Brewbound Podcast: TRU Colors Closes, 2 Big Distribution Deals Made and Allagash to Move its Taproom

[00:00:00] Jessica Infante: True Colors closes, several distribution deals go down, and Allagash is going to open up a new taproom. Find out more next on The Brewbound Podcast. Hello and welcome to The Brewbound podcast. My name is Justin Kendall and I'm the editor The Brewbound and I am joined by Jessica Infante, the managing editor The Brewbound. What is up, Jess?

[00:00:31] Mark Seperic: Hey, nothing. It's a really nice day. Did you know that it's gorgeous outside?

[00:00:36] Jessica Infante: I would have to leave a basement to go outside and find out. But I plan to do that when I use my brand new battery charged mower. It's very exciting being a homeowner.

[00:00:48] Mark Seperic: That's a big deal. Congrats.

[00:00:51] Jessica Infante: Yeah, it's going to be a big time for me starting to do lawn care after not having to do anything other than shoveling. Also joining us, maybe someday a homeowner. I don't think she owns a lawnmower. Zoe Licata, our Generation Z consultant, Brewbound reporter extraordinaire. How are you doing, Zoe?

[00:01:12] Dogfish Head: Good. I don't think homeownership is anywhere close in my future or any other Gen Z's future, but otherwise doing great.

[00:01:21] Jessica Infante: We'll try to get you there someday, but you may have to flee Massachusetts, too, like myself, to make it a reality.

[00:01:29] Dogfish Head: Yeah.

[00:01:29] Jessica Infante: So anyway, on to the business at hand, and we've got a BrewTalks event coming up on Thursday, October 6th in Denver. We are coming to Denver for the Great American Beer Festival week, and we're going to kick it all off, start things before the festival even gets started with a BrewTalks Meetup, we're going to have networking and conversations at Cervantes Masterpiece from noon to 3 p.m. Mountain Time. We've got a pair of conversations. We teased it last week. We're going to talk about Kraft's reliance on IPA and how we can maybe break that reliance a little bit. And we've got a great panel to do that. We're going to be joined by Mark Seperic, the brewmaster for Dogfish Head. We're going to be joined also by Kyle Ingram, the brand director for Sierra Nevada, and Mary Mills, a consultant for Three Tier Beverages. I am very excited about this panel, and it's one that Jess, I know, is near and dear to your heart.

[00:02:32] Mark Seperic: Yeah, I am pumped. This is a tough conversation that I think we all need to have.

[00:02:38] Jessica Infante: Yeah, I think that you and I talked about this as sort of our Armageddon moment where, like, if we were going to put some minds together and figure out, like, how to stop the asteroid coming toward Earth or whatever, you know, who would we want? So these are three of those people.

[00:02:54] Mark Seperic: Yeah, I would take these guys any day.

[00:02:56] Jessica Infante: Yeah. And we're not going to play any crappy Aerosmith music either. uh you bite your tongue that was a lovely song that was a terrible song and a song well well before zoe was probably even born yeah i mean i have fond memories from middle school dances but sure all right our second conversation we're going to talk about strategies for building national accounts teams and getting into chains. And that's, again, another just idea that we are bringing to fruition. And to help us bring that to fruition, Billy Clayton, Senior National Accounts Manager from Odell Brewing is going to join us. Tamron does this survey all the time. And what they find out is wholesalers say, crap brewers could really use some help in this field or in this area. So we're going to talk about it.

[00:03:47] Mark Seperic: Yeah, I'm excited for this conversation. National accounts, I think are, I don't want to say uncharted waters for smaller craft brewers, but they maybe seem a little intimidating. So I think we can really glean some wisdom from all of our panelists that really are going to give audience members some actionable advice about how to approach, you know, national chains in your territories.

[00:04:11] Jessica Infante: Yeah, we have some outreach on both of these panels, which means we may have more panelists coming up. And we're definitely going to have more panelists on the second panel. Stay tuned. We'll be back with more information on these. But let's dive into the news of the week. And wow, on the heels of last week's conversation with Charles Bethe from the New Yorker about True Colors. A few days later, True Colors is no more. They are closed as of Friday, September 9th.

