What We Learned About Craft Beer Last Week

There’s never a shortage of things happening in the craft world, but we’re on the other side of a particularly frenetic week. It was one that both spotlighted underlying dynamics and also raised questions about what’s coming next.

Here are four takeaways.

Some small craft brewers really don’t like big brewers. Just ask Wicked Weed Brewing. Shortly after Anheuser-Busch InBev announced it was acquiring Wicked Weed, the North Carolina Craft Brewers Guild said it will no longer be a voting member. That was followed by a number of craft brewers dropping out of the Wicked Weed Funkatorium Invitational, a charity event. (Wicked Weed said on their Facebook page that the event “will go on as planned and we look forward to releasing a new brewery list as soon as it is available.”) Co-founder Walt Dickinson talked to Men’s Journal about the backlash. And it was just two weeks ago Wicked Weed was named by Thrillist as the best craft brewer in North Carolina.

Most consumers care about the beer. Wicked Weed’s social media handles are chock-full of commenters saying they won’t drink its beers again. And there’s no question that some craft beer enthusiasts will take this position. That said, craft brewers that have partnered with big brewers have continued to attract beer drinkers and grow. Lagunitas Brewing Company is a perfect example of that, and last week Heineken announced it had taken full ownership of the iconoclastic California brewer. Lagunitas founder Tony Magee gave his side of the story in a 1,900+ word Tumblr post, reassuring fans that Lagunitas will not become “corpocratic” and that he is “using Lagunitas’ equity to buy deeper into an organization that will help us go farther more quickly than we could have on our own.” (Last week Molson Coors reported expansion plans for the MillerCoors family of craft brewers.)

Questions about the future of craft pricing keep popping up. With new brewers coming in, established ones expanding and total growth slowing down, that’s not surprising. Last month Boston Beer CEO Jim Koch warned that the expansion of craft 15-packs (still small, but growing) could exert downward pressure on pricing. Last week Craft Brew Alliance CEO Andy Thomas spoke to craft price elasticity, as reported by Beer Business Daily (subscription required). From the story: “The way to build a good, long-term, healthy brand franchise is to continue to drive value and charge a fair price,” said Andy. “That said, short-term tactics are not exclusive to big brewers … All’s fair in competition.”

Is Boston Beer morphing into an FMB play? There’s no question FMBs are becoming more important at the country’s largest craft brewer. As Boston Beer recently reported, first quarter volume declines for Samuel Adams beers and Angry Orchard ciders were “partially offset by increases in Twisted Tea and Truly Spiked & Sparkling brand products.” It was a similar story for 2016, as Twisted Tea and Truly grew while Sam Adams, Angry Orchard, Coney Island and Traveler declined. Then last week, as reported by Beer Marketer’s Insights (subscription required), Judy Hong of Goldman Sachs recently said Twisted Tea has “underappreciated value.” From BMI: “She values Twisted Tea brand at $776 mil, with rest of co valued just under $1.2 bil. (That’s while Twisted under 20% of Boston volume, INSIGHTS estimates.)  Twisted Tea has ‘shown consistent 10-14% volume growth’ for several yrs running.’”

Now let’s see what this week brings.