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Posted in The Bruery, Headlines

The Bruery takes on private equity with Castanea Partners

Today Placentia, California based The Bruery announced that they are partnering with Newton, Massachusetts based Castanea Partners.

The Bruery is still a relatively small operation after 9 years. A few years ago The Bruery split into two units, with the wild and sour arm of the brewery now known as Bruery Terreux. Then just this year, the brewery started releasing India pale ales as Offshoot Beer Co. According to founder Patrick Rue there are still unrealized ideas.

That being said, Rue is going the private equity route. Castanea Partners have already invested in a few notable brands like Jeni’s Splendid Ice Cream, Urban Decay cosmetics, Essentia Water, and Drybar. According to the Castanea Partners website, this is their first foray into the alcohol industry.

Going forward Patrick Rue will remain CEO and his father Mike Rue will still own a significant portion of The Bruery, Bruery Terreux, and Offshoot Beer Co.

Castanea Partners is going to assist the brewery financially and operationally, exploring new options across their 29 state footprint.

We are still an independent craft brewery.

The amount of the investment has not been disclosed, nor the new ownership split. The deal is expect to close by month’s end.

by Reid Ramsay
Posted in Headlines

AB InBev will spend $2 billion on their American brewing operations

If you ever wondered how deep Anheuser-Busch InBev’s pockets are, maybe this will give you a little perspective. The world’s largest brewery is going to invest $2 billion in their U.S. market over the next three years.

To date, ABI has purchased ten craft breweries valued a millions each. They operate 12 production facilities around the U.S. that produce over 200 million barrels (or 6.2 billion gallons of beer) annually. In contrast, the largest craft brewery (in volume), D.G. Yuengling & Son, hovers at 3 million barrels annually.

ABI pays $20 million to Major League Baseball annually for licensing rights, $1 billion to the National Football League for a six year licensing deal, plus Major League Soccer and Nascar deals.

Let’s not forget the 100+ billion dollars spent on acquiring SABMiller.

The list goes on, but you get the idea. ABI has some pretty deep pockets.

America’s craft brewers are a little intimidated, and maybe a little scared of this world Anheuser-Busch is creating. That kind of money flush operation is hard to compete with. The battle for grocery store and gas station shelf space is being decisively won by ABI. Now craft’s biggest competitor is dropping $2 billion in their American beer presence over the next fews years.

Where The Money will be Spent: 2017-2020

Below is a brief breakdown of how $2 billion will be spent. Take note of a new interesting initiatives that include Elysian, new dry hopping tech, and planning for new brands and products at a few key facilities.

  • $15 million will be spent on the Fairfield, California facility. Elysian Brewing will soon be producing their Space Dust IPA there.
  • $200 Million will be spent on capital improvements at the brewery’s 12 largest production facilities. (Some noted below)
  • $180 million is earmarked for expanding aluminum bottle production (a big sell at concert and sports venues)
  • $82 million is headed into Anheuser’s supply chain. Some of the cash will build state of the art distribution centers in Los Angeles and Ohio
  • $10 million will be invested in non-alcoholic operations in Baldwinsville, New York
  • $28 million expands Fort Collins, Colorado brewery’s aluminum bottle production, and new dry-hop capabilities
  • $18 million at Williamsburg facility for new technology and labeling machines
  • $12 million at Cartersville, Georgia facility for new packing capabilities, and new energy efficiency
  • $13 million for the Saint Louis facility for new beechwood tanks, and new abilities to brew new brands
  • $11 million at Merrimack to to begin innovative cross brewing capabilities…alongside craft partners.
  • $11 Million at Jacksonville for aluminum bottles
  • $8 million will be spent at Houston to brew Michelob Ultra Lime Cactus, and aluminum bottle production

With 10 new breweries under their belt, the new distribution facilities are a requirement. Additionally, at least one of the production facilities is gearing up to brew beer from their acquired, former craft breweries (at minimum Space Dust IPA).

By the looks of things, ABI is investing in themselves and their presence in the American market. Most likely expect to see brands like Wicked Weed, Four Peaks, Karbach, and Golden Road going national. Let’s leave it with a quote from Anheuser’s VP of Supply:

“We are focusing on investments which empower our employees to do what they do best – brewing the best beer. Ninety-eight percent of the beer we sell in America is proudly made here at our 21 breweries using the highest quality ingredients.” – Dave Taylor, Vice President of Supply for Anheuser-Busch.

by Reid Ramsay
Posted in Headlines, Anheuser-Busch

AB InBev South African hops vs. Craft breweries (A new drama)

Today some American craft breweries took to social media to voice their concerns about another Anheuser-Busch maneuver. This time it has to do with hops.

