Brewbound Podcast: Brewers Association Staff Economist Matt Gacioch on Craft Brewers’ ‘Realistic’ Mindsets, Industry Trends, Headwinds & CBC

[00:00:00] Justin Kendall: Heading to CBC? Kick things off the day before at Brewbound's meetup at Love City Brewing in Philly, Sunday, April 19th from 5 to 7 p.m. Connect with beer industry leaders, grab a drink, and catch up with the Brewbound team. It's free to attend and walking distance from the Convention Center. Head to Brewbound.com slash lovecity.rsvp. And don't forget to catch the Brewbound team at booth 956 during CBC. Next on the Brewbound Podcast, Brewers Association staff economist, Matt Gacioch, breaks down the top 50 breweries list and Craft Brewers trends. Hello, and welcome to the Brewbound Podcast. I'm Justin Kendall.

[00:00:51] Jessica Infante: I'm Jessica Infante. And I'm Zoe Licata.

[00:00:54] Justin Kendall: And this week, we are bringing you an interview with Matt Gacioch from When Brewers Association. This is part of our CBC site takeover. So if you go over to Brewbound.com by Friday, you'll see a whole lot of preview for the upcoming event. We've got our picks. We've got our overall look at what's going on in craft. We're going to have indie folks and their picks for where to go and get something to eat or just take a break and indie.

[00:01:27] Matt Gacioch: Yeah, we've got all of that. We're going to have. special Q&A with BA board member Audra Gaiziunas. Audra's gonna do a little Q&A with us for our Round With, she's on the BA board. She's also the CFO of Dissolver in Asheville and also runs her own Craft Brewers finance consulting firm brewed for her ledger. So she's got a host of knowledge and plus she's just an all around nice person. So we'll hear from her too as part of this package.

[00:01:53] Justin Kendall: So look for that Friday and Monday and even Thursday with the release of this podcast. But we are gonna be in Indianapolis Amid the trade show floor of the Brew Expo America. We'll be at booth 512 recording future episodes of this podcast and just chatting people up. So swing over and say hi to us and we'll be out and about too. We are friendly. We are.

[00:02:21] Jessica Infante: In case anyone was concerned.

[00:02:23] Justin Kendall: And Zoe's making a special trip to the, is it the Motorsports Museum?

[00:02:28] Jessica Infante: The Motor Speedway Museum.

[00:02:30] Justin Kendall: Motor Speedway.

[00:02:31] Jessica Infante: Yeah. So if you want an activity on Monday before things get too crazy, go to the museum.

[00:02:37] Justin Kendall: And you can kiss some bricks?

[00:02:38] Jessica Infante: You can. For an extra fee, you can kiss some bricks and go on like a tour of the, they have a track over there. So if you're into that. Not as aware of the lore of IndyCar, but I will learn at the museum.

[00:02:53] Justin Kendall: Could you love IndyCar as much as you love F1?

[00:02:55] Jessica Infante: No, I don't think so. That's a lot more of driving around in circles. That's where I draw the line. At least give me some corners. Fair.

[00:03:04] Justin Kendall: Who could argue? That sounds like something a UPS driver would say. We also have Brewbound Live coming up December 10th and 11th in Marina Del Rey. You can go to brewboundlive.com and find out more details about the event. Tickets are on sale now. Look for announcements in the coming months. Last thing I'd say is, if you like this podcast, please subscribe and give us a review. And with that, let's get to the news. Zoe, you covered When Brewers Association's webinar on tariffs. A lot of interesting stuff coming out of there. And I'd like to get your sense of it, having been on the call, because there was definitely a vibe to your story.

[00:03:47] Jessica Infante: I will say that everyone on the call was It was all about sharing information, right? How can we best move forward with all the information that we have? And we're trying to find some positives in everything that's happening, but still being realistic that this is something that people in the industry have to deal with and there's not necessarily a lot we can do about it. Bart Watson was one of the folks on the call. He is now president and CEO of When Brewers Association, and he's been doing a lot of conversations in Washington DC to talk about what's happening and advocate for small and independent Craft Brewers. And he admitted, you know, this is kind of operating differently than we have really operated in the past. Specifically, this administration is operating differently. And, typically, trade groups like When Brewers Association have what they call like beer advocates or beer heroes, beer champions, like folks within, you know, the House or the Senate that are really advocating for beer. They're on beer's side, quote unquote side. And we'll listen to what these trade groups are saying and we'll advocate for their needs in any of their legislative discussions. When it comes to this administration specifically, when it comes to any conversations around tariffs, nobody really wants to touch it. They are basically saying, we don't have a lot of power here. We're letting the president do what he wants to do when it comes to tariffs. And so the Brewers Association is having to speak more directly with members of Trump's administration. to advocate for Craft Brewers. So it's, it's operating a little bit differently. And it also means they have the trade groups possibly have a little bit less power when it comes to advocating for moves here, which Bart Watson admitted saying specifically the aluminum tariffs, they're staying around. There's not really anything they can do about it. The Trump administration is really dedicated to these tariffs. There's a 25% tariff right now, and this is something they did in the previous Trump administration, so they're not budging. Now the BA has to kind of pivot and focus on, okay, what are things we can help with? And that's more like preventing certain tariffs from happening, like barley tariffs, which would significantly impact Craft Brewers. And then also how can we help our members with just dealing with the impacts of aluminum tariffs and things that we can't really change right now.

