10 Barrel might be moving in to San Diego?

Thanks for the link.

The plan is not really surprising, only that they'd choose downtown San Diego first.

But what is really surprising is the author thinking that ABInBev, owning less that a quarter of 1% of the breweries that produce flavorful beer, is doing something more than becoming a player in the much larger flavorful beer market. Something that they have failed at for several years now.

 

Really? AB & MC seem to be doing OK...

10 fastest growing beer brands in the USA, 2009-2014:

#5. Leinenkugel
> Sales change (2009-2014): 103.1%
> Parent company: SABMiller
> Barrels shipped in 2014: 975,000

#6. Blue Moon
> Sales change (2009-2014): 82.6%
> Parent company: SABMiller
> Barrels shipped in 2014: 2.1 million

The only BA-defined craft brewer on this list was:

#8. Yuengling Lager
> Sales change (2009-2014): 34.0%
> Parent company: D.G. Yuengling & Son, Inc.
> Barrels shipped in 2014: 2.3 million


Going back a couple of years:

 

But that requires that we include Shock Top in the category of flavorful beers.

But seriously, treat "brewers of flavorful beers" as a synonym for "Craft Beer brewers." Their numbers and market share continue to increase (even without the BA redefinition that allows folks like Yuengling to be counted as craft brewers).

 

The BA definition has nothing to do with flavor!

But, I was commenting on the commonly expressed view here that the Shock Top / Blue Moon brands are failures. They clearly are not.

 

I think we have a tendancy here to overestimate the size and the influence of the craft beer "community" as compared with the craft beer "consumer".

 

And why do you think they intend to rely on "the craft beer community" for their business? Most of the people who buy and drink a craft beer mostly drink AALs and occasionally drink a craft beer. Why would they even care what the craft community thinks of them?

 

Agreed. Unfortunately the sales from the average drinker will gravitate towards 10 Barrel, Ballast, and the like regardless of their independence. I'm mostly concerned for Monkey Paw, one of the most creative brew pubs in SD, which is literally a block away.

 

Makes sense, but that would probably be true if anybody opened a brewpub in that location. Seems like an inherent side effect of the rapid growth we are experiencing in the number of breweries opening and the number of beers on offer. I don't see there's any necessary reason to think 10 Barrel, Ballast and the like have any particular uniqueness that the average beer drinker would or would not be attracted by.

Edit: I mean its not like most people even know or care who owns 10 Barrell or Ballast Point.

 

You might have been thinking this and just not typing it, but while you're absolutely right that the number of craft breweries is increasing in a big way (and will probably continue to for a while), the craft dollar share isn't growing as fast. This means that the increase in craft breweries suggests that they are all getting smaller pieces of the pie. Most of the compelling dollar sales growth in craft breweries is from expanded distribution, not because they have strong growth in their existing markets (in fact, mature markets are down for many large craft brewers).

 

With 1-2 breweries/brewpubs opening every day in the US we are entering a hyper-competitive craft beer market now. The businesses which will succeed are the ones that are best serving the desires of the broader craft beer consumer market.

Cheers!

 

Well, combined with Heineken/Lagunitas putting a facility in PDX, it seems that the big boys are getting a bit more assertive.

 

I appreciate the article for reminding me which brands to avoid.

 

As I posted below you: "...we are entering a hyper-competitive craft beer market now."

Cheers!

 

Well I don't think it was in my mind, but then partly that may be because I'm not convinced from what I see going on around us that the available dollers are not keeping pace rather than being channeled in ways that the standard metrics and measures don't track. E.g., Unless someone has figured out how to track dollars spent out of pocket at the local brewpub on beers that are never seen in the distribution chain or those supermarket sales figures so many are fond of quoting.

 

I didn't think the new 10 Barrel brewpub in Portland would do well either but from what I've heard they've not had any trouble drawing crowds. I mean, if any city is going to reject a corporate beer brewpub it's Portland right?

 

Hmm, yes I'd expect it to be Portland, especially since many more there would know of 10 Barrel before the purchase and be aware of who currently owns the brewery.

 

Interesting ninja edit to add more information.

So a further note. As you mention, neither Blue Moon nor Leinenkugels are owned by ABInBev during that period of time and it is not clear yet whether they ever will be, given the manovering that has to take place for ABInBev to be able to acquire SABMiller with the apparent goal of moving in a big way into the African market.

But in any event, looking just at the numbers on the page, in some circles, Shocktop would be considered a failure relative to both BlueMoon and Leinenkugels when those growth percentages are considered. However we don't have ready to hand the Shocktop Growth numbers for the same time period covered by the SABMiller brands, so that could change the game either to look much better or to look worse in the comparison of ABInBev with rival SABMiller....

We probably also ought to be figuring out a way to factor in here the Bourbon Barrel aged beer from AB, the American Ale release, and some of the Michelob brand trial "experiments" which are all no longer with us.

 

Same seems to apply for the Fat Heads outpost in PDX as well.

 

Sorry about that... you quoted it too soon!

 

Not to worry. Figured that was what was going on but thought I'd rattle your chain just a wee bit.

As I pointed out in another thread, the major point of most of these discussions is to figure out more about what's going on in a complex situation.

 

Fat Heads isn't a corporate owned brewpub, though.

I don't go to them anymore, but Elysian's pubs have continued to do well here in Seattle after the purchase.

 

A number of BAs have posted about the success of various brewpubs in the PNW that might have been impacted by anti-AB ‘backlash’ but all indications are they are still doing well.

I recognize this is anecdotal but it seems that the broader craft beer consumer market has a criterion of spending money at brewpubs that provide them with a good drinking/eating experience vs. specific corporate ownership.

Cheers!

