News Deschutes delays Eastern expansion

Discussion in 'Beer News & Releases' started by Riff, Apr 16, 2018.

  1. Riff

    Riff Crusader (739) May 12, 2016 Virginia
    Beer Trader

  2. BeastOfTheNortheast

    BeastOfTheNortheast Initiate (188) Dec 26, 2009 Pennsylvania

    Expansion? Why anyone would gamble on expanding right now with the way the trends are going is beyond me.
     
  3. EvenMoreJesus

    EvenMoreJesus Champion (827) Jun 8, 2017 Pennsylvania
    Premium Member

    I would agree. Shore up what you have first. Not sure how stable Deschutes is, but you'd have to be pretty confident to think about opening another full scale brewery right now.
     
  4. JackHorzempa

    JackHorzempa Poo-Bah (3,451) Dec 15, 2005 Pennsylvania
    Premium Member

    “Now, city and Deschutes officials say market conditions have caused the brewery to pause and re-evaluate the timing and scale of its expansion.”

    Yup, market conditions are very competitive for larger, distributing craft breweries right now.

    If Deschutes is still confident that they could sell the beer they brewed at an East Coast location, there is a brand new brewery available for sale (via auction) in Virginia Beach, VA.

    Cheers!
     
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  5. jcos

    jcos Aspirant (251) Nov 23, 2009 Maryland

    I think the expansion was previously planned and some agreement made with Roanoke, so that is why there is this press release saying they are scaling back from original plans. I'm unsure(legally) what was in the original agreement.
     
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  6. NeroFiddled

    NeroFiddled Poo-Bah (9,302) Jul 8, 2002 Pennsylvania
    Beer Trader

    I totally understand their move, and it's probably a good one given their line-up, but at the same time I've always found Deschutes beers to be quite solid. I'd think they'd have a chance... at least if they start brewing NEIPA :wink:

    I'm kidding but... this is one of the reasons that I'm predicting a fall out of - or at least big fight between - the bigger regional and national breweries. Smaller, non-production or limited-production breweries can adapt and change quickly, but packaging and large distribution is a different beast and they can't keep up with the wishy-washy desires of our up and coming beer consumers.
     
  7. Tamarack

    Tamarack Initiate (119) Sep 22, 2016 Massachusetts

    For real, with the way the big regional guys are having to start pulling back and tightening up, delaying expansion at a secondary location seems like the smart play.
     
  8. Tamarack

    Tamarack Initiate (119) Sep 22, 2016 Massachusetts

    16oz stickered can with a hiphop reference name, Flaked oats, Citra, Galaxy, lowflocc English yeast. Basically like printing money.
     
  9. Bitterbill

    Bitterbill Poo-Bah (5,702) Sep 14, 2002 Wyoming
    Premium Member Beer Trader

    The last thing I want to see is Deschutes, one of my favourite breweries, fail at anything that they attempt. Pausing could be just the right thing, as many of you above have already stated.
     
  10. Oktoberfiesta

    Oktoberfiesta Aspirant (299) Nov 16, 2013 New Mexico
    Beer Trader

    Wow. Speaking of Deschutes, add them to another long list of breweries that I seem to neglect. I love their obsidian stout as a no frills sub 8% stout but haven't bought it in years. Fresh squeezed is solid and PNW pale ale is always nice. I only tend to buy their seasonals since I know they're fresh.

    But much like Odell, these regional breweries are getting neglected big time. Many local options come come or surpass both of those guys so dollars tend to trickle elsewhere.

    Im calling it. They're hurting and this brewery expansion won't happen. Keeping the brew pub open is nice. Are they producing one offs and more seasonals there? A smaller 15bbl regional operation seems more feasible for alot of these breweries, instead of trying to dominate the world. They need to dominate markets first.
     
