Amazon Offering Beer Delivery in Richmond, Virginia
During last week’s Brew Talks panel on evolving three-tier dynamics, Dogfish Head vice president of sales Todd Bolig warned to “be aware of the Amazon threat” due to the e-commerce goliath testing alcohol delivery in several markets.
The threat is reality in Richmond, Virginia, where earlier this week Amazon began offering beer and wine delivery to Prime members, according to the Richmond Times-Dispatch.
One-hour deliveries of hundreds of alcoholic beverages, including Bud Light, Stone Brewing, Devils Backbone and several other beer companies, are available from 10 a.m. to 10 p.m. daily. One-hour delivery costs members $7.99 and two-hour delivery is free for Prime members.
Amazon already offers alcohol delivery service in Seattle, Washington, and Cincinnati and Columbus, Ohio.
Stone Hotel On Hold
The proposed Stone Brewing hotel in Escondido appears to be delayed, according to the San Diego Union-Tribune.
Escondido Mayor Sam Abed told the newspaper that the 99-room boutique hotel project was on hold.
“Stone is committed to doubling its brewing capacity and doing the hotel, but I think they are waiting to complete their European ventures and then come back here and do that,” Abed told the outlet. “They are still committed, but I think it’s just been put on hold for a little bit.”
The San Diego-area craft beer company announced last year that it had entered into a $26 million licensing agreement with Untitled Hospitality to develop 13 acres of land next to Stone’s Escondido brewing facility.
The hotel was projected to be built by early 2018.
Study: 34 Percent of California Millennials Choose Marijuana Over Beer
A study from OutCo, a Southern California medical marijuana company, and Monocle Research found that 34 percent of California millennials surveyed said they’d substitute cannabis for beer.
“Growing up with anti-tobacco messaging, the smoking rate for 18-29 year olds in the U.S. has dropped by 22 percent over the past decade, leaving alcohol as the substance of choice,” OutCo CEO Lincoln Fish said in a press release. “But we are already seeing a decrease in alcohol sales, which means that cannabis is poised to be the new recreational substance of choice for many millennials and beyond.”
Beer took the hardest hit, while 18 percent of millennials also said they’d trade wine, and 14 percent of the generation said they’d switch from spirits to marijuana.
Tasting Rooms Help Microbreweries Grow
Brewers Association chief economist Bart Watson examined the growth of microbreweries — breweries that make less than 15,000 barrels per year with 75 percent or more of its beer sales off-site — and found those that had tasting rooms grew faster than those without.
It’s notable that 9.4 percent of sales from small and independent brewers occurred on site last year (an increase from 7 percent of sales in 2015). But Watson is clear that this isn’t just building onsite sales.
“As I laid out in my previous post on onsite sales,” Watson wrote, “microbreweries with tasting rooms only saw 12 percent of their growth coming from increased at the brewery sales. We’ll see if the same finding holds in California, but for now, the data lend support to the hypothesis that tasting rooms aren’t just a good source of revenue for breweries, they also help brands outside the brewery as well.”
Threes Brewing Responds to Jim Koch Editorial
Jim Koch’s New York Times editorial on the state of the beer industry is still reverberating, drawing a critical response from Threes Brewing head brewer Greg Koroski.
In a Men’s Journal essay, Doroski wrote that consolidation of breweries is a threat but there’s a bigger threat from within as regional breweries and small, local breweries compete for share of stomach.
“And while this may depress the potential for growth for breweries beyond their home markets, overall I believe this is clearly positive for the industry as a whole, and for local communities,” Doroski wrote. “While Boston Beer Company may want to cast itself as a David against the big bad Goliath of macro beer, it is important to recognize that they face significant pressure from the many small local breweries making great, interesting, and innovative beer across the country. We shouldn’t discount the threat that these beers and breweries pose to aging brands and breweries that have prioritized growth of market share over innovation, relevance, and sustainability. But, at least to me, this pressure from the bottom is necessary and should be celebrated.”
Read more here.
Lagunitas Founder on Thinning of Herd
In contrast to Koch’s apocalyptic rhetoric, Lagunitas founder Tony Magee sounds optimistic.
