Brewbound Podcast

Innovation in craft brewing is a lot like a pee-wee soccer game, with all of the players running toward the same ball. At least, that’s how Neal Stewart, the vice president of sales and marketing for Deschutes Brewery, sees it. And that’s not a bad thing. So how do craft brewers differentiate in a crowded and more competitive climate? They need to figure out what their “superpower is” and make that their focus, he explained during Episode 5 of the Brewbound Podcast’s third season. “What do you do really well?” Stewart asked. “Even if that kind of sounds similar to another brand, be OK with that, but really focus on that, and find a unique way of communicating that.” That’s just one of the nuggets of knowledge shared by Stewart, who recently added the VP of sales title and responsibilities to his existing role as VP of marketing for the Bend, Oregon-headquartered craft brewery. Stewart, who joined Deschutes in April 2019, has more than two decades of experience working for some of the biggest beer companies in the U.S., including Pabst, Dogfish Head, Molson Coors, Mark Anthony Brands and Flying Dog. In this week’s featured interview, Stewart discusses his preference for working with people with beer industry experience and who have “been through wars and been in the trenches,” the differences in starting at a large beer manufacturer versus a small craft brewery, and how craft beer has stopped being an “easy business.” Stewart also explains why he’s adopted a wholesaler’s mindset, and why he’s embraced the dreaded question, “How does this help us sell beer?” “For them, it’s all about efficiency and it’s all about moving boxes,” he said. “And I think that craft brewers right now need to be thinking about how do we move boxes and how do we spend our budget to do that immediately.” Listen to the episode above, or find it on popular platforms such as iTunes, Google Play, Stitcher and Spotify. New episodes of the Brewbound Podcast are published Thursdays. For questions, comments or suggestions, please email [email protected]. Editor’s Note: Justin Kendall is well aware that he confused Skynet with Skylab. He regrets the error and apologies to the Terminator.

“Death by 1,000 cuts.” That’s how Deschutes Brewery founder Gary Fish describes craft beer’s current competitive landscape, as more venerable, regional breweries, such as his 30-year-old Bend, Oregon-based company, compete with a cohort of more than 7,500 small craft breweries. To Fish, the “800 pound gorilla” Deschutes is going up against is no longer Anheuser-Busch InBev, but these thousands of small, local breweries. So how does an established regional player such as Deschutes — the 10th largest craft brewing company in 2018, according to the Brewers Association — stay ahead of the horde? “The way to compete, from our perspective, is through innovation,” Fish told his company’s wholesalers last month during a national sales meeting in Portland. “It’s getting in front of them. Increasing the amount, the frequency and the volume of our conversations with our consumer, and listening to what they’re providing us, so we can get them the flavors, the concepts, the brands that they truly value.” For Deschutes, like many other brewers, innovation is taking the company to avenues beyond beer, with plans to launch Modified Theory, a new line of flavored malt beverages inspired by trends in craft cocktails and mixology, next year. Asked if he ever thought Deschutes would morph into a “beverage company,” Fish said he’s never ruled anything out. “I spent a lot of the last 32 years paralyzed by fear, so the idea that we would morph into this, I never thought negatively about it, but I also never thought that we’d be more than a beer company,” he said. “We make our own cider, we have our own whiskey, we have already become an adult beverage company, much more than just a beer company. So whether or not it was predicted, we’re already there. So the transition to some of these more than beer products seems a very natural one at this point.” In Episode 3 of the Brewbound Podcast’s second season, editor Justin Kendall leads a panel discussion with Fish, Pacific Northwest general manager Chris Hudson, regional sales director Stacy Denbow and former Columbia Distributing chairman Ed Maletis. They discuss Deschutes’ evolution into a beverage company, how difficult it is to get mindshare and focus in 2019 and giving consumers what they want. Listen to Episode 3 above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast are published Thursdays. For questions, comments or suggestions, please email [email protected].