  11. Tucquan

    Tucquan Poo-Bah (2,640) Oct 11, 2007 Pennsylvania
    Premium Member

    I also like the idea of buying the Green Flash brewery at a discount, provided Deschutes has confidence in being able to sell their beers on the East Coast with enough volume to support the investment. Personally, I'd buy fresh Mirror Pond in 16oz cans regularly here in PA, and to a lesser extent, Fresh Squezzed. I'm a fan of Fresh Squeezed for sure, but most of my beer purchases are for beers around 5% ABV or less.
     
    russpowell likes this.
  12. JackHorzempa

    JackHorzempa Poo-Bah (3,451) Dec 15, 2005 Pennsylvania
    Premium Member

    Do you buy a lot of Deschutes beer? As a fellow Pennsylvanian I will report that I personally do not buy their beers anymore since their prices are way too high at my local beer retailers (suburbs of Philly). Regardless of freshness these beers are a "no" from a price perspective.

    Cheers!
     
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  13. bbtkd

    bbtkd Poo-Bah (1,920) Sep 20, 2015 South Dakota
    Premium Member

    If expansion would allow them to add more Abyss variants, increase Abyss production, and start bottling Abyss in 12oz doses, then I'm all for it. Though, yeah, staying in business is advisable too.
     
  14. Tucquan

    Tucquan Poo-Bah (2,640) Oct 11, 2007 Pennsylvania
    Premium Member

    Yes I do. I have spent a lot of time working in Portland, OR. I remember landing at PDX around midnight about 8 years ago. As I drove to the hotel, I stopped at a bar for pizza and beer. I ordered a local beer that I had never had before, and it was Mirror Pond. My first taste caused me to say wow. I've liked it ever since. Subsequently, I went to the pub downtown a number of times. And two years ago made a point of going to Bend Oregon to visit the brewery there on my way to Crater Lake. Just a fanboy I guess.
     
  15. Lahey

    Lahey Aspirant (289) Nov 12, 2016 Michigan

    Fresh squeezed is one of my fiancées favorites, but I've never seen a six pack of it that wasn't old. So it's usually a tap only purchase. They should be working on this issue with their current distribution footprint first (assuming it's not just my area with this issue)
     
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  16. denver10

    denver10 Poo-Bah (2,293) Nov 17, 2010 New Mexico

    I am sure they will be eating some $$$, but not as much if they went forward with their initial plan.
     
  17. Hoos78

    Hoos78 Aspirant (272) Mar 3, 2015 Ohio
    Beer Trader

    When you say many locals surpass Odell and Deschutes, do you mean in terms of quality or popularity? If it's the latter, I get it. If the former...not so sure.

    I'm beginning to pull back in terms of my "ticking". I'm tired of trying new beers, most of which are local or semi-local, and enjoying +/- 50% of them. Deschutes makes great beer, every bit as good as it needs to be. Fresh-Squeezed will take residence in my fridge throughout the summer, along with Black Butte and Pacific Wonderland.

    I'm going to tighten up my buying patterns and resist the urge to try every new beer I see. Here's the thing...there are many new beers that I really do like, but I don't like them any more than old standbys from breweries that I appreciate and respect that might be struggling in the current environment. I'm going to throw most (not all) of my bones their way for a while. I'm pretty sure my enjoyment of the product will not suffer at all. If anything, forgoing a bit of the FOMO attitude will probably enhance my enjoyment.
     
  18. pro100

    pro100 Initiate (147) Oct 12, 2014 California

    Don't do it Deschutes. Its not a good time for expansion.


    Their Obsidian Stout and Black Butte Porter are some of my favorite shelfies.
     
  19. Oktoberfiesta

    Oktoberfiesta Aspirant (299) Nov 16, 2013 New Mexico
    Beer Trader

    A little of both.

    I shouldn't say many as I'm really only speaking of two. La Cumbre and Marble both have core offerings that match or exceed mostly everything out there. They could compete in every market with what they have. That's also the feeling that Deschutes had when they wanted to expand. Everyone things they are better and unique than the others.

