Craft brewers have been living in turmoil for a few years now. Slowing growth, increasing competition, a pandemic, shifting consumer focuses, a consolidating middle tier, shrinking retail shelf space, supply chain turmoil, inflation, layoffs, increased minimum wage, skyrocketing rents have all taken a toll.
So craft brewers continue to try to figure out how to survive in this new normal. Here are three recent examples:
In San Leandro, California, 21st Amendment has “reimagined” its 120,000 sq. ft. production facility into a canned beverage co-packing facility capable of producing beer, non-alcoholic beer, FMBs, seltzers, canned cocktails, energy drinks, juices, sodas, etc.
21A has six million cases of annual capacity at the facility and the capability to can 12, 16 and 19.2 oz cans and variety packs from 4 to 30 cans. A tunnel pasteurizer will be operational by Q4 2023. The company can produce batches from 100 to 500 barrels and has 300,000 barrels of annual capacity.
Meanwhile, four months after announcing plans to scale down its operations, the Lost Abbey is exiting its San Marcos production space and looking for an alternating proprietorship or contract brewing relationship. Pizza Port Brewing will take over the space and the Port Brewing and The Hop Concept brands.
Finally, New York’s Captain Lawrence has forged a sales and marketing partnership with Uinta Brewing owner U.S. Beverage. However, the portfolio company and importer has not taken an ownership stake in the 17-year-old craft brewery.
Those are just a few recent examples of how craft brewers are shifting their business models in this business climate.
In other news …
A week after the world’s largest beer manufacturer ceased operations at its Ohio craft brewery and made Platform Beer Co. into a phantom brand and laid off workers at its other craft operations, Anheuser-Busch InBev didn’t offer any color into its craft strategy going forward during its full-year/Q4 earnings call. Wall Street analysts also didn’t ask about it either.
Jess, Zoe and I discussed the shutdown of Platform’s Ohio ops and what this means for acquired craft brands moving forward on the latest Brewbound Podcast. We also chatted with Aaron Staples, who has tracked the impact of Paycheck Protection Program funding on craft breweries. Listen here.
Oh, and A-B is going to be all right with revenue of $57 billion and a gross profit of $31 billion in 2022. That’s even with a very soft Q4 in the U.S. with depletions (sales-to-retailers) and shipments (sales-to-wholesalers) declining -7.6% and -8.6%, respectively.
A-B isn’t the only big brewer shaking things up. Molson Coors reshuffled its executive deck and reorganized its Americas business operations. Michelle St. Jacques, who was chief marketing officer, got a big promotion to chief commercial officer. Sofia Colucci, who was leading the Miller brand family, will backfill the CMO role. President of emerging growth brands Pete Marino is taking off, with his last day set for April 30. Basically, the moves are meant to increase the speed of operations.
In other Molson Coors news, the brewer is looking to settle a lawsuit for alleged “deceptive and unlawful practices in labeling and marketing its Vizzy Hard Seltzer” for $9.5 million.
House Beer, the lager brand that was put on ice in 2022, is getting a second lease on life thanks to motocross star Carey Hart.
Energy drink maker Monster is pretty “pleased” with its foray into alcoholic beverages so far. It’s also trying to score an additional $167 million in its false advertising suit against Bang producer Vital Pharmaceuticals on top of its $293 million jury verdict awarded earlier this year.
The Finnish Long Drink — a grapefruit and gin highball — is finding its niche within the canned cocktail space in the U.S. market.
Lots of new products hitting, including:
- Athletic Brewing and Super Coffee collaborating on Suped Up, a non-alcoholic extra dark beer with coffee;
- Another MTN Dew flavor, Livewire, is getting an alcoholic crossover brand;
- High Noon Sun Sips is launching a tequila-based hard seltzer variety pack.
Lots of people changing jobs — or in the case of Jon London, going back to Boston Beer, where he’ll be the brand director of the Angry Orchard cider brand.
On a high note, the National Beer Wholesalers Association’s Beer Purchasers’ Index topped 50 for the first time since May 2022, meaning wholesaler purchasing is back in expansion territory. That’s a good thing.
Cheap Plugs ….
Brewbound’s first Brew Talks meetup is set for May 7 in Nashville to start the Craft Brewers Conference week. We’ll be discussing the dichotomy between low- and no-alcoholic offerings and the higher ABV products, which are driving growth within the craft beer industry, and much more. Join us for an afternoon of networking, business conversations and beers at Nashville Underground. Get those hotels booked soon. Taylor Swift is playing Nashville May 5-7 and it’s getting tough to get a room.
Also, Jess, Zoe and I will be at the California Craft Brewers Summit in Sacramento starting on March 20. Come see us on the expo floor in the Brewbound Studio, where we’ll be recording podcasts and hanging out.
And that’s a wrap on this week. A big thanks to Jess and Zoe for covering late last week and early this week so my little family could visit grandparents on the East Coast. And a big thanks to all of you for your continued support of Brewbound. We appreciate it. We’ll be back next week.