[00:04:45] Mark Seperic: Yeah, this is a really interesting situation. And it's, it's sad, you know, like now a bunch of people have lost their jobs, which is never, ever, ever good. Not at all pleased about this part of it. But I mean, I'm not pleased about any of it. But I mean, you heard last week's conversation with Charles. He spent a lot of time investigating true colors, their mission, their ethos, and the violence that just seems to swirl around this brewery's ecosystem. And I mean, it was a bold idea, but ultimately one that couldn't really play out. If you visit the brewery's Facebook page, founder George Taylor posted a very lengthy post explaining a lot of their struggles and things that the brewery has gone through in its life. And he pointed to a lot of negative media attention and said it really scared off some investors. They lost a total of what would have been $5.6 million in investment this year. And without that, they just can't operate anymore. He said they were down to like about $8,000, which is not enough to keep a brewery going. So yeah, he announced that they'd be going out of business. I don't know, what'd you guys think about this?

[00:06:06] Jessica Infante: It's pretty sad, I think. as questionable as the premise of the mission was, I feel really bad for the folks who were working there and have lost their jobs and were trying to make better lives for themselves and their families. And now they're just kind of left out in the cold. And I really hope that there's someone who can scoop them up and help them out.

[00:06:32] Mark Seperic: Yeah, that's perfectly put. I mean, I'm glad that, you know, and if you didn't listen to the podcast last week, True Colors is the Wilmington, North Carolina-based brewery that employs active gang members from rival gangs and gives them, you know, on-the-job training and gives them, you know, jobs at the brewery in various parts of the beer industry, different functions. And it had a really strong mission, got some backing from Molson Coors. They were packaging and distributing one beer so far called True Light, which was a 96 calorie light lager. And a lot of things that happened, but I think that probably the biggest story around the brewery was that last summer, one of its employees and a friend of his were shot and killed in an incident that took place at the home of then brewery COO George Taylor III, the son of George Taylor, the founder. And, you know, three people have been charged in that crime. But, you know, just questions kept popping up about what is happening. And is this the right way to go about this, this mission with a really important cause?

[00:07:48] Jessica Infante: I mean, people's lives are at stake. Literally. Yeah, literally at stake. And it's dangerous. There's an element of danger to this.

[00:07:56] Mark Seperic: Yeah, if you haven't, I strongly encourage listening to that conversation with Charles and reading his story in The New Yorker. But yeah, as of right now, True Colors will be ceasing operations. George Taylor previously in other interviews had said, at least Charles had reported that George was saying he could envision himself selling the company within a few years and questions arose about what would happen if he were to do that? Would the new owners keep this staff of active gang members, just a lot of questions. And, you know, in his post about the closing of the brewery, George said that, you know, there were things in place to make sure if you work there for five months, you were given equity in the company. And there was a limit to how much money he would be able to make should he sell, which would only be the amount that he invested from the start.

[00:08:45] Jessica Infante: So he cleared up some some questions, but he did clear up some questions, but he did it after the fact. This is something that people have been asking about for a while. It's something I asked about when Molson Coors made the initial investment in the brewery, and there were no answers. And I feel like if they'd maybe put this out there ahead of time or made it more public, A few folks would maybe give him more of the benefit of the doubt. Yeah. Them being George Taylor and his intentions here. And, you know, maybe I missed it, but I mean, it's definitely something that I asked about and didn't receive an answer to. And I just feel like they could have been more forthcoming about this or more transparent. And, you know, maybe they were. I can't claim to be an expert on true colors and everything that they were doing. But from what I've I've seen, it was a question that was left hanging for a lot of folks.

[00:09:39] Mark Seperic: Yeah, for sure. You're right.

[00:09:40] Jessica Infante: Yeah. Some more news. Reyes is adding a 10th market. They're going into Tennessee and they're doing it in a big way. They're acquiring D.E.T., distributing for $400 million, according to our friends over at Beer Marketers Insights. That's a big deal.

[00:10:01] Mark Seperic: Huge deal. Anytime Reyes expands into a new state, it's always noteworthy. So, you know, last year was Michigan, the year before was Indiana, so this year it's Tennessee.