    Maybe others have simply caught up. I love the many choices but as I slow down on my consumption, I tend to go with the local offering 8 times out of 10 when I think of what I'm buying for the week-month.

    Then I look at other regional beasts who have come to NM recently. Founders two years back. Firestone walker a few years back. Bells just recently.

    Then you have your fake craft like golden road, 10 barrel, and karbach who have come on strong in my state. For the average consumer , it almost leaves a regional brewery who's been here awhile back 9-10 spots on priority. It may be good to be lumped in with stone, lagunitas, SN, NB, DFH, And the few I mentioned above. But anymore, there is no sheer lack of a quality product. Deschutes isn't bringing anything anymore unique than the next player.

    What's their distro footprint now? They've been in NM so long, I take them for granted and their accessibility for granted from others.

    I'll be sure to check out the selection this Friday and post some impressions here. I need to make it an effort to support these guys again.

    I can see them jumping into new states and selling well for awhile. But the fall off is even more severe than ever before. Is that one year increase worth a huge investment? That's what everyone is trying to figure out.
     
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  20. TomCat11

    TomCat11 Devotee (469) Jul 21, 2012 Virginia
    Beer Trader

    Correct. The original announcement was made in 2016 and even then they (Deschutes) was clear they would not have originally broke ground until 2019 and opening around 2021. IIRC there were $$ incentives from the city that would be kicking in within the next couple months so the timing of this announcement is due much to that approaching.
     
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  21. laketang

    laketang Meyvn (1,036) Mar 22, 2015 Illinois
    Premium Member

    I also think they have a solid lineup but think it may be best to stand pat right now.
     
  22. hopsputin

    hopsputin Meyvn (1,223) Apr 1, 2012 New Jersey

    Smart move, in my opinion. Absolutely love Deschutes, but expansion doesn't seem to be a safe bet in the current climate. We don't get them in NJ, but I'd rather continue like that than not see them anywhere if things were to go south due to the expansion.
     
    jakecattleco likes this.
  23. Crusader

    Crusader Aspirant (211) Feb 4, 2011 Sweden

    As per brewbound Deschutes declined 5.6% in dollar sales in 2017 and through the first three months of 2018 are down 15% in dollar sales. In such a situation I would say that it seems prudent to step on the breaks when it comes to an expensive expansion of capacity.
     
  24. MistaRyte

    MistaRyte Devotee (421) Jan 14, 2008 Virginia

    I'm wondering if (my home state) Virginia will emerge out of this with a somewhat tainted craft beer expansion reputation... first Green Flash, then Deschutes pulls back, etc.
     
  25. trevord13

    trevord13 Initiate (152) Sep 30, 2010 Virginia
    Beer Trader

    As someone living in Roanoke I always felt this deal was strange. From the incentives laid out from the state and local government, the timing, and the changing beer market. All of it never added up to me. This is not shocking by any means. Hopefully they can work out something on a smaller scale that will satisfy the local community and not drive the company down the Green Flash path.

    However, I am very glad to have Ballast Point beautiful East Coast operation just 30min down the road. Always great beer, food, and the views are some of the best in the region.
     
    johnnybgood1999 likes this.
  26. Ranbot

    Ranbot Zealot (500) Nov 27, 2006 Pennsylvania

    Agreed with everyone above... it's a bad time to build a new production brewery. Tap the brakes.

    However, Deschutes could probably do really well with a brewpub, assuming they find a good location. I've been to their brewpub in Portland and it's is awesome, so they know how to do it right. Brewpubs seem like a safer path for regional breweries to expand with local relevance. Like recently Victory opening in Charlotte, NC, and Goose Island in Philadelphia, and there are brewers who have always had the brewpub experience a major part of their business model like Stone, Brewdog, Iron Hill, Appalachian, etc.
     
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  27. thuey

    thuey Aspirant (254) Nov 13, 2015 California

    Gotta say that Lagunitas snuck into IL at the right time. If they tried doing that now, things could have been really different.
     