[00:06:14] Justin Kendall: That thing you said about When Brewers Association being like, there's not much that we can do right now about aluminum. Remember when the Beer Institute was leading the charge against tariffs on aluminum and steel? I think this may explain a little bit of why they've been so quiet, at least publicly, facing on this issue, which is a big change for them.

[00:06:38] Jessica Infante: Yeah, so like I mentioned, the Trump administration had aluminum tariffs previously. These are Section 232 tariffs, so it's a specific type of power that the president has to enact certain tariffs like this. The way that these are enacted is different than like those 10% tariffs that he's doing. It's a totally separate thing, which is, I think, also partially why they have less say in what's going to change here. This is basically just in the president's power. And in that previous administration, the Beer Institute was very, very vocal about the impact of the aluminum tariffs. They were claiming that they were not doing what they were supposed to be doing, that it was basically putting a flat rate on all aluminum, that it was charging aluminum that was being produced in the United States still. So there was a lot of complicated factors happening there. And now the Beer Institute has not really said anything about aluminum tariffs or being outspoken against them. So it's been a very interesting shift in their actions Round With. And yes, it does explain it possibly a little bit that they realize they can't do anything, that this is something that's here to stay.

[00:07:49] Justin Kendall: The 2018 tariffs were 10% and these are 25%. So we've got a 15% increase in these. So where is When Brewers Association putting its focus at this point?

[00:08:02] Jessica Infante: Barley is a really big thing that's, you know, 40% of barley comes from Canada. So if there is a tariff, which has been paused several times for Canada and for Mexico, if there are tariffs that affect barley, that would really hurt crop growers. So they're focusing on making sure that doesn't happen. If there is tariffs for goods from Canada, that they have exemptions for things like barley. Barley has been exempt from tariffs in the past. And then they're also working on how can we support brewers in other aspects like making sure they know how to support their workforce. One of the other participants in this webinar was Scott Metzger from Kraft Ohana, and he was mentioning really the first real effect you're possibly going to see out of these tariffs because we don't know what We'll stick when and all those fun things. It's just the toll it will possibly take on your workforce, on the people that are working for your companies, whether it's the mental toll of just not knowing what is going on, the financial toll of, okay, if their groceries are going up or the prices of things for their personal lives are going up, that's going to affect them at work as well. So how can we support our workforce to make sure that they are feeling okay through this? Both employee sentiment and consumer sentiment is going to be a massive thing moving forward because this is really a super uncertain time of what is going to happen to the economy. Other things they pointed out too was this could also be a potential time for beer to step up and could potentially have an advantage over wine and spirits because there is a thought that wine and spirits are going to be affected even at a greater extent than beer is being impacted. They tend to have more international business going on or have more supplies coming from different countries, more types of products that can only be made in other countries. And so beer could have an advantage here. Even cider got a little bit of a shout out because it's like, hey, this is a product that sources, it's apples, all basically from US farms. This is a very domestic enclosed product. this could have an advantage moving forward if prices do increase for things. And there are some price increases already happening. Scott Matsker did point out that aluminum pricing for cans is going up already. So you are starting to see some impacts, but those should only further... The amount of products that are impacted by price increases should only go up.

[00:10:37] Matt Gacioch: I love how the silver lining here is like, this could be cider's moment.

[00:10:43] Justin Kendall: You can read that at Brewbound.com. You can also read Jess's recap of the NBWA and FinTech webinar with Lester Jones. And Lester was a ray of sunshine, I heard.

[00:10:56] Matt Gacioch: Oh, Lester was all rainbows and butterflies and smiles. No, Lester, as he usually is, was definitely a realist, but you know, Lester likes to keep it upbeat and peppy, which I always appreciate. And this covered Q1 and the conclusion that Lester drew about Q1 is that similar to Austin Powers' International Man of Mystery, the beer Industry Headwinds lost its mojo, needs to get it back. But unfortunately for beer, there's no Dr. Evil. There are many culprits at play. Hard to really know what's doing it, but basically stuff's bad. Q1 was rough. The overall industry was down about 4% year-over-year Q1 2025 compared to Q1 of 2024. And there's, you know, when you kind of dig into the on versus off split, on isn't bad. It's like kind of flat. It's down just 0.2%, but the off-premise was down big, 4.7%. And the way that these two sectors of the beer industry split, it's kind of like the 80-20 rule where the on-premise accounts for under 20% of all dollars. So even though it looks not bad, it's still pretty bad because it's just not big enough to make up for those losses in the off-premise.

[00:12:15] When Brewers: This episode is brought to you by the Craft Brewers Conference, where big ideas, bold beers, and brutally honest shop talk collide. Join thousands of industry pros leveling up their game. Don't miss it. Register now Brewers Conference.com.

