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Beer Insights Extras

Extra beer business news, thoughts and insights from the publishers of Beer Marketer’s Insights, Insights Express, Craft Brew News, Beverage Business Insights and Alcohol Issues Insights.

Steve Hindy at NYPL 4/25 - In Defense of the Revolution

Steve Hindy  at NYPL 4/25 - In Defense of the Revolution

Steve Hindy and friends Kim Jordan & Charlie Papazian were interviewed by Paul Holdengräber in the LIVE from the NYPL series, joining past luminaries such as Margaret Atwood, David Byrne, Don DeLillo, Umberto Eco, Jonathan Franzen and Toni Morrison.  

Interview challenged BA members - is it really a craft revolution?  Or perhaps a revelation (of taste)...

Steve Hindy's reveal last night at the NY Public Library:  "We will be announcing an Asia project within the next few weeks."  We recently opened a brewery in Sweden.  We’ll do something similar in Asia.”


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Firestone Walker: 3/4 of Biz in Calif; 805 Expands and Cans; Paso Robles Campus Expanding; Venice Location to Come

This is excerpted from a Craft Brew News article from April 1st, following a visit to Firestone Walker's facilities in March.

Firestone Walker rose up out of California's Central Coast wine country immortalized in the movie "Sideways." And the Firestone family, which had earlier made its name in the tire business, owned a pioneering Firestone winery in the region for decades. Indeed, the original tiny brewery of 6000 square feet was "very much a hobby," built on the grounds of the family's winery in Los Olivos back in 1996. The wine connection remains strong (including a number of beer/wine collaborations). "The culture that exists in the wine community is a big part of who we are," said co-founder David Walker, which "speaks to the artisanal, experimental and quality" aspects of Firestone's identity. Firestone Walker makes some of the most acclaimed "big beers." Firestone Walker and its brewmaster Matt Brynildson were recently dubbed "the most decorated American brewery" by San Jose Mercury News beer columnist Jay Brooks. He pointed to its repeat wins at GABF as midsized brewery of the yr and also at the World Beer Cup as Brewery of the Year. These aren't major publicity ploys for Firestone (so far), but they are key to the company's culture, which focuses on the brewmaster and his team (Matt is a partner) and gives them a lot of latitude. "My function," said co-founder Adam Firestone, is "to enable beer-making." Adam also ran Firestone winery from 94 to 2006.

Firestone Walker Goes Deeper With 805 At the same time, Firestone Walker is also making its play for the mainstream. "We need to talk to the 85%" of people that haven't noticed craft, as David "optimistically" estimates. Leading the charge in that regard is of course its 805 brand, an easy drinking blonde ale that is so far a runaway success along Calif's central coast. The brand with the area code for a name (like Goose Island's 312) is "more of a lifestyle than an area code," said David, and it's become a source of local pride. This spring 805 has expanded further into Southern Calif and will also sell in cans starting in May. 

Sprawling Campus in Paso Robles Expands Again; Next Expansion Decisions in 2014

A "Cathedral" of Barrels in Buellton; Feral One Firestone Walker has a second facility in Buellton, 45 minutes north of Santa Barbara, that includes a taproom/restaurant, a tasting room and Barrelworks, which opened in Jan 2013 and houses its wild and barrel aged beers, which the co calls a "Cathedral of Barrels."



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Founder Jerry Steinman celebrates 90th Birthday

Beer Marketer's Insights was founded in 1970 by Jerry Steinman.  Last Sunday, February 9th, he celebrated his 90th birthday at a Rockland County NY restaurant with grandson David, son Benj & daughter-in-law Robin.  Jerry was proud to be wearing a sport jacket that he first wore on his 50th birthday!  


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Craft and the Age Old Concept of Beer & Sports

It’s not that we haven’t seen it happen before; it’s that more craft beer/professional sports combinations are starting to make the news more frequently.  This is an age old connection: beer and sports. That’s always been a staple, tho typically most utilized by the Bud, Miller, and Coors families of brands.  


Last week, news broke that Seattle’s Hilliards Beer Co cranked out 12K cases of a Seattle Seahawks themed beer, dubbed “The 12th Can,” a reference to the team’s fans - “The 12th Man” - reported Puget Sound Business Journal.  It was created in September, just in time for the start of the season, after a local radio station “publicly asked for a local beer dedicated to the country’s loudest fans,” co announced in press release earlier today.  Since then, “the brewery had to drastically increase production to keep up with demand” in midst of the Seahawks success, as the team prepares for the Super Bowl this Sunday.  The 12th Can is a sessionable pale ale at 4.5% ABV that “is sold in 12-packs of 16-ounce tallboy cans for about $20 per pack,” added paper.  Less than a week later, Hilliards already sold another 500 cases, and brewers are working 12 hr shifts “just to make sure fans would have enough to drink come Super Bowl Sunday,” sez co.  That’s a fast $500,000 in sales at retail, and with a little under a week til the Super Bowl, who knows how much more Hilliard can tack on! See the article here 


Recall, there was also beer buzz in Denver after Peyton Manning’s post game comment that “what’s on my mind is how soon I could get a Bud Light in my mouth.”  Left Hand Brewing sent a light-hearted letter to the Quarterback, calling for a beer “audible,” along with 3 cases of Left Hand brew.  West Flanders Brewing out of Boulder, CO made a small batch brew dubbed Omaha Omaha Brett, in honor of Peyton.  Actually the first name West Flanders tried, “Brett On The Broncos,” was flagged by the NFL for "engaging in unauthorized promotional use of the NFL Marks (including inter alia, the AFC word mark and the Denver Broncos word mark and color combination) in connection with the promotion of your business."  This week West Flanders made the news again, but this time for its wager on the big game with Seattle’s Elysian Brewing.  Terms of the bet are as follows: “the head brewer for the brewpub of the winning city’s team will be flown to the losing team’s city, at the loser’s expense.  The winning brewer will take over the losing brewery’s equipment and staff and brew a beer of their choice on that brewery’s equipment,” West Flanders announced.  And “to raise the stakes even higher, on tapping day the host brewery must fly…the winning team’s flag for two weeks or until the beer is gone, whichever comes first.” It was not too long ago that Harpoon, Sam Adams, and Schlafly bet some beer based on the outcome of this past World Series.  That was all over the news for some time leading into the Series, and there’ve been plenty other friendly bets between breweries during large sporting events as well.