[00:10:14] Jessica Infante: And that's 9 million cases and more than 5,000 customers that will be going to Reyes. The acquisition is expected to close in November. This is a longtime family owned business and lots of key suppliers, a lot of the ones that you would think of when you think of Reyes, Molson Coors, Constellation Brands, Boston Beer, Marc Anthony Brands, Diageo, Heineken USA, Pabst, Sweetwater, Lagunitas, Gambrinus. So a lot of big brands changing hands there.

[00:10:47] Mark Seperic: Yeah, yeah. And it looks like DET's got warehouses in Nashville and Jackson. This will bump Reyes' estate count up to include California, Florida, Illinois, Indiana, Maryland, Michigan, South Carolina, Virginia, and Washington, D.C.

[00:11:01] Jessica Infante: Big deal. Sort of a smaller deal, but with a very large player, Columbia Distributing being that large player, and Scout Distribution, smaller player, launching a joint venture in Idaho. This is a kind of sign of the times move. It's a strategic partnership. I spoke with Scout CEO, Jeff Hansen, and Columbia President and CEO, Chris DeFonsi, about the deal, and what they're telling me is, This is sort of the wave of the future. It's going to be some of these smaller partnerships as businesses open up. And they really want this to be a scout run operation in Idaho. They want to sort of focus on the way Scout does things. They're going to glean some of the knowledge that Columbia obviously has on getting into chains. But this is going to be a scout operation. And Jeff, they've got some big aspirations here. Jeff Hansen told me that the five-year plan is to reach one million cases through the JV. And just to sort of set the stage here, Scout does about a million cases now in its two territories, which is Southern California and Arizona.

[00:12:18] Mark Seperic: This is a huge leap. One thing that really struck me from your story was that they said to you that they're really interested in Idaho because Idaho has had a huge population growth in the last couple of years with people moving from, I'm sure a lot of the pandemic has a lot to do with this in the advent of remote work, people can move out of higher priced markets and into places like Idaho.

[00:12:40] Jessica Infante: Idaho, Iowa, it's all the same to some folks.

[00:12:43] Mark Seperic: Oh yeah, yeah, look at you.

[00:12:47] Jessica Infante: Well, let's also move on to another sort of big deal. Allagash is opening up a new tasting room in 2024. And Zoe, this was all you. Tell us what's going on there with our friends, the Allagashians.

[00:13:03] Dogfish Head: Yeah, so Allagash announced today they've agreed to purchase this little more than seven acre plot in Scarborough, Maine, which they say is about 15 minutes from their current Portland brewery. And that is going to house a brand new tap room that will replace their Portland tasting room. So they're going to continue producing and packaging Allagash in Portland, but that whole consumer facing spot is going to move down a ways to this, they call it a mixed use live, work, play community called the Downs. So they're going to be an anchor tenant there with this new tap room. It's supposed to have a lot more space for people to visit, more tap space, more just community space. But it's going to be a little weird. I think Allagash is such a Portland centric brand. It's not going to have this taproom right at the brewery anymore. The taproom in Portland is going to remain open through till this new place opens. There's not going to be any like gaps in time. And it will transition into a very small. Tasting room area, so there's still be a small section there, but it's mostly going to be converted into more production space in Portland and no brewery tours currently planned at the moment. So a little different than the Portland brewery seat, but it's just seems to be, they need the space for production. I mean, they've been increasing it significantly specific, like this past year, they increased 24%. They're at almost 118,000 barrels in 2021 and things seem to be going well this year too. So they needed that production space.

[00:14:51] Jessica Infante: I could hear Jess internally gasp when you said no brewery tours.

[00:14:58] Dogfish Head: Yeah, I asked them, but this was just brought it up, but we asked them what will happen with because you're going to have your tasting room now separate from where production is happening. And they said a spokesperson told us that just the logistics of the space and production set up and how brewing is, they just are going to refrain from restarting public tours right now and TBD on if those will return.

[00:15:26] Mark Seperic: This is like a question I've had floating around my head for probably over a year now. It's like, how does the pandemic affect this? Because mostly everybody stopped their tour operations, which makes sense. But you know, the beer drinking public is so different than it used to be. Like people are generally pretty informed and they don't maybe need that rudimentary knowledge that you get on a brewery tour. You know, I mean, everybody teaches you how to make beer and then everybody includes like, you know, stories about their own brand. It's basically like an hour long. commercial for your brewery, but has interest waned in the public? What's happening? What are we going to do? So really, really interesting to me that Allagash is giving them up. And Allagash had a great tour. I've been on it a few times. So much fun.