 

Well, FH isn't exactly "local" anymore. If you've got 3 locations, in 3 states, spread from Pennsylvania to Oregon, you're more than just the neighborhood brewpub.

 

But as I already pointed out they expanded into Portland, where there is also no shortage of breweries. They're doing just fine in Portland.

 

Trust me - they will not be welcomed with open arms by the locals here. Especially using such aggressive tactics as opening up directly down the street from one of our most respected 10bbl brewers in SD - Monkey Paw. They will unfortunately get all the goon tourist downtown that think Shock Top is craft beer though, and that will be enough to keep them afloat. There are already moves being made to educate people about what 10 Barrel means to the community and the future of craft beer in SD. I hope they fail, but I doubt they will.

One locals rant.............

 

Before the Portland location actually opened I thought they would fail there. I definitely underestimated the "Shock Top" crowd as you call them. I forget sometimes that not everyone is as interested or passionate about craft beer and their local scene as me and the people in my circle are.

 

truth!

 

Here's why I'll disagree with you, the only things I can think of that are sold outside a distribution chain that can't be picked up easily are:
A. Independent beer/liquor stores - Could be somewhat significant volume, especially in states like PA, CO and IN where there are laws that heavily favor these stores (wholesaler distribution, full strength beer and cold beer respectively). However, that's just the reality and frankly selling independent store by independent store is a pretty small thinking way to move significant volume. Remember, chain liquor stores like Total Wine sell their data to IRI.

B. Brewpub/Taproom (as you mentioned) - They can't effectively scale, while retail analysis (food/drug/mass/convenience/etc.). I'm sure more dollars are flowing to breweries through these avenues, but I don't think there has been a significant consumer shift out of the traditional retail and on premise beer channels to support the idea that scan and POS data aren't still the best insights available on beer industry trends.

We'll obviously see when the TTB next reports on production by brewery, but it's hard to separate the wheat from the chaff not understanding where/how all of that is sold.

 

I agree with this. I was at the 10 Barrel brewpub in Bend, OR. a couple years ago, and the place was rockin'. And I highly doubt it's any diferent since they "sold out".
It is a fun place with good food and great beer. It's near the downtown area in a thriving beer community.
I see no reason they won't have great success in San Diego, or anywhere for that matter.
As others have pointed out, most people couldn't care less who owns the place. I suppose in a place that has many options it might make a little difference, but again, I'm sure they will be fine.

 

How many folks in SD shop at Walmart and wear Nikes? This Inbev outpost will do just fine in SD. The majority of folks don't care what international monster of a company owns a particular business, as long as the location is decent, the prices good, and quality of product acceptable. Try getting a spot at the bar at Elysian Fields or Pyramid on a Seacow game day in Seattle. Both still get packed.

 

Well, you spend more time thinking about these numbers, and have the real numbers to work with, and so I'm not going to disagree with your analysis. But I must confess to having a certain distrust of the numbers ever since I learned about the widespread, sometimes unthinking, use of a measure (grocery store sales) which simply ignored data from a state the size of PA (over 12 million with one of the largest markets in the country for flavorful beers).

We are the only state to still have two family owned breweries in operation continuously since before prohibition, we have one of the lowest per captia sales of Budweiser in the nation, we have some of the best distribution in the country, and we are experiencing almost explosive growth in number of small breweries and brewpubs. Most or all of which is/was simply being ignored by at least one of the commonly used measures.

My own analytical work in other domains keeps ringing an alarm bell in the back of my head....

 

Actually quite a lot of people that live in SD try to live a conscious life and choose to spend their money wisely on local/non-corporate brands. You would be surprised! And the buzz around here right now with 10 Barrel's move into the community (especially right down the street from a real craft beer bar/brewery) is not one of positivity. For example, there are many craft beer bars that will no longer carry brands like Ballast Point and Saint Archer. Where there were handles months ago, they've been replaced by actual craft brewers. The craft beer community is actually pretty tight here and when someone blows it, action is taken. They won't be embraced in the community by locals. But in a tourist town, as I mentioned in my original post, a move like this will probably be a successful one.

 

And all those same things were said in threads about 10 Barrel and Fat Heads is PDX. Both doing OK. Time will tell.

 

And God I love the fact that I make a great living pondering it ;-)

Realistically, the challenge is that to think in the big picture, sometimes you completely miss the target on the small stuff. I generally combat that by focusing on small brewery business as an aggregate. I'll admit, sometimes I completely miss the mark using the data I have. For example, on a small local forum I was showing that from syndicated data, my suggestion to a local brewery would be to discontinue beer X (the question being discussed among the group was "what beer should local breweries drop and replace with something new). I got a PM from the brewmaster and apparently it's their #2 selling beer with strong on premise sales and brewpub sales that never get picked up in my data. That being said, he agreed that outliers like that are the exception not the rule. Also, we're talking <1,000 bbl/year. The difference could be 1 or 2 draft lines in a place with high craft velocity.

I'm also extremely fortunate to not have to do really any business in PA since I don't work with Giant Eagle or Wegmans. That being said, the explosion in small breweries/brewpubs isn't just PA. There are at least 5 in my local area which don't sell off premise at all. But, considering how little volume they're making, I see it as rounding error at best in the bigger "beer" picture (though those are probably the places you and I would frequent). I think the total volume across all of them last year was <5,000 bbl. Living in a city with two local breweries >15,000 bbl shows how small they really are. Also, most of them don't serve food, so it's unlikely they're having a strong negative impact on bars/restaurants since they're a completely different drinking occasion.

 

You realize he's talking about Portland Oregon, not Portland Maine, right?

 

Hmm, with a statement like that I have to wonder who is the one that actually doesn't realize.