Tallgrass Production Brewery Suspends Operation

One-offs can be an easy sell, yes, but they present a lot of challenges for a brewery with decent size and regional distribution. Label approvals, packaging costs, potential confusion at retail, working new batches into the brewing schedule, etc. The return is often not worth the hassle. As you alluded to, breweries seek stability. You get this by building a line of core products (maybe 4-5 different beers) and focusing on those. You might have a seasonal line or some one offs too, but the aim of these is always to support the core, not supplant it. Any good sales rep, supplier or distro, should be out there pushing core first. That is what makes everyone the money. You'll never keep the lights on by focusing on rotational stuff, and the pull in the market is often short-lived.

From the snippet you posted, it sounds like Tallgrass had just gone through some product rationalization (purposefully ceasing production on certain brands in order to focus in on core items) and pivoted to focus more on kettle sours. Seems like it may have been a desperation move that either failed outright or was too little, too late.

 

#DrinkLocal is very real. Any brewery considering a significant expansion of their brewing capacity (which is another way of saying, "spend a LOT of money") and expanding their distro that doesn't consider this, especially if they're in that "slightly-less-than-mid-size-to-mid-size" category, is setting themselves up for a hard landing, IMHO.

 

I really enjoyed that one

 

There will be a role for well made regional players.

I think the hyper local taproom sales of 16 ounce juice bomb cans thing is only going to go so far. It is the new thing now but suspect there will be another thing that comes along and shakes it up.

I went and bought the four pack of 16 ounce a hazy galaxy citra bomb from our locally revered Heist. I like those hops. Hate to say it but I poured it out as soon as I took the second swallow and went in and got a Sierra Nevada Oktoberfest— perfect.

Seems like a lot of folks around here in their 40s 50s or so have just kind of petered out on some of the new trend. Not sure what it means for the regional folks but those making good beer and financially well positioned I suspect will continue to do well. Our local Highland continues to be an example of such.

Clawhammer, anyone?

 

I agree (or at least hope) that the NEIPA phenomenon likely won't last for much longer (a couple years?) in most markets, but hyperlocal is a major factor regardless, and I don't think there's a bright future for breweries that depend on multi-state distribution save for the most firmly entrenched. Even just the many local players in most markets making "boring," traditional or traditional-ish styles are crowding the regional players off of the shelves. Breweries like Tallgrass simply don't provide enough product differentiation to overcome the locals' homefield advantage. Many people will choose, almost every time, even a slightly inferior product from a nearby brewery they frequent and their friends talk about over beer from just another brewery that they'll never visit two or three states away, regardless of whether either has any beer geek cachet. Also, many regionally distributed breweries make a splash as the hot new thing in town when they first hit the market but descend to "shelf turd" status very quickly as the novelty wears off.

 

@islay >>Great points.

Our regional “local” Highland is perhaps well enough established (20+ yrs) yet still working to stay relevant yet continuing with solid classics.

I am amazed at the handful of smaller outstanding regionals doing it here—Westbrook, for example. I think Westbrook might be the best across a range of styles that I know (except Burial who is more limited). What do you see for the Founders and Bells of the world?

 

Bummer. Key Lime Pie and Raspberry Jam were both excellent.

 

"Quality" now is making hazy juice beers, pastry stouts, and lacto forward fruity sours. Not surprised.

 

This quote is very telling. Same sort of concept that CC was facing.
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“There is still a lot of upside to the brands, and the opportunity is out there, we just need more money to keep going,” he said.

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Obviously more sales=more money. But throwing another 3-4 million at this to get into 22-28 states won't solve a damn thing. I can see why others are hesitant to want to invest in this company. Maybe back when they were right at 16k and pushing 100% capacity for 2-4 solid years, they may have had some takers. This was the same thing that CC was facing. Even at 100% capacity, if youre not making money, somethings very wrong. Some of these guys almost get what they deserve for being as unsavy as they appear to be

That's scary how accurate that is. I love all three of those styles.