As an increasing number of craft beer companies close their doors, the market for used brewing equipment is heating up. But not all that glitters is gold, especially when it comes to buying assets from a distressed brewery. John Dantzler, the co-founder of New York City’s Torch and Crown Brewing, recently joined the Brewbound Podcast to share his experience buying used brewing equipment at a bankruptcy auction. According to Dantzler, to maximize your value at a bankruptcy auction, brewery owners need to do their homework. “If you are acquiring something out of bankruptcy, it is typically not going to be this pristine, brand new piece of assets,” he said. His advice? Operate under the assumption that precision equipment such as filters, or centrifuges have “probably not been treated the right way.” “Those are probably beyond salvageable,” he said. “But the actual stainless steel or harder assets that you can beat up a little more, that’s where we ascribed the value.” In episode 42 of the Brewbound Podcast, Dantzler discusses the ins and outs of bankruptcy buys and explains why he’s committed to opening a production brewery in Manhattan. He also discusses what’s leading to the uptick in distressed brewery sales, and shares how his business model has evolved over the last five years to accommodate for the current marketplace realities. Listen to episode 42 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Chris Furnari and Justin Kendall, are published every Thursday. Episode 43 will be released on Thursday, July 4. For questions, comments or suggestions, please email [email protected]. Show Notes: 0:00 – 23:55: Chris Furnari and Justin Kendall introduce episode 42, discuss hard seltzers, old beer on retail shelves, and the latest news. 23:55 – 1:02:08: Furnari and Kendall interview Torch & Crown Brewing co-founder John Dantzler. 1:02:08 – 1:23:36: Furnari and Kendall share takeaways from the interview, and rundown segments

Want to know how to constantly sell out of your flagship product? You could try asking Lawson’s Finest Liquids founder Sean Lawson, but even he’s not entirely sure why drinkers come back time and time again for his popular Sip of Sunshine double IPA. “I wish I knew,” he said during a recent interview for the Brewbound Podcast. “For me, I think the best answer to maintaining that is to really maintain a focus on trying to create the best beer in the world.” Nevertheless, there are some simple yet incredibly effective strategies Lawson has deployed that contribute to the success of Sip. One of the factors that helped push sales of Sip of Sunshine beyond $6.7 million in the convenience channel alone last year, according to IRI, was a commitment to freshness. “[We] demand that our beer is kept cold all the time and that we get it to the customer as fresh as possible,” he said. In episode 35 of the Brewbound Podcast, Lawson discusses the Sip of Sunshine business and explains how his company approaches innovation. He also shares advice for brewery owners looking to expand and talks about how to entice customers to visit the taproom. Listen to episode 35 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Chris Furnari and Justin Kendall, are published every Thursday. Episode 36, which features an interview with Iron Hill Brewery’s Mark Edelson and Kim Boerema, will be released on Thursday, May 16. For questions, comments or suggestions, please email [email protected]. Show Notes: 0:00 – 17:30: Furnari and Kendall introduce episode 35 and discuss the latest news 17:30 – 58:15: Furnari interviews Sean Lawson 58:15 – 1:20:10: Furnari and Kendall share their takeaways from the interview and rundown segments

NBWA chief economist Lester Jones has a theory: The beer industry is suffering from cognitive dissonance. “Cognitive dissonance, in psychology, is this mental discomfort that everyone experiences when they have … contradictory beliefs and facts that send them into a state of confusion,” he told the Brewbound Podcast. Despite the ongoing narratives that beer sales are slumping and millennial consumers are cutting their alcohol consumption, there isn’t enough data that paints an accurate picture of the current landscape to say definitively that those phenomena are actually occurring, Jones said. To make his point, Jones argued that the growing popularity of hard seltzer, hard kombucha, and other non-traditional products could be part of the reason why sales of standard beer are declining. However, that doesn’t mean that millennial consumers are wreaking havoc on the alcohol industry. “They will find brands that they like; they will become brand loyal consumers,” he said of millennial drinkers. “They will change the face of the beer industry and 10 years from now we will look back on millennials and say – you know what, they actually behave like everyone else did.” In episode 30 of the Brewbound Podcast, Jones explains how the NBWA’s monthly “Beer Purchaser’s Index” can help predict future industry trends, and how beer professionals can use it to make more informed decisions. He also explains his “cognitive beer dissonance” theory and gives us all a reason to believe that the industry is actually pretty healthy. Listen to episode 30 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Chris Furnari and Justin Kendall, are published every Thursday. Episode 31, featuring Revolution Brewing chief commercial officer Donn Bichsel, will be released on Thursday, April 11. For questions, comments or suggestions, please email [email protected]. Show Notes: 0:00 – 20:25: Furnari and Kendall introduce episode 30, discuss a recent encounter with baseball legend Wade Boggs and discuss the latest news 20:25 – 54:00 Furnari and Kendall interview Lester Jones 54:00 – 1:07: Furnari and Kendall share their takeaways from the interview + segments

