Brewscape: The Latest Craft Beer Brand News

Lynne Weaver to Buy Back Three Weavers From CANarchy

Craft rollup CANarchy Craft Brewery Collective and Three Weavers Brewing Company founder Lynne Weaver reached an agreement in early June in which Weaver and her investment group will reacquire the Inglewood, California-based craft brewery.

With the split from CANarchy, Weaver will “pursue her vision of a Three Weavers branded brewery, tasting room and restaurants within Hollywood Park’s retail district,” the company said in a release.

Weaver said conversations about buying back Three Weavers started in January and culminated in the “asset acquisition,” which includes “everything Three Weavers,” including the intellectual property, equipment and location. Weaver added that she will maintain her equity in CANarchy.

CANarchy — whose craft brands includes Oskar Blues, Cigar City, Deep Ellum, Squatters, Wasatch, and Perrin — acquired the Inglewood, California-based craft brewery in July 2018 in a deal that chief operating officer Matt Fraser told Brewbound was “cash-free and debt-free.” He added at the time that the company paid off the debt Three Weavers took on to build its brewery at the time.

Weaver, along with about a dozen Three Weavers investors, exchanged their shares in Three Weavers for equity in CANarchy at the time of the sale. According to a U.S. Securities and Exchange Commission filing from July 2018, CANarchy offered $18,473,301 in equity as part of the rollup’s merger with Three Weavers.

Weaver declined to share who is involved in the investor group, but described them as “a lot of the same folks who have been with me from the very beginning who believe in what I believe.”

That vision includes the construction of a Three Weavers branded brewery, tasting room and restaurant within the Hollywood Park retail district near SoFi Stadium in Inglewood.

“As I went through the process of forming this opportunity, I always had in my head that I can make it whatever I really envisioned,” she said. “But at the end of the day, what felt right was really for it to be Three Weavers. And that came to a head at one point.”

Weaver said CANarchy CEO Tony Short and the team understood the opportunity at Hollywood Park for Three Weavers “but we just couldn’t figure out a way to be able to make this work.”

Those conversations shifted to CANarchy offering the opportunity for Weaver to purchase the brewery that she founded in 2013 in order to pursue the Hollywood Park project. The goal now is to open Three Weavers’ Hollywood Park location by the end of 2022, although it could be as late as March 2023.

CANarchy was the nation’s sixth largest craft brewery by volume in 2020, with production output of 489,626 barrels, according to data in the May/June 2021 issue of the Brewers Association’s New Brewer. The company’s volume increased 2% last year, and it holds a 2.13% share of the segment, according to the BA.

BA 2021 Consumer Survey: 94% of Weekly Craft Drinkers Drink Other Bev-Alc Categories

In a year when craft beer volumes declined for the first time in the modern craft era, drinker interest in craft beer did not abate, Brewers Association (BA) chief economist Bart Watson said during an early July presentation of the trade group’s annual consumer poll.

“Sales trend does not equal the demand trend,” he said. “Simply put, I think there’s a lot of good things that we see in the survey — that the fundamental demand for craft has remained strong through COVID, even if sales took a hit, if we saw that channel shift from on-trade and at-the-brewery sales to off-trade and package sales.”

The number of legal drinking age adults who consume craft beer has reached its highest point (44%, up 1% from 2019) since the BA began commissioning The Harris Poll to survey U.S. craft beer consumers in 2015. Of them, the number of people who say they drink craft beer weekly has also reached its zenith — 50%, an increase of 1% since 2019.

“Not only is the total pie of craft drinkers increasing, but according to this survey, at least within that people who drink craft, are shifting their balance of drinking toward more craft,” Watson said.

However, the gap between people who report drinking more craft and those who report drinking less is narrowing. A seven-point split separated those who reported drinking more and those who drank less, down from 9% in 2020 and 17% in 2019. Watson attributed this to craft beer drinkers straying from craft beer to other beverage alcohol categories.

“We continue to see craft drinkers who say that they’re drinking less craft, the No. 1 reason that they cite for drinking less craft is that they’re drinking more of other beverage alcohol,” he said.

The survey also found that craft drinkers are what Watson described as “omni-biborous.” What that means is that nearly all (94%) of weekly craft beer drinkers say they drink from at least one other beverage alcohol category each week. The most frequent segment for non-craft consumption was non-craft domestic beer (69%), followed by wine (67%), imports (65%), spirits (62%), flavored malt beverages (54%), hard seltzer (52%) and hard cider (42%).

Craft is stealing the most share from other beer; 8.8% of consumers who said they’re drinking more craft beer said they’re doing so because they are drinking less non-craft, which is more than twice the rate of drinkers who said they are drinking less craft because they’re drinking non-craft (4.2%). Hard seltzer posted a similar ratio: 5.8% of respondents who are drinking more craft said it’s because they’re drinking less hard seltzer, while only 2.3% of respondents said they’re drinking less craft and more hard seltzer.

