Big and Small Brewer News

[Jim Dorsch]

Lots going on in recent days.

Surely you've seen that ABI has bought the remainder of Modelo, pending Justice Dept approval. They will sell their interest in Corona's importer, Crown, to the owner of the other half, avoiding antitrust issues there.

The AB irony continues. First, AB declined to buy the brewery that, years later, had grown into a giant that swallowed AB. Then AB tried to buy the remainder of Modelo that it didn't already own, to keep themselves out of Inbev's hands. Now AB Inbev has bought the rest of Modelo.

I read that MillerCoors' Tenth and Blake subsidiary is buying the equipment and brands (except Celis, apparently) from the defunct Michigan Brewing Co, intending to do some smaller-scale brewing. T&B oversees brands including Pilsner Urquell, Leinenkugel's and Blue Moon.

Christine Celis, daughter of Pierre, who passed away not too long ago, has acquired the Celis brand name from Michigan Brewing Co, and intends to revive the Celis brand.

[Jim Dorsch]

By the way, I'm also seeing more talk in the industry about a shortage of qualified workers. This makes sense when you suddenly see a huge increase in the number of breweries. Of course, if some of these new ones collapse after a bit, then that problem is solved.

[LStaff]

If all the new breweries that are planned to come on board do so, there will also be a shortage of ingredients. There is already a shortage of citrusy hops that are popular in IPA's today.

[LStaff]

Greenflash just announced they are going to build an east cost brewery. Unlike Sierra Nevada and New Belgium who have flagship name recognition outside of the beer geek realm, consistent quality, and reasonable pricing, I have doubts of its success.

[Jim Dorsch]

It will be interesting to see how all this new capacity plays out. Everyone has said we need more capacity to meet the industry's goals for market share. But this is a lot of capacity coming on very quickly. Regarding Green Flash, the growth right now is at the higher price points, but clearly there is a limit to demand. Great Divide has done quite well after ratcheting up to higher price points. We shall see ...

[MOREKASHA]

Dales as well is coming east. In regards to what Jim said, Sierra has family in the business so they look OK for quite a while. I just wish I enjoyed their new beers as opposed to the original core products.

[Jim Dorsch]

My only concern is that the industry could suddenly have excess capacity. Time will tell. In any case, I'm sure that many of these new breweries will start with a fraction of their theoretical capacity, and add tanks as they need them. So there may not be a glut at all, particularly as long as sales increase at current rates.

[MOREKASHA]

There are about 1000 new breweries coming on line this year....all making Imperial triple IPAS......it's no longer micro it's craft, it's no longer contract brewing it' gypsy brewing....yet others grow and grow carefully (bells), I want more lovely soft pale ales, some real lagers (not aged 2 weeks) and i want a lovely Celis right now....

[The Professor]

TELL IT brother!!
I could not agree with you more.

It's going to be mighty interesting to observe the brewing world over the next few years. I think we're in for some surprises (and most probably another shakeout). It's a no brainer that there'll be a more aggressive entry by the bigs into the "craft" scene too...and also at least _some _ real surprises at the high quality of some of the offerings we'll be seeing (it's starting already).

[Jim Dorsch]

Shock Top White is approaching the sales of Sam Adams Lager. Blue Moon White is about twice that already. Yes, it's going to be interesting.

[MOREKASHA]

But are the drinkers of Shock Top & BM big beer drinkers or craft brew lovers? Do they buy those products instead of Bud, Coors, Miller ct.....

[Insidious Rex]

My guess is that these "macro craft" drinkers are doing it almost exclusively at the expense of the macro lagers. I doubt there's been any impact at all to Sam or Sierra Nevada. And a certain percentage of those people may graduate to the true craft stuff (its a LOT easier path then the giant jump from Coors Light to Dogfish Head) so in a way it benefits the craft brewers.

[Jim Dorsch]

I posed the question to Bump Williams, who analyzes beer sales data. He said this:

We haven't done any recent brand work on it but it appears as if Shock Top does NOT source as much craft beer volume as Blue Moon does. Seems that people who drink BM seem to be craft novices and move on to other craft beer offerings. Shock Top shoppers seem to be premium and below premium drinkers.

[Jim Dorsch]

I would guess that Shock Top, which sells at a pretty low price, doesn't sell much to those who drink primarily craft beer. Blue Moon might have more success with them. The lines between craft and macro will probably continue to blur, such as has occurred with the purchase of Goose Island by ABI.

[MOREKASHA]

Also, doesn't AB import Budvar these days. While not a "craft" brew, I stand up for the Budvar and the late great Plzen as 2 great representatives of what a real Pilsner is supposed to be. Besides being a great quaff, Budvar has an expiry date, so I know if I'm getting a reasonably fresh bottle. It's either Bottle conditioned for me or dated bottles.

[Jim Dorsch]

Yes, I believe you're correct. How ironic, given the legal battles between the two around the globe about rights to the Budweiser name.

[JessKidden]

> Also, doesn't AB import Budvar these days.

Breaking News: "Budvar ends distribution deal with Anheuser-Busch"

http://finance.yahoo.com/news/budvar-ends-distribution-deal-anheuser-104820737.html

Looks like US Beverage is picking up the contract http://www.unitedstatesbeverage.com/
(US Beverage picked up some of Heineken's secondary brands when they shut down their other import company, Star Brands).

Isn't this something like the 4th or 5th importer for "Czechvar" in little more than a decade? I gotta say the local A-B houses by me didn't do much with the brand- I remember 2 year old 500ml. bottles sat on the shelves ignored that were from the previously importer.

When I do see a case of Czechvar, it's never close enough to fresh for me to consider buying it. The one good aspect I recall was right after the deal, AB included it in one of their $10 Mail-In Rebate Imported Beer deals- $14 case of Budvar? Yeah, I'll take it.

[MOREKASHA]

That's fresh news. I did notice that Budvar wasn't seen as much lately. I really believe that it has a great story to tell ( and a great taste) even in this time of quadruple imperial wild yeast beers in a can.

[LStaff]

I'm with you, I think there is a lot more to be done with pale ales that is different from all the Sierra Nevada copycats. And I would love some real all malt craft lagers that didn't cost an arm and a leg to be regular drinker. Near me there is a new all-"lager" start up that is getting beer geek praise- because most of their beers are geared to beer geeks - smoke, over-hopped, imperials, 4 packs, etc - but when it comes to more drinkable lager like their helles, its heavy handed, sloppy, and disjointed. I'm holding out hope for Two Roads startup in CT that promised to make a helles as one of their flagships.

[MOREKASHA]

http://austinist.com/2012/06/29/celis...

[MOREKASHA]

The news about Celis is music to my taste buds. I never understood why Miller sold off Celis to MBC. You'd think that another, maybe more respected smallish brewery would have bid on it and really run with the brands. God how I miss those brews.

[Jim Dorsch]

It was an ugly thing, what happened to that brewery under MBCo ownership. The company has a much better understanding of craft these days, thank goodness. Speaking of which, it's going to be interesting to see how the big breweries play in craft as the years go by. A lot of craft's first wave will retire in the coming decade, which could put some choice properties up for sale.