Latest IRI: Craft Holding on to Low Single-Digit Growth

Dear Client:

You have to hand it to the craft segment a bit. For as much as its grown in the last 10-15 years, and for as long as we’ve been talking about a slowdown  more recently — a couple of years now — at least in scandata, it’s holding on to a somewhat steady low-single digit growth.

In the latest IRI data, to April 21, craft is up 3.4% in dollars YTD in multi-outlet and convenience, and 4.1% in the latest 4 weeks (Easter boost, perhaps? Although we’re told the current and prior 4-week period both contained promotional activity related to the holiday). But for the longer, recent 12-week period, it’s up only 2.8%. Still… we seem to remember nearly the same stats a year ago.

Some big craft brands are showing better growth than their YTD trend. Notably, Lagunitas IPA, the fourth largest craft brand in the multi-outlet channel, is down 0.5% in dollars YTD, but slightly up in the latest four weeks and flat in the 12-week period, despite price per case measures being just a hair up.

Then, too, Sam Adams seasonal is showing better trends as the year goes on. YTD it’s down 7% in MULC, but the latest four weeks it’s up 5.4%, and down 4.5% the 12-week period, which is still an improvement from the longer-standing trend. Perhaps that has to do with the reformulated Summer Ale.

BIG GROWERS: MOSTLY THE SAME. There’s lots of red among the top 15 craft brewers, though notably there seems no slowdown in sight for Founders All Day IPA, Elysian Space Dust, and Firestone Walker 805, which are all up double digits across all periods. Space Dust, however, has a lower price per case, where the other two brands have seen rising price per case numbers. And Bell’s Two Hearted is still up single digits across all periods.

In the back half of top 30 craft brands, some other highlights. New Belgium Voodoo Imperial IPA (IRI still calls it Rampant, but that’s a throwback) is still up in a 30% clip. Voodoo Ranger is up high singles.

And Cigar City Jai Alai is still up double digits.

SIERRA HAZY STILL ON A TEAR… Sierra Hazy Little Thing is still up triple digits; further down the list, though, Sierra is having a tough time with seasonal, down around a 40% clip (last year they had some good seasonal blips, so maybe this is partially due to tough comps).  

KONA MAKING A BIG WAVE. Another standout in the latter part of he list: Kona Big Wave’s traction. That recent distribution drive [see CBD 05-02-2019] seems to have moved the needle: Big Wave is up 20% YTD, but 46% the latest four weeks and 26% for the 12 week period.

BIG IPA BRANDS HAVING IT TOUGH. Sweetwater 420 and Stone IPA, which were strong growers not too long ago, are both down low-mid singles in all periods.

Meanwhile Sam 76, which landed as one of the top craft innovations in 2018, is down double digits in all periods.

SAGE CAPITAL TRANSFERS CONTROLLING INTEREST BACK TO SCHLAFLY FAMILY

Today the St. Louis Brewery — more commonly known as Schlafly — announced that David Schlafly and “a group of local investors” have acquired the controlling interest in the brewery.

David is a cousin of brewery co-founder Tom Schlafly, so “the new ownership structure allows the Schlafly family to continue the Schlafly Beer legacy into the future,” per announcement.

The “group of investors” have been described to CBD as “a small group of individuals, some of whom are cousins of Tom and David.”

Recall that PE firm Sage Capital has been involved in the brewery since late 2011/early 2012, when Tom and co-founder Dan Kopman transferred a 60% ownership interest in the business to that group, which included David Schlafly. In 2012, employees purchased roughly a 5% stake in the brewery, but another 15% was marked for employee purchase in the future.

But Sage, which previously had a controlling interest in the company, and “several current and former employees” have now sold some units, shifting majority ownership to David Schlafly “and the group of investors.”

Co-founder Tom and Sage Capital will maintain some representation on the Board of Directors, and are minority stakeholders.

We asked the company: Why now?

“David has been an investor since 2012. Over the years, his investment has gradually increased,” a spokesperson told CBD. “But David and Tom have been having ongoing conversation about returning control of the business to the Schlafly family.  David and Tom are in total agreement with respect to the mission of building the brand and in building the community that has been so good to their family for several generations.”

Recall that former Schlafly CEO James Pendegraft left the brewery late last year amid rumors that he’d written an incendiary newsletter about a competitor [see CBD 12-10-2018]. We have not heard any news on his replacement.

Earlier this year, the company appointed Fran Caradonna to be CFO and chief administrative officer at the brewery. Fran had previously co-founded and been general manager of another local craft brewer, O’Fallon; she also co-founded the Signature Beer Company, one of Schlafly’s first wholesalers.

Asked if a new CEO has yet been named, we were told that David will be “actively involved … and as soon as our new leadership team gets settled, the team will discuss the overall organization of the brewery. Right now, our team is strong, especially with the recent hire of industry veteran Fran Caradonna as CFO and CAO.”

BEER BRIEFS:

GEORGIA YOUNGIN’ WILD LEAP BREW CO. INCREASING CAPACITY BY 60%. LaGrange, Georgia’s very own Wild Leap Brew Co. will soon undergo a “significant expansion,” per company announcement. The brewer, which turns two in a few months, is set to install “additional 120-barrel fermentation tanks” to its brewhouse this month, an expansion that will bump their brewing capacity by “nearly 60%,” according to the release. The expansion will signal a “significant increase in production and potential new markets,” the Georgia brewer said.

EDITOR’S NOTE:  UPDATE ON OUR READER APP

Good news. Our SchuPub 5.0 reader app for iPhone and Android has been fixed and updated to now include imbedded links and images, just like the email and web versions. Download the app for free and start reading BBD and all our publications in one easy place on your phone or tablet.  Search app store for SchuPub.  

Now we have three ways to read our publications:

  1. Email — while the most popular way to read, the delivery to your inbox can be unreliable, particularly as security firewalls have recently tightened to exclude most mass broadcast emails.
  2. Our Websites — This is a great alternative to email. Now all of our articles are posted at the same time as the email broadcast, and it’s a nice clean easy read with no clutter (and we keep the fonts big for the old folks), particularly on a computer or tablet.  However, loading a website onto a mobile device can be cumbersome. So….
  3. SchuPub App 5.0 — For mobile viewing, the free app is ideal.  Not only are articles now posted to the app at the same time the emails are sent, but the app now supports embedded links and images, just like the email version.  And once you’re logged in, you can stay logged in.

If you have any questions, contact our expert trouble-shooter  jessica@beernet.com.

Until tomorrow,

Jenn, Jordan, and Harry

“It’s only when you look at an ant through a magnifying glass on a sunny day that you realize how often they burst into flames.” – Harry Hill

———- Sell Day Calendar ———-

Today’s Sell Day: 4

Sell days this month: 23

Sell days this month last year: 23

This month ends on a: Fri.

This month last year ended on a: Thurs.

YTD sell days Over/Under:  0