Wine is the largest benefactor of lost craft share, with 4.4% of respondents reporting drinking less craft and more wine; however, 5.4% of respondents said they are drinking more craft and less wine. Cannabis had a similarly close split, with 2.7% of respondents saying they’re drinking more craft and consuming less cannabis, and 2.5% saying they’re consuming more cannabis and less craft.

In the 2021 survey, the rate of weekly craft drinkers who reported also consuming hard seltzer weekly increased 2%, to 34%. Craft drinkers who also drink hard seltzer weekly nearly doubled from 2019-2020, increasing from 17% to 32%.

Meanwhile, the rate of weekly craft drinkers who reported also consuming wine declined by 2%, to 48%. The 50% rate of 2020 was wine’s peak since 2018, when 43% of regular craft drinkers reported also drinking wine weekly.

Asked why they continue to buy craft beer, drinkers’ top reason is still the beer itself.

“The No. 1 reason that people buy craft is still the beer — taste, flavor,” Watson said. “Every year we’ve done this, 95%+ of people have said, ‘That is a reason that I drink craft.’ There’s other variants of that too — freshness or aroma — that all score very, very highly.”

Some consumers said they purchase craft beer for what Watson dubbed its “value components” — that it’s local and independently owned. Recognition of the BA seal, the upside-down bottle insignia the BA allows its members to include on packaging and marketing materials to demonstrate their membership and independence, has increased 14%, to 68% among weekly craft drinkers. A majority of non-weekly craft drinkers (52%) also reported recognizing the seal.

Anheuser-Busch Appoints Brendan Whitworth as North America Zone President

Anheuser-Busch InBev has pulled from within its ranks for its next North American Zone and U.S. CEO, naming Brendan Whitworth to the post.

Whitworth, who has worked within A-B since 2013, had served as the world’s largest beer manufacturer’s U.S. chief sales officer. He took the reins July 1 from Michel Doukeris, who supplanted Carlos Brito as CEO of A-B InBev global.

“Over the last four years, Brendan has helped to shape and drive our 10-year commercial strategy. His market insights, consumer-first mindset, and strong leadership have been invaluable assets on our journey to lead industry growth,” Doukeris said in a press release.

Whitworth’s successor as chief sales officer will be named at a later date, the company said.

Denver Craft Beer Bar Falling Rock Tap House Permanently Closed

After 24 years in business, iconic Denver craft beer bar the Falling Rock Tap House permanently closed June 27.

Owners Chris, Steve and Al Black made the announcement in a blog post titled “So long and thanks for all the beers.” They acknowledged that the news “may come as a shock” to some of their patrons, but the COVID-19 pandemic’s effect on the Falling Rock’s business “has just been the icing on the cake of the last five years.”

“A year-long construction project that caused a 30% drop in sales, changes in the neighborhood that have impacted our business negatively (like crazy late-night crowds and decreased office usage), continued increasing competition from our suppliers, challenges in finding kitchen staff plus rapidly increasing costs all have added up to a financially unsustainable situation,” they wrote. “After consultations with our landlords (who have bent over backwards during COVID to help us and have been amazing for the last 24 years to work with) we have all decided that us closing will allow both parties to move on without causing financial harm to either one.”

The Blacks thanked their customers, staff and craft brewery partners for the last 24 years. They offered “special thanks” to Crooked Stave Artisan Distributing, Elite Brands and California’s Russian River for their help over the years.

The Blacks also thanked the customers who purchased beer from their cellar sale and those who donated to a GoFundMe campaign earlier this year that raised $18,900 from 177 donors, but fell shy of its $30,000 goal.

“You got us through the winter and gave us a shot at surviving, I’m sorry that we didn’t ultimately succeed but you have our undying gratitude,” the Blacks wrote. “Thank You.”

Natalie Cilurzo, Russian River co-owner and president, called Falling Rock’s impending closure “absolutely heartbreaking news.”

“Chris and Cheryl have become good friends which makes it even sadder knowing what a painful decision this was to make and how devastated they are feeling,” she told Brewbound. “Before Falling Rock opened, Rock Bottom was pretty much the only place to hang out in Denver during GABF. Once Chris opened his specialty import and craft beer-centric bar in LoDo, we all flocked to see it that first year and never stopped being the gathering place whenever we are in Denver.”

The cancellation of 2020’s GABF due to the COVID-19 pandemic proved to be more adversity for Falling Rock.

Duvel USA Taps Seraf De Smedt as President, Names New Leadership Team Put Wellness Industry ‘On Notice’

Duvel Moortgat named Seraf De Smedt president of Duvel USA, the parent company of Boulevard Brewing and Brewery Ommegang, in early June.

