast at a room temperature, on the contrary lagers are made with bottom – fermenting yeast below 10 Celsius. The global beer market is expected to generate about $688.4 billion in sales by 2020. Besides this, the aforementioned industry is likely to register a CAGR of 6 percent during the forecast period 2015 to 2020. A significant increase in the consumption volume is believed to fuel the market growth in developing regions.
Worldwide, sales is following an upward trend. Many brands are now experiencing tremendous success due to a sudden rise in the disposable income and changing lifestyle. Exploiting a niche segment, matured markets are also witnessing a dramatic shift in the high calorie beer market and have developed a taste for low –calorie brew. Likewise, continuous popularity of craft brew has paved a path for a new generation of producers. It is phenomenon, that right from their debut to their annual sales the strong and light brews occupy majority of the market share in the beer industry. Alternatives to glass such as PET, makers are using durable yet ductile, affordable and sustainable packaging solutions like cans or draught. Consumption statistics also disclose a rapid growth in the number of female drinkers.
Beer Market Analysis by Type
World’s largest brands have uncorked and positioned their wide portfolio of strong and light brew in the domestic and international market, which now occupies a major chunk of the total business. The market for strong brew is expected to garner about $464 billion in sales by 2020. Besides this, the strong industry is likely to register a CAGR of 6.5 percent during the period 2015 to 2020. Many developed countries have been biased to stronger brew, a liking that has become highly accentuated with the brand image associated with such drinks. In the West, taste and refinement are the prime factors for drinkers. Thus many prefer strong brews due to their high alcoholic content. In close completion are the light brews that have low calorie count and other nutritional contents. Light brew have exploited the desire of the health conscious drinkers to stay healthy.
Beer Industry Market Analysis by Production
Breweries are categorized into macro-breweries and micro-breweries based on the production volume or size. Officially the war between them is on, with craft brew companies increasing their production capability. Macro breweries are offering quality and quantity across greater distances. At the same time microbreweries are benefitting too. Likewise, emergence of breweries in less saturated locales worldwide too is a welcome news. Recent changes in drinking preferences have considerably increased the demand for micro-breweries, which is anticipated to register a CAGR of 9.3 percent during the period of 2015 to 2020. Larger number of discerning consumers are shifting to locally produced drinks, enabling the ale industry to revive. So, with varieties of flavor as well as alcohol content, microbreweries are increasing today because distributors spotted a huge demand and took risk on imports of major microbrew brands.
Industry by Category
Better sales of even the more expensive premium, super premium and draught have shrugged off all doubts about the dip in the consumption volume. Consumers today are increasingly desirous to experiment with locally produced premium and international varieties. Many brewers now recognize that the premium brews industry would stay the most attractive new segment. Some brewers have just hyped their portfolio as premium in many countries because they are international. Producers are putting greater focus on how they should brand these premium labels. Premunization, is significant and an innovation, that aims at targeting the high–spending customers including highly trendy brews for tier -1 mavericks. The premium industry is anticipated to register a CAGR of 6.4 percent during the period of 2015 to 2020, when compared to the super premium and normal brew segment. Besides this, the super-premium brews are observing a rapid growth in the business and would grow three folds. Few major consumer behavior pattern have also given the super-premium sales a push. The grocery outlets today make up a major part of alcohol sales in terms of value. This presents a greater opportunity for the super – premium brews to grow via channel expansion. Moreover, the normal brews occupy a largest division of about 43 percent of the total industry.
Industry by Packaging
The packaging plays a vital role when it comes to influencing the customer buying pattern. Available in bottles, cans or draught these drinks are delivered with care and consideration. In line with the growing sales of brews like ales, new and flavored drinks in bottles are making waves. However with acceleration, canned brew are giving an intense competition to their bottled and draught peers. Likewise, cans are becoming more and more famous and idiosyncrasy in it contributes to the shift in the buying pattern or attitude. There is a rising demand for canned that can be easily stored as well as transported. Further, what makes canned the first choice is the fact that it protect the content from external heat. Alongside this, range of already –established draught brews are continuing to expand in the competitive business environment.
Industry by Geography
Over the 300 years that ale existed in North America, customer demands has constantly pushed the segment forward with rapid and steady growth. Next, introduction to the craft brewing technique created immense opportunity and a greater population responded to it with further support. Similarly, Europe also has an emerging market for hop lovers. Region’s relaxed brewing mandates have stabilized the consumption volume, which fell significantly in the past two years. Emerging economies are also becoming significantly important to the major international brands, as sales in some matured region still lags. Increased sales in Latin America and Asia has empowered producers to economize out complete sales growth. The Asia – Pacific market is expected to garner about $202.4 billion in sales by 2020. Besides this, the market is expected to register a CAGR of 7.3 percent during the period 2015 – 2020.
Beer Industry Competitive Analysis
To acquire a major chunk of the market, brew producers are seen expanding their distribution channels even for their less popular breeds. Merger and acquisition, rumors have hovered over the brew sector for years, with many domestic and international brewers considering tie – up at some point, inescapable. Likewise, multinational producers continue to make huge investments to grow their reach and trump up collaboration with domestic operators, to help consumers keen in exploring the local and international varieties buy them. To tap demand for expensive brews, a product segment where companies have more rivals brands decide to compete directly and launch new products.

