Night Shift Brewing

Getting off topic a bit, but I totally disagree. Yeah, I'm cost conscious, but I don't buy much Harpoon or Sam because most of their beers are not very good. Sierra Nevada is a totally different story and they reach a level of quality that far exceeds many of the hyper local beers on the shelves at my local package store. Locally, Wachusset is another brewery that's keeping prices and quality at a point where I never have to think twice about grabbing a six pack. NSB should keep doing its thing. It's working great. But I think as they and others try to keep growing, they will run into this problem more and more. There's a pretty small number of people who will pay mid to upper teens for four beers, and I think most of them are already buying.

 

Absolutely (and to parts of what @matthewp said as well). I should have been clearer that I was trying to make a very specific point with the comparison to wine. I can't seem to track down the link at the moment, but I read an interesting story about how wines are priced that explained that some wineries make a very conscious decision to position their product at a particular point on the spectrum irrespective of cost (to some degree - obviously cost is a factor that can't be completely ignored).

The point was that there are wines that cost essentially the same to make that sit at quite different price points at retail simply because that's how they've decided to frame their brand and which customer base they are chasing. They gave an example of a winery whose product sold better at a higher price point simply because the clientele in their area turned their nose up at "cheap" wine. So price can be a trickier measure of quality/cost when buying wine than it is for other products.

I was meaning to wonder whether that sort of thing is finding it's way into beer (obviously there have always been tiers of pricing in beer, but since beer is so much cheaper than wine there hasn't necessarily been a lot of room to maneuver).

I realize this isn't terribly helpful without some actual data here, so I'll try and track down the story I read.

 

Just to be clear - my response did not imply anything about SN quality. They aren't priced lower because they use worse ingredients are quality. They have better buying power and larger brewhouse. I think they have a 200bbl+ brewhouse in NC... we have a 20bbl. Roughly same labor to produce 20bbls as 200bbls. That's a huge savings! All that to say - SN make excellent beer. I drink it regularly.

 

I wonder how many people turn their nose up at "cheap" lagers like Pilsners compared to the $20 four pack of a DDH New England IPA?

 

Don't want to derail the NS thread but hard disagree here. IMO SN beers are better than "any beer from any craft brewery" almost every time. Super consistent, long shelf life. The price/format is just an added bonus. You might be right on that last sentence because taste is subjective of course.

 

I can't speak for anyone else, but I assume the others (like me) were responding to this post.

 

To respond to this and the other comments about quality. As I mentioned Sierra Nevada makes quality beer. The funny thing is so does Anheuser-Busch. They are very consistent and I'd bet there is even less oxygen getting into a can of Bud than into anything SN makes (again comparing very little to very, very little here is splitting hairs).

You wouldn't ask SN why they can't make beer as cheap as AB, would you? AB's brewers could probably teach the SN brewers a few things about scaling and consistency but you wouldn't knock SN for that. SN is good at the scale they are at and they make good beer.

You obviously prefer the taste of SN to Bud. AB and SN are attacking a slightly different market (ignoring some of the craft beer acquisitions by AB). Same thing with most of the craft breweries out there compared to SN (differentiating small craft from large craft, not really comparable). Regardless a quality made beer may or may not taste better than a beer from a brewery with less experience. Most people drinking from breweries like NSB are looking for something different taste wise. Rather than talk about quality ingredients I'll switch to say more unique ingredients. Smaller breweries (or the smaller sandwich shop) is going to be introducing unique ingredients faster than someone like SN. Like I said Torpedo is a great beer but it lacks some of the taste I am looking for that a brewery like NSB provides (as I said originally old school craft vs modern craft).

 

"Lacks some of the taste" and "tastes better" are things I just can't argue/understand. It's all subjective. Sounds like you just think something with a NS or (insert craft brewery logo here) label is inherently better because of it, which is fine. I just disagree.

There are days I drink Miller High Life and Budweiser and Bitburger. There are (a lot of) days I drink SNPA or Torpedo or Summerfest. There are days I drive to Hill Farmstead and buy a case of Arthur. All of these beers and many others are great to me and worth the cost, that's why I buy them and keep buying them.

I tend to stick with the tried and true breweries/brands for repeat purchases and save my "try a new beer I've never had before" to a handful of my favorite breweries. I know that is the polar opposite of a lot of people on here.

Buy/drink whatever beer you want - t just irks me when I see broad comments like "any craft beer is better than Torpedo" or "you obviously prefer the taste of SN (not even sure which SN beer) to Bud".

 

Sounds like you just like Nightshift's beers more than Sierra Nevada's. Or specifically, the styles Nightshift brews as opposed to what Sierra Nevada brews.

Do you like Pfaffenheck better than Summerfest? Do you like Kellerweiss more than Furth?

 

The key phrase I wrote was "that I am looking for". That intrinsically states that its my preference, not that NSB or any other craft beer is better but that I generally prefer smaller craft beer to something from a brewery like SN. I'm clearly not conveying my thoughts effectively so I'll simply state I like SN beers. Narwhal Stout is a highly underrated beer, I probably should drink more of that. Torpedo is a great beer but I rarely drink it because I prefer different hops than what is in Torpedo. Anyhow I'll quit on that front while I'm behind.

