As the craft beer segment matures and sales slow, a lot of brewers are trying to figure out the path forward. That seemed to be the unofficial theme of the week.
Even some of the most well-respected craft brewers are having to take a step back, including The Lost Abbey’s Tomme Arthur.
The next phase for The Lost Abbey is to get smaller and asset light. Arthur walked myself, Zoe and Jess through the decision and what comes next on this week’s Brewbound Podcast. Arthur told us that scaling down was about getting to the “right size” for the Lost Abbey’s future. Listen for lots more insights from Arthur on the decision and what others in similar positions should consider.
For a legacy California craft brewery like Speakeasy Ales & Lagers, the next chapter is a merger with Fresno-based Full Circle Brewing, creating one of the biggest Black-owned breweries in the nation. This is a trend that we continue to see — and there was another deal announced today with Asian-inspired California brewery Dokkaebier acquiring Federation Brewing in Oakland.
Some breweries are partnering with Bevana, a North Carolina-based platform that enters into revenue sharing agreements with its full-scale brewery partners and takes over their supply chain, route-to-market and back-of-house costs. It’s all about erasing breweries’ various constraints and allowing brewers to focus on innovation, Bevana’s Aaron Gore shared. The company also has an affiliate program in which it helps breweries set up e-commerce sales to 42 states. I asked Gore how the company is able to ship beer to the majority of the U.S., and he assured me that “it’s all above board” and it’s been signed off by “all the appropriate regulatory agencies.” Find out more about Bevana here.
Then there’s 21st Amendment, which has transformed its production facility into a co-packing facility. 21A co-founder Nico Freccia shared what the California brewery is looking for in co-packing partners on the latest edition of Brewbound Frontlines.
For brewers looking for an exit, there are a lot of factors to consider when selling your brewery and our latest Brewbound Voices column explores them.
And sometimes things just don’t work out. Take Danish brewer and one-time craft darling Mikkeller, which is ceasing operations in the U.S. and closing its last San Diego outpost this weekend. After announcing it would pivot to contract brewing in August, Mikkeller’s Miramar production facility’s equipment has hit the auction block.
In other news …
As brewers consider what’s next, they’re facing a further consolidated middle tier. In Massachusetts, wine and spirits distributor Martignetti Companies has struck a deal to acquire Quality Beverage, which distributes Anheuser-Busch, Constellation Brands, New Belgium, Sierra Nevada, Harpoon and others. We’ll see if the suppliers decide to go along for the ride.
Constellation Brands’ fiscal year ended February 28, and its beer business’ net sales reached nearly $7.5 billion. Constellation earnings calls are typically nothing but good news, but in Q4, beer shipments declined -5.4%. Lots more details here.
Diageo is shutting down its production brewery and laying off 97 workers in Maryland, but keeping its Guinness Open Gate taproom open. Recall that Diageo opened a $110 million facility for ready-to-drink beverage production about a year ago.
Focus is the name of the game, according to Bump Williams Consulting. The firm says brewers need to innovate more efficiently and they also need to stop confusing consumers with too much variety.
Meanwhile, market research firm NIQ (don’t call ‘em NielsenIQ anymore, please), says beer category innovation growth slowed in 2022.
A few housekeeping notes before we go …
Brewbound’s first Brew Talks conversation and networking event is coming to Nashville on Sunday, May 7. Tickets are available now.
We’ll be discussing the growth drivers in craft beer — higher ABV offerings and no- and low-alcohol beers — with Dogfish Head’s Sam Calagione, Greater Good Imperial Brewing’s Colleen Quinn and Athletic Brewing’s.
We’ll also explore strategies for opening out-of-state taprooms with Monday Night Brewing’s Jeff Heck, Hi-Wire Brewing’s Adam Charnack and Weather Souls’ Marcus Baskerville. Get those tickets.
Also to help you prepare for the Craft Brewers Conference, Jess will be taking part in a free Community Call with Turn It Up Media’s Chad Melis to share strategies for surviving the week. The virtual conversation is April 12 at 1 p.m. ET; register for free here.
If you’re in the Boston area, consider joining us for a meetup at our headquarters in Newton, Massachusetts, from 6-8 p.m. on Thursday, April 13. All beer, food and beverage professionals are invited to stop by for networking with our team and each other, as well as beverages and light appetizers.
And that’s the week. Thanks to Jess and Zoe for all they do, and thanks to all of you for supporting what we all do. We’ll be back next week.