[00:12:36] Matt Gacioch: One interesting silver lining that Lester was very excited about was draft. Keg beer actually gained about 4% in the on-premise in Q1 of this year compared to Q1 of last year. So that's something, right? Maybe?

[00:12:51] Justin Kendall: It is, we had Jen Hawk from Draftline at Brewbound Live talking with Lester about draft and the potential there. And even the BA has been bullish on draft, right?

[00:13:02] Matt Gacioch: Yeah, there's reason to believe here that the on-premises is making a big comeback. And Lester even called out the fact that of all of the new establishments that open, anything with a license to sell beer, about 70% of all of the new licensed beer retailers are in the on-premise. But the on-premises is making a comeback. The other thing that he did call out is that the number of those licensed beer retailers, be they on or off, is kind of Tabbing Out. You know, we had a really high number per capita going into the pandemic, and obviously it fell off a cliff in 2020 when everything had to shut down. And it's been slowly climbing out of that hole, but we've seen stagnating growth in the past two years. A couple other things that I thought were interesting here is that Craft Brewers looked really strong at the start of this year in the first like two, three weeks, but that has since fallen off. So probably just a little bit of a blowback from, you know, holiday load in where everybody needed to replenish after the holidays. So it looked like we had some big retailer purchases. Cause that's what this data is. Important to call out that whenever Lester does these quarterly reports with FinTech, Fintech is, among other things, they're an invoice processing service provider between wholesalers and retailers. So what they're able to cover is retail invoices. They assume it covers, or the estimate is that it covers about a third of the beer industry, but it's not exactly a perfect, you know, one-to-one for what's actually happening out there, but we can definitely sniff out trends. So lots of interesting stuff in this report, as always, but one segment that Lester called out that I find really interesting, as always, is hard T. And Lester's presentation partner, Kaiser, who's the VP of Distributor Strategy for FinTech, called this the definition of dominance, where twisted T is gained share. Twisted T lost 4.2% share last Q1, gained exactly that amount back, back up to 81.5% of the hard T segment. The number two hard tea brand lost 4.2% share, which is interesting. So that is Monster's Nasty Beast, and they are now at the number two brand at 4.9%. And it is funny, the hard tea story is really a twisted tea story, no matter how many entrants try to nudge their way in. Non-ALK is similar in that it's really dominated by Heineken Zero Zero and Athletic. Interesting to check out Q1 numbers on Non-ALK, obviously, because it includes Dry January. Heineken Zero Zero accounts for just about 22%, but when you add together all of the five athletic brands that are in the top 20 non-ALC brands, they are just behind Heineken Zero Zero at 21.7% and they are gaining share where Heineken is losing a good amount of share. So it will be really interesting to see these numbers this time next year.

[00:15:54] Justin Kendall: And I see Michelob Ultra Zero Talk.

[00:15:57] Matt Gacioch: Yeah, man.

[00:15:58] Justin Kendall: Which is obviously new to the list, new this year, and I see it everywhere, stacks of it.

[00:16:04] Matt Gacioch: Yeah, I'm glad you called that out, actually. It's quite a freshman showing. They captured 7.5% share, making them the third largest NA beer and on and off-premise retailers after just launching in January.

[00:16:16] Justin Kendall: but they even talk about sports betting. Sports betting?

[00:16:19] Matt Gacioch: Yeah, potentially one of Dr. Evil's henchmen in this attempt to steal Mojo from beer.

[00:16:26] Justin Kendall: As Maggie Timoney pointed out on the stage at NBWA last year.

[00:16:31] Matt Gacioch: Yeah, you hear a lot of grumbling about sports betting, and it's one of those things where I know people say it's not having an effect, but I just don't see how that's possible. It's gotta have some effect. It's everywhere.

[00:16:45] Justin Kendall: Was it John Oliver who had this special talking about sports? It was. If you haven't watched the John Oliver show about sports betting, check it out because you can see how things go off the rails quite quickly with sports betting.

[00:17:01] Matt Gacioch: I happen to be at the casino in the Boston area on the weekend that sports betting opened. And the sports betting area was packed, packed. And we're inundated with ads since, and that was obviously a while ago. So I just don't understand how this is not siphoning off at least some discretionary spending from that key 21 to 34 year old male demographic.

[00:17:26] Justin Kendall: Just hoping those parlays hit. So we've got a lot of great things over at Brewbound.com for insiders. We've got a feature on Westbound and Down Brewing in Colorado and their fundraising efforts there. They've hit their capacity limits and they've got a plan to grow to 20,000 barrels by 2028. You can read all about that. We've got so much more. We've got our CBC site takeover going on right now. So check those out. But before we get out of here and get on to our featured interview with Matt Gacioch, let's play Another Round or Tabbing Out. And one of the things that popped up a few weeks back was a meme that our friend Dave Infante at Fingers posted, which was basically AB Skimmers, which is their, what is it, iced tea, basically their surf sides.

[00:18:16] Matt Gacioch: Yeah, it's hard tea and lemonade made with cut water vodka.

[00:18:19] Justin Kendall: Yeah. So it is essentially taking design elements from both Surfside and Suncruiser for its packaging, or at least that's what it looks like to us, or to anybody who has eyes, I guess.