And here’s a short “Analyst’s Review:”

The Global Beer Market would witness a steady growth in the coming years. Europe accounts for the highest revenue generating region in the global beer market followed by Asia-Pacific and North America. The growth in the North American and European region would be at a moderate pace in the future due to increasing health consciousness and legal regulations in the region. However, there has been a significant increase in the demand of beer in the developing countries of Asia-Pacific region. International brewing companies like SABMiller, Heineken have introduced especially brewed beer for the Asian market catering to the distinct taste buds of the consumers. The global beer market is primarily driven by the increasing disposable incomes and changing lifestyles. The growing adoption of craft beer and the rising number of restaurants and bars would further accelerate the growth of the beer market.
Conventionally, the male population has been the major consumer segment. However, with evolving cultural changes and modernization, there has been a significant rise in the count of females drinking beer. Women in the age group of 21 to 30 consume more beer than other age groups. Women generally prefer light beer with low alcohol content. Many vendors in the market are focusing on drinks especially made for women to increase their customer base and serve a wider audience. There has also been a rise in the adoption of craft beer as consumers want to explore different beer flavors. Craft beers include traditional brewing methods with exotic ingredients which add distinct flavor to the beer. Craft beer is widely adopted in the European and North American countries while Asian countries are still in the growing phase. Growing health consciousness, heavy taxation, and legal regulation limit the growth of the market. Stiff competition from substitutes including wine and other spirits also restrict its adoption.

You can buy the full report https://www.alliedmarketresearch.com/beer-markethere, and if you want to share it with me, I wouldn’t say no.

Dogfish Head Sells 15% Stake To Private Equity

September 29, 2015 By Jay Brooks

dogfish-head-green private-equity
I saw Sam only briefly at GABF last week, not long enough to have a conversation. He was finishing a panel talk on pilsners with Matt Brynildson and Vinnie Cilurzo, and I had the stage next, to announce the North Amercian Guild of Beer Writers awards. We shook hands, and hugged, and he was off to the next event. I wish I’d had more time, because he obviously had some news. Dogfish Head announced this morning that LNK Partners, a private equity firm based in New York, has bought a 15% stake in the craft brewery, and will also hold one of the five voting seats on Dogfish Head’s board.

In the Beer Street Journal, Sam told his employees and co-workers the news.

