Two weeks remain in 2022 and the reviews are beginning to filter in. Spoiler alert, it’s not been a great year.
Brewers Association (BA) chief economist Bart Watson ran through the trade group’s annual “Year in Beer” wrap up. Watson, who really is a great front-facing person for the BA, also presented at our Brewbound Live business conference. Insiders can watch his presentation, “It’s the Industry, Stupid,” a play on political strategist James Carville’s “It’s the Economy, Stupid.”
What else did we learn? Zoe has you covered: Craft’s performance was weaker than expected. The on-premise may be back, but draft isn’t.
The BA also offered a high-level overview of the year, with around 9,500 breweries in operation at some point in 2022. The trade group counted more than 550 brewery openings and in excess of 200 closings — Jess rounded up the most recent closures, including Lagunitas’ Seattle taproom and Bear Repulic’s Rohnert Park taproom this week.
On the flip side, what’s it like to try to open a brewery in 2022? Sarah Real and Mike Dell’Aquila, the co-founders of Hot Plate Brewing, shared their experiences of trying to open a brewery in Western Massachusetts on the latest episode of the Brewbound Podcast.
In other news …
For those with last-minute holiday shopping still to do, how about buying a wholesaler?
Self-described “consolidator of beverage alcohol distributors” Keg 1 struck a deal to acquire River City Distributing Company in Louisville, Kentucky. The transaction will close in January. Keg 1 is adding about 5 million cases to its multistate “combined annual sales volume of over 120 million cases.”
Not to be outdone, Andrews Distributing in Texas is buying neighboring distributor Price Distributing, picking up around 1.25 million cases in the deal, which closed today (December 16).
Speaking of M&A, Arlington Capital Advisors director Ryan Lake broke down the state of beverage alcohol M&A, including in the middle tier, during Brewbound Live. Follow this link to watch our conversation.
This is probably the most metal imagery ever attached to a Brewbound story or a Credit Suisse report. Why? “Pricing is a Closet; Volume is the Skeleton,” meaning all of those price increases may be concealing disappointing volume sales in the U.S. beer industry, according to financial analyst Kaumil Gajrawala.
From Jess’ report: Since 2019, the price of a case of beer has increased +12%, “largely to combat inflation,” and “unexpectedly low elasticities (thus far) make revenue growth look healthy,” he wrote. However, dollar sales growth is far outpacing velocity – the measure of sales per point of distribution. Follow the link to read.
The Credit Suisse report follows the most-recent Consumer Price Index from the U.S. Bureau of Labor Statistics. The CPI for beer at-home is up +7.7% in November 2022 compared to a year ago, and reached its highest level since 1991, when the federal excise tax doubled, according to Watson from the BA.
Bell’s Two Hearted is becoming a family. Hazy Hearted IPA (7.5% ABV) is joining the crew, along with a new variety pack, featuring pack exclusives Big Hearted (9.5% ABV imperial IPA) and Change of Heart (6.8% ABV cold IPA).
Effective January 1, non-alcoholic hopped tea and NA beer maker Hoplark will split into two subsidiaries: Hoplark, which will oversee the existing core brand, while Hoplark Lab will launch new beverage brands and products under the leadership of company founder Dean Eberhardt.
Constellation Brands’ attempt to move its Mexican import brands away from Olympic Eagle hit a roadblock when a U.S. district judge granted the Pullayup, Washington-headquartered distributor a preliminary injunction blocking the attempted termination.
Artisanal Brewing Ventures (ABV) has restructured its sales force, cutting “a handful” of sales roles, in order to better focus the company’s efforts on off-premise retailers.
That’s the week. If you’ve read this far, thanks for reading and subscribing to Brewbound. If you’d like to become an Insider and support our independent journalism, this link is calling you.
Until next week.