Industry headwinds, brewery acquisitions, the emerging cannabis sector, and the seemingly never ending battle between big and small beer makers were the focus of Brewbound’s most-read stories of 2018.
Green Flash’s financial troubles — which surfaced in January — set the tone for a tumultuous 2018 for many beer companies. But even as craft growth slowed, and as many companies fought to stay in business, the news wasn’t all doom and gloom as some brewers formed strategic partnerships and others entered the cannabis space.
Below are Brewbound’s most-read stories in 2018.
In what became a familiar 2018 storyline, Kansas’ Tallgrass Brewing Company suspended operations and laid off its workforce in August. At the time, Tallgrass founder Jeff Gill told Brewbound that the company and its investors were exploring options to save the business, including bringing on an outside financial partner or selling to a strategic partner. However, no sign of a resurrection was clear by the end of the year.
11. Blue Moon Creator Plans to Release Line of THC-Infused Non-Alcoholic Beers
After retiring from Molson Coors in January, Blue Moon creator Keith Villa quickly found a second act: launching a cannabis company with his wife, Jodi, focused on producing a line of THC-infused non-alcoholic craft beers. Ceria Beverages’ first offering — a Belgian-style White Ale called Grainwave — hit Colorado dispensaries in mid-December. Cannabis is poised to grab more headlines in 2019 as a growing number of alcohol companies invest in the space, and as additional states legalize recreational use.
10. DME Receivership Leaves Hundreds of Craft Brewers in Limbo
The late 2018 collapse of Canadian brewing equipment manufacturer Diversified Metal Engineering (DME) quickly became one of Brewbound’s most-read stories. In late November, DME’s financial woes surfaced after the company defaulted on loan payments to the Royal Bank of Canada (RBC) and entered into receivership. DME’s financial struggles left in limbo hundreds of of North American craft brewery owners who had shelled out millions of dollars in equipment deposits. DME’s fallout will continue to play out in 2019, as breweries adjust and a January 7 deadline for bids on the company looms.
In October, the Brewers Association’s (BA) board of directors proposed dropping the “traditional” requirement from the group’s three-pronged craft brewer definition. The proposal underscored the BA’s efforts to emphasize the small (producing fewer than 6 million barrels) and independent (less than 25 percent owned by a non-craft brewer) components of the definition.
Nearly two months later, the BA board approved the revised definition, replacing the “traditional” pillar with “brewer.” Moving forward, BA-defined craft brewers will no longer need to derive a majority of their volumes from beer. In addition to meeting the small and independent pillars of the organization’s definition, a BA-defined “craft brewer” must possess a Brewer’s Notice from the Alcohol and Tobacco Tax and Trade Bureau (TTB) and “make beer.”
The BA made two additional moves: forming a political action committee to support lawmakers who back the organization’s causes and creating a new voting member class for taproom breweries.
8 & 7. Deep Ellum Sells to Canarchy After Fallout with Storied Craft Breweries; Artisanal Brewing Ventures Acquires Sixpoint Brewery
2018 was a relatively quiet year for dealmaking, but the transactions that were finalized nonetheless grabbed readers’ attention. In June, Texas’ Deep Ellum sold to Fireman Capital-backed Canarchy Craft Brewery Collective. As part of the deal, Dallas-based Deep Ellum gained a much-needed capital infusion to complete a $3 million expansion project as well as access to brewing capacity at Colorado-headquartered Oskar Blues’ satellite facility in Austin, Texas.
Meanwhile, Artisanal Brewing Ventures acquired New York-based Sixpoint Brewery in November. ABV, the family office-backed holding company formed in 2016 via the merger of Victory Brewing and Southern Tier Brewing, said Sixpoint gives the rollup a stronger presence in the New York City market, where the company plans to open a Sixpoint branded taproom in Brooklyn.
6. Dogfish Head Unveils New Variety Pack; Founder Calls Commodity Craft a ‘Slippery Slope’
While introducing a premium-priced 16-pack that transforms into a leak-proof cooler in March, Dogfish Head founder Sam Calagione expressed concerns about lower-priced and more approachable craft styles being sold in larger pack sizes.
“Ultimately, all three tiers lose out because it could commodify craft into something consumers are only willing to pay a buck or two more than domestic light lager or premium beer,” he said. “It’s a slippery slope.”
5. Laura Bell to ‘Step Away’ as CEO of Bell’s Brewery on May 18
In a surprise move, Bell’s Brewery co-owner Laura Bell announced in April that she would “step away” as CEO of the Michigan-based craft beer maker to pursue “other passions and interests.” Bell was named CEO in February 2017 and relinquished the position in mid-May 2018. Bell remains a member of the company’s board of directors.
4. Trillium Labor Practices, Brewing Methods Questioned
Employment issues in craft beer came under scrutiny in 2018 after a former Trillium Brewing Company employee raised questions about the Massachusetts craft beer maker’s labor practices and brewing methods. In a Beer Advocate forum posting, the ex-worker accused Trillium of cutting the base compensation for retail employees from $8 an hour to $5 an hour.
The backlash would eventually lead Trillium founders JC and Esther Tetreault to increase the hourly pay of their retail workers to between $15 and $18, plus tips.
3. Coors Chairman Slams Brewers Association in ‘Open Letter’
The divide between craft brewers and big brewers remained in 2018. At the April Craft Brewers Conference, BA chairman and Left Hand Brewing co-founder Eric Wallace criticized big brewers during his address, calling acquired craft brands “weapons in the arsenal of the big breweries … used to control as much of the market as possible.”
In response Molson Coors board chairman Pete Coors penned an “open letter” criticizing BA leadership for pitting industry members against one another. “You undermine your credibility by pitting us against one another to the ultimate detriment of the entire beer industry,” he wrote.
Although beer industry leaders have vowed to work together to improve category health, the relationship between big and small brewers remains tenuous.
2. Led By $23 Million Purchase of Cisco Brewers, Craft Brew Alliance Buys 3 Beer Companies
In October, Craft Brew Alliance (CBA) cemented its relationship with three smaller brands via separate purchase agreements. The publicly traded, Portland, Oregon-headquartered craft brewery group acquired Massachusetts’ Cisco Brewers, North Carolina’s Appalachian Mountain Brewery and Miami’s Wynwood Brewing. The combined cost of the transaction was less than $45 million.
1. Green Flash Pulls Distribution From 32 States, Eliminates 15 Percent of Workforce
The most read story of 2018 was the first in the saga of Green Flash Brewing’s financial issues. In mid-January, the San Diego craft brewery pulled distribution from 32 states and cut 15 percent of its workforce. Green Flash was the first major indication that midsize craft breweries were facing serious headwinds. Ultimately, Green Flash was sold to a new investor group, and the company pulled out of its recently constructed production brewery in Virginia Beach, Virginia — which was later acquired by Atlanta’s New Realm Brewing.