[00:18:36] Matt Gacioch: I'm sorry, but they look like Surfside and Suncruiser had a baby. Yeah. It's like the Suncruiser horizontal color blocking, but with the colors of Surfside. with a little chevron, so it's a little different, but you know. It's just funny to me that they chose to name this product Skimmers, which is also the thing that nefarious people can put on ATMs and gas pumps to steal your credit card information. They're just being transparent with what they do. Right? I can't take credit for that one. It came from my industry gal pal group chat.

[00:19:13] Justin Kendall: You gotta appreciate that level of transparency. Just being up front here, but we're being inundated with an influx of new RTDs, whether it's from AB or Tilray Brands, as you know, the company that loves to rationalize lots of things under the Project 420 banner. They've got a new RTD brand too that they just announced, what was it, last week? Mm-hmm, Cruzees. Cruzees. Cruzees. Don't forget that extra I.

[00:19:46] Matt Gacioch: You need the extra I. It's not cruisers. That's true. It's not cruises. Cruises. And to their credit, this is different than the hard tea and lemonade products we were just talking about. They've got what, like a Cuba Libre in the mix. Something that seems like a hard Arnold Palmer. Golf tea. Golf tea. That's creative.

[00:20:10] Justin Kendall: And then there's a blood orange vodka soda. Yeah.

[00:20:16] Matt Gacioch: So yeah, it makes sense. I mean, the branding on those is, I think it's very pretty, aesthetically pleasing, but to me looks very much like Montauk branding, which makes sense because Montauk is their Tilray sibling.

[00:20:29] Justin Kendall: Why not take from what you already own? I feel like that's okay.

[00:20:34] Jessica Infante: Yeah, that's probably okay.

[00:20:36] SPEAKER_??: Yeah.

[00:20:36] Jessica Infante: What feels different about this one to me is like hard seltzers, everyone was basically doing the same thing, but you still had the original brand names affiliated with them. So consumers could basically pick based on whatever brands they already were familiar with. They're all coming out with new brands that these products are under. And so I feel like it's causing even more confusion where all these products look very similar and nobody really knows who is who and who's making them. And it just makes it even more like, okay, how do I even choose which one I go with? It just makes it even more of just a muddy mess.

[00:21:17] Matt Gacioch: A muddy mess, I think is a great way to put it. Zoe, you covered a webinar last week and pulled out one tidbit that RTDs were not 25% of spirits, but driving all the growth. And the early days of hard seltzer were exactly like that. Hard seltzer was one of the only segments that was driving growth in the beer Industry Headwinds everybody kind of put their eggs in that basket. And look where that basket is right now. We went from like constellations worth of And by that, I mean the sky, not the Mexican importer. We had so many hard seltzer brands and now that long tail really fell off. And it really is just basically a white claw with a little bit of truly story. The skimmers thing from AB is interesting because, you know, like we were talking about earlier, in Cupwater, AB really had a first mover. Cupwater, I think, is one of the earliest spirits-based RTD cocktail brands out there. And then they didn't keep pace with innovation as fast as other brands were. And so now they've got to rush to keep up. And it's the same kind of thing that happened with them and Bud Light Seltzer. You know, Bud Light Seltzer was always a distant third, but it was much later to the game than Wyclar, truly. I want to say that Bud Light Seltzer came out in January, 2020. when Truly and White Claw were both at 2016. So, you know, when you have to catch up when the horse is that far out of the barn.

[00:22:42] Justin Kendall: Which is wild that they even had to catch up because they had the original hard seltzer in their portfolio, Spike Seltzer, which became Bonne and Viv, which became Extinct.

[00:22:55] Matt Gacioch: Es no mas.

[00:22:56] Justin Kendall: Yeah.

[00:22:56] Matt Gacioch: And I liked Bonne and Viv.

[00:22:58] Jessica Infante: I liked Bonne and Viv too. I thought their flavors were good. Yeah.

[00:23:02] Justin Kendall: Maybe we're five years away, 10 years away from the, remember Bonne and Viv? Like then they'd bring it back.

[00:23:09] Matt Gacioch: Like Zima.

[00:23:10] Justin Kendall: Like the Zima thing. Yeah. Which I think still exists in Japan.

[00:23:14] Matt Gacioch: There are no new ideas under the sun. Then there's apparently no new art design either. So.

[00:23:21] Jessica Infante: I think, Justin, you brought up a good point before we started recording, too, that there is potentially a little bit of an AI element here, too, of how many folks have laid off their graphic designers lately and are creating just very similar-looking packaging art.

[00:23:39] Justin Kendall: GPT. Yeah. Make it Surfside and Suncruiser. Give me a mix of that.

[00:23:45] Matt Gacioch: We should actually try that later to see what happens.

[00:23:48] Justin Kendall: Yeah. If it comes up Skimmers, we'll know. Anyway, I'm Tabbing Out on this. I think we're getting too far down the path to an overstock shelf of these things, these copycats, and a discount cart here in a year or two.

[00:24:06] Matt Gacioch: Yeah, I'm with you on that. This is just too much and too similar, and there have to be new things in the world, right?

