Welcome to Brewbound’s Inside Look at the Beer Business for the week that was … Sunday, January 7, 2024.

First, of course, a happy 2024 to you all … may it be filled with gifs, filled with beer. 

What’s that? No, I’m sorry BUD LIGHT, we can’t start the year in April just this once … but I like where your head’s at.

AND: San Diego sewer beer is so 2017. Ladies & gentlemen, I give you… San Diego condensation beer! (apparently potable water is a large concern in San Diego 😬).

Yes, the EAST VILLAGE Brewing Co. is making an IPA and a honey ale in conjunction with the uh, San Diego Airport (sadly they did not go with the SANIPA name, I mean … it’s right there! 🤦).

EVBC is using water captured from “condensate that drips from the bottom of air conditioning units attached to jet bridges at the airport” to brew the beers, so you know it’s good. 

Although the way the COLORADO RIVER is going these days, it may be time for some breweries to start making some calls to PHX, ABQ and LAS too.

Ownership issued an official response to the lawsuit from their 2% investor Eric Granger, stating among other things that:

• They’ve paid him over $850K so far on his $10K investment made back in 2012, which after taxes, has resulted in over a +2500% ROI for Granger.
• As of Q4 2023, Granger was notified in October that he’d be getting an additional $5K per quarter dividend, “representing a 200% annual return (each year into the indefinite future) on his $10,000 passive investment” – essentially as long as TREE HOUSE’s business and prospects remains consistent.

They also filed a motion to dismiss the lawsuit, and Zoe has you covered here on their responses to claims over excessive executive pay and forged documents. Your move, Eric.

“What we’re seeing in the (deal) market at the moment is a lot more breweries have taken on more meaningful debt and that’s a problem in terms of people wanting to transact.”

– Industry dealmaker SIMON THORPE at BREWBOUND LIVE, discussing the state of brewery ‘sale’ dealmaking, where cash up front is, for all intents & purposes, a thing of the past… as factoring in a brewery’s debt and depreciation is now a huge consideration in most deals out there at this point.  

A great conversation and #realtalk for any breweries out there thinking about, or actively looking for a deal or way out -- highly recommend checking out the video here!

Come to think of it, it’s been a long while since I used this gif …

KCBC

NYC Sales Representative - Brooklyn, NY

SIXTH CITY DISTRIBUTION

Field Sales Rep - Columbus, OH

ATHLETIC BREWING

Territory Manager, Florida - Various in FL

DRIZLY is out with its poll of 1,000 LDA folks about what they expect to buy in 2024.

Beer actually went up a point! 68% said they plan to buy beer in 2024. Of those, here are some preferences:

• Light Lager: 43% (+5% from 2023)
• Seasonal: 35%
• Stout: 15% (+3%)

Just me, or does that kinda sound like a pretty awesome action movie title?

Yes, Japan’s brewing giant has bought Wisconsin’s contract brewing powerhouse, who also has carved out a fine niche as a go-to for non-alc brewing for brands, including their own lauded brand, UNTITLED ART.

OCTOPI made 220K BBL of beer in 2023 for its contract partners (and UNTITLED ART), but also makes a lot of other bevvies, as total output was about 508K BBL for the year.

ASAHI had been on the hunt for more capacity for about a year, based on reporting from Reuters in late 2022.  

OCTOPI founder Isaac Showaki will stay on to continue running the team, and they will still be in the contract brewing business, in addition to making ASAHI Super Dry and a brand called KOZEL for the North American market. 

No price was disclosed, as #BigBeer JAPAN has now completed its U.S. business punchcard … with SAPPORO of course buying STONE, and KIRIN’s NEW BELGIUM and BELL’s purchases #freesub!

Man, we really gotta find a way to spice up their earnings calls. Here are the basics for CONSTELLATION’s FY24 Q3 (which … again, CONSTELLATION operates on its own calendar, so this covers the three months ending November 30).

• Net beer sales: +4% ($1.98 billion)
• Beer shipments (sales to wholesalers): +3.4% YoY, versus +8.7% in Q2;
• Beer depletions (sales to retailers): +8.2% YoY, versus +7.9% in Q2;

Total FY24 guidance for operating income was also bumped up 1%, to +7% to +8%.

Yeah, total beer fell from a 51 in November … to a 44 in December in the NBWA’s monthly poll. At-risk inventory was also under 50 at 47.  

As always, a reading of 50 or higher means that the category or a segment is in expansion; below 50 indicates contraction.

But – let’s be optimists! Every category except one was above its corresponding Dec. 2022 reading, and the one that wasn’t (Below Premium) could actually be interpreted as a positive!

OK, let’s not get too big of a head here, craft folks – you’re still the 2nd lowest reading out there.

What happens when 5 beer writers enter a Zoom? Man, I really shoulda thought of a punchline before I wrote that ... but uh, I'm sure it makes for a great podcast! #nicesave

Team BREWBOUND discusses the year that was with fellow esteemed industry journalists Kate Bernot and Christopher Shepard, although I will say – not a gif in sight, so can we really use the term ‘journalist’? 🙄

Listen Here!

• BROWN FORMAN is moving production of JACK DANIEL’S COUNTRY COCKTAILS out of its Louisville, KY warehouse to an undisclosed … “external manufacturing organization.” Man, how great would it be if that’s what they put on the packaging label 🙏.
• Jersey OG brewery FLYING FISH has filed for bankruptcy, and creditors are calling for liquidation. This after they couldn’t come to a deal with CAPE MAY Brewing last year. It’s mostly owned by two private equity firms, and the brewery did about 16K BBL in 2023 (-4% YOY), according to BA numbers.
• Add MA’s NIGHT SHIFT to the list of breweries making NA beer for taproom enjoyment on draft … with Featherweight IPA.
• MO’s BOULEVARD also added 2 new NA SKUs, a wheat beer with lemon, and a “superfruit” seltzer under their QUIRK brand.
• Bay Area wholesaler MATAGRANO has made a deal to buy fellow SF-area distributor BOTTOMLEY. It’ll add about 1.8M cases and bring MATAGRANO’s total up to roughly 6.5M cases.

This week’s beer goes out to a beloved member lost from the BREWBOUND family over the holidays, who hands down had the best name (sorry, Zoe), and overall #goodboy, Dusty Rhodes. 

Dusty was a beloved figure in both the Kendall family, and the BREWBOUND MA offices when Justin lived back on the East Coast … and while I never had the pleasure of meeting Dusty IRL here at the BREWBOUND NYC, uh, desk, I certainly have fond memories of him interjecting some life, and frankly much needed laughs (and definitely some barks) into the several pandemic-era zooms Justin and I had. 

Which kinda looked something like this.

So, maybe spend a few extra minutes in the yard or just around the house this weekend with the furry members of your family – no one stays forever, and you never know quite when that moment will be … so make the most of the moment you’re in.

Slainté!  

-Sean McNulty 

(you can always reach me here on Linked-In)