Today, I am excited to announce that Mariah and I added a new asset as external support to Dogfish Head – LNK Partners. You are likely thinking, who or what is that? Well, they are an incredibly smart and experienced group of people who have worked with companies of all sizes and styles like Levi’s, Performance Bicycle, Gatorade and Calvin Klein to help those guys achieve their goals in their respective industries. LNK is making an investment to own 15% percent of our company…

He also said he plans to eventually repurchase the shares from their private equity partner, but the cash infusion was necessary at this time to allow for Dogfish Head to continue on its growth path. They also recently finished a $50 million expansion, which was almost entirely financed with bank debt.

Brewbound has further details on the announcement.

sam-em-me
Sam, Emily Sauter (from Two Roads Brewing) and me at Belmont Station during the Oregon Brewers Festival in Portland earlier this year.

Cisco Brewers Partner With The Craft Brew Alliance

September 29, 2015 By Jay Brooks

cisco-brewers CBA
The Craft Brew Alliance, or CBA — which includes RedHook, Widmer and Kona — announced today that “it has formed a strategic partnership with Cisco Brewers,” Nantucket Island’s only small brewery. The Massachusetts brewery will enter “into a master distribution agreement and alternating proprietorship” with CBA, which according to the press release, will give Cisco “access to CBA’s extensive sales and distribution network and New Hampshire brewery to support Cisco’s growth, and bring more of their coveted island-inspired craft beers to more consumers throughout the Northeast.” The press release is cagey in using “strategic partnership” and not acquisition, merger or a buyout. Money undoubtedly changed hands, but nothing was disclosed about the moneteary arrangements of the deal.

American Brewery Count Reaches 4,000 Milestone

September 29, 2015 By Jay Brooks

american-beer
The Brewers Association announced this morning that the American Beer Industry has hit another milestone: there are now over 4,000 active breweries in the U.S. It also appears likely that the previous high of 4,131, which was achieved in 1873, will likely be broken if not by the end of this year, then certainly sometime in 2016.

Here’s the press release from the BA’s economist, Bart Watson:

Much of the beer world’s attention in the past week was focused on the Great American Beer Festival. However, the week also brought another milestone in the resurgence of local American brewing, with the Brewers Association database passing 4,000 active breweries. Although precise numbers from the 19th century are difficult to confirm, this is almost certainly the first time the United States has crossed the 4,000 brewery barrier since the 1870s.
Van Wieren (1995) notes that the Internal Revenue Department counted 2,830 “ale and lager breweries in operation” in 1880, down from a high point of 4,131 in 1873. Given the strong pace of openings (approximately two openings/day with a net increase of 1.9/day factoring in closings), it is likely that later in 2015, or early in 2016, there will be more active breweries in the United States than at any point in our nation’s history. This is a remarkable achievement that would have been unthinkable in late 1970s, when the number of American breweries dipped below 100.
More recently, it seems only a short while ago that I was writing about passing the 3,000 brewery mark, and many of the same thoughts still apply: the continued return to a localization of beer production and the potential for future growth balanced by ever increasing competition and future challenges for breweries to differentiate themselves. I’ll also repeat what I said then:
“What it does not mean is that we’ve reached a saturation point. Most of the new entrants continue to be small and local, operating in neighborhoods or towns. What it means to be a brewery is shifting, back toward an era when breweries were largely local, and operated as a neighborhood bar or restaurant. How many neighborhoods in the country could still stand to gain from a high-quality brewpub or micro taproom? While a return to the per capita ratio of 1873 seems unlikely (that would mean more than 30,000 breweries), the resurgence of American brewing is far from over.”
The past 15+ months have borne out that statement as the map of U.S. brewing has continued to diversify. There are now breweries in more than 2,000 unique cities across all 50 states. At the same time, there are also nearly 1,000 cities with a population of more than 10,000 that don’t have a local brewery yet, and numerous neighborhoods in larger cities without a local brewpub or taproom. As America’s beer culture continues to deepen and spread, there are still ample opportunities for well-differentiated, high-quality entrants. So, to all the hard-working brewers/brewery staff that have made 4,000 breweries a reality, and to the next wave of innovative entrants to follow, cheers!