[00:16:10] Dogfish Head: I know we talked about it when all this stuff was happening with New Jersey because they have all those house where you kind of have to do these tours. Yeah, but figure out ways to go around that or do whatever works best. But it's interesting how it varies.

[00:16:26] Mark Seperic: Very creative ways to evade that in the garden state. But fascinating to me what they're doing here. And I think these mixed-use developments, this seems to be a wave of the future. We've covered Highwire, you've covered Zoe Highwire quite a bit. And every time they send us a press release for a new tavern, I feel like it's almost always in one of these. It's like an anchor tenant in a mixed-use retail residential thing. And can you imagine living upstairs from Allagash? That would cause problems. I mean, wonderful problems, but...

[00:17:01] Dogfish Head: But yeah, yeah, yeah, I feel like yes, specifically with Highwire, it's just like, it seems to be the the new thing to do is like become even more of a part of a community by becoming a key figure in these spaces where you can get food, you can shop, you can live, you can hang out with your kids, like there's these large spaces with multiple tenants to bring people in.

[00:17:31] Mark Seperic: Yeah. I mean, you've got like a built-in consumer base of the people who live there, but there's other businesses around you. So there's other businesses that are generating foot traffic. Whereas if you you know, are somewhere in an industrial park on your own, you're responsible for all your own foot traffic. So I get it. And I'm sure, you know, Allagash and I'm sure Highwire does the same. I'd hope that everybody really includes, you know, their own character and charm in their build outs. I'm sure that will happen.

[00:17:58] Dogfish Head: Yeah, and Allagash has said they want to keep the same spirit and all the same feel and everything in this new tap room. It's still going to follow all their B Corp like certification requirements. So it's still going to be an Allagash space, even though it's separate from the actual brewery itself.

[00:18:15] Jessica Infante: And zero production on site, right?

[00:18:18] Dogfish Head: Yeah, that's the impression we've got is no production. It's just it's a tasting room. But yeah, Portland is going to be where their production stays.

[00:18:27] Jessica Infante: Right on. Well, you both sat in on the latest Brewers Association collab hour with our friends BK Kruger and David Williams from Bump Williams Consulting, and I caught a little bit of it. Dave's getting a little little salty. I don't know that salty is the right word. But he was like, you know, you need to do this. Like, at the end, he really sort of zeroed in on some takeaways. And I was pretty impressed.

[00:19:04] Mark Seperic: Yeah, Dave dropped a lot of wisdom. I think all three of us were particularly struck by what he was sharing about 19.2 ounce cans. You know, there's a lot of them, but there's still a lot of interest in them at retail. So if you don't have a 19.2 ounce program, maybe consider it.

[00:19:26] Jessica Infante: With that, what really jumped out at me too was Dave pointing out that it's not all IPA either. There's some room and space to play in other styles. And I feel like we're almost having the conversation that we can have during BrewTalks, but another plug to join us at BrewTalks in Denver. But yeah, that was really something that grabbed me.

[00:19:50] Dogfish Head: Yeah, and he was pointing out like these real like trendy styles that we see it like the hazies and stuff like that may seem really intriguing to put a player in that. They are also really top heavy, like really, that growth is dominated by a couple brands right now. And jumping into one of those spaces may not actually get the return that you expect, because it's so top heavy, and pointed to some other brands that are other styles that are also seeing growth that maybe we should look to that you may have a better edge in, which was interesting because I feel like it's, we've been talking a lot about like hazies. It's like the thing, everybody's doing a hazy. That's the part that's growing right now, but it's really, it's really only a few people. It's really New Belgium.

[00:20:39] Jessica Infante: New Belgium and Sierra. Sierra's got the number one hazy in the nation.

[00:20:44] Dogfish Head: They do.

[00:20:45] Jessica Infante: Hazy little thing. I don't know why that sort of surprised me. I knew it, you know, but I guess it's just because when I think of Ranger Imperial IPA, like generally now it's just like, oh, it's got to be hazy. And now it's just Rangers and Imperial.

