Industry News (Issue 18)

Brewery Openings Continue To Rise

Using data from Symphony IRI, Nielsen and in-house information, the Brewers Association reported that 2014 was another positive year for the expansion of beer brewed by smaller, independent breweries. Overall volume was up due to the BA’s change in its definition of craft brewer, but other signs confirmed a boom in the small brewer segment.

The U.S. brewery count surpassed 3,200 and the number of brewery licenses is above 4,500, indicating many new breweries are in planning. Thirteen states now boast more than 100 breweries. "Consumers are making a conscious choice to buy and try the plethora of options produced by small and independent craft brewers," said Bart Watson, chief economist of the BA.

The BA statistics are in contrast to the annual data released by the Beer Institute, whose figures indicate over-all growth in beer sales are flat. Using a domestic tax paid estimate, the BI reported a decrease in over-all beer sales of 0.8 percent through the first 11 months of 2014. The number of barrels being taxed during that period dropped by 1.4 million barrels.

The data confirms the growth of the flavorful beer segment known as craft, which includes breweries owned by major brewing companies, versus traditional light American lagers. The BA data indicates a nine percent growth in households trying beer styles that fall outside traditional American lagers.

The preferred style for those venturing outside the mainstream was IPA according to the BA. The IPA style accounted for 21 percent of sales volume in the craft sector as defined by the BA, which excludes brewers with more than 25 percent ownership by a brewer making more than six million barrels per year.

Magee Backs Off Lawsuit Against Sierra

In a sign of increasing competition among the leaders of the Brewers Association’s list of craft brewers, Tony Magee, owner of the Lagunitas Brewing Company, briefly filed suit claiming a trademark infringement against the Sierra Nevada Brewing Company.

The suit claimed the label of the Hop Hunter IPA of Sierra Nevada, announced the first week of January, was too similar to the label for the Lagunitas IPA, which features the three letters of the beer style in large type. A spokesman for Sierra Nevada vigorously denied any trademark infringement.

Once Twitter response proved predominantly negative, Magee quickly dropped the suit and explained his reversal in a series of tweets, including this one: “Today was in the hands of the ultimate court; The Court of Public Opinion and in it I got an answer to my Question; Our IPA's TM has limits.”

Concern about the new beer being a collaboration with Sierra Nevada, an issue raised by distributors, helped motivate Magee to file suit, he said.

Sierra Nevada ranks second on the current BA list and Lagunitas ranks fifth. Both companies have opened second breweries in Mills River, North Carolina and Chicago, respectively, and anticipate increased brewing volume.