“The reports of craft beer’s demise have been overstated,” Magee recently told the Press Democrat. And yet, Magee acknowledged the slowdown is here and compared it to “a hard winter on a herd of elk.”
“It’s [a] great thinning of the herd,” he said.
That doesn’t mean Lagunitas isn’t feeling the pinch. Despite opening a new taproom east of Los Angeles in Azusa, Magee is delaying beer production at the facility until 2018.
“The industry has slowed down,” Magee told the outlet. “We just don’t need the capacity right away.”
Meanwhile, Lagunitas is reportedly forecasting 1 million barrels of production this year, up from 910,000 in 2016.
Heineken, which purchased a 50 percent ownership stake in Lagunitas in September 2015, is planning a Lagunitas brewery in a yet-to-be-disclosed location in Europe.
Goose Island Founder Talks Global Expansion
International expansion is on the mind of Goose Island president Ken Stout, who discussed his company’s plans to become a global brand, and dismissed Chinese craft brewers’ criticisms of the brand’s expansion there with the Chicago Tribune.
“What good would it do us here in Chicago to be bellyaching with all the new breweries that have opened up in the last 10 years?” Stout told the outlet. “It’s just competition. It’s the same with any industry. For some reason, beer gets a little more scrutiny because it’s a more personal thing,”
Stout was seemingly referencing a Fortune story titled “China’s new craft-beer bully,” which discussed in detail Anheuser-Busch InBev-owned Goose Island’s expansion in the country since early last year, including offering incentives to bars to carry Goose products while pushing other beers off tap.
Firestone Walker’s John Bryan Dead at 52
Sad news as Brewbound learned last week of the death of John Bryan, Firestone Walker’s central territory sales director. Bryan, who had worked for 17 years for Kansas City’s Boulevard Brewing Company, died on April 12. The 52-year-old had suffered a massive stroke.
Firestone Walker announced Bryan’s death on its Twitter page on April 12. “Our brewery lost a vital member today. Please join us in raising a beer to John Bryan; a great husband, father, mentor, peer, friend.”
Our brewery lost a vital member today. Please join us in raising a beer to John Bryan; a great husband, father, mentor, peer, friend. pic.twitter.com/CI7SNoBw9J
— Firestone Walker (@FirestoneWalker) April 12, 2017
Boulevard also eulogized Bryan: “With heavy hearts, we raise a glass to our beer brother, John Bryan. JB, as he was known to countless friends in the beer industry and beyond, lent his passion for connecting people with great beer to Boulevard Brewing Company for 17 years before joining the team at Firestone Walker Brewing Co. A driving creative force behind the inception of the Smokestack Series, JB’s contributions to beer are dwarfed by his selfless devotion to family and friends. Great people are often described as being larger than life and JB’s room-filling laugh, dry wit and undeniable charm made him truly one of a kind. We ask that you keep John’s family in your thoughts as you celebrate his life in the coming days. Cheers, brother. You will be missed.”
Bryan was known for riding around Kansas City in his 1967 Cadillac convertible, as noted in his obituary. From Bryan’s obituary: “John had an amazing lust for life and shared it with all he met. He enjoyed grilling, throwing darts, and cruising around in his ’67 Cadillac convertible, and he always had a crew of friends along for the ride.”
Bryan is survived by his wife, Alice, and two children.
Florida Senate Passes Bill to Allow Beer Companies to Sponsor Theme Parks
Beer sponsorships could be coming to Universal Studios, Disney World and Busch Gardens in Florida. Florida senators have approved a bill that would allow beer companies to sponsor events and advertise at the state’s theme parks, according to News Service of Florida.
SB 388 would allow beer manufacturers to sponsor up to 25 events or promotions a year at theme parks with “at least 25 contiguous acres owned and controlled by the same business entity” that attract at least 1 million visitors annually.
However, the bill is reportedly running into opposition from various craft breweries, MillerCoors and many distributors who believe the bill gives Anheuser-Busch InBev and unfair advantage in inking sponsorship agreements.
Indiana Attempts to Close Cold Beer Loophole
An Indiana gas station owner who found a legal loophole that allowed him to sell cold to-go beer now finds himself in the crosshairs of the state’s lawmakers and the liquor store lobby, WXOW reported.