Then too, there’s been a handful of articles that have created a Beer Super Bowl of sorts, comparing Denver’s beer scene to Seattle’s beer scene (and/or Colo’s beer scene to Wash’s beer scene).  One article by the Herald-Review, looks at the # of breweries within each city, as well as the different “cutting edge” and “adventuresome” styles being brewed: Denver has a whopping 44 breweries, while Seattle has 32, according to Beer Advocate.  Both are impressive numbers when you compare to NYC’s 15 breweries, LA’s 13; Seattle’s 32 breweries are greater than Chicago and St Louis combined, noted paper.   Since both cities “support thriving beer cultures that are on the cutting edge of the modern beer scene,” paper proposes “we simply allow the winner to be decided by the Super Bowl victors.”   


And if all the above wasn’t enough craft/sport combos, an extensive piece by Sports Business Journal was recently written that shed light on continued shift of US sports stadiums towards more craft beer.


UPDATE                   UPDATE                   UPDATE                       UPDATE

Since this post, there have been some further developments to Seattle’s 12th man beer references.  Two other Washington state breweries have created beers referencing Seattle Seahawks 12th man.  One, Dick's Brewing, has named its beer “12 Man Pale Ale,” and sold “6,000 cans and 300 kegs” in January as of Jan 28, reported Komo News. This brew has reportedly been 2 years in the making, “and much of the process has involved legal red tape,” noted paper.  Recall, Texas A&M has trademark on the phrase, “12th Man.”  Yet with the simple omission of “th” in 12th, Dick’s Brewing got the go ahead and is reaping the benefits amidst the Seahawk’s success.  Both Hilliard's and Dick's apparently did their homework, tactfully referencing the 12th man without raising any yellow flags with Texas A&M. However Foggy Noggin Brewing, a WA nano brewery, did not have such luck.  It brewed a one off, “12th Man Skittles IPA,” that was meant to “only serve around 55 people,” on Super Bowl Sunday, and quickly received a Cease and Desist order from the University, reported Bothell Reporter.  The Seattle Seahawks went through a similar suit for using the “12th man” in February 2006, tho “the university and the Seahawks ended up settling out of court, as the Seahawks agreed to pay a licensing fee and acknowledge Texas A&M’s ownership rights of the trademarked phrase,” added Bothell Reporter.  “I was blown away that this university even heard about us using that name for our beer,” Manager of Foggy Noggin, Jim Jamison told paper.  Foggy Noggin has since asked folks not to use the original name, and has apologized for “any perceived infringement on any trademarks.” 




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My BMI Experience (So Far)

Hi everyone. I’ve met some of you, have yet to meet many of you, but here I am: David Steinman, 3rd generation BMI.  It’s been 4 mos and change since I started working full time, and, well, time flies.  Christopher Shepard (Eric’s son), and I are what my dad often refers to as “the youth movement.”  Admittedly, it will take some time before I can contribute my end of “the youth movement” the way that I want to be able to, but you may be surprised at how much of my writing you’ve seen thus far, albeit with a good chunk of editing.  Throughout my youth I’ve worked for the family business, whether it be labelling and stuffing envelopes with those vintage orange newsletters, or “interning” during the summers to better learn the beer biz.  I also had a 3 yr stint working for local Vermont breweries, Long Trail and Otter Creek, where I started as a sales & mktg intern and eventually hired on full time as the co’s Marketing Coordinator.  There my job included anything from tracking and managing POS, to creating sales reports for the sales team company wide, to repping the co at local events and promotions.  Now I’m learning on the fly at BMI, and trying to apply whatever random knowledge I’ve picked up along the way to the biz.

A few things I’ve been able to learn and/or contribute since I started: 

•  Everything’s off the record until it’s on the record: a lesson learned that is preached here at BMI.  It’s still early and I’ve yet to form relationships with many of my own “sources,” if you will, but I know that once I do, I need to approach every working relationship with this motto.  Building work relationships is perhaps the most important skill/asset I’ve yet to acquire, and is key to my growth within the company, as I’ve witnessed through my dad’s ample allotment of hours spent on the phone any given day.

•  The numbas are the numbas: A point my father and grandfather have always instilled in the company, as far as I can tell.  And I’ll flat out tell ya: I like writing about numbers.  You can’t argue the numbers.  They’re something tangible that I can understand right away, and are so essential to understanding what’s happening out there in the mkt for all of us.  I may not have 30+ yrs of experience to help cultivate my beer insights, but at least I have the numbas.

•  Throw me to the “lions”: Since starting, I’ve attended my first BMI Conferences, NBWA Convention, state distrib mtgs, and brewer annual sales mtgs as a BMI employee.  From what I can tell, these kinds of events are crucial to the industry from a networking standpoint as well as an educational standpoint, and are also crucial for my development as an employee here at BMI.  Not to mention, these meetings are almost always held in great spots, and always a great time.  Sure Dad, I’ll go if I have to.  

•  Facebook and Twitter and more social hoopla: BMI isn’t exactly the most tech-savvy company in the world, but despite being fairly behind on the tech-front, we’ve started to increase our play in social media, just like the rest of ya.  As the youngest member of the BMI team, you’d think I would be at the forefront of our social media movement, but so far that ain’t the case.  Jim has taken on that role, especially on Twitter, where basically every news source needs to be these days, no matter how small a niche.  And Christopher has been, for the most part, our voice on Facebook.  But I’ve played my part too, with Facebook posts, CBN tweets, and so-on.  