We have verified the facts amidst the social media outrage. The news emerged in a memo from ZA Hops, an independent hop distributer. ZA Hops previously had access to and sold surplus South African hops, grown by farms under the SAB umbrella. Confirmed by Paul Gatza of the Brewers Association, ZA Hops was informed that surplus hops from SAB Hop Farms in South Africa would no longer be sold outside of the AB InBev network. The memo they sent out included the statement:

I was informed by SAB Hop Farms (part of ABI’s purchase of SAB-Miller) that ABI are commandeering all the hops that were to be allocated for distribution to North American craft brewers. The goal is to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet. Regardless, they refuse to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace. – ZA Hops (Full memo below)

This isn’t entirely surprising since the acquisition of SABMiller, including SAB Hop Farms, occurred in the fall of 2015 thereby giving ownership to AB InBev. However, many breweries have lashed out today at the news that they will not have access to purchase SAB grown South African hops this harvest.

This move by AB InBev opens an interesting discussion however. While they are completely within their rights to use their own assets (hops in this case), within their own breweries, and restrict competitors (North American craft breweries), it has incited the industry into some interesting reactions.

The biggest chord struck seems to be a general fear at the shear size and power of AB. Following the shocking news this week about Wicked Weed, the craft beer industry has to feel like no one is safe. To follow that purchase with the loss of previously accessible hop varieties, once again to AB, can’t feel good.

It seems a scary pattern of vertical integration becoming clearer and clearer each year. Distributers, craft breweries, even home brew supply shops to name a few. Now they have cut off an entire hop region from anyone outside of AB InBev.

We find ourselves asking, how far will this go? Will AB InBev try to vertically integrate even further and expand their North American hop sector as well? This week has made it pretty obvious that even those we thought would never sell, do.

America’s craft sector has made amazing leaps and bounds with hundreds of new craft breweries founded every year. In fact this year, the U.S. hit over 5000 craft breweries during a generation that is encouraged to “drink local” and “drink craft.” It’s become pretty clear that AB has noticed and is waging war. They started quietly at first, but this week has been pretty loud to the ears of craft beer lovers.

At the end of the day, the news has been rough on craft beer this week. It has raised a lot of anger, fears, and questions. But frankly, what did we expect from AB? For them to lay back and watch their percentage of the beer market shrink year after year and say, “well its only fair, at least the people have choices?”

No, this move is exactly what should be expected from Anheuser-Busch. It falls right in line with historically how they do business. How they grew so large and became such a powerhouse in the first place. It’s smart business. As a publicly traded company, their responsibility is to their shareholders, not their competitors.

But does it suck for the breweries we know and love? Absolutely. Does it suck for all who support independent craft brewers and loved those yummy South African hopped beers? Absolutely.

UPDATE: AB InBev makes a statement on South African hop allocation. 

 

FULL: ZA Hops Memo:

“Along with the news late last week of ABI buying Wicked Weed, I was informed by SAB Hop Farms (part of ABI’s purchase of SAB-Miller) that ABI are commandeering all the hops that were to be allocated for distribution to North American craft brewers. The goal is to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet. Regardless, they refuse to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace. So unfortunately, there will be no CY 2017 hops available from ZA Hops. Whether they decide to sell to the craft beer market independently is unclear at this point should they not be able to allocate all the hops internally. This is a shocking turn of events, though commensurate with ABI’s business practices, and devastating to my company – yet another blow to craft beer.”

Image: Beer Street Journal/ Elk Mountain Hop Farm

by Reid Ramsay
Posted in Stone Brewing Co., Coming Soon, Headlines

Stone is brewing a New England IPA, Nor’East Nod

It’s undeniable that Stone Brewing is well-known for brewing big west coast style IPAs. Breweries like Stone and Sierra Nevada have shaped the perception of the American IPA. Then quietly, or not-so-quietly, folks in New England brought the the haze craze to life. Paying homage to the new, Stone Nor’ East Nod Double IPA is coming.

The lack of bitterness is an earmark of the “New England Style IPA” or NEIPA. Stone’s repertoire of west coast styles are big on hops, finishing notably bitter. Stone Nor’ East Nod Double IPA will be far less so than the brewery is accustomed to.

The 21st Anniversary Nor’East Nod India pale ale is in inspiration of, and ode to, what many of our comrades in the northeast are currently brewing, and we happily drinking. It’s an India pale ale, for sure, but not like we’ve ever experienced before. Our past as early progenitor of the West Coast style of India pale ale means we are intimately familiar, in fact still very much in love with, lingering bitterness. Unlike that, THIS India pale ale is all ’bout hop flavor with a sweet, bright, decidedly UN-bitter finish. ‘Nuff said. Give this sweet hoppy nectar a try. We’re pretty sure you’ll like it as much as we do.

Stone Nor’ East Nod Double IPA is slated for 22 ounce bottles and draft, potentially in August. The brewery has not yet announced this release.