  28. ilikebeer03

    ilikebeer03 Champion (856) Oct 17, 2012 Texas

    I love Abyss, but around here (Houston) it's gotten to be ~$18 a bottle for the regular. $25 for variants. As such, I must all of my will power and often pass.
     
  29. thuey

    thuey Aspirant (254) Nov 13, 2015 California

    It's $18/25 at the Portland, OR brewpub too.

    I do think Deschutes could benefit from dropping the price. I feel it's been shelf-turding the last few years because of that (and stiffer competition).
     
  30. craigo19

    craigo19 Devotee (497) Oct 12, 2009 Michigan
    Premium Member Beer Trader

    Smart move by Deschutes. With single digit growth and with little mark-up for distribution brew pub is the way to go.
     
  31. jcos

    jcos Aspirant (251) Nov 23, 2009 Maryland

    I don't think it is a Virginia issue that these beer companies estimated the market incorrectly and paid the price.
     
  32. spelingchampeon

    spelingchampeon Defender (646) Feb 21, 2016 Delaware
    Premium Member Beer Trader

    The "Green Flash Paradox" should be a wake-up call to all breweries at the moment. As said before, even a brewer such as Deschutes with a solid profile, could suffer the same thing as GF. The numbers are leaning towards down sales again.. and (probably) not because the beer isn't good.. the whole playing field is over-saturated. Best to take a step back and reevaluate in a year or two.. after things play out a bit.

    Nothing wrong in doing it the smart way.

    [side note: I have to go into PA to get Deschutes. While delicious, a lot of their beer is OLD so I'm not buying them. Some are higher priced as well. Who's to fault.. the brewer, the distributor, or both? I also saw the same thing with GF at my local stores.]
     
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  33. JackHorzempa

    JackHorzempa Poo-Bah (3,451) Dec 15, 2005 Pennsylvania
    Premium Member

    They are all higher priced at my local beer retailers.
    If you can figure out why beers are higher priced in PA vs. other (surrounding) states please let me know. I have asked this question many times on BA threads. I figured that some BA who is in the beer industry would be able to answer this question but so far no luck. I can tell you that the answer is not due to PA excise taxes on alcoholic beverages.

    I have not purchased any Deschutes beers in years since they are overpriced here in PA IMO.

    Cheers!
     
    spelingchampeon likes this.
  34. bbtkd

    bbtkd Poo-Bah (1,920) Sep 20, 2015 South Dakota
    Premium Member

    I don't buy them a lot, but do try the variants when I can find them. Recently bought the rum and tequila variants. I loved rum barrel stouts so expected to love that one, and I barfed tequila through my nose in college, so didn't expect to like that one. The opposite was true, the tequila was much better, and no flashbacks to college! Sure would like to see Abyss in 4x12oz packs, and would buy several at $15-$17 a 4-pack.
     
  35. Oktoberfiesta

    Oktoberfiesta Aspirant (299) Nov 16, 2013 New Mexico
    Beer Trader

    I went to buy an assortment yesterday at TW. Mirrorpond had best by 3/30/18, inversion 5/26/18, and fresh squeezed not so bad at 6/20/18. I'm sure the porter and stout would've been fine. But out of principle alone, I walked with other brands in my cart.

    If their distributor doesn't care, why should I?
     
    SunDevilBeer likes this.
  36. spelingchampeon

    spelingchampeon Defender (646) Feb 21, 2016 Delaware
    Premium Member Beer Trader

    I have no clue. I've never thought it was a state reason, more the brewery, or the distributor, or the store.

    One of my favorite low ABV beers is Against The Grain - The Brown Note. A 16oz 4pack goes for $12.99 at 1 store. At another store 3 miles away, it goes for $13.99. I would think the distributor is the same, since both stores are in the same state, and footprint. I haven't bought a 4pack lately.