In 2014 we’ll look to add plenty more tweets and posts, a BMI/Express Facebook page (not just our CBN page), numerous graphs and charts depicting trends old and new from our ocean of data, and we’ve even started a Throwback Thursday social media initiative to celebrate our co’s 40+ yrs of history.  So it’s a start!  Onwards and upwards for BMI in social media. 

•  Basic knowledge of Excel has come in handy (Data Filters and Freeze Panes):  I’m no computer whiz, but as a millennial there are certain computer “tricks” that I’ve picked up inherently that most boomers and beyond would never learn.  For instance, the moment I looked at an IRI report, I knew that my dad and Eric had never used the “freeze panes” function in Excel to view this data, and never once sorted data via data “filters.”    A couple of simple little trick that makes viewing big data clumps a helluva lot easier – right Dad?  

Recently we’ve started to focus on creating more graphics, charts, images and what-have-yous with the plethora of data we have access to from 40+ yrs of following the beer biz.  I’ll look to create plenty more of those going forward. 




•  21 Express articles, 36 CBN articles, 1 BBI article, 2 Blog Posts and counting:  That’s how many articles I’ve written that have been published thus far.  Not too many considering how many articles per issue and how frequently we churn out issue after issue, but a solid start that I feel pretty good about.  Writing anything ranging from IRI data to conference coverage, to what’s hot in the news wires, and more.  Many more articles to come – see if you can guess which ones are me.

As I continue to find my voice as a writer, and we discover more ways for me to help BMI, I look forward to learning more about this industry that we’re all so lucky to be a part of.  Until next time.




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#TBT - Beer Stocks in 2008 vs 2013

In today’s INSIGHTS Express we wrote about continued growth of beer stocks in 2013, including the immense success of Constellation and Boston Beer.  For a throwback we decided to look at an article we published in Jan 2009 about beer stocks the previous yr to see how 2013 stacked up against 2008 - when US beer volume reached its highest point ever.  Sales don’t always equate to higher stock prices, as we wrote in article dubbed “Tuff Yr for Beer Stocks Too,” in our first Insights Express issue of 2009.  Of course, this was in midst of the economic downturn, so stocks were down in most industries.  Now 5 yrs later, we’ve seen volume declines in 4 of last 5 yrs, yet  increased $$ sales and increased stock value.  Interesting to see how far many of these stocks  have come in just 5 yrs.  Take a look at the article below:


Tuff Yr for Beer Stocks Too (published Jan 5, 2009)  Beer industry stocks declined in 08, tho several did better than major indexes (S&P down 39% for yr, London exchange down about 2/3).  MolsonCoors stock price slipped 5.2% in 08 after 37% surge in 07.  SABMiller dropped 18% in 08, but has actually surged by almost 60% from its Oct lows.   Meanwhile, AB InBev sunk down to 10 Euros at its low, but since jumped back to over 17 Euros.  That’s still less than half its 08 peak (adjusting for new shares).  Heineken stock dropped 50.5% in 08 too; it had gained 23.7% in 07.  As for other alc bev stocks, the largest, Diageo, dropped by 34%.  And largest vintner (as well as half owner of Crown), Constellation Brands also fell by 1/3 to $15.77 in 08.  But it too surged 60% from Oct lows.   Craft brewers had rough 08 in mkts.  Boston Beer stock off 24.6% to $28.40 and Craft Brewers Alliance stock dropped 82% to $1.20 after closing 07 at $6.65.   So-called “vice” stocks, like alc bev, tobacco and gambling cos, are “often touted as great investments during economic downturns,” wrote Biz Week in article titled “Are Vice Stocks Losing Their Allure?”  In this downturn, “the naughty are still waiting for their reward.”  Biz Week concluded: “It remains to be seen if alcohol, tobacco and other vices continue to prosper as affordable luxuries for many people. Or if, desperate to cut costs, consumers decide to clean up their act.”  


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“Dollars Up, Volume Down”

That’s the phrase we hear from most distribs in recent years when we ask “how’s business?”  No one wants the reverse, of course, and brewers and distributors alike are often more profitable than ever.  But many industry execs remain in a funk about soft total volume, especially big brewers whose fates and business models are tightly tied to mainstream brands/styles.  2013 will be the 4th volume loss in 5 years, unprecedented in modern times.  Since the formation of MillerCoors and AB InBev in 2008, those two brewers will have shed in the neighborhood of 17 mil bbls by the end of this year, and total industry shipments are likely to be at least 8 mil bbls lower than in that peak year 2008.


It’s no surprise then, that execs from AB (Dave Almeida), MillerCoors (Kevin Doyle) and Pabst (Kevin McAdams) all stressed at our Insights Seminar last month how important it is for “all segments” – including economy and premium, especially premium lights – to be healthy and growing, not just the high end.  On the other hand, Crown’s Bruce Jacobson and Boston Beer’s John Geist, while agreeing on the need for big, lead brands to be healthy, seemed far less concerned about driving overall industry volume.  Indeed, John talked about Boston being happy to grab some of the estimated 3 mil bbls dripping from the “leaky bucket” that’s mainstream beer right now.   Recall too, John’s boss Jim Koch has pointed out that craft brewers define themselves, at least in part, in opposition to big brewers.  That’s even while Kevin warned that losing a premium light beer drinkers is “especially” bad for craft since they are often the same drinkers.  Kevin also mentioned that the “real issue” is declining per capita beer consumption, while wine and spirits per caps are growing.

