Brewscape: The Latest Craft Beer Brand News

A-B Ceases Operations at Platform and Dishes Out Layoffs at Other Craft Breweries

Anheuser-Busch InBev (A-B)-owned Platform Beer Co. ceased operations in February, less than four years after the Cleveland-based brewery was acquired and joined the beer giant’s craft unit, the Brewers Collective.

The brand will live on as three IPAs – Haze Jude IPA, Odd Future Imperial IPA, and the new Canalway IPA – according to an A-B spokesperson.

Brewbound spoke with leaders from A-B’s High End division – which includes the Brewers Collective – in December. They said the division’s priorities for 2023 were “maximizing” Stella Artois, growing its premium lagers and continuing to lead craft growth with its Brewers Collective brands.

Brewers Collective VP of marketing Carrie Shafir noted the craft division consists of 20 brands, and “if we’re not focused, it can get messy very quickly.” She said the division would continue to focus on “leading with style” and gaining share in “top performing craft styles.”

One day after the news of Platform’s shutdown, reports began to roll in of layoffs at some of A-B’s other craft breweries. Employees have been let go from Houston, Texas-based Karbach Brewing and Patchogue, New York-based Blue Point Brewing, according to LinkedIn posts from workers. Layoffs have also been reported at Lexington, Virginia-based Devils Backbone, Asheville, North Carolina-based Wicked Weed, and Chicago-based Goose Island Brewery, A-B’s largest craft brewery.

It is unclear how many employees or breweries were affected. In a statement to Brewbound on February 23, A-B High End division president Andy Thomas said:

“Winning in craft remains a key pillar of our strategy to lead and develop the Premium segment, but winning means something different in today’s marketplace than it did a few years ago. This week, several of our craft brewery partners announced local team updates that will allow them to better address evolving consumer needs and trends in their home markets and beyond. As the craft industry continues to transform, we’re staying laser focused on continuing to lead growth in the segment.”

A-B has long had ties to craft beer, beginning with investment in Widmer Brothers and Redhook nearly 30 years ago, which evolved into the Craft Brew Alliance (CBA) in 2008, the platform of eight craft brands A-B acquired in totality in 2020 after owning a 31.2% share.

The world’s largest beer manufacturer began acquiring craft breweries in its own right early in the last decade, beginning with its purchase of Goose Island in 2011. Since then, the Brewers Collective has expanded to include 20 brands nationwide.

House Beer Racing Back on the Scene Under New Ownership

Premium craft lager brand House Beer is revving things up in 2023 with new ownership. The decade-old company is set to be acquired by motocross athlete Carey Hart, who will “restart production and bring the brand back to its former glory,” House Beer announced in February.

The Venice Beach, California-based craft brewery was founded in 2013 with a focus on on-premise sales, As a result, the brewery struggled to find footing when shutdowns from the COVID-19 pandemic “diminished” its business, and House Beer halted production in early 2022 with little fanfare.

Hints that House Beer may be returning began in September, when the brand returned to its Instagram page after a more than six-month hiatus. In response to comments asking if the beer was returning, the company said “our beer is heading out to more bars and restaurants very soon.”

Financial details of the deal were not disclosed.

“I am thrilled to have the opportunity to return House Beer to the market,” Hart said in the release. “The beer has always been a favorite of mine, and I knew I wanted to be a part of letting it come back to life. House Beer has a diehard fan base and a rock-solid flavor profile, and I am excited to help it reach new heights.”

Hart, who is married to singer-songwriter Pink, plans to “bring a new level of energy and innovation” to House Beer, while “still maintaining the brand’s traditional brewing methods and commitment to quality,” according to the release. The first batches of House Beer’s flagship House Premium Craft Lager (4.5% ABV) will be available in Southern California beginning in March, in 12 oz. can 6-packs and 12-packs, 12 oz. stubby bottles, and on draft. The beer is being produced by “a contract facility on the Central Coast,” a spokesperson told Brewbound.

Hart plans to “refocus” on his home market of Southern California, as well as introduce House Beer to grocery stores, and increase the brand’s share in the off-premise, according to the release. Scout Distributing will be House Beer’s “primary distributor,” but the company “may have announcements soon about other distributors,” the spokesperson said.