Style: Imperial IPA
Availability: 22oz Bottles, Draft.
Debut: August, 2017

9% ABV

by Reid Ramsay
Posted in Speakeasy Ales & Lagers, Headlines

Speakeasy Ales & Lagers sells to Hunters Point Brewery

Back in March we heard the sad news that Speakeasy Ales & Lagers was closing due to, “difficulty securing capital investment, and outstanding debt obligations.”

Today we received happier news. Hunters Point Brewery in San Francisco, CA, has purchased Speakeasy Ales and Lagers’ brewing equipment and beer brands. Per Speakeasy, Hunters Point is considered the holding company, and had no plans on releasing new brands on the near future.

Founded by Ces Butner, previously of Horizon Beverage Company, Hunters Point will continue brewing the existing Speakeasy beer lineup with no changes for now.

“The beer quality will remain the same and we have every confidence that the current distribution network and territories will stay intact. We’ll be working closely with all the distributors. Right now we just need to revive the Speakeasy brands, and I’m prepared to do just that.” – Ces Butner

Hunters Point Brewery plans to have their taproom open as soon as possible, following a few additional hires to the 8 employees remaining after the original Speakeasy Ales & Lagers closure.

by Reid Ramsay
Posted in Headlines

Georgia beer bill now law, plus what’s next for breweries

Georgia governor Nathan Deal has signed Senate Bill 85 into law, The state’s breweries will soon finally have the freedoms they have been so desperately seeking. The only downside? It doesn’t go into effect into September 1st.

Until the passage of this bill, breweries selling beer directly to consumers was illegal. In all reality, the way breweries were forced to do this is nothing short of confusing and downright wrong. If you live in a state where you can enjoy a pint directly at the source, consider yourself lucky. Most in Georgia sure haven’t been able to.

First of all, breweries have had to pay taxes on the beer they produce to the government. They are allowed to sell tours and give away 36 ounces on site, and depending on your tour price point, up to 72 ounces of “souvenir beer” to-go. In theory, no one is buying beer, just tours.

From a tax standpoint, the brewery pays production taxes, collects taxes on tours, and is forced to pay taxes on the souvenir beer going out the door, even though it’s illegal to sell it to the consumer. Sound messed up? You aren’t the only one.

In the meantime, it has been perfectly legal for Georgia wineries to sell wine by the glass or bottles to-go from their facilities.

Blame has been passed around for years, but many point fingers at the wholesalers and their unfounded fear of losing money when breweries can direct sell. SB 85 is a compromise that pleases both the Georgia Wholesalers and craft breweries.

As of September 1st, breweries will finally be able to direct sell to consumers. The bill will allow a consumer to purchase up to a case a day on site, plus sell beers by the pint on site. No more tour/souvenir red tape.

Beer Street Journal has reached out to Georgia breweries to see what they have in store for the law change. Thanks to the proximity of Asheville to Atlanta, many of the state’s breweries are planning to adopt an “Asheville” model of operation. That’s long taproom hours, pint sales, bottle offerings, etc.

SweetWater – The state’s largest is planning longer taproom hours, beer sales by the pint, and expanded take away sales.
Monday Night Brewing – Is opening The Garage, a second facility on Atlanta’s belt line. With both facilities in mind, the brewery plans on hiring 7-10 more full time employees, and up to 25 more part timers.
Terrapin Beer Co.  – Pint sales are first in mind. The brewery is meeting today about the new law.
Wild Heaven – Plans on overhauling the Avondale taproom to make it a daily hangout space, outdoor improvements, plus a more aggressive single barrel taproom series. The brewery is also building a second Georgia location. Expect more employee hires, and beers by the pint.

According to the Brewer’s Association, Georgia ranks 49th in breweries per capita, with 0.7 breweries per 100,000 people (last updated in April, 2016).

Image: Beer Street Journal / SweetWater

Georgia beer statistics, 2016. Graphic: Brewer’s Association

 

by Reid Ramsay
Posted in Headlines

“Counter” festival for charity planned opposite of Wicked Weed’s Invitational

Earlier today we posted a story covering the plethora of breweries pulling out of Wicked Weed’s annual summer Funk Invitational. Their new association with Anheuser-Busch is so toxic to previously participating breweries, that many breweries have cut participation in the Invitational, despite the charitable tone.

You might think that is a pretty crappy situation for Eblen-Kimmel Charities, and Asheville, North Carolina’s underprivileged community. Well, craft breweries are some of the most charitable folks you’ll ever meet. The story looks like it doesn’t end here.

A source that wishes to remain anonymous has contacted Beer Street Journal about a new “counter festival” to the Wicked Weed Invitational that hopes to debut this summer, benefiting the same charity.

The new counter-festival already has 8 confirmed brewery attendees and we’re told that once they cross the 10-12 attendee mark, the “counter” sour and wild festival will be announced.

Again, this new event will occur around the same time as the Wicked Weed Invitational, and will benefit the same Eblen-Kimmel Charity.

Developing… 

PIC: Beer Street Journal/GABF 2016

by Reid Ramsay