[00:24:13] Jessica Infante: Yeah. I mean, if Jim Cook can't even tell the difference sometimes, I think we have a problem. So I am Tabbing Out. Fair.

[00:24:23] Justin Kendall: Well, with that, let's get to our featured interview with Matt Gasiak from When Brewers Association.

[00:24:31] Matt Gacioch: Here to help you get ready for Craft Brewers Conference next week is the man who knows all the numbers, Brewers Association staff economist, Matt Gasiak, making his Brewbound Podcast debut, I believe, right?

[00:24:43] Brewbound Podcast: That's true.

[00:24:45] Matt Gacioch: Wow. Well, Matt, welcome. Thank you so much for joining us. We know busy you are. How are you doing?

[00:24:50] Brewbound Podcast: I am so great. You know, it's the season where pretty much the acronym CBC is everywhere in our office and on every one of our Slack channels and everything is all CBC all the time right now. So yeah, just really feeling that energy and getting really jazzed for Indianapolis.

[00:25:09] Matt Gacioch: Do you guys take like a staff rest day the following week? You need like staff recovery, like Thursday, Friday.

[00:25:16] Brewbound Podcast: Not Thursday, cause you know, there's still the conference and cleanup and all of that. Our recovery will be on the following Monday. So in emergencies, you could reach us, but mostly we're gonna be just kind of resting our feet and our voices.

[00:25:31] Matt Gacioch: Well deserved. Well, so in addition to the run up to CBC, which I'm sure is an all hands on deck effort, you in particular have been super busy yesterday and to timestamp this, we're recording this on Wednesday, April 16th, but we were busy and you were busy covering the annual Craft Brewers production report. And that I'm sure is a huge lift for you, but how relieved are you to have that out the door?

[00:25:56] Brewbound Podcast: Yeah, well, I mean, it's, it's always a huge project. This is my second year doing it. I've been having been with the BA since the start of 2024. So it felt a little less chaotic this time around, which, you know, a quest for constant improvement here. But, you know, it's a time of huge engagement with so many of our members in the Craft Brewers community to try to hone these numbers, do all the data cleanup, get everything kind of apples to apples compared to a year ago. And to be able to ship out kind of the high level report the other day was was great and really excited to get into more of the details through BART's State of the Industry address at CBC. And then there's more sort of data publications that come out in the weeks that follow. And then kind of all of the data is available in the May-June issue of The New Brewer.

[00:26:53] Jessica Infante: Like you said, Matt, you were kind of really thrown into this last year right away. Now you're a little over a year into it, but you're also coming in at a time where people are paying extra attention to the numbers because they're a little scary sometimes. We just saw craft volume was down 4% last year. Can you contextualize that a little bit for us? What should people be feeling and how should they be responding to what they read in those numbers?

[00:27:18] Brewbound Podcast: Yeah. So, you know, everyone's going to interpret the data differently. You know, I had, I had actually had a conversation yesterday where someone asked me, You know, When Brewers optimistic or are they pessimistic? And the sense I get right now is Craft Brewers are realistic, that they are understanding that this is a new environment that we're operating in. You know, mid-April 2025 is very different than mid-April 2015. And a lot of breweries in this country got their start well in kind of those wild boom times of the 2010s. And so, yeah, I think there is a realism that the environment is different these days. And, you know, the fact that our industry, the Craft Brewers industry, is maturing, you know, we're not in in that kind of huge expansion phase right now. And so we wouldn't expect those huge growth numbers to continue indefinitely into the future. It just can't an industry can't sustain itself at that rate. So, yeah, and there's a bunch of challenges facing the industry, of course, economic challenges. We've got challenges with consumers, how they're evolving. challenges of competition within beverage alcohol are, you know, it's, it's a crazy landscape compared to where we were a decade ago, let alone 30 years ago, in terms of the variety that consumers have available to them. And so a reduction of 4%, obviously, that's not the direction that we like to see the industry go, but is is not sort of any sign of falling off of a cliff. It's showing that Craft Brewers are supplying what the market's demanding. And one last point on this that I'll mention is that the 4% decline number is only for beer. And as we know, a lot Craft Brewers have shifted some of their efforts and their production into non-beer products. And so some of that production didn't just disappear, it shifted.

[00:29:20] Jessica Infante: I think that's really important context for this whole conversation. All those numbers and the top 50 production lists and things, those are all just beer. Also doesn't include some of those like sub segments within beer that we sometimes call beer, you know, like flavored malt beverages or like hard seltzers and things that's really talking about beer.

[00:29:40] Brewbound Podcast: Exactly. Yeah. And, and I should mention non-alcoholic beer is included in the beer category here. So that's inclusive.

[00:29:48] Matt Gacioch: That's good to know. You mentioned that we are a far cry from the crazy, crazy boom times of like 10 years ago, which is absolutely true. But, you know, we've been in unprecedented times for over five years now, thanks to COVID, but current trade policy has really dropped us pretty firmly in very uncharted waters. Mix that in with changes in consumer demand. What are you hearing from BA members right now about their concerns?

