April 17, 2013
Bronx’s Next-Laid Plans
Dear Client:
Expect to hear more about the Bronx brewery. After two years of seeding the New York City area with their signature Bronx Pale Ale on draft only, they’re launching 16 oz. cans in Eastern New York state. And a larger distribution footprint with Union’s new craft distributing sister company, which distributes from Westchester all the way to the Canadian border. In fact they just soft-launched Albany last week. Co-founder Chris Gallant says it’ll be a test for the way they might go to market in other states.
Recall that the borough-themed brewer started out via contract two years ago. That model will change slightly when they open a new brewery later this year in Port Morris, Bronx, with an initial capacity of 3,000 barrels. They’ll continue to brew some outside as well: cans and draft of Bronx Pale will come from Wisconsin’s City Brewing, and specialty offerings will come out of the Bronx location when it opens.
The brewery will sit in a heavily industrial area. “You have to make it a point to get here,” said Chris, and they have to make people want to stay. “To do that we’re working with a design firm [DME] to create the look and feel of the taproom.” Another “must”: Getting the right permit to allow people a full pint. “We have to have that. We don’t want people come in, have 4 oz. and leave.”
Total required for the brewery was around $1.7 million, including brewing equipment, build-out, and working capital (which included new employees). They funded the new brewery through another round of equity from friends and family, as they have from the beginning. But this time around they got Chase Bank to help out with equipment. “They were actually great, and they’ve have done a couple of different breweries as well. They’ve built themselves a nice little niche in the New York area doing brewery loans,” said Chris.
Now cans will accelerate the uber-exportable brand, which plans for 5,000 barrels, up from last year’s 1,300. Before the package offering, Madison Square Garden was among their top accounts. “We’re not in Yankee Stadium yet. But we’re in Yankee Stadium’s seakhouse,” Chris added. “Those sorts of venues take a lot of beer. But aside from that, what works really well for us are restaurants that have great beer and beer culture but not a lot of taps. Spotted Pig, for example, moves a lot of beer for us.”
MINNESOTA BREWERS SAY TAX BILL WOULD QUADRUPLE THEIR ANNUAL PAYMENTS
Minnesota House Democrats are trying to raise the state excise tax to the tune of a “small 7-cent-per-drink” increase as part of a package to raise state revenue. But the AP in St. Paul covered a loud defense from local brewers, who said it could quadruple their annual tax bills.
Currently, brewers pay the state $4.60 for every 31-gallon barrel they brew, as they have since 1987. The story claims the House tax bill looks to raise that by as much as $27.75 for each barrel of beer. Summit Brewing founder Mark Stutrud estimated that the proposed increase would bump his tax bill to the state from about half a million last year to close to $2 million, even after a $1.4 million tax credit. Hiked costs will trickle down to the consumer, Mark said. “It’s not 7 cents a drink anymore. It’s terrible spin. It’s a lie,” he was quoted.
House Tax Committee Chairwoman Ann Lenczewski said the bill intends for alcohol’s biggest users to “help the state recoup some of its costs” for some $3 billion in alcohol abuse. She also pointed to built-in cuts for small brewers. “It includes a tax credit that wipes out the excise tax for up to 50,000 barrels a year, so microbreweries would be off the hook. Brewers and wholesalers who sell more than 200,000 barrels a year aren’t eligible,” per the story. Summit owner Mark pointed out they’ll exceed that amount in five or so years; they plan to do 120,000 this year.
BEER BRIEFS:
CHASE HAS NAMED JOHN STUCKER HEAD OF NEW BEVERAGE INDUSTRY GROUP, which will serve mid-sized suppliers, distributors and retailers across the U.S. The team will “provide financial services to meet the complex banking needs of beverage companies as well as deliver industry expertise and solutions to help clients grow and operate more efficiently,” per announcement.
YANKEE STADIUM NOW HAS “BEER MIXOLOGY” STATION, instead of “Craft Beer Destination,” as the stand with MillerCoors Tenth and Blake offerings at the Bronx stadium was previously named. The rebrand came in response to an outcry started by blogger Amanda Rykoff, which then spread across different media outlets.
MORE ON SWEETWATER DISTRIB CHOICES IN NEW MARKETS. The Atlanta-based brewer will open Outer Banks, North Carolina with City Beverage Co., and Myrtle Beach, South Carolina with The Yahnis Co., rounding out their distribution to offer beers comprehensively throughout each of those states. In Q2 and Q3, the brewery will begin shipping its 3 new states including Kentucky, Virginia and Louisiana, bringing SweetWater’s availability to a total of nine U.S. states across the Southeast.
HANGAR 24 GOING TO VEGAS. AB house Nevada Beverage Co. will kick off Hangar 24 in South Nevada officially May 1.
Until tomorrow, Jenn
“People who complain about taxes can be divided into two classes: men and women.” — Anonymous
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