Here we go, with a look at the past. It has been a wild ride in the industry the last three years, and 2017 was no exception. More big changes, which will dramatically shape the future.
BA Defined Craft Up 6% in 2016
MARCH 28, 2017
The year starts out where it left off, with the annual announcement by the Brewers Association of the previous year’s craft numbers. It was no surprise that 2016 was a tough year, but all things considered, growth was still fairly strong with 6% increase in BA-defined craft brewery production. This was the smallest increase since 2008. Retail dollars grew by 10%.
Boston Beer Drops 15% in First Qtr.
APRIL 27, 2017
One story emerging in 2017 was the slowdown by the large and well-established craft breweries. And no one represents that group more than Boston Beer Company. No one was surprised that sales were down, but the extent of the drop was a bit of a shock. The company reported a 15% decrease in shipments equaling a 707,000 barrel drop in its beer, cider, tea and hard seltzer brands. The company reported a net income of $5.7 million, which was a $1.3 million decline from the same period previous year.
ABInBev Dips Toe Further into Craft Beer Media
JUNE 5, 2017
We got used to Big Beer buying into the craft category in 2015 and 2016. And we got used to ABInBev buying into the craft segment in creative ways such as dabbling in the homebrewing sector. But when ZX Ventures, a division of ABInBev purchased an ownership interest in RateBeer (the actual purchase was in 2016 but it wassn’t announced until mid-2017), the industry was shocked. It was like Ford Motor Company buying into Road & Track magazine. It showed ABInBev was willing and ready to go deep into the craft category.
‘Seal of Independence’ Rolled Out by BA
JULY 4, 2017
The Brewers Association, looking for a way to differentiate independently owned craft breweries from Big Beer owned craft breweries made a splash with the announcement of a new seal designed to help consumers identify beer brewed by independent breweries. The seal was made available for use only to small and independent American craft brewers that meet the BA’s craft brewer definition. Results on the design were mixed and adoption and use by the family of indie craft brewers has been slow to appear on packaging – where it matters most if it is to make an impact.
Craft Brewers Grow by 5% Through Mid-year
AUGUST 1, 2017
Craft brewers continued to grow through the first half of 2017 – although at a slower rate than in the last 10 years. Mid-year data released by the Brewers Association showed beer production by BA-defined craft brewers up by 5% through the end of June – which is right about where it will likely land for full-year 2017.
Sapporo Buys Anchor Brewing
AUGUST 3, 2017
No argument here about this being a top story for the year. Japan’s Sapporo Holdings purchased Anchor Brewing, the San Francisco brewery credited with igniting the American craft beer renaissance. It was not unexpected, rumors had been swirling for many months, but it was still a sad day in the industry.
Tied House Laws Survive Major Court Case
JUNE 22, 2017
This might be the most overlooked top story of the year, but the implications were enormous. The Ninth Circuit Court handed down a huge victory for tied house laws by ruling in favor of the California Alcohol Beverage Control (ABC) in the Retail Digital Network (RDN) v. Prieto court case. The case challenged a key tied-house law in California’s Business and Professions Code. If the court’s decision had gone the other way, it would have surely been the beginning of the end for tied house laws across the country.
GABF Turns 36 with Record Number of Entries
OCTOBER 10, 2017
On the surface, this might not seem like a top story, but there is a lot to be said here. The beer festival space is a crowded one, with beer festivals springing up in every corner of the country and every weekend of the year. Many long-established beer festivals are showing declining attendance (most notably the Oregon Beer Festival) due to “festival fatigue” by the beer enthusiast. But the GABF carries on, growing every year in both size and attendance. Well done!
Constellation Invests in Cannabis Industry
NOVEMBER 2, 2017
First, but not the last. Constellation Brands, importer of Corona and owner of Ballast Point Brewing dived into the cannabis industry by buying a 9.9% stake in Canopy Growth Corporation. Canopy Growth is a major publicly traded cannabis company based in Canada. Expect all major alcohol companies (and craft too) to start investing in cannabis. It may take a while, maybe even until the feds get on board. But it’s not a question of if, it’s just a question of how long it will take for cannabis to be legal in most states and for the public to adopt it just as they do beer, wine and cocktails today.
Avery Brewing Sells Stake to Mahou San Miguel
NOVEMBER 30, 2017
Ouch! This one hurt. Craft breweries are selling, merging and deal-making right and left. But when Avery Brewing Co., right in the backyard of the Brewers Association, announced a partnership with Mahou San Miguel, and therefore losing their “BA-defined” craft brewery status, they then came out and said they couldn’t care less about being in the BA club.
CBA Sells Woodinville Brewery
DECEMBER 4, 2017
You know things are changing when whole breweries get sold off because of overcapacity. Craft Brew Alliance announced that it entered into an agreement to sell its Woodinville, Washington facility to Sound Commercial Investment Holdings, LLC for $24.5 million. Expect to see more of this as brewing capacity continues to be way over demand.
Reduction in Federal Excise Tax Signed into Law
DECEMBER 22, 2017
The best for last. I rate this as the biggest story of the year. President Trump signed into law H.R.1, which includes the Craft Beverage Modernization and Tax Reform Act (CBMTRA), lowering the federal excise tax for breweries, wineries and distilled spirits producers. This is the first reduction in the federal alcohol excise tax ever. In the works for many years, first as a craft beer-only tax reduction (which didn’t cut it with policymakers), the BA joined hands with Big Beer, wine and spirits; and snuck it in at the last minute. Amazing!
HAPPY NEW YEAR!! Onward to 2018!