[00:30:14] Brewbound Podcast: The way that consumers and markets don't like uncertainty, small business owners really don't like uncertainty. And that is kind of the environment that we're in right now. There's a lot of products that go into beer making and the operating of a brewery can be bought from within the US, but the supply chain is so complex and so global that certain tariffs are going to have impact on pricing of brewery inputs. And so not being able to plan too far in the future because of how things have been changing so quickly, has made it really tough for brewery owners to make great beer and feel like they can make a solid business plan for the year and years ahead. So definitely a lot of challenges. And to go back to CBC, I think this is going to be a topic that is discussed not just in the seminar rooms, not just from the main stage, but in every conversation in the hallways, every conversation over beers at night. Folks are trying to get a handle on what to do, what their peers are doing. And so I think that CBC couldn't have come at a better time for folks to feel like they're not alone in these uncharted waters.

[00:31:28] Jessica Infante: you know, when people are coming up to the BA and asking some of these questions, what has been the BA's advice or guidelines? Is there anything that we should be expecting to hear maybe at CBC for just what steps brewers can possibly take right now?

[00:31:43] Brewbound Podcast: So in such a dynamic landscape, there's not kind of one silver bullet of something to do to totally protect from any supply chain risks or anything like that, of course. So really it's staying informed. We at the BA are doing our best to, we, we tried this new, we now have a ticker on our website for any, uh, tariff related updates that, um, you know, just something where busy brewery owners don't need to try to sift through all the madness of the internet and, and have kind of a place to see where things are happening, any updates along the way. So yeah, staying informed and not freaking out is kind of the big thing. You know, trade policy is still changing, still dynamic. And so to make any kind of rash decisions based off of what we think things will be like in six months could end up kind of going a full 180. So kind of keep informed, keep calm and keep making great beer. And that's kind of the, plan right now and if there are any updates, we'll be the first to tell folks about it.

[00:32:57] Matt Gacioch: Awesome. You calling this changing and dynamic was much more polite than what I would have said, which would probably start with the word cluster, right?

[00:33:04] Brewbound Podcast: Yeah, it's a regional dialect, you know.

[00:33:08] Matt Gacioch: Regional dialect. With so much uncertainty, it feels really hard to know what to do. So what are some proactive steps Craft Brewers can take to shore things up? I assume a lot of this is going to be, hey, visit suppliers at the trade show and just talk out a plan and do things like that. What do people need to know as we head into the conference?

[00:33:28] Brewbound Podcast: Yeah, absolutely. And the Brew Expo America being the largest gathering of brewing suppliers is an amazing place to actually have those one-on-one touch points. But to your point, we've been pointing out Craft Brewers should be in open communication with their suppliers to let them know what their needs are today, what they expect they'll be in the future, and kind of get that two-way dialogue going to understand where their suppliers are seeing risks, what the supplier has done to mitigate some of those risks, and all of that. So whether that happens at CBC or that happens over the phone with their suppliers, that's certainly something that brewery owners can be proactive about right now. But to have the opportunity to not just interact with existing suppliers, but also potential suppliers understand the entire landscape of what's happening in the brewing supply chain at the CBC Expo. That's one of the, one of kind of like the three main buckets of value that we see a lot of breweries get out of CBC. And so we definitely say, you know, there's an amazing seminar schedule, there's amazing social schedules, but make sure to block out time to spend time on that expo floor and interacting with those suppliers.

[00:34:48] Matt Gacioch: shameless self plug, we too will be on the expo floor at booth 512, so come say hi. Love it.

[00:34:54] Jessica Infante: Please. One last thing on the data that came out this week. Included in that list was also the top 50 lists for both Craft Brewers and for overall brewers. Were there any specific themes within some of the ships you saw there or some breweries that came in that really stood out for you from those lists? Any key takeaways from those?

[00:35:16] Brewbound Podcast: Yeah, I mean, at a high level, one of the nice parts about seeing the top 50 list each year is saying, you know, these are some of the strongest and most successful brands within our industry. And in the face of a challenging economic and consumer environment, these brands are still finding a way to connect with their consumers. And many of them found growth in 2024 compared to 2023. To your point or to your question of kind of newcomers and things like that, we had eight new breweries enter the craft top 50 list that weren't on the list in 2023. And I believe all of them were ranked in the forties. So these weren't, you know, the biggest of the big Craft Brewers, but it's those that have still found a way to find their niche within the market to find new ways to connect to consumers that, you know, we're happy to be able to recognize those folks on the top 50 list this year.

[00:36:18] Jessica Infante: Normally we don't see a lot of movement on that list, maybe a couple breweries here or there, but this was like a pretty significant amount of new names on there, which was interesting to see. I mean, it's a bit encouraging that there are some Craft Brewers that are still being able to find some growth there and move up there. And I know we're all looking forward to when we get to see the actual numbers that will come out from the new brewery too, as we like to refer to it as our Bible.

[00:36:45] Matt Gacioch: It is one of our favorite weeks of the year.

[00:36:48] Brewbound Podcast: The new brewer release, it's, yeah, we should have some kind of a party for it. It's mostly, yeah, it's mostly like, I got it out the door, excited. Yeah.