Why is industry volume so soft?  And what could/should be done to reverse the trend?  The usual suspects for volume woes are:

  • economic factors that have hit mainstream beer drinkers harder than craft/import drinkers poor weather comps (especially in early 2013)
  • outperformance by spirits and wine
  • more aggressive beer price increases, especially since 2008 and especially vis a vis spirits and wine
  • less-than-spectacular marketing by big brewers
  • a volume hit from craft as some consumers are drinking “better, but less”


In the past, AB execs have cited some of the above, adding the payroll tax as another 2013 hitch, but more recently have suggested that economics/labor force participation are by far the dominant factors.  MC’s Tom Long recently suggested that a 2-point reduction in the unemployment rate would “dramatically help” the premium light segment.  But I suspect each of the factors above (except weather in the long run) have played a significant role, though reasonable minds can differ about their respective impacts.  Another issue, tied to marketing and the spirits/wine success: Heineken USA’s Dolf van den Brink, again at our Seminar, discussed the importance of forging much stronger ties between beer and multi-cultural and female consumers.  (There’s a 23-point difference in the percentage of males and females who drink beer, 56% vs 33%, while the corresponding numbers for spirits are 44% and 42%.)

Not much can be done, by any brewer, about factors #1 and #2.  Kevin, David and others have talked about “educating” retailers about some “basic math” of beer: it turns faster than other categories at retail and thus deserves more space and merchandising than it’s getting.  AB and MC are spending vast sums of money to educate retailers. David showed some data that “proves” its “balanced portfolio” approach “works for retailers” to build the category.  MC claims that where it’s the “category captain,” stores outperform.  We’ll see whether these efforts impact space, merchandising and volume going forward.

Outperformance by wine and spirits has been going on for over a decade and shows little sign of an abrupt halt.  The reasons for their outperformance are a combination of:

  • pendulum swing (beer couldn’t kick spirits’ ass forever and American wine consumption couldn’t stay as low as it had forever)
  • spirits companies’ decision to advertise on cable at a particularly ripe time when rates were low and channels exploding
  • more impactful creative (in some cases)
  • public policy wins (Sunday sales, etc)
  • more aggressive beer price hikes, especially on subpremiums, which drove some consumers to drink something else (i.e. lower-priced spirits)
  • on-premise efforts by spirits which helped give rise to cocktail culture and creative mixology
  • popularity of flavored spirits
  • those more balanced demographics


Again, how one weighs these factors can be debated, but they add up to a hit on beer.  Big brewers have targeted spirits occasions with new products (Platinum, Ritas, Redd’s) with varying success and will likely do more of the same in the future.  As one craft brewer recently said: “We’re doing our part,” by attracting wine/spirits drinkers to switch (on occasion), pairing beer with food and offering a higher-priced/image product.  But don’t expect craft brewers, or major importers like Crown and Heineken USA, to do much to drive economy or premium light brands.  They don’t sell them and craft/import growth is dependent in significant part upon cannibalizing that volume.  And there’s still a ton of meat on those bones: over 140 mil bbls/yr, give or take.  To the extent big import brands are “mainstream,” Crown and HUSA may be more concerned about overall volume than craft brewers, but not nearly as much as AB and MC.

Net-net: the top 2, and to a lesser extent Pabst, have a huge challenge on their hands.  To keep their breweries running efficiently they do need to press against the entire business and a number of weak but still-large brands in their portfolios, while expanding innovation via new brands and packages.  And each has also launched significant, separate on-premise initiatives.  That’s a lot of balls to juggle, in addition to keeping an eye on the economy and Diageo, Gallo, et al.  Crown is clicking right now, has a demographic tailwind in the growth of the Hispanic population and a large brewery to expand.  Similarly, HUSA will be focused on the import drinker, multi-culturals and again exclusively the high end.  Meanwhile, unless and until craft segment growth – which is coming in large part from mainstream beer – ends, craft brewers will no doubt continue to focus their efforts on a much more limited landscape: literally fewer geographic markets in some cases, a smaller population of drinkers and a much narrower band of marketing options for all.  That’s even while simultaneously broadening their brands’ appeal.  Competitively, they’ll be far more focused on big brewers’ craft-like entries and the endless stream of new craft brewers entering the market, not on ways to shore up total industry volume.

None of this bodes well for turning the volume tide anytime soon.  Perhaps we’ll get that 2-point reduction in the unemployment rate.  Perhaps AB has “cracked the code,” as it sez it has, on Bud Light marketing and MC will figure out how to fix some of the legacy Miller brands.  Perhaps more women will discover the joys of beer and more adults will “come back” from spirits and/or wine.  Maybe pricing trends will change to make beer a better buy in the eyes of entry level drinkers.  But each and any of those would be a mighty big change.  In the alternative, “dollars up, volume down” seems a more likely alternative, and perhaps the best we can hope for, in the short run.

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#TBT - Beer Wholesalers Have a Friend in Judge Sotomayor (5/29/09)

Beer Marketer’s INSIGHTS and our sister pubs have included scads of articles about the 21st Amendment over the years.  Most have probed whether this or that legal or policy decision supports or weakens states’ rights to regulate alc bev biz under the 21st Amendment, which ended Prohibition.  Modern debate got kicked off by vintner’s/consumers pursuit of direct shipping the product to consumers’ homes, bypassing wholesalers and retailers.  Many in industry viewed this as weakening states’ regulatory authority/oversight of the biz.  Over the years, debate over scope of states’ rights under 21st Amendment has occurred in US Supreme Court and other federal and state courts, not to mention numerous industry panels on deregulation, different business models and other policy questions.

In honor of Repeal Day, on this 80th anniversary of the end of Prohibiton and the ratification of the 21st Amendment, here's an article from a 2009 edition of Insights Express that re-examined a 2004 US Court of Appeal decision (later overturned by Granholm case) on the occasion of Judge Sotomayor's nomination to the Supreme Court.  Enjoy.