Bottom line
I think every major region already has a Tallgrass type brewery. They don't need another. A local brewery, Santa Fe brewing just spent millions and want to expand into other states. Overall product is solid but totally replicated by what other locals are doing elsewhere. Another brewery, Bosque spent 2 years revamping an old building north of ABQ and are ready to sell beer everywhere in larger quantities. Another brewery, Steel Bender has been open just 18 months but have taken to expanding their brewhouse space because they are already at capacity. I get wanting to grow and be ahead of the game. But the game isn't the same anymore. None of these products are truly unique and going to Denver or Phx markets, youll blend in and be forgotten

 

According to the neipa comparison thread every major region has a neipa producer they feel measures up to the "big boys".

Everything is replicated by locals. 98% of the time the locals aren't as good. 98% of people can't tell the difference and being local for 1% of people puts it over the top. All this beer and craft has never been in a better place while being so sickly .

Shit is falling and no one sees how no brand loyalty is killing most breweries.

 

Bell's may be a strong, respected, and classic enough brand to weather the storm and retain market share. Founders is beloved but not quite as entrenched, and I'd be very worried about the sustainability of its recent massive growth if I were in charge there. Its excessive dependence on All Day IPA (62% of its sales last I saw) is very concerning in a fickle marketplace, and that's a beer that excels among non-traditional craft beer customers who could be lost to other alcoholic beverages if the cultural winds shift against craft beer. There's no reason to believe Founders can catch lightning in a bottle again if demand for that beer crashes. I definitely think Founders is an overexpansion candidate.

 

I used to buy their stuff all the time to drink during K-State games. However, I think because of market saturation I saw very little of their products on the shelves here in Missouri. And what was on the shelves weren't my favorites. It was all their cake/pie beers.

 

What hurts the mid size brewery more: the hyperlocal movement or the expansion/growth of the larger breweries, like In Bev, New Belgium, Stone, Bells, etc?

Looks like In Bev is now on its way becoming the largest "craft" brewery....we can argue the use of craft there, but focus on the product and audience...Where is all that growth coming from? Is it simply a result of purchasing breweries and their production capacity or are they winning over their markets as well and bringing in new customers? When Bells enters a new market, a sale of their beer is generally going to come at the cost of another beer, right? People have budgets.

I would imagine these are the companies the regional breweries are largely strategizing against when expanding into a market. They have no counter that they can offer to compete against locals, as they can't offer the local taproom experience like a local brewery can. So if a community likes to go out to drink their beer, more than go to the local beer store, there is nothing they can do against that (other than buy local taprooms in that community, which some do). Their success will depend on being able to sell that contingent that does go to the beer stores. At which point, I think the buy local vs the buy craft population tilts a little more heavily towards the buy craft population. And this equation does not even touch upon the price of beer and what people are comfortable spending on it.

I think we here at BA make up the population that allows small, local breweries to flourish. But I think the big and mid-sized breweries are more dependent on a very different, much larger audience than us.

I am sure discussing the environment today and holding that against a company like Tallgrass is unfair to a degree, as when they decided to go all in and expand the scene was very different than it has become. There were far few breweries, the breweries that were around were not as big, powerful, and widely distributed as they are today, and hitting up the local taproom was not the trend it is today. But, at the same time, I am sure when these companies made these decisions to go all in, they were 100% aware that it was a gamble and if it didn't pan out, they had no security net and this was a likely outcome. They could have always followed a more conservative model and expanded more slowly and strategically, whic many do/have done.

 

Damn this sucks, 8-bit Pale Ale has been on my want list for quite a while now

 

I really liked the 8-bit but had been overlooking it due to so many other choices. C'est la vie.

 

Seems like there's a boundary of size you don't want to go over unless you really have a great IPA that everyone loves. Two hearted keeps Bell's sales right, All day for founders etc. Two hearted especially got peoples attention before their expansion, they had sales waiting. Seems to be the same with cigar city and jail alai.

Tallgrass didn't build up any kind of reputation country wide before they tried to build an empire. Sounds like most people have heard of buffalo sweat, but what a terrible name. It doesn't scare me off, but it surely doesn't entice me. Bad marketing, boring cans, not enough one offs for most people. Meh in a world of oooh.