Bountiful Breweries

Chuck Silva Leaving Green Flash

September 28, 2015 By Jay Brooks

green-flash-new
Brandon Hernández had the news this morning that Chuck Silva Resigns from Green Flash Brewing Co., published on WestCoaster. I first met Chuck at the old, much smaller, Green Flash brewery not too long after he started there in 2004. As Brandon details, Chuck was undoubtedly a big part of the brewery’s subsequent success. According to the press release, Chuck is planning on creating his own new brewery, Silva Brewing Company, along with his wife Mary Jo. He’s looking at the Central Coast of California, near where he grew up and where he has many longtime friends and family. It’s apparently been in the works for some time now, and starting today, he be concentrating on the new project full time.

About his time at Green Flash, Chuck had this to say:

“It’s been so fulfilling to play such a major role in the accomplishment of so many goals at Green Flash. Together, we’ve come further and grown larger than I could have ever foreseen. I couldn’t have done it alone and I thank every member of the craft community that helped me along the way,” says Silva. “But it’s always been my dream and personal long-term goal to brew on my own terms. Now is the time to go for it and I’m looking forward to working on smaller projects.”

Good luck, Chuck, I for one can’t wait to have a beer at your new brewery.

Chuck Silva, from Green Flash Brewing
Chuck Silva at GABF in 2009.

Anheuser-Busch InBev Acquires L.A.’s Golden Road

September 23, 2015 By Jay Brooks

golden-road ABI
This morning, Anheuser-Busch InBev announced they were acquiring Golden Road Brewing, located in Los Angeles. The Wall Street Journal confirmed “Terms of the deal weren’t disclosed,” and that the “acquisition is expected to close in the fourth quarter.”

From the press release:

“The energy and passion of the beer community is what drew me into this industry and with Golden Road we wanted to help develop the craft beer market in L.A.,” said Meg Gill, ‎president and co-founder at Golden Road Brewing. “Our team worked hard to build Golden Road from the ground up and we are proud of the growth we’ve achieved in such a short time. California is an exciting and competitive market for beer and I see endless opportunities in partnering with Anheuser-Busch and their incredible distribution network to bring our beers to more people.”
As the largest craft brewery in Los Angeles County, Golden Road expects to sell approximately 45,000 barrels of beer in 2015 and can be found in more than 4,000 retail locations. With a brewery focused on draft and can production, a pub in Los Angeles and a new tasting room downtown. Additionally a new tasting room, opening in 2015, second production brewery and pub in Anaheim will be operational by the fourth quarter of 2016. Its core brands – Point the Way IPA, Wolf Among Weeds IPA, Golden Road Hefeweizen and 329 Days of Sun Lager – represent 95 percent of volume. Along with the core beers, Golden Road brewers are constantly experimenting with the freshest ingredients through a collection of rotating, seasonal and limited-edition brews, most notably the Custom IPA Series, a line-up of diverse, hop-forward IPAs.
“Golden Road’s commitment to making great beer, their pioneering spirit and the passionate beer culture built within the company is what appealed to us,” said Andy Goeler, CEO, Craft, Anheuser-Busch. “Their focus on giving back to the community and impact on the Los Angeles craft market in four short years makes Golden Road a strong addition to our craft portfolio.”
Golden Road Brewing will join Goose Island Beer Company, Blue Point Brewing, 10 Barrel Brewing and Elysian Brewing as part of Anheuser-Busch’s High End Business Unit’s portfolio. Anheuser-Busch’s partnership with Golden Road Brewing is expected to close by the end of the fourth quarter of 2015. Terms of the agreement were not disclosed.

Meg and me at the opening Gala for SF Beer Week in 2011.

Several major news outlets have picked up the story, including the L.A. Times, The Wall Street Journal, Fortune and the St. Louis Post-Dispatch.

And here, co-founder Meg Gill talks about the deal in a video.

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