Beer Wholesalers Have A Friend in Judge Sotomayor (published May 29, 2009)

Her views on the 21st Amendment vs. Commerce Clause may not be the hottest topic surrounding the nomination of Judge Sotomayor to the US Sup Ct, but distribs gotta remember she’s a fan of states’ rights under 21st Amendment.  A big fan.  Judge Sotomayor was part of 3-judge panel in US Ct of Appeals for 2d Circuit that upheld NY restrictions limiting direct shipments from out-of-state shippers.  That decision later reversed by US Sup Ct in Granholm, but it included some of the strongest language on record in favor of 21st Amendment’s grant of states’ rights to regulate alc bevs.  From beginning to end, judges embraced uniqueness of alcohol’s legal status in US.   Second paragraph of decision starts: “The 21st Amendment is unequaled in our constitutional experience – it repeals one constitutional provision and creates an exception to another.  The Amendment was not a narrow legislative delegation of federal authority; it was the will of a nation speaking through its constitutional process.”

The judges questioned analysis of other circuit courts in direct shipping cases that first determined whether laws violated dormant Commerce Clause, then whether 21st Amendment “saved” them.  This approach “is flawed because it has the effect of unnecessarily limiting the authority delegated to the states through the clear and unambiguous language” of 21A, 2d Circuit wrote.  Inquiry in these cases, judges wrote, “should not allow” Commerce Clause to “subordinate the plain language” of 21A.

As distrib advocates have argued for yrs, panel acknowledged that those who drafted 21A did so specifically “to allow states authority to circumvent dormant Commerce Clause protections, providing that they were regulating the intrastate flow of alcohol.”  That’s why they decided that NY’s law -- recall it forced out-of-state wineries who wanted to ship direct to set up bricks and mortar within the state – “falls squarely within the ambit of section 2’s grant of authority.”  Regarding that requirement, the panel concluded succinctly: “Presence ensures accountability.”  That presence requirement raises costs, they acknowledged and would “create substantial… problems” if it involved any product “other than alcohol.”  Here’s the kicker: “But business efficiency must give way to valid regulatory concerns in this unique area of commerce.”   A final hug: “Changes in marketing techniques or national consumer demand for a product do not alter the meaning of a constitutional amendment.”

This is the kind of language that distrib advocates would love to resurrect in legal strategies going forward.  Having someone on the US Sup Ct who has already signed off on it (Judge Sotomayor did not write the opinion) can’t hurt their cause.  Note: INSIGHTS was prompted to return to the 2d Circuit’s 2004 opinion after reading about Judge’s Sotomayor’s involvement in the case in Mark Brown’s Daily Industry News update this morning.  His source:, a pro-direct shipping site.

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Archive Diving for Throwback Thursday

Beer Marketer’s Insights has been walking this beer biz beat for a while now, leaving us with 40+ years of archived text.  Sounds like a perfect opportunity to participate in Throwback Thursday (#tbt out here in the wilds of the web) to us.  Expect to see us dive into our archives more often on Thursdays and share what we find right here.

For our first #tbt post, we looked at our flagship publication, Beer Marketer’s Insights from 20 years ago.  1993.  In many ways, a very different beer industry.  But disagreements between tiers over state franchise laws have been fairly constant, even if the individuals, specific issues and even some association names have changed.


Calif Bill Package in 94?  Biggie Support?  Now Calif Small Brewers Anti Franchise Law (published Nov 29, 1993)

In lively session at BAA meeting (Brewers Association of America), Roger Hanney, veep of Calif beer distribs assn, said all 7 bills in legislative package to shore up 3-tier system are "still alive and well," tho didn't pass this yr. "We believe we could get it (the package) through to the governor in 94," Roger added, but distribs "don't necessarily have wholehearted support of major brewers."  Calif small brewers, staunch ally of beleaguered Calif beer distribs on this bill package, part ways with distribs on franchise law. Robert Judd, exec dir of Calif Small Brewers Assn (now 85-90 small brewers, includ­ing brewpubs) told BAA his members were "the 1st and only brewers to go out and sup­port" Calif beer wholesalers legislative package.  "We received the criticism of the major brewers" for that support, Bob added.  But he warned that Calif small brewers "oppose the franchise bill as proposed."  Don't like such fundamental provisions, like exclusive territories. Bob said his members view franchise bill as "in effect, a 'no-divorce' law."  Roger responded:  "You can't have it both ways," meaning that if small brewers are with wholesalers, must understand need for franchise law to preserve 3-tier system.  "We can't sit back and do nothing or we won't have the system," Roger added....  A few days later, Wall St Jnl, in long, overly pessimistic article on beer wholesaling, quoted prexy of Calif Grocers Assn on 3-tier system: "It's an antiquated system.  Eventually it must be changed.... The major brewers know they've got to change. It's happening today in all other products."  Meanwhile, top AB brass including August III recently met with distribs in Calif and pledged continued support of 3-tier system.

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12 Days After Boulevard/Duvel Deal, KC Star Comes Around

Many Kansas Citians seemed pretty distressed in the days immediately following Boulevard Brewing’s announcement that it will soon be owned by Duvel Moortgat.  Much of that reaction was based on Duvel Moortgat’s Belgian-ness, foreign-ness or at least its non-Kansas-City-ness.  In the Craft Brew News we sent out on Oct 22, we noted the initial Kansas City Star editorial that called the deal “disappointing” and “unfortunate,” as well as a second editorial originally titled the “Boulevard Brewing blues," but now going by another name.

But this week, folks over at the Star seem to have turned a corner, printing today’s “If experience holds, Boulevard’s fans and hometown will do just fine.” It comes just days after CNBC shared the glowing response to the deal from Sam Calagione, founder of Dogfish Head and current Brewers Association chairman.  We printed Sam’s opinion that Boulevard founder John McDonald has “made one of the most graceful transitions in ownership of a craft brewery that’s been made yet,” in Insights Express yesterday.  The Star’s current article looks closely at Duvel’s experience with Brewery Ommegang, founded in 1997 and purchased by Duvel Moortgat in 2003.  Citing Cooperstown-area locals and bar-owners, the article attempts to assuage worried Kansas Citians, noting that not only does Ommegang still make “award-winning Belgian-style beer, just like it has since 1997,” but it also still regularly gives back to its upstate NY community and does its fair share attracting visitors to that community.  Boulevard is a company with deep connections to KC, and now one Missouri resident told the paper that, even under this new ownership structure, “I don’t see that changing.”