[00:36:58] Matt Gacioch: Totally. So we talked a little bit about how this production data only includes beer, you know, both elk and non-elk, but where do you see opportunities lying for Craft Brewers right now? How much buzz is there about things that are maybe beyond the scope of traditional beer?

[00:37:16] Brewbound Podcast: Lots of buzz and lots of data to look into, both sales data as well as consumer data. And, you know, there's certainly a lot of opportunity at the macro scale for brewers that want to expand into beyond beer beverages as part of their portfolio. It's not going to be kind of that silver bullet for everyone. At the end of the day, breweries need to understand their consumers and their potential consumers and understand what's, you know, what the operational costs and investments would look like for some of those. So in order to make the decision of whether to move into these other products, it should be a kind of strategic calculation, not just kind of chasing trends that we're seeing at the national level.

[00:38:07] Jessica Infante: You mentioned the investment required for that. There is this tricky time right now where the cost of doing any of these things is high. The cost of just doing your regular business is going up and demand is down in some places. So what guidance is a BA giving to croppers for how you can find that balance in your business strategies?

[00:38:28] Brewbound Podcast: We tend to be and kind of assert that it's valuable to always be data driven to understand where the costs are. We, we do a financial benchmarking every couple of years. And so breweries can get a get a handle on sort of where they're spending compared to their peer groups. you know, at the end of the day, many folks enter this business because they're passionate and, you know, are very good at the craft of making beer, but to be sustainable into the kind of long-term, it needs to really be, you know, business decisions that are made. And a lot of times that connects with sort of that same passion and the same mission, but also understanding if there is maybe a product mix that consumers are demanding that maybe The brew team isn't, it's not their favorite style, but it still connects with folks that would get more people in the tap room. You know, those types of decisions where it's not giving up the spirit and the authenticity of the Craft Brewers, but also meeting consumers where they're at.

[00:39:33] Matt Gacioch: We've been hearing at a couple of different conferences that we've been to Craft Brewers are getting increasingly interested in food service, but that's tough business.

[00:39:41] Brewbound Podcast: It's tough. And, you know, we talk about tight margins on beer, tends to be even tighter for food. And so if it works and there's lots that have found success, you know, really leaning into a food program, then great, but it's not going to be for everyone.

[00:39:56] Jessica Infante: Well, I mean, a lot of folks too, I've heard several people say when we go to conferences, like a lot Craft Brewers aren't going into Craft Brewers because they want to run a restaurant. They're going in because they want to make great beer. So it's quite a shift that you have to make in your mind of like, all right, am I going to do this and how do I do this?

[00:40:16] Brewbound Podcast: Yeah. And investment to build out a commercial kitchen in a space that doesn't already have it, that is not a small price tag. And then staffing and all of that, there's a lot to making that kind of a decision.

[00:40:32] Matt Gacioch: Yeah. One of When Brewers in the town where I live, they opened in a space that previously had been, I think, like a diner. So they had the kitchen there and they were never really using it. And they have partnered with like a local, very small burger-centric chain that now operates a pop-up out of their kitchen all the time. And it really seems to be driving traffic. Their burgers are really good. I think that's a really interesting model because they're two separate businesses. You order beer at one register and your food at the other register, and they don't intermingle at all, but you can go to one spot, take care of both of these needs, and I think they probably both drive traffic to each other. So I'll be interested to see if things like that start to catch on.

[00:41:12] Brewbound Podcast: Totally, yeah, I have an example of one of those just down the street from me on South Broadway in Denver. So it's definitely happening.

[00:41:20] Matt Gacioch: Definitely a thing. Well, Matt, you are just over a year on the job. What have you learned about Craft Brewers since joining the BA?

[00:41:28] Brewbound Podcast: So much. But I should also mention that I've also been kind of like lurking in the shadows of the Craft Brewers industry for a very long time. My first job in the industry was in 2010.

[00:41:41] Matt Gacioch: Me too.

[00:41:43] Brewbound Podcast: Oh, no kidding. Yeah. Been around for a minute. Yeah. No, we're, uh, you know, mature or something, but yeah, I, I actually, uh, I actually interned with the BA in the Q1, 2011. I was first to be a employee way back, way back when. And actually for the five years leading up to now being a full-time with the BA, I was a contractor as well. So as I said, just kind of like hiding, hiding a little bit more in the shadows, but there's still, I mean, there's so much to learn every single day about this industry. And, uh, you know, what have I learned? I've learned about seasonality in a way that I didn't know, like with granularity in a way I didn't know it before, and understanding how much variation there is between kind of a high level, you know, underneath a high level number, because we can try to paint with a broad stroke for the industry, but really every business operates in its own local environment, its own local context, and so, Yeah, there's so much, so much to learn every day. Members ask the best questions and my answer is almost 100% of the time. That is a great question. I haven't looked into that yet. So keeps me busy with kind of some of the most fun projects that a data nerd could ever dream for.

[00:43:06] Matt Gacioch: Awesome. Well, we've covered the gloom, we've covered the doom. On a higher note, Read More exciting note, what are you looking forward to about visiting Indianapolis Amid have you been there before?

