Dear Client:
After yesterday’s story on The Florida Beer Wholesalers Association opposition to SB 1344/HB 0715 that would legalize 64 oz. growlers in the state, Beer Industry of Florida chief Eric Criss wrote in to alert us of their support. His organization, comprised of all but one MillerCoors distributor in the Sunshine State, “supports the [local] Craft Brewers Guild in its quest to legalize the growler container size,” he wrote. “It is our position that the container size change alone is not a threat to the three-tier system.”
Meanwhile, the Broward Palm Beach reported today that HB 0715 has to pass through the House Regulatory Affairs Subcommittee [the Senate bill unanimously passed the Senate Regulated Industries Committee in late March], but “Rep. Debbie Mayfield is currently refusing to put the bill [HB 0715] on the agenda.” The agenda, however, is not fully determined until the day before the committee meets sometime next week. The Florida Brewers Guild is “hoping individual citizens reach out to Mayfield in support of the bill.”
The story also unearthed a failed last-minute amendment attempt before the bill’s first Senate hearing. The provision “would have made changes to the licenses issued to craft breweries and would have allowed only the smallest breweries to act as vendors. Larger breweries such as Cigar City would not have been allowed to sell beer from tasting rooms had it gone through.” The addendum was reportedly favored by the Florida Beer Wholesalers Association, who also reportedly have donated thousands over the last few years to amendment sponsor Sen. Maria Sachs (D-Delray Beach).
Lots of tasting room battles this year. It’s no wonder craft brewers are fighting to gain — or even simply retain — rights to sell more beer on their premises. As former craft management consultant-turned-Brooklyn operations specialist Matt Gordon put it, “to the extent you can sell beer out of the brewery to consumers at that $600 per keg, that’s a great way to finance a company from the beginning and improve cashflow.”
To that point, the Montana battle pitting tavern owners against small brewers re: how much the latter should be able to sell out of tasting rooms is plodding along. The Montana Brewers Association Newsletter recently shared that their own HJ18 (to create an interim committee study to analyze the existing liquor licensing structure) passed committee unanimously. The Montana Tavern Association’s competing HB616, calling for separate licensing for breweries wanting to sell more than 40% of product out of their taprooms, comes up for vote today. “Tell them that the Department of Revenue’s recent legal opinion indicating that HB616 raises a significant risk of lawsuits in Federal Court is a great example of the many unattended consequences of a last minute bill like HB616, and just one more good reason to VOTE NO ON HB616!” Montana Brewers Association Newsletter said.
SURVIVING THE BUBBLE, BY BROOKLYN’S OPERATIONS SPECIALIST
If last year’s CBC was all trepidation over craft capacity and financing, this year seemed to focus on the bubble — and educating The Little Guy. Indeed, the session on “Surviving the Bubble” by Brooklyn guy and former consultant Matt Gordon seemed aimed at bringing TLG up to speed on the specific landscape into which he or she will enter.
The theme: Projections are promising but startups should consider two distinct contingency plans. Best-case scenario plans should involve for the ability to meet unexpectedly high demand, juggle excess inventory vs. lost sales, and continued access to financing (obviously still a big deal).
Worst-case planning should center on a brewer’s ability to manage to profitability if craft sales slow, flatten or drop. Matt advised brewers to consider all along: Do you have strong enough core and local demand? Reasonable debt/leverage?
REST OF CRAFT TRENDS. Matt also made a few projections based on today’s numbers for smaller craft producers (for reference, we reported some of his other observations Monday). Intriguing: If all breweries in planning were to come to fruition, it would be a roughly 53% increase. But even with that hike, “average barrels per brewery is likely to increase” — by his projections, from roughly 2,500 barrels a brewer for the “Rest of Craft” contingency to twice that in 5-1o years. Of course, trends will likely not stay steady; the viewpoint is directional.
Also, though SKU proliferation is a huge challenge, the number of SKUs contributing most to sales has increased rather rapidly recently. In October 2010 the top 180 SKUs made up 80% of dollar sales. Just 2 years later, in Sept 2012, 309 SKUs made up 80% of sales. This also bodes well for “Rest of Craft.”
BEER BRIEFS:
ABITA INTROS LEMON WHEAT as their new summertime seasonal. It will hit in early April; popular Strawberry Harvest Lager and Lemon Wheat will be on shelves together “in some markets” during late spring, per company statement.
BREWPIC: San Diego Padres chief Tom Garfinkel tweeted in late March, “Check out @BPbrewing Beer Garden signage going up at Petco Park.” The Ballast Point Beer Garden will be the entire patio behind the Left Field scoreboard.
Until tomorrow, Jenn
“Lead me not into temptation; I can find the way myself.” — Rita Mae Brown
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