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Costco Testing Craft-Centric Beer Display in Michigan

CBN stumbled into a striking Costco beer set in Ann Arbor, Mich last weekend that a source sez is currently being tested in the state. Under a central sign that sez “Craft Beer,” a tiered display of 25 different big bottles, attractively displayed each in their own boxed areas, priced at anywhere from $5.99 to $15.99.Included everything from staple big bottle brands like Stone Arrogant B*stard to offerings from the Bruery, Dogfish Head’s Theobroma, New Holland's Dragon Milk plus a lot of Belgian accents.Indeed, display had Framboise Lambic, Chimay, Saison Dupont, Delirium Tremens and more.Also the Sierra/Russian River collaboration Brux and Fin Du Monde.One can wonder how well these collectively and individually will turn (although higher ABV beers have longer shelf-life), but it was quite an eye-catching evolution at one of most important beer retailers.


We also saw a large dual display of Duvel and Ommegang 3-packs of big bottles.  Plus cases of Bell’s Two Hearted Ale, Sierra Torpedo, a New Holland fall seasonal  along with Kirkland (Costco's private label) craft beer.Bud Light, Miller Lite and Labatt Blue were in less prominent positions. Corona and Heineken 18-packs and a Molson Canadian 28-pack were also offered.Tho the set offered many different price points and a fairly wide variety (also included Guinness, Beers of Mexico, Stella and more), the emphasis is clearly on trading consumers up and expanding their horizons to the wide world of craft and Belgian-style beers. We hear that similar displays have been seen in parts of Calif. Yet another sign of changing times.

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Craft Growth in China Hearkens to US Trends

“Craft beer began bubbling up through the cracks in China about five years ago.  But it may still account for as little as 0.01 percent of the domestic beer market - the world’s largest with 50 billion liters consumers in 2011 alone.”

That’s well over 400 million barrels, about twice the size of the US beer market.  It also means that China’s craft production in 2011 was somewhere around 40K bbls, if this guesstimation from China Daily’s European Edition is to be trusted - the source pegs US craft share at 12%, a big overstatement though.  Regardless, it’s still early days for craft beer in China, but like the US and other markets, it’s changing rapidly.

This China Daily piece, like others, points to the importance of expats: Americans or Europeans that brought their excitement for beer with them in their move to China.  But Chinese natives are starting to get it too, an essential step in the spread of any idea or invention.  A quarterly Chinese beer magazine, Hops, got its start as an English-only publication in 2011.  Last year it began publishing in Chinese too and “now that’s bigger than the English one,” managing editor Kathryn Grant told the paper.  Recall that American craft had its roots in visits to European breweries, whether German, Belgian or English and subsequent desires to bring those flavors and the associated cultures stateside.

Grant also offered that craft beer is changing the drinking culture in China: “it’s not just ‘ganbei’ (drink to get drunk) culture anymore.”  Instead, drinkers are drawn to the flavors of the new beers, like in the US.  One expat, Michael Jordan, brewmaster at Boxing Cat Brewery in Shanghai said that “we’re definitely seeing a trend switch, where locals are getting into different styles of beers.”  Grant echoes that sentiment and builds on it, noting that Chinese-owned breweries “are actually more experimental,” because they’re using local ingredients that they’re already intimately familiar with but that foreigners may understand less - “like ginseng, asparagus, seaweed, aniseed and Sichuan pepper.”

The backdrop of these early days for Chinese craft beer is a growing overall beer market: “beer has been gaining popularity in China in recent years, while demand for wine and spirits has been losing steam.”  While beer down slightly in US in recent years, we printed in Insights Express this morning that spirits’ growth has slowed over the last year and a half, at least in 17 control states.  We'll continue to observe dynamics between alcohol segments here in the US, but every once in a while taking a gander at other markets, especially those as large as China, can be an interesting detour.

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Back to DC for CAP

Exec editor Eric Shepard here, off to DC today for annual Center for Alcohol Policy mtg.  CAP sponsored by NBWA and once again features broad range of input from industry, regulators and public health.   Org has been criticized for giving stage to prominent public health figures who are often harshly critical of the beer business.  Indeed, this yr’s program includes speakers from Alcohol Justice (ex- Marin Inst) and Eat Drink Politics, as well as MADD.  But as outgoing NBWA chairman Bob Archer said at Vegas convention, NBWA feels it “must continue to build working relationships with certain non-traditional allies, including public health and safety organizations.  Doing so does not mean that we are putting our stamp of approval on every action or position of these organizations.  However, if we want them to support our independent three-tier system of beer distribution when it is under attack, then we must consider working with them. “  Also on tap at CAP: a coupla attorneys/observers who criticized ABI-Modelo deal from antitrust pt of view, attys/profs to talk about 21st Amendment/legal cases, a round-up of state regulation issues and overview of de-regulation in UK vs US.  The party ain’t as hearty as at NBWA convention, but there’s usually plenty of food for thought.  Look out for coverage in Alcohol Issues Insights and more.

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Article: BrewDog Blogs About "Craft" Definition in UK, Europe

In yesterday's issue of Craft Brew News (vol. 4, no. 58), we included the below article about the suggestion for an official "craft brewer(y)" definition in the UK and Europe, from the founders of Scotland's BrewDog.  We include it here for your consideration.

BrewDog Dudes Get Down to Defining “Craft Beer,” Er “Craft Brewer”; BFM Ain’t Their BFF

Taking cues and quotes from Stone’s Greg Koch and Brewers Assn, BrewDog founders James Watt and Martin Dickie posted a manifesto of sorts on their blog on why they “categorically believe we need to define craft beer” in UK and Europe.  Why?  The longer version is to: 1) “protect craft brewers and what we are building”; 2) “guide consumers” in this new category; 3) “ensure craft brewers can charge a fair and sustainable price for their masterpieces” and; 4) enable craft beer to grow in UK as it has in US.  Their 3-word, and perhaps more revealing, version: Blue F*%#!@G Moon.  Dickie and Watt, for years among the most vicious and funniest critics of global, mainstream beer, are lighter than usual on the rhetoric, but do point out they don’t want retailers to create craft beer sections that get “carpet bombed by beers that are not craft” and also charge the large global brewers with “bastardizing beer on a colossal scale.” Net-net: without a recognized definition they fear “the large monolithic brewers will simply exploit all that we have worked so hard to build.”