[00:43:17] Brewbound Podcast: I have been to Indianapolis before. I've actually been to this conference center before. Lovely conference center. Everyone's going to love it. But yeah, I mean, Indy's a great town. I lived for a long time in the Midwest, so I'm really happy to kind of get back there. Indy's a great beer city. I actually wrote it down. Yeah, I think that, yeah, something like almost 70 breweries in the metro area, you know, kind of the area surrounding. a really great beer town and yeah, CBC is just kind of like my favorite event of the year. GABF has its place and it's very fun, but CBC to be the largest industry focused gathering of Craft Brewers professionals and their suppliers, it's just a really special time. I always learn so much from the seminars. As I said, I don't know, there's an energy of the expo floor. And then just kind of, you know, I love catching up with old friends and meeting new folks as well. So, so much to be excited about in Indianapolis.

[00:44:24] Jessica Infante: And it really, it's like our Super Bowl, right? It's the biggest event of the year for sure.

[00:44:29] Brewbound Podcast: It's apt that you used a football metaphor because at the welcome reception, it's at the Indianapolis Colts Stadium on the field. People get to kick field goals or try to kick field goals. And my bet is that we're going to have a lot of people walking Round With, uh, with limps on Tuesday after that, after folks have a couple beers and think that they could kick a 40 yard field goal and pull a hammy. So we might have to have a PT on, on the scene there. We'll see.

[00:44:58] Matt Gacioch: Over under how many, uh, how many field goals do you think are going to make it?

[00:45:03] Brewbound Podcast: I actually think, you know, we're an athletic group of people. We could. On a podcast, we couldn't see the kind of eye rolls that were, that just happened there. But no, I think, I think there's going to be some folks that, that surprised. I know, I know at the BA we've been kind of, there's been a lot of trash talk internally on our own Slack about who, about competitions, things like that. So, so it'll be a good show no matter what.

[00:45:31] Jessica Infante: You'd like are going up against a legit athlete if Bart isn't there. So that's some stiff competition.

[00:45:39] Brewbound Podcast: That's true. Yeah. I don't know how many Frisbees he kicked though. So I think we, we might still have, we might still have an advantage.

[00:45:47] Matt Gacioch: Fair. Very true. Yeah. I mean, like I see your point, I feel like CBC is like the family reunion with the cousins you like. And GABF is like when you throw a house party when your parents are out of town and way more people show up than you can handle. Yeah. Both are fun in different ways. Yeah.

[00:46:02] Brewbound Podcast: Fun in different ways. Awesome.

[00:46:04] Matt Gacioch: Well, Matt, are there any seminars in particular that you're looking forward to sitting in on during the conference?

[00:46:10] Brewbound Podcast: So it's my turn for a shameless plug. I'm actually giving a seminar at the conference that is actually tied in quite well to the conversation that we've had today. The title is Reverse Engineering Success. And so what I did was worked in partnership with four breweries that found really good growth in 2024. I have one brew pub, two tap rooms, and one distribution focused brewery. and then kind of worked backwards on some of the strategies that they had taken to find that growth and kind of mapped that over consumer data that we have to kind of understand how those strategic decisions ultimately led to a solid year in 2024.

[00:46:52] Matt Gacioch: That sounds fascinating. What day and time?

[00:46:56] Brewbound Podcast: Yeah, that's on Tuesday at 1.15 PM, so I'll be the post-lunch entertainment. But yeah, hopefully not too many folks snoring in the background. I think it's before most of the beer gets served, so should be okay. But yeah, there's a whole stats and trends track on the CBC website. Folks can look if this is an area they're interested in. There's a couple of great speakers that are also looking at beyond beer and kind of the total beverage alcohol market. And so tons of great data, of course, BART's state of the industry. And then one other thing I'll point out that is actually not directly related to stats and trends is that this year we're having an event on Tuesday evening at 5 p.m. called Askin' and Bibe When Brewers or any attendees can get together in a room with some technical brewing experts, the technical subcommittees at the BA. So folks who look at sustainability and safety and Craft Brewers quality among others. and just be in a room and drink beers and ask questions to some of these folks that are really some of the leaders in these technical brewing spaces. So a really cool opportunity to really take advantage of being in the same city and in the same room with so many of the leaders in our industry. That's awesome.

[00:48:20] Matt Gacioch: Yeah, that's great. Really, really cool idea. Well, Matt, this has been an awesome conversation. Always so great to chat with you. Can't wait to actually see you in person and get a beer in a couple of weeks. Yeah, absolutely. And thank you so much for joining us. This has been lovely.

[00:48:35] Brewbound Podcast: Thank you.

[00:48:36] Matt Gacioch: And that is our show for this week. Thank you so much to Zoe and Justin and the whole Brewbound BevNET audio visual team that worked so hard on this podcast. If you enjoyed the podcast, please be sure to subscribe to it. review it, give us a five-star rating. I would appreciate that wherever you like to listen to podcasts so other people can discover the show too. If you have any feedback, please drop us a note at podcastatbrewbound.com and we will be back with a fresh episode next week.