Brewscape: The Latest Craft Beer Brand News

Molson Coors to Cease Production in Irwindale, California

In January, Molson Coors Beverage Company announced plans to cease production at its facility in Irwindale, California, by September 2020.

The second largest U.S. beer manufacturer also announced an agreement with Pabst Brewing Co. that gives the Los Angeles-based beer company the option to purchase the Irwindale facility for $150 million.

“This move will allow us to optimize our brewery footprint while streamlining our operations for greater efficiency across the network,” Molson Coors chief integrated supply chain officer Brian Erhardt said in a release. “While it was a very difficult decision, we have extra capacity in our system and Irwindale’s production can be absorbed by other breweries in our network.”

The 40-year-old Irwindale facility employs about 470 workers and produced 4.8 million barrels of product in 2019 — including Miller Lite, Coors Light, Miller High Life, Miller Genuine Draft, Steel Reserve, and Miller 64, among others — which was shipped to 261 independently owned wholesalers.

Over the next nine months, Molson Coors will begin moving production from Irwindale to its facilities in Golden, Colorado, and Fort Worth, Texas.

As for Molson Coors’ arrangement with Pabst, the maker of Pabst Blue Ribbon will have 120 days after receiving notice from Molson Coors of Irwindale’s closure to exercise its option to buy the facility.

In a statement, Pabst Brewing chairman and CEO Eugene Kashper said the company will work with “new long-term supply chain partner, City Brewing Company, to evaluate this opportunity and are committed to choosing a path forward that is in the best interest of all our stakeholders.”

In November 2019, Pabst reached a long-term agreement to move the majority of its production volume to City Brewing Company by December 2024 and maintain contract production at City’s facilities until 2040.

White Claw Maker to Build $250 Million Facility in Arizona

Mark Anthony Brands has selected Glendale, Arizona, as the location of its $250 million West Coast production facility.

The maker of White Claw and Mike’s Hard Lemonade first revealed plans in the fall to invest $385 million to build two new production facilities, including one in New Jersey.

Mark Anthony Brands expects the 916,000 sq. ft. Glendale facility to open in June and employ 200 full-time workers. In addition to White Claw, the facility will produce Mark Anthony Brands’ other offerings, including Mike’s Hard Lemonade and Cayman Jack Cocktails.

Mark Anthony Brands is self-financing the approximately $250 million project. The company is forecasting sales of $4 billion in 2020. Last year, White Claw sales topped $1.5 billion, with total hard seltzer category sales nearing $2.5 billion.

Once both Arizona and New Jersey facilities are online, about half of Mark Anthony’s volume will be produced in-house. The company also contract produces at Cold Spring Brewing in Minnesota.

Josh Landan, Celebrity Investors Launch Hard Seltzer Brand in California

Saint Archer co-founder Josh Landan has launched a new hard seltzer brand in California.

Ashland Hard Seltzer is Landan’s play into the $2.5 billion-plus hard seltzer category. The brand started with more than 250 points of distribution, including national chain commitments from major big box and grocery retailers such as Costco, Target, Whole Foods, Sprouts, Kroger, BevMo, Total Wine and Bristol Farms/Lazy Acres.

Over the last year, Landan admitted he got swept up in the hard seltzer trend, which led him to create his own brand.

“I’m 40 now and I have three kids — 12, 9 and 5 — and the days of me drinking multiple IPAs after work are long gone,” said Landan, who co-founded Saint Archer in 2013 and sold the San Diego craft brewery to MillerCoors in September 2015. “This is what my wife and I and my friends have gravitated toward, drinking the hard seltzers, because you can still have fun and have a couple of drinks and not really feel it in the morning”

Landan, who holds a majority stake in the new business, has tapped 30 celebrities, actors, athletes, models, influencers, designers, and musicians as equity investors in the venture. Among them is action sports star Paul Rodriguez, with whom Landan co-founded the Saint Archer brand, and actors Adam Devine and Blake Anderson.

“I’ve been able to pull together a lot of our friends from all kinds of different walks of life,” Landan said. “Country singers and athletes and actors and everybody in between coming together.”

Ashland is the newest brand in Landan’s growing portfolio, which includes Harland Brewing Co. beer, Claxton Cellars wine, Villager non-alcoholic coconut water and Little Villager organic juice for children. According to Landan, Ashland plays as a California-based lifestyle brand and is the most gender-neutral beverage product that he has ever launched.

IRI: Off-Premise Beer Sales Top $37 Billion in 2019

Total beer dollar sales in 2019 increased to $37.2 billion in U.S. off-premise retailers, according to market research firm IRI.

The Chicago-based firm, which tracks category-wide sales at major off-premise retailers, reported a 5.2% increase in beer dollar sales, and a 2.3% increase in volume sales at multi-outlet and convenience (MULC) stores (grocery, drug, club, dollar, mass-merchandiser and military) through December 29.

Meanwhile, market research firm Nielsen reported that total dollar sales of beer, FMB and cider in the U.S. grew 3.4%, to $39.6 billion, while volume sales increased 0.7% for the 52-week period ending December 28.

Of course, scan data only offers part of the picture — distributed beer sold in off-premise retailers such as grocery, convenience and big box stores — for a year, not factoring in on-premise dollar sales, at-the-brewery sales and other metrics such as independent liquor stores. However, the data does give insight into sales at large retailers.

According to IRI, seven segments — imports, domestic sub-premiums, craft, flavored malt beverages, domestic super premiums, non-alcoholic beer and assorted — increased dollar sales in 2019.

Dollar sales of FMBs, which include hard seltzers, increased 43.1%, to nearly $4 billion, while volume sales increased about 42% last year.

Nielsen, which breaks out hard seltzer segment data from FMBs, reported that off-premise dollar sales of hard seltzer increased 212.5%, to $1.5 billion, in 2019.

Much of the growth in FMBs is being driven by the triple-digit growth of Mark Anthony Brands’ White Claw offerings (+330% dollar sales) and Boston Beer Company’s Truly Hard Seltzer (+180.2%), according to IRI. Portfolio-wide White Claw dollar sales reached $833.6 million last year, while Truly brand family dollar sales topped $368.8 million.

The popularity of White Claw and Mike’s Hard Lemonade products (+12.5%) has made Mark Anthony Brands the fourth largest beer company in the U.S. In 2019, Mark Anthony Brands’ products increased dollar sales 87%, to almost $1.5 billion.

Dollar sales of beer’s largest segment, domestic premiums (Bud Light, Budweiser, Coors Light, Miller Lite and others) declined 3.1%, to more than $12 billion. Volume sales were also on the decline for domestic premium brands, down 4.1% in 2019.

Although craft beer dollar sales continue to grow, up 2.8%, to $4.3 billion, in 2019, the segment has slowed considerably over the last two years. In fact, just 13 of IRI’s top 30 craft brands posted dollar sales gains in 2019, mirroring 2018’s results.

Reyes to Acquire Claypool Distributing in California

The Reyes Beverage Group is making another wholesaler purchase in California, announcing in January an agreement for its Crest Beverage subsidiary to acquire all of the assets of Imperial, California-based Claypool Distributing.

As part of the deal, Reyes, the nation’s largest beer wholesaler, will add about 650,000 cases of product and about 400 new customer accounts to Crest’s business. Claypool services the southeastern part of California, including portions of San Diego, Riverside and San Bernardino counties, as well as throughout Imperial County.

San Diego County-based Crest services the United States’ largest craft beer market, with annual sales of 14 million cases to 4,600 customers.

Reyes has been among the most active buyers in the middle tier, with the Claypool purchase being its eighth acquisition in California since June 2018.