Although the post starts out to define “craft beer,” Watt and Dickie ultimately follow BA in defining “craft brewer” instead, while going circular in explanation that “the definition of a craft beer is a beer brewed by a craft brewer at a craft brewery.”  Note that the definition moves between defining both a company and the facilities it operates.  Not surprisingly, their proposal, like BA’s definition, doesn’t actually have much to do with those liquid “masterpieces.”  A European craft brewery, in this draft proposal (they’re open to suggestion), is limited to less than 500K hl annually.  That’s about 425,000 bbls, so no single craft brewer could have much more than 0.1 share of 300-mil-bbl Euro beer mkt.  That’s significantly smaller than BA’s definition, which allows a 6 mil-bbl to have nearly 3% of 208-mil-bbl mkt.  The guys also amend BA’s “traditional” with their own “authentic” (brewing all beer at original gravity and not using corn, rice other adjuncts to “lessen flavor and reduce costs”), add “honest” (labeling all ingredients and production location and brewing all of its beer at “craft breweries”) and use tighter definition of “independent,” less than 20% owned by brewing co that operates any brewery that doesn’t qualify as craft.

Dickie and Watt acknowledge the size limit may be the most “contentious” aspect and suggest it could be dropped entirely, since most brewers over 500K hl would likely fail the “authentic” tests.  Independence level defended since “intent is a massive part of craft brewing” and once craft brewer sells to big brewer, it’s no longer craft, even if beer “might still be ok (for a while).”  Blogpost singles out Goose Island and predicts that in 10 yrs the brewery will no longer exist and “all their beer [will be] made under contract with rice and corn at an InBev plant.” BrewDog founders hope definition will be recognized by Campaign for Real Ale (CAMRA) and Society of Independent Brewers (SIBA) in UK, as well as by The Brewers of Europe Assn.   Read the entire post here.

Editors’ Note: For brewers so ostensibly committed to quality products, Watt and Dickie are notably far more focused on their business interests, defending the niche they’ve built and even their pricing, than on the product itself.  While BrewDog and (at least their UK) counterparts are growing fast, gaining share of mind, stomach and attention – just like their US counterparts – there is the same whiff of fear, arrogance and even contempt for their consumers and retailers, who they don’t seem to think can be trusted to make the ‘right’ decisions.  Gotta also note that many US craft brewers wouldn’t pass muster for Watt and Dickie.  Contract brewers working in plants that make non-craft brands or that label where the company is based rather than where the liquid is produced?  No go.  Brewing purely at original gravity could get tricky for some US brewers too.  A final irony: Dickie and Watt, like the BA, would clearly toss craft segment founders Rob and Kurt Widmer, and the rest of CBA, out of the club due to AB’s ownership stake.  That lends a slightly sour taste to the congratulatory video message they recently sent to the Widmers (a very funny bit with Jim Koch, shown at CBA Vegas mtg) on their 30th anniversary.

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Back in Denver for GABF

It's that time of year again!  I got into Denver yesterday afternoon to cover the Great American Beer Festival for Craft Brew News.  It'll be a whirlwind couple of days full of great times, great people and lots of great beers.

But it's a good thing I'm back here too.  Long-time readers (hah!) may remember that I left my brain in Colorado the last time I was here, coincidentally as the 100-year flood hit the Front Range.  For those of you also in Denver this week/weekend, be in touch as I'm always up for a beer and spin around the festival hall.  But also be sure to remember what happened very close by exactly one month ago - the GABF has created this helpful page for those attending the fest (or not) who are interested in helping with Flood Relief efforts.  Hope to see you here!

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Beer, Craft Beer and Beverage Insights, All in 140 Characters or Less

You guessed it: Beer Marketer’s Insights has entered the Twitter-sphere.

If you’re a regular tweeter chirping away out into space, check us out for updates, links, breaking news and of course, top-notch beer business and beverage business insights from not one but 3 different BMI-operated handles.

We’ll be tweeting from @BeerInsights about topics influencing the US beer industry and anything from our flagship publication and Insights Express.  Check out @CraftInsights if you want to stay up to date with our Craft Brew News editors and the fast-changing craft beer business.  And don’t forget about @BevInsights, which began its Twitter-life late last month by helping Beverage Business Insights break its story about the end of Coca-Cola Co and Campbell Soup Co’s distribution agreement for V8.

Follow one or all three, but don’t miss out on even more exclusive coverage and commentary.

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Anti-GMO Battles Could Impact Beverage Manufacturers

Anti-GMO forces are viewing several upcoming battles at the state level - particularly Wash State - as crucial to generating momentum that might result in federal legislation requiring labeling of foods/bevs that employ genetically modified ingredients. That was key message that came thru at 10/4 panel discussion at Baltimore Convention Center, even as adjoining show floors of Natural Products Expo East displayed increasing signs that natural-products purveyors are responding to issue on their packaging and in their consumer and retailer communications.

"The way to get federal legislation is through the states," declared panel moderator Steve Hoffman, dir of Compass Natural and a key member of Yes on 522 Campaign in Wash State. "We don't want to lose twice on the West Coast," he added, in reference to deflating loss in Calif 2 years ago of Proposition 37 at hands of massive media blitz by big food and bevcos. "We know we're going to be outspent" in Wash State but still believe victory is within reach when 3-week voting cycle begins in coupla weeks, he said. He later noted to partisan crowd that 64 countries have passed GMO legislation by now, including likes of Russia, China and Syria.

