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Consolidate and/or Divest: A Craft Beer Plan
Breweries! Get your Breweries here!
Without sounding like I’m beating a dead horse, the craft beer industry is fucking scary. Since the newsletter I released last month mocking the Brewer’s Association and their head in the sand approach to a stagnant industry a lot of parts have moved around. Essentially we are seeing some big beer companies divesting from brands they purchased while a number of independent breweries are merging with other breweries to survive.
AB InBev, the world’s largest brewer, shuttered Platform Beer back in February after only purchasing the Ohio brewery in 2019. They also decided to divest from Appalachian Mountain Brewing by selling the brewery back to it’s original owners in North Carolina. To add onto that they cut a number of jobs across other craft brands in their portfolio.
Constellation Brands, the American operating company of Groupo Modelo, shed all it’s remaining craft brands in Funky Buddha and Four Corners. This comes a few years after selling off Ballast Point for a 6 digit loss. Essentially they don’t see profitability in craft anymore.
While the big boys are cutting craft we are seeing mergers or consolidations of smaller, independent breweries. Bear Republic sold all its brands and IP to Drake’s Brewing while closing their facilities. Cape May Brewing agreed to purchase Flying Fish Brewing but then pulled out of that deal just a few days ago. River Horse Brewing has agreed to purchase DuClaw Brewing. A lot of moving and shaking.
I honestly think that this is only the beginning of these sort of things. On the most recent episode of my podcast, United We Drink, we discussed a lot of this. More consolidations or merger or whatever you want to call them are going to happen. That’s a fact. There are many breweries out there underwater despite appearances looking good. And really these types of deals will probably be a good thing.
The Bear Republic sale was a really interesting one itself. Racer 5 is an iconic craft beer. Anyone that doesn’t look back and call them important to craft as a whole doesn’t know shit. But as trends changed Bear Republic struggled to keep sales up off of name alone. Drake’s, another bay area brewery with a ton of history, weathered some of those changes better and saw an opportunity to bring some well known brands under their roof.
The sale was only for the brands and Bear Republic’s IP. None of the facilities or pubs were involved. I have since seen auction listings for Bear Republic’s equipment. Drake’s saves some money on having to operate another brewing facility in the far northern point of Sonoma County and instead can make these beers right in San Leandro. Maybe we’ll see a brand refresh for Bear Republic brands like how Drake’s refreshed their look a few years back and maybe it will bring back some sales to the one time legend that is Racer 5. It didn’t work out terribly well for Anchor, another bay area legend but who knows? Maybe?
I think this move will probably get a lot of other older brewery owner’s interests peaked. While they have seen struggles and diminishing sales they may see an out with some sort of return. If there is a decent sized brewery nearby that is doing alright and has some capacity to spare that spot may have the ability to bring in those legacy brands and keep them alive and maybe even breathe some new life into them. It seems win win. You can divest with some return that doesn’t require closing down everything and the brand can live on.
But let’s be honest, some of these brands need to go away. There is just too many breweries that skated by for too long simply by being a brewery. Just being a business in a category should not be your business model. I, also, shouldn’t buy your beer just because you are a brewery and you are in my town or an adjacent town. You have to give me more than that. You have to give most consumers that are into beer more than that. I’m sorry—more to your employees than to you—but if you expect me and others to buy your beer just because of that then you need to go away and go back to whatever big business job you had before. Trust me, you’re better off there.
I’m not trying to be all doom and gloom but, let’s be honest, it’s kinda my thing. I want a number of breweries to succeed because I think they make good beer, do good for their communities and employees and just get it. But I know some of those places are struggling too despite what you see. You’re not going to see a brewery plaster across their social “We aren’t good fam. We need your help.” I’ll do my part to keep supporting the ones that I love and feel need my help. I suggest you do it too. In the meantime, let the mergers begin!
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I’d Have a Beer
Recently we, at Copperpoint, did a collaboration with our friends from Tampa Bay Brewing. Can’t reveal that beer yet but the fine people of TBBC brought some beers of theirs down for us. I snagged a couple cans of things and Space Donkey stood out to me.
I’m a big fan of TBBC’s Reef Donkey pale ale. Super flavorful pale ale the way that they should. Space Donkey is a hazy pale ale with a big emphasis on Galaxy hops. Loads of stone fruit in there with a touch of citrus notes.
I’m not going to lie, for all of my love of traditional styles I can get down with a well made, low ABV hazy. There just aren’t a ton of them. Everyone is making big, high octane ones and I get it. They sell. Ones like these have, a lot of times, just as expensive of costs in them as their higher ABV brothers. Trying to then sell a 4 pack for near the same price with a significant difference in ABV is difficult. So, again, I get it. Doesn’t mean I can’t hope and dream. This is my newsletter anyway.
This is a Photo
Limantour Beach, CA
Back in California again. This shot was taken by Limantour Beach inside of Point Reyes National Seashore. This vast park has so many breathtaking spots in it and we only saw such a small part of it. The fog climbing over hills in the distance we my favorite sights.
We were strapped for time and constrained by our kids, who are still too young for long outdoor excursions. I seriously can’t wait to go back to this park some day for my shots and just a great outdoor experience with the family.
Do you like this shot? I have prints available for purchase. All sales are super appreciated.
Monday or Tuesday
I realize the last couple editions of this have not come out on the usual Monday mornings. For that I apologize sincerely. I don’t know why I thought Mondays would be a good idea for this. It leaves me rushing at the end of the week with no time on weekends to get it finished. Going forward I want to make this a little more open ended. Some editions may come out on Mondays but if not they will be hitting your inboxes on Tuesdays. I’m really appreciative of all of you that keep coming back to the newsletter. Is there a topic you would like to see me talk about? Hit me up in the comments. Until next time. Cheers!
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