“We’re delighted to have found a new steward of the House Brand in Carey,” former CEO Chris Barrow said in the release. “We can’t think of anyone better suited to carry forward the legacy of the brand into the coming years, and we’re excited to share a House with him as soon as the cans start rolling off the line.”

Sierra Nevada Makes Minority Investment in Riot Energy; Will Package and Produce

Sierra Nevada Brewing Co. has made a minority investment in Riot Energy, a Venice, California-based energy drink company. The California brewery will “initially serve as an investor,” but will “eventually produce and package Riot Energy products” once its CanDo Innovation Center is up and running.

Sierra Nevada announced construction of the 85,000 sq. ft. CanDo facility in September. The Chico, California-based production facility will have a 500,000-barrel annual capacity and will be dedicated to beyond beer offerings, including Strainge Beast hard kombucha and non-alcoholic versions of Sierra Nevada’s existing beer offerings.

The investment in Riot may help the more than 40-year-old brewery connect with younger consumers who are “seeking better-for-you recipes,” according to the release. Founded in 2016, Riot is a “100% plant-powered,” certified organic energy drink company. Its products contain “no added sugar, no artificial sweeteners and no unrecognizable ingredients.”

“Consumers are underserved by the big beverage brands,” Riot founder Laura Jakobsen said in the release. “We are creating a different, more crafted choice to be energized with the simpler, cleaner ingredients consumers are demanding, yet current category brand leaders aren’t trusted to deliver.”

Sierra Nevada was the third-largest craft brewery by volume in 2021, according to the BA. The company produced more than 1.1 million barrels of beer in 2021, a -1% decline year-over-year (YoY). 2022 was “relatively flat and down just slightly from a volume perspective,” Sierra Nevada VP of sales Ellie Preslar told Brewbound in September.

Riot marks Sierra Nevada’s second foray into M&A, albeit a minority stake. In February 2019, the company acquired San Francisco-based Sufferfest Beer Company, a craft brewery whose gluten-reduced offerings were marketed toward athletes and made with ingredients such as bee pollen and sodium. However, by the end of 2020, Sierra Nevada discontinued the Sufferfest brand.

Braxton Brewing Spins Off Garage Beer into New Company

Braxton Brewing Co. has formed a partnership with brand investment marketer Andrew Sauer to spin off its Garage Beer light lager into a new company: Garage Beer Co.

Sauer, who will serve as president of Garage Beer Co., will focus “on growing distribution, sales and notoriety” of Garage Beer, while Covington, Kentucky-based Braxton will handle production of the 4%-ABV, 95-calorie beer. In addition to producing the lager, Braxton will continue selling the beer in its taprooms and promoting it throughout the Cincinnati area.

Speaking to Brewbound in February, Braxton co-founder and CEO Jake Rouse described the creation of Garage Beer Co. as “a true partnership” with Sauer. Braxton will maintain an equity ownership stake in the newly formed business along with Sauer.

“The newly formed Garage Beer Company has the ability to bring more resources to growing Garage Beer to a much larger footprint than Braxton can,” Rouse said. “It just basically allows us to level up focus and an ability to scale in a much larger way.”

Sauer will bring a national brand perspective to Garage Beer and “truly focus on growth,” with a dedicated sales and marketing team for the brand, Rouse said.

As president of Garage Beer Company, he will also have the autonomy to lead the organization, including raising capital. A CPG marketing professional who previously worked for Jim Beam and J.M. Smucker Company and most recently served as CEO of Hilo Nutrition, Sauer will be tasked with “fueling stronger, more strategic growth, including attracting new consumers, shelf space and celebrity talent,” according to a press release.

“This team expansion, to us, will allow the Braxton team to do what they love the best, and to get back to their roots as beer makers,” Sauer said in the release. “While we get to focus on bringing the best light beer on the market to more people, we’ll focus on our Midwest roots first, and expand into new corners of the world who are thirsty for something authentic, innovative and different. We’re all really excited about the growth and expansion potential of this amazing brand.”