De Smedt assumed the top role in the company from Boulevard founder John McDonald, who returned to retirement.

McDonald temporarily paused his retirement in January when Jeff Krum resigned as president in the midst of a sexual harassment and toxic workplace scandal that rocked the Kansas City, Missouri-headquartered craft brewery that also brought about the dismissal of the company’s chief financial officer and three additional employees, as well as the resignation of VP of marketing Natalie Gershon.

“Since Boulevard became part of the Duvel Moortgat family of breweries in late 2013, Seraf has been an instrumental leader for our company,” McDonald said in a release. “He has always worked closely with our U.S. operations, so having him take over the reins as president gives me great confidence that we are set up for a successful future.”

De Smedt, who has served as chief finance and administration officer for Duvel Moortgat since 2013, will split time between the U.S. and Belgium, working with the U.S. leadership team while also overseeing the Duvel’s global finance team.

Rounding out Duvel USA’s leadership team are:

• Bobby Dykstra, executive vice president of sales and marketing;
• Rick DeBar, general manager of Brewery Ommegang;
• Steven Pauwels, brewmaster of Boulevard;
• Dali Grabar, director of engineering for Boulevard;
• Julie Weeks, vice president of communications and culture;
• Stephanie Walker, director of human resources.

Lord Hobo Leadership Moves: Brian Walsh Takes Over as CEO

Lord Hobo Brewing Co. appointed industry veteran Brian Walsh as the Woburn, Massachusetts-based craft brewery’s new CEO in mid-June.

Walsh, who last served as CEO of Smuttynose Brewing Company, assumed the post from Lord Hobo founder Daniel Lanigan, who will remain a member of the company’s board of directors.

Speaking to Brewbound, Walsh said his goal is to bring stability to Lord Hobo and fix the brewery’s foundation. For Lord Hobo employees, that means “an ongoing open-door policy” for them to bring issues directly to Walsh.

“We take this very seriously,” he said of the allegations levied on social media.

Part of Walsh’s plan to reboot Lord Hobo includes reorganizing the company’s leadership structure with eight department heads, including the human resources manager, reporting directly to him. Those department heads will be assembled from the brewery’s existing workforce, with an eye on gender equity to ensure representation within its leadership team.

Among those leaders will be long-time employee Kate Ballenger, who will continue as head of retail operations and general manager. Walsh believes this will help provide stability within the organization and foster “an open and honest” dialogue with their teams.

Walsh is encouraging employees to report any misconduct to those eight department heads, who will share the information with him and the company’s HR manager.

In addition to Walsh’s hiring, Lord Hobo appointed long-time beer industry exec Simon Thorpe and Wendy Nowokunski, a director of the private investment firm that acquired a stake in Lord Hobo in 2017, to the brewery’s board of directors.

The leadership moves at Lord Hobo follow Lanigan’s name appearing in posts among the thousands of Instagram stories shared by both Brienne Allan (@ratmagnet) and Embolden Act Advance (@EmboldenActAdvance) from women who have experienced harassment, misogyny and assaults while working in the beer industry. Lanigan was specifically referenced in at least three posts making allegations that he made advances to female employees.

Following those stories, Nathan Whipple, then-Lord Hobo president, posted an apology to the company’s social media accounts, announced an investigation into the allegations and affirmed the brewery’s commitment “to providing a safe community, free of harassment, bullying and discrimination in all forms for our employees, industry partners, and customers.”

Walsh steps into the lead role of a brewery that was once among the fastest growing in the U.S., with distribution in 15 states. Lord Hobo’s production declined 36%, to 30,075 barrels of beer, in 2020, according to production data in the Brewers Association’s May/June issue of The New Brewer. Those declines indicate the negative impact of the COVID-19 pandemic on Lord Hobo’s at-the-brewery and draft businesses.

At Smuttynose, Walsh helped lead the post-bankruptcy turnaround of the New Hampshire craft brewery. He brings several years of high-level executive experience to Lord Hobo, including stints as president and CEO of both Pittsburgh Brewing Co. and Long Trail Brewing Co. prior to taking the reins of Smuttynose. In the early 2000s, he served as VP and general manager of Labatt USA’s northeast division.

SweetWater to Take Over Red Truck Brewing’s Fort Collins Production Facility

The westward expansion of Atlanta’s SweetWater Brewing Company under Canadian cannabis firm Tilray continues.

After adding distribution in Colorado earlier this year, the company will go deeper in the Centennial State with the acquisition of a 32,450 sq. ft. production facility, taproom and restaurant in Fort Collins that had housed the U.S. operations of Canada’s Red Truck Brewing Company since May 2017, and Fort Collins Brewery before it.

In addition to the new production facility, the company has also opened the SweetWater Mountain Taphouse at Denver International Airport as part of a partnership with Concessions International (CI). The Denver airport is SweetWater’s second airport bar collaboration with CI, following the SweetWater Last Call Bar and Grill at Atlanta’s Hartsfield-Jackson International Airport.