[00:21:01] Dogfish Head: What I thought was one of the most interesting parts about this was at the beginning of this presentation, talking about like the presence of craft in all like autonomous outlets that sell any type of FMB or anything and. Like hard seltzer is in 97.5% of these outlets. Kraft is in 93.4% and that doesn't seem like a big difference and like 93.4% is still a lot, but that's shrinking. And he's asked, he's like, why is like all these other segments still have a presence or are gaining a presence in these retail outlets? Craft isn't like it's beyond just the sales. It's just like even getting in those stores in the first place is shrinking, which is a little scary.

[00:21:52] Jessica Infante: Yeah, there's a rationalization of craft SKUs that are coming out of the shelf sets to make way for some of these products. Right.

[00:22:00] Dogfish Head: Mm hmm.

[00:22:01] Jessica Infante: I just hear hello darkness, my old friend coming in. So I mean, maybe we should call this this good for this week. Anything else you both want to hit other than should we hit Jess's wing eating prowess?

[00:22:18] Mark Seperic: Yes. I was not the one eating the wings. I am a great wing eater. It's one of my few skills. I'm really great.

[00:22:25] Jessica Infante: Bone-in only. We know.

[00:22:26] Mark Seperic: Bone-in only. And I get everything off the bone. I hate when you split a plate of wings with somebody and they take like two bites and then toss it aside. My dad, notorious, the worst person to split wings with because it was you leaving so much behind. But anyway. Big shout out to our friends at Tributary and Sacred Profane for inviting me to host their take on Hot Ones, the wing eating interview show at Tributary last night in Killary, Maine. Todd Mott, the co-founder of Tributary, who is a New England craft legend, and Mike Fava, who's the co-founder of Sacred Profane with Brianne Allen. They each went toe-to-toe eating wings and answering my obnoxious questions. Zoe came to watch. I did not eat any wings. I did try one dab of the hottest hot sauce and immediately got a case of the hiccups. It was not cute. Yeah, but we had a good time. It was fun. It was fun to ask fun questions, you know, because we try to keep this like all business all the time.

[00:23:27] Dogfish Head: Yeah, we got some real nice candid answers out of there. Officially, no one wants smoothie beers or dessert beers anymore seems to be the takeaway. No, but no, it was really fun. I tried their blueberry ale because when in Maine, you got to get some Maine blueberries and it was delicious. Very cool space over there. Glad to just go out to breweries and see the breweries instead of being holed up in our little offices writing about them every day. So it was a nice change.

[00:23:58] Mark Seperic: It was nice to be out in the world. Yeah. I think my favorite question that took them a long time to answer was, So in classic French cooking, there's what's known as the five mother sauces, and I'm not going to attempt to butcher their names here, but like Bechamel is one of them, you can imagine. So I asked Todd and Mike, if we had the equivalent in beer, what would be the five styles of beer that you need to know and master before you're considered somebody who knows their shit? So it was fun to see them go back and forth. They said Porter...

[00:24:29] Jessica Infante: Pastry Stout? Oh, no.

[00:24:31] Mark Seperic: Pastry Stout was not on that list. No. Imperial Stout was. Imperial Stout, Porter, IPA, which is open to interpretation, Mike said preferably English or Classic American, Pilsner, and ESB. Wow.

[00:24:47] Dogfish Head: My favorite of Todd's various great quotes of the night, but he referred, he said that loggers need more love, but he referred to what loggers are in the U.S. as flabby, yellow, fizzy shit. We need some real, some real loggers to have their moment here. I thought that was beautiful.

[00:25:08] Jessica Infante: Does he have to pay royalties to Greg Cook on that?

[00:25:12] Dogfish Head: Maybe maybe he also he said he was the one who said that dessert beers and those things should go away the pastry stouts and stuff. He said just eat a donut and drink a beer and you'll have the same experience. I'm here for that, man.

[00:25:27] Mark Seperic: That that's great.

[00:25:29] Jessica Infante: Well, I think I saw a press release about donuts and beer that came through today, actually.

[00:25:34] Dogfish Head: So probably.

[00:25:36] Jessica Infante: Anyway, with that, we're going to call it for this week. Thanks to all of you for tuning in and listening to us. Thanks to Jess and Zoe for hanging out. Thanks to Joe for putting all of this together. We're going to be back next week.