Tiny New Hampshire Awash with Breweries

Dear Client:

Few states are tacking on breweries like New Hampshire.

Indeed, the number of craft breweries in The Granite State has increased by 33% since 2015, reports the Union Leader, citing new stats from C+R Research.

In fact, “with 5.6 craft breweries per 100,000 people, New Hampshire is among the top six states that have seen the most growth in recent years,” according to the report. Overall, New Hampshire now ranks number nine as far as brewery count per capita goes.

Some New Hampshire brewers, like 603 Brewery, Throwback Brewery and Rek-lis Brewing Co. have thrived as the competition has picked up, undergoing several expansions over the past few years.

Other brewers in the state haven’t fared as well.

FROM 15 TO 80 BREWERIES IN 3 YEARS. Neighborhood Beer Company, closed its doors “amid financial troubles” late last year. It was one of 15 breweries in the state when it opened in 2015, “but by the time it closed there were more than 80.”

Dover’s 7th Settlement Brewery closed a month later in December, bringing its five-year run to an end.

“Running a small business is hard,” Throwback co-founder and president Nicole Carrier said. “As more small breweries open, I think we’ll see more and more failing, but that is just the reality of running a small business. Some breweries will have the right mix of great beer and business acumen, and some won’t.”

Sometimes a brewery is fortunate enough to have a second chance to get that mix right, as is the case with Smuttynose Brewing Co., the state’s largest craft brewer, whose financial struggles forced the Hampton-based brewer into a foreclosure sale last spring.

And it appears Smuttynose may be making the most of their second chance. “Things are really picking up for us,” Aubree Giarrosso, the brewery’s events, retail and brand manager, told the Union Leader. “Even with this many breweries around our territory we’ve been able to grow over the last year, and I think a big part of that is being one of New Hampshire’s original craft breweries,” Aubree said.

BELL’S SAYS SAYONARA TO VIRGINIA

Late last month, we shared news that Bell’s Brewery was pulling its beer from Richmond, Virginia [see CBD 01-25-2019]. Now, the Michigan-brewer has taken it one step further, pulling its beer from the entire state of Virginia.

BACKGROUND. As we reported last go-round, Bell’s withdrawal from Richmond stemmed from their reluctance to work with middle-tier giant Reyes Holdings. Recall that Bell’s brands were set to end up in a Reyes-owned shop, Premium Distributors of Virginia, after Premium Distributors acquired Bell’s distributor for the Richmond area, Loveland Distributing, late last year.

Rather than working with a Reyes-owned entity, Bell’s decided to terminate Loveland and leave Richmond, a market where they do about 60,000 cases annually.

That explains the departure from Richmond, but why say sayonara to the entire state?

“Because of the laws in the state of Virginia, if I stayed in the market, we see a significant risk to our business,” Bell’s founder and president Larry Bell, told the Richmond Times-Dispatch.

As you could probably guess, Loveland and Premium don’t want to lose out on the business from Bell’s, so they’ve filed a complaint against the brewer with the Virginia Alcoholic Beverage Control Authority, alleging that Bell’s is in violation of the state’s franchise law, the Virginia Beer Franchise Act.

The Virginia ABC is slated to hear the dispute on March 1.

Larry said they will “fulfill existing orders” in the state with other distributors like Blue Ridge Distributing, and Hop & Wine, but after that Bell’s will begin to disappear in the state.

“It’s painful,” Larry said. “It’s really, really unfortunate and a hard decision” and one I wish we just didn’t have to take.”

It’s not the first time Larry has made a “painful” decision like this. The brewer left Illinois in 2006, after National Wine & Spirits tried to sell Bell’s distribution rights to Reyes’ Chicago Beverage Systems. Bell’s ended up staying out of Illinois until National Wine & Spirits left the state, about two years later.

BEER BRIEFS:

PA BREWERS GUILD HIRES NEW DEPUTY DIRECTOR. Pennsylvania’s official brewers guild, The Brewers of Pennsylvania (BOP), has hired the former Chair of Pennsylvania’s House Liquor Control Committee, Adam Harris, to the newly created position of Deputy Director. In this new role, Adam “will further bolster the BOP’s advocacy efforts and its quest for a more fair playing field” within the state’s three-tier system.

Until tomorrow,

Jenn, Jordan, and Harry

“The nice thing about standards is that there are so many of them to choose from.” – Andrew S. Tanenbaum

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