SweetWater founder and CEO Freddy Bensch said in a press release that the Colorado expansion “truly brings things full circle,” returning the team to where their brewing careers began at Boulder Brewing Company in 1992.

“We have a lot of respect for the beers and brewers from Colorado and look forward to raising a glass in this great state,” he said. “There’s not a more perfect location to expand our brand and help grow the reach of our heady, high-quality brews with beer drinkers throughout the West Coast.”

The move appears to be a little abrupt. In mid-June, the Coloradoan reported that Red Truck had pitched an expanded beer garden to the city of Fort Collins. That story noted that the brewery’s taproom and restaurant, then known as the Truck Stop, had been closed to the public since March 2020. Social media posts indicated that the company was still producing beer for distribution.

SweetWater said it will offer Red Truck employees roles with the company and hire additional workers.

The facility will produce cans and kegs of core offerings such as 420 Extra Pale Ale and H.A.Z.Y. IPA and specialty offerings for distribution in the western U.S. The brewery “will undergo an extensive renovation,” including “enhancements to the brewing and packaging areas,” and a “facelift for the taproom and restaurants.”

SweetWater will also honor existing contract brewing arrangements that are ongoing at the facility.

Year-to-date through June 13, off-premise dollar sales of SweetWater 420 Extra Pale Ale have declined -12.6%, to nearly $8.7 million, according to market research firm IRI. Those numbers come against the backdrop of tough year-ago pandemic-driven comps and a largely reopened on-premise channel. 420’s dollar share of the craft beer market so far this year has declined -0.05%, to 0.39%, the firm reported.

SweetWater produced 226,639 barrels of beer in 2020, a decline of -13%, according to the Brewers Association’s (BA) New Brewer magazine. That made SweetWater the 11th largest BA-defined craft brewery by volume.

Molson Coors Ceases Production of Coors Hard Seltzer in US

The river has run its course for Coors Seltzer. In a message to the company’s wholesalers, Molson Coors chief marketing officer Michelle St. Jacques and U.S. sales president Kevin Doyle announced the company will cease production of Coors Seltzer, asking wholesalers to sell through remaining inventory.

The company pointed to the struggles of beer-branded hard seltzer line extensions — while also noting the success of its Vizzy Hard Seltzer — as the reasons behind the decision to discontinue Coors Seltzer, which launched in September 2020.

Citing proprietary data, St. Jacques and Doyle noted that Anheuser-Busch InBev’s Bud Light Seltzer has declined 5.2%, and Constellation Brands’ Corona Hard Seltzer has declined 26.1% in the four-week period ending June 27 compared to the same time last year. In the same period, sales of Vizzy Hard Seltzer have increased 66% compared to last year.

“You can see the clear contrast in performance when compared to brands that have seen the most success over time, such as White Claw and Truly, and those that have enjoyed more recent successes, like Vizzy Hard Seltzer and Topo Chico Hard Seltzer,” St. Jacques and Doyle wrote. “That’s why we’ve made the decision to discontinue Coors Seltzer in the U.S. and commit our energy, resources, material supply and shelf space to Vizzy and Topo Chico Hard Seltzer.”

The company is asking wholesalers to replace Coors Seltzer with Topo Chico and Vizzy at retail, which it said are the No. 3 and No. 5 growth brands in the hard seltzer segment over the last four weeks.

Off-premise dollar sales of the Coors Seltzer variety pack have totaled $24.4 million at multi-outlet food and convenience retailers since launching in September 2020 through June 13, according to market research firm IRI.

Coors Selzer was available in a variety 12-pack featuring Lemon Lime, Mango, Black Cherry, and Grapefruit flavors. Each 12 oz. slim can checked in at 4.5% ABV and contained 90 calories.

Touted as a hard seltzer “with a mission,” Coors Seltzer partnered with Change the Course, a non-profit organization that focuses on preserving rivers. Each purchase of a Coors Seltzer 12-pack triggered a donation from Molson Coors to Change the Course that would provide the services to restore 500 gallons of fresh river water, up to 5 billion gallons through the end of 2021.

Despite its frosty reception in the U.S., Molson Coors will continue producing Coors Seltzer for the Canadian market, where the brand holds a 3.7% share and is the sixth-best selling brand in the segment four months after its launch, Doyle and St. Jacques wrote. Vizzy is also available in Canada, but Topo Chico is not.

“It’s never easy to discontinue a brand that you’ve poured your heart and soul into,” St. Jacques and Doyle wrote. “However, if a brand isn’t performing up to our expectations, we will pivot quickly and shift resources where they can make a bigger impact.”

Indeed, the discontinuance appears to be a swift decision, as in June the company announced the release of Orange Cream Pop Coors Seltzer.