I'll finish with small craft breweries make a lot of awful beer. While my statements and word choices indicated one thing it was not to state that "any craft beer" is better than Torpedo. Statements like "prefer SN to Bud" was a quick short hand comment after writing a ton of other stuff. I won't expound any further on what I meant since its not making it any better A conversation like this is better had over a beer or two.

 

I addressed most of this in another post but to be clear, SN makes certain beers that are better than certain beers from NS or any other craft brewery.

 

@robNSB while we have you here and talking about scale, any comment about the enormous recent increase in NSB scale? This is really impressive - new distribution? Feeding the new locations?

 

Nice chart--I didn't know that data was easily accessible. How do you get it? Manually enter from the pdf?

 

Kinda. The PDFs come from https://www.mass.gov/lists/dor-alcoholic-beverages-excise-forms-and-reports . I noticed that copy and paste of the PDF gave me almost usable data, so I have a little script to munge that into csv. (Meaning, I have the numbers for all breweries/distributors listed in the PDFs) Graphs are from R with tidyverse. Now that I've done it a few times, it might be time to automate the PDF extract step and make a little webpage for this.

Nice of Massachusetts to have this readily available. I've looked for comparable in a few other states, but no luck. Even tried to go to the Fed, but their wording implies that this data is not subject to FoIA. https://www.ttb.gov/foia/frl.shtml

 

Great info, thanks for posting it. So the revenue report must be from the perspective of the state. Meaning the revenue from a brewery within the report is the amount the brewery payed to the state in any given month. I assume this can be used to calculate the breweries monthly revenue (or profit?). Does anyone know how to calculate the monthly payment a brewery makes to the state? Or maybe I'm just confused...

 

the taxes paid by the entity to the state are purely % per gallon; they're also viewable via the "revenue report" alongside each monthly "gallon report".

Extrapolating from there to brewery revenue is not possible; that's not the basis on which the taxes are collected.

 

Nicely done! The spike isn't exactly as significant as it looks here - some of our volume was getting classified under Night Shift Distro numbers. It is now all under NSB. The big surge is mostly due to the launch of Lime Lite. We have been growing pretty steadily in MA - adding accounts at a healthy clip. YTD volume is up over 30% which you can clearly see in that chart. In cash register data (IRI) - we are the number 2 craft brewer in MA liquor and number 9 when you include the big boys. Which is shocking to us! Can't thank our fans enough!

We added some CT distribution at end of May but that isn't reflected here.
One thing to note - this is just tax for beer that is sold in MA. And does not include beer that gets shipped to other states. For NSB -95% of our beer is sold here in MA so it's pretty accurate for us but less so for brewers who send beer to a bunch of states.

 

Night Shift is putting the pieces in place to open a new taproom, brewery, and distributorship in Philadelphia. Targeted to open in 2020. The facility would be their largest. According to the article, the additional production could make Night Shift the 3rd largest Massachusetts brewer in a few years. They are currently 7th largest.

https://www.bostonglobe.com/busines...y-expansion/ES4ebEvdOMKQV5dtqzL9WJ/story.html

 

That's great news for them, they deserve it.

I can't help but wonder what the economic outlook for craft beer is.

How well are things selling in stores? I see a lot of outdated beer on shelves, meanwhile more and more breweries are expanding distro. That seems like a pretty obvious issue, no? Are they just hoping they continue to eat into big beer's share of the market?

If a recession hits, is craft beer considered a luxury that will break the age-old "people drink in good times and bad times" logic?

 

Based on the Night Shift business model I think you can assume they've probably given more thought to those questions than nearly any other brewery. They've got a diverse portfolio, including a beer that is aimed at the macro industry and their new hard seltzer line. They've used contract brewing to increase production without the associated investments and risk inherent in that in the past. They expanded with a brewpub in a different area that also sells craft coffee. They are their own distributors as well as the distributor for other craft beers and spirits. Now they've moved into another great beer market so they can be a "local beer", decrease shipping costs, increase freshness for other markets, etc..

Basically everything they do points to smart growth. In general their beer isn't at the high end of the cost spectrum and they've done things to already decrease the hard costs such as paying a distributor and decreasing shipping costs by staying local (and building local) to their markets. So even with a downturn in the economy they can probably do ok. The saturation I think is still an issue but that's kind of where their diversification comes into play.

On the flip side, those breweries that are depending on the high margin sales direct from their tap room? Guessing they'll be the first to go. People will continue to drink during a recession but certainly will reduce how often they go to a taproom as well as look for beer that has better cost to taste value. Jack's Abby and Night Shift are two that spring to mind. A place like Tree House might survive just due to the fact that they've made enough money already to perhaps pay off their expansion and they are hopefully sitting on a pile of money. That's a bit more luck than planning though IMHO. In the end a recession or change in demand will basically shake out who are good brewers AND good business people vs the bad brewers and/or the bad business people.