In a beer industry littered with hazy IPAs, one cloudy brew stands above the rest. Allagash White, the ubiquitous Belgian-style witbier made in Maine and sold in just 17 states, is the eighth-largest craft brand, sold on draft, in the entire U.S., according to research firm Nielsen. “It’s a very, very strong brand on-premise, but we are probably selling 75 percent of our beer on-premise,” Allagash Brewing founder Rob Tod told Brewbound editors Chris Furnari and Justin Kendall during episode 29 of the Brewbound Podcast. According to Tod, Allagash White is one of only two top-10 craft beer brands growing sales on-premise. But the brand’s impressive on-premise presence hasn’t necessarily led to strong sales at grocery and liquor stores, as only a quarter of the Allagash White business occurs off-premise. That’s likely to change, thanks to the introduction of canned packages, which rolled out in February. “I think people kind of view us as a special occasion beer on the off-sale,” Tod said. “We want to use cans to bring Allagash White to really every occasion on the off-sale.” In episode 29 of the Brewbound Podcast, Furnari and Kendall chat with Tod about how the addition of canned packages will transform the Allagash business in the years to come, how the company is repositioning itself off-premise, why it invests disproportionately in quality-control measures and how it approaches innovation without chasing trends. Listen to episode 29 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday. Episode 30, featuring NBWA chief economist Lester Jones, will be released on Thursday, April 4. For questions, comments or suggestions, please email [email protected]. Show Notes: 0:00 – 16:45: Chris Furnari and Justin Kendall introduce episode 29, discuss recent people moves and provide an update on #Corntroversy 16:45 – 1:00:10 Furnari and Kendall interview Rob Tod 1:00:10 – 1:11:35: Furnari and Kendall share their takeaways from the interview

In 1997, the late rapper Notorious B.I.G. posthumously released the chart-topping hit “Mo’ Money, Mo’ Problems.” Biggie’s maxim — one that speaks to the issues that can arise as profits grow — comes to mind when Russian River Brewing co-founder Natalie Cilurzo explains the difficulty of convincing early-stage investors to sell their stakes in one the world’s most highly acclaimed beer companies. “The bigger your company gets, and the more successful it becomes, and the better your cash flows, and the bigger your profits, and the bigger your dividends — the less likely you are going to have investors that want to sell out,” she said. According to Cilurzo, who co-owns the brewery with husband Vinnie Cilurzo, Russian River Brewing bought most of the company’s early investors out between 2012 and 2014. At that time, craft beer sales were growing double-digits and startups were flooding the market trying to get a piece of the action. “We ended up having to pay a lot of money to successfully make them whole and buy everybody out,” she said, noting that conversations were “difficult.” In order to reclaim all of their interest in Russian River, the Cilurzos’ went to the bank and put up their “life and limb” as collateral. “We didn’t own land, and so you don’t have really valuable property,” she said. “All you have are all of your assets tied up in your business.” In episode 22 of the Brewbound Podcast, Cilurzo sits down for a wide-ranging conversation that examines the process of managing debt, buying out investors, building a $50 million brewery, exploring industry trends and more. Also in this episode: Brewbound editors Chris Furnari and Justin Kendall discuss Anheuser-Busch’s Super Bowl LIII commercials and Sierra Nevada’s first-ever acquisition. They also give their Warm Shelf/Cold Box nominations of the week, and play a game of “Did Andy Crouch Tweet That?” Listen to episode 22 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday. Episode 23, featuring Beer Advocate founders Jason and Todd Alström, will be released on Thursday, February 14. For questions, comments or suggestions, please email [email protected].