Garage Beer launched in August 2018 as a 15-pack priced at $15.99. The brand maintained that $15.99 price point until last year, when retailers increased it by about $1, Rouse said.

The spin off comes as Braxton has reformulated Garage Beer’s recipe to make the beer “lighter.”

Garage Beer also received a packaging refresh and will begin hitting retail shelves in 16 oz. 6-pack cans, 12 oz. 15-pack cans, and 19.2 oz. single-serve cans over the next couple of weeks, Rouse said.

In 2021, Braxton Brewing’s production was flat at an estimated 20,000 barrels, according to the most recent data available from the Brewers Association. Braxton ranked as the largest taproom brewery by volume in the south region as designated by the trade group.

With Sauer taking the lead on marketing and selling Garage Beer, Rouse told Brewbound that Braxton will be able to focus on launching new brands and opening new brewery locations in the Cincinnati/Northern Kentucky International Airport and in Union, Kentucky.

“I’m excited overall about what Braxton has in store and super excited as we continue to use most of our capacity for Garage Beer while we grow together,” Rouse said.

Montauk Begins Distribution Expansion Following Acquisition by Tilray Brands

Montauk Brewing Co. has begun the distribution expansion leadership promised following its acquisition by global cannabis firm Tilray Brands. The New York-based craft brewery has begun distributing in Connecticut and Rhode Island, in addition to filling out its presence in New York and New Jersey.

Montauk’s existing network includes Boening Brothers on Long Island, SKI Beer in New York City and Kohler Distributing in northern New Jersey. Over March and April, the brewery has filled out the remainder of New Jersey with Shore Point Distributing and Kramer Beverage, as well as upstate and western New York with Oak Beverage, A.L. George, Saratoga Eagle, Lake Beverage and Dutchess Beverage.

For its new states, the brewery has partnered with Northeast Beverage and F&F Distributors in Connecticut, and C&C Distributors in Rhode Island. The company is also eyeing “even more areas for distribution over the next few months,” according to a press release.

“Over the past 10 years, our fans have been asking for Montauk on tap in their favorite bars outside of Long Island and NYC, and we are so excited to finally deliver,” Montauk co-founder Vaughan Cutillo said in a press release.

Montauk’s flagship Wave Chaser IPA (6.4% ABV), which accounts for about 50% of Montauk’s business, will “lead the charge” with the expansion, along with the brewery’s seasonals Montauk Summer Ale (5.6% ABV) and Watermelon Session Ale (4.9% ABV).

Tilray acquired 100% ownership of Montauk in November for an initial purchase price of $35.11 million, made up of $28.688 million in cash and $6.422 million in stock, according to a 10-Q filing. Tilray was still in the process of assessing the final fair value of Montauk’s net assets as of Tilray’s Q2 2023 earnings report in January, but preliminary estimates value the brewery’s total assets to be worth $53.403 million, with $8.048 million in liabilities, for a net asset value of $45.355 million.

Montauk joins a bev-alc portfolio Tilray has been building since 2020, including Atlanta, Georgia-based SweetWater Brewing, Breckenridge, Colorado-based Breckenridge Distillery and San Diego, California-based Green Flash and Alpine Brewing. At the time of the Montauk acquisition, Tilray chairman and CEO Irwin Simon expressed the company’s intent to “leverage SweetWater’s existing nationwide infrastructure and Montauk Brewing’s northeast influence” to “significantly expand” Tilray’s overall distribution network and grow all its bev-alc brands.

“Our meetings with distributors in these new footprints have been exciting and productive,” Tara Hanley, Northeast area sales manager for Sweetwater and Montauk, said in the release. “They see the momentum and impressive scan data in Metro NY, so the time is perfect for Montauk to expand. The fans are ready, the brand is ready, and we are ready to work closely with all of our new partners.”

Montauk’s production volume declined -4%, to 46,935 barrels, in 2021, the majority of which was contract brewed, Montauk general manager Terry Hopper told Brewbound in November. The combined annual output for all four of Tilray’s craft brands would be more than 309,000 barrels of beer, according to the BA’s 2021 estimates.