All told, 26 states are considering initiatives in coming year, panelists noted, and that's getting attention of FDA and Dept of Health & Human Services, noted Elizabeth Kucinich, Washington lobbyist who's dir of policy at Center for Food Safety and exec producer of much buzzed-about documentary GMO OMG. (She's also wife of former Ohio congressman Dennis Kucinich, who was in audience and also addressed some of issues.) On flip side, food/bev and chemical giants like Monsanto recognize threat and are taking steps to preempt the states, with major bill expected to drop in Congress in coming weeks.


More info at

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On Bubbles and Saturation Points

Talk of a craft beer “bubble” flared up again recently.  To combat claims of that phenomenon, staff economist for the Brewers Association Bart Watson weighed in via this thoughtful BA blog post.  We discussed Bart's post in Craft Brew News last week, noting that while “it doesn’t appear that craft is overinvesting in capacity” to Bart, capacity can sometimes be difficult to track.  BA members we speak to on a regular basis are often pretty confident when sharing capacity statistics for their facilities, but also point out that capacity numbers vary based on which beers are brewed when and can therefore change.  We also acknowledged the growing number of large craft and contract-focused facilities currently being built or recently-opened as a possible complicating factor in the future.  As we concluded that article, "time will tell."

This week, we’ve already caught a couple of media outlets touching on the matter. Here, Crain’s Detroit Business wonders about a “saturation point.”  It includes thoughts from Founders co-founder Mike Stevens, Michigan Brewers Guild executive director Scott Graham, Bart himself and a few other beer industry observers and newcomers.  The primary question arises from worry for some of these folks: are too many craft brewing entrepreneurs ‘getting in’ just to make a buck?

Up in the craft-loving Pacific NW, NPR station KPLU approached the topic from the perspective of a long-time hop-growing family that has recently started brewing their own too.  The BA’s Julia Herz reprises her claim here that asking if there’s room for more breweries is “like asking the National Restaurant Association if there should [be] another restaurant down the street.  And the answer is: of course.”  As for the Smiths and their Bale Breaker Brewing Company?  “They haven’t [been] able to keep up with demand since opening in April.”

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Latest Relaunch: Drewrys Returns to Midwest Market

As 2013 continues, we keep seeing more revivals of once-lost brands.  The latest in this line is Drewrys, which closed up shop back in the early 1970s.  Chicagoland-based private investment firm Appletree Capital has relaunched Drewerys and started contract brewing in Lacrosse, Wis (likely at City Brewing, a common contract choice there and elsewhere), according to Crain’s Chicago Business.  Three brands debuted at the annual Brewfest in South Bend, Ind last month.  A spokesman for the brand explained that “retro beer is kind of coming back and there’s a lot of interest in that.”


Back on June 26, the following article appeared in Insights Express to catch readers up on similar brand re-introductions.


Legacy Brand Relaunches and Regional Brewery Revamps


Investors seem to be increasingly banking on historical and local cachet of a host of regional brands and old brewery buildings recently.  Narragansett ceo Mark Hellendrung expects to sell a million cases of ‘Gansett in 2013, he told the Boston Globe.  Other brands are turning to a craft-like “reinvention,” like Berghoff, which announced a lineup of newly-formulated beers including a seasonal Belgian wit and hoppier red ale that it’s peddling in Ill, Wisc, Mich and Ind and brewing at Stevens Point in Wisc.  If a brand isn’t getting a face-lift, the building that housed it just might be.  Recall that a new Christian Moerlein Brewing set up shop in one of the brand’s old Cincy buildings in 2010.  Another spot in the brewery complex is now occupied by brand-new Rhinegeist Brewing and a third company is also brewing in the area, according to AP.  In the late 1800s, that area of Cincy, called Over-the-Rhine, was home to 18 brewing cos.  A century later it was named America’s most dangerous neighborhood.  This month, Cincy City Council approved a plan that seeks to help solve OTR’s problems by making it a brewery district, hoping to attract other brewing cos.  Elsewhere, possible resurrection of old Oly brewery in Wash also in the news this week because a requirement barring production of alcoholic beverages at the site, instituted when Miller vacated the spot in 2003, has been lifted, according to Olympian.  Current landowners are hoping a new tenant will come in, use some of the space to brew, and the rest to build out retail, office-space and perhaps residential space too.  And startup Flat Earth Brewing moving into the old Hamm’s site in St Paul, Minn, earlier this mo.


(This article originally appeared in Insights Express vol 15, no 80 on June 26, 2013.  Subscribers with active Archives access can view and search previously published material at their leisure.)

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Benj's Adventures in San Diego

What a day in La Jolla and San Diego last Friday! First I went to the California Beer and Beverage Distributors Association meeting.  There I saw a panel moderated by consultant Bump Williams that featured some great info on the wild proliferation of SKUs (stock keeping units) in California foodstores.  Over 350 new beer SKUs have been introduced there this year alone, according to IRI data.  About half are craft.  The beer business is getting more and more complex.  Anheuser Busch InBev president North America Luiz Edmond made that point about increased complexity in a speech later that morning and also pointed to California as a trendsetting state.  We featured both Bump and Luiz in this recent issue of our INSIGHTS Express.

After the meeting, I visited several notable craft brewers on the San Diego scene: local legend Tomme Arthur at the Lost Abbey/Port Brewing Co, up-and-comers Doug Constantiner and Travis Smith at Societe and  the longtime leader of the San Diego scene, Stone founder Greg Koch at the World Bistro Liberty Station.  That thriving establishment seats about 800 and it was full, one of the latest examples of the rapid evolution of the San Diego craft brewing scene.  Much more of our info/impressions on the craft beer business in San Diego in the next issue of Craft Brew News.

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 2019 Beer Marketer's Insights Seminar

The 2019 Beer Insights Seminar will be held in New York City, on Sunday evening, November 17th to Monday, November 18th at Convene.