Jay Ricker reportedly worked around a law prohibiting convenience stores and gas stations from selling cold beer by installing seats and serving burritos, which earned his store a restaurant designation that allows it to sell cold beer, the outlet reported. (Grocery and convenience stores in the state are allowed to sell warm beer and cold wine.)
GOP leaders, who have received hundreds of thousands of dollars from the liquor store lobby, have agreed upon a measure to close the loophole and force Ricker to stop cold beer sales. However, the bill reportedly offers several exemptions for fraternal clubs, golf courses, hotels, resorts and marinas.
“We were targeted,” Ricker told the Associated Press. “You’ve got all these exemptions to the rules — except us.”
The House and the Senate still must vote on the bill, which would require at least 60 percent of alcohol sales be for on-site consumption in order to get a permit renewal. There is reportedly some doubt that the free-market favoring rank-and-file members of the Indiana Legislature will accept the bill, which would become law in April 2018 if it passes.
Hijos de Rivera Buys 32 Percent Stake in Irish Craft Brewer
Northern Spain’s Hijos de Rivera has purchased a 32 percent share of Carlow Brewing Company, which makes O’Hara’s line of craft beers, according to FFT.ie.
The partnership with Hijos de Rivera allows Carlow’s founders to return the investment of its initial minority shareholders and gives it access to Hijos de Rivera’s distribution network.
Hijos de Rivera, a family-owned business known for Estrella Galicia, owns 6 percent of the Spanish beer market.
Carlow Brewing’s founders will maintain a controlling majority in the business.
Flat Top Brewing Sold; Turner Alley and Metalcraft Fabrication Close
Banner Elk, North Carolina-based Flat Top Brewing is under new management. The previous owner, Nathan Paris, announced the sale on the brewery’s Facebook page.
“My family and I are so very thankful for the support, encouragement, and friendships we have received over these past few years,” Paris wrote. “We plan to remain in the area and support the new owner as he takes Flat Top to the next level. The new owner is a great guy and I’m sure he’ll be posting an introduction here very soon. Stop in and meet him in the meantime!! Thanks again for joining us on this adventure and I hope you’ll continue your support of Flat Top Brewing Company as it continues to evolve under new ownership!”
Flat Top had been listed for sale on CraftBreweryForSale.com for $450,000, noting that the owner has more than $850,000 invested in the brewery.
Meanwhile, Turner Alley Brewing Company in Cedar Rapids, Iowa, closed in January.
Backes Commercial Auctioneers held an auction yesterday for the brewery’s equipment, including a 15-barrel brew system.
Turner Alley, which described itself as a “regional production brewery specializing in classic European styles with an American twist,” announced the decision to close in January and posted a final note earlier this week on the company’s Facebook page.
“This is a great opportunity to snag some amazing deals on brewery equipment, furniture, knick knacks and memorabilia,” the company wrote of the auction.
In another sign of the slowing times, Metalcraft Fabrication, which did brewhouse and tank work in Portland, Oregon, closed in March after 10 years, according to the New School.
Co-founder Charlie Frye told the outlet that his business grew rapidly but “did our best to do so responsibly.”
“I’ve learned that despite any one person’s experience and/or success, unless they have something to lose, their advice should be taken with a grain of salt,” Frye told the New School. “Additionally, a business owner should always be aware that their finances are in order and those trusted to manage them are qualified to do so.”
In that story’s comment section, Bill Baburek of Omaha-based Infusion Brewing wrote that Metalcraft accepted a $45,000 deposit in late December for a $60,000 tank order and “we get nothing for it.”
“We bought two tanks for $60,000 but now Portland Kettle Works wants another $52,000 to finish tanks that were supposed to have been finished and shipped last week,” Baburek wrote. “We got screwed by Metalcraft.”
Frye responded to Baburek writing that Metalcraft was forced to shut down operations before the order was completed.
“He has every right to be upset,” Frye wrote. “However, MCF had no reason to believe we would not be able to complete his order when we accepted his deposit. No criminal wrongdoing ever occurred at MCF. While many other breweries also lost their deposits, the total of these losses did not exceed one million dollars. Regardless, I am working on an effort to recover as much of the lost deposits as possible.”