Craft Brew News 09/06/19

(Courtesy of Brewbound.com)

https://www.brewbound.com/

Night Shift to Open $10 Million Brewery in Philadelphia, Expand Production in Everett, MA

Everett, Massachusetts-based Night Shift Brewing announced plans Wednesday to open a $10 million, 130,000 sq. ft. production brewery in Philadelphia.

Speaking to Brewbound, Night Shift co-founder Michael Oxton said the company is “committed” to opening the new brewery before the end of 2020.

The Philadelphia project is being financed through a combination of cash flow and bank debt, he added.

Night Shift’s three founders — Oxton, Rob Burns and Michael O’Mara — collectively own about 80% of the business, with friends and family holding the remaining stake in the company.
Oxton said “Since our beginning, we haven’t taken on any more investors and we have no plans to do so,”. “Our runway is fiercely independent for 100-plus years, and we have no plans of raising outside capital and letting another firm sort of dictate our decisions.”

Earlier this month, the Philadelphia Board of Zoning Adjustment approved Night Shift’s permit to operate a taproom inside a former Anheuser-Busch wholesaler warehouse, according to the Boston Globe, which first reported the story Wednesday.

In Philadelphia, Night Shift will lease the building, which is already equipped with refrigeration space, loading docks and a potential taproom location. The company plans to install a 100-barrel brewhouse in the space, which will immediately unlock 30,000 barrels of initial capacity. Over time, Night Shift could scale production at the facility to 200,000 barrels of capacity, although Oxton stressed that Night Shift remains committed to a philosophy of letting demand dictate growth.

In addition to opening the Philadelphia brewery, Night Shift is upgrading its Everett headquarters, replacing its 20-barrel brewhouse with a 60-barrel system. The new brewhouse is expected to be operational next month.

All of that demand has Night Shift on pace for 50% volume growth by the end of 2019. Oxton projects the company will produce more than 40,000 barrels, up from around 30,000 barrels in 2018.

Craft Brew Alliance Exploring All Options in the Wake of No Offer from A-B

Craft Brew Alliance CEO Andy Thomas had a rare off-cycle conference call with investors and analysts today after his company’s largest playmate, Anheuser-Busch InBev, declined its long-held option to purchase the Portland, Oregon-headquartered craft beer maker.

The call came two weeks after the August 23 deadline for A-B, which already owns 31.3% of CBA, to make an offer of $24.50 per share (about $328 million) to purchase the remainder of the company or pay a one-time fee of $20 million. A-B opted for the latter, leaving questions about the world’s largest beer manufacturer’s future interest in the smaller beer company known for brands such as Kona Brewing, Widmer Brothers, Redhook and others.

Since that time, CBA’s stock (BREW) has declined from $12.96 on August 22, the day before the deadline, to $9.28 at the end of trading today. It has sparked speculation that CBA might look to sell to another suitor or divest its brands, including fast-growing Kona. Another narrative emerged saying CBA and/or Kona were too entangled with A-B to ever be unlinked.

Thomas stressed that CBA’s management team is being “exhaustive” in making sure all options are considered before choosing the correct path forward. The company’s leadership team has begun working with independent board members, bankers and external advisors to explore alternatives, “strategic and otherwise,” and the conversations with A-B have continued as CBA tries to understand what a future relationship looks like, he said.

“We wouldn’t be in the discussions that we’re in right now if we thought status quo is an acceptable outcome,” he added. “It is not.”

The biggest CBA block is that Kona brand, which is pushing 500,000 barrels and growing “high-single to low-double-digits,” Thomas said.

Boston Beer Company is Taking Truly Hard Seltzer on Tap to Bars and Restaurants

Truly Hard Seltzer-maker Boston Beer Company announced today the nationwide launch of “Truly on Tap,” a new product that the company is calling ”one of the first hard seltzers available on draft” across the country.

Boston Beer CEO Dave Burwick told Brewbound, via email, that Truly on Tap is the Pure offering renamed. He noted that Truly on Tap shares many of the attributes of a vodka soda: “effervescent, clear, finished with a squeeze of fresh fruit” but with a lower ABV.

According to the sales sheet, Boston Beer appears to be positioning Truly on Tap as an alternative to light beer and spirits, attempting to capture happy hour and game-day occasions during the upcoming football season.

Citing off-premise sales data from market research firm IRI, the sales sheet notes that hard seltzer sales year-to-date have surpassed those of IPAs — the most popular craft beer style — through July 7.

Additionally, the company calls out a Radius study, which found that two-thirds of drinkers said they would substitute drinking a beer at a bar with hard seltzer if it were available. If that wasn’t a sobering stat for alcohol producers, Boston Beer cited a Harris Poll that the company commissioned last October that found 70% of 21- to 31-year-old consumers said they’d choose hard seltzer over other alcoholic beverages at bars and restaurants.

Truly, along with White Claw, already make up 85 percent the off-premise sales of hard seltzer offerings, according to market research firm Nielsen. The firm also projects the hard seltzer industry to generate $1 billion by the end of 2019.

Dogfish Head Nears National Distribution; Adds 45th State, Mississippi

Dogfish Head Craft Brewery is just five states away from completing national distribution.

The Milton, Delaware-based craft brewery, which merged with Boston Beer Company earlier this year, announced Monday the addition of its 45th state — Mississippi — via Capital City Beverages.
Sales of Dogfish Head products, such as 60 Minute IPA, Slightly Mighty IPA, SeaQuench Ale and 90 Minute IPA, as well as seasonal offerings, will begin in the state starting in early September.

Last year, Dogfish Head ranked as the 13th largest domestic craft brewery, with production of 275,000 barrels of beer, according to national trade group the Brewers Association. The company is on pace to grow to around 300,000 barrels by the end of this year, with net sales of $120 million.

The $300 million merger of Dogfish Head and Boston Beer — which makes the Samuel Adams, Truly Hard Seltzer, Twisted Tea and Angry Orchard cider brands — was completed in July.

Following the transaction, Boston Beer founder Jim Koch said the two brands would work to align into a single wholesaler network.

Koch told Brewbound in July, “We think monogamy works a lot better in wholesaler relationships than polygamy,”


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