Hop Take: Craft Beer Sues Big Beer, Craft Wine Wants in on the Drama


3 minute Read

Hop Take: Craft Beer Sues Big Beer, Craft Wine Wants in on the Drama

Photo By Stone Brewing

This week saw another ripple in the Big Beer versus Independent Beer debate.

On Monday, Stone Brewing released an announcement and video detailing a lawsuit Stone filed against MillerCoors regarding its Keystone brand. According to Stone, MillerCoors co-opted the Stone Brewing brand by rolling out a recent rebranding of Keystone in which the industrial light lager is referred to as “Stone.”

This lawsuit is at least partially a publicity stunt. But it does make a point: In a big-versus-small-beer war, how far will companies go to beat out the competition? Or, from the independents’ perspective: How far will Big Beer go to “trick” consumers into buying global brands?

Now, it may also be true that consumers have been referring to Keystone as ”Stone” for decades – long before Stone Brewing’s existence.

“This lawsuit is a clever publicity stunt with a multi-camera, tightly scripted video featuring Stone’s founder Greg Koch,” says Marty Malone, MillerCoors media relations manager. “Since Keystone’s debut in 1989, prior to the founding of Stone Brewing in 1996, our consumers have commonly used ‘Stone’ to refer to the Keystone brand and we will let the facts speak for themselves in the legal process.”

To his point, some beer drinkers, even Stone fans, are conflicted about the issue.

At the end of the day, it all comes down to a matter of taste.

Craft Beer’s Private Equity Pie Is Losing Flavor

News got out last week that Storied Craft Breweries, a craft brewery investment firm, pulled out of a deal with Deep Ellum Brewing, a Dallas-based brewery. The original terms were a 56 percent stake and $8 million in growth capital, according to a report in Brewbound. Citing declining craft beer growth, Storied Craft Breweries slashed that to 24.5 percent and $1 million.

Storied’s hesitation is not unfounded: Craft beer as a category showed some positive numbers last year but, overwhelmingly, U.S. beer sales are down. Deep Ellum, however, grew 37 percent in 2017.

“We are the third-largest craft brewery in Texas, but we have the same challenges as everyone else,” John Reardon, Deep Ellum founder, told Brewbound. “We grew 37 percent, but that is not really to the credit of the investment. I credit the hustle and the heart of my team, who is continuing to squeeze beer out of a very constrained brewery.” In short, he said, “It has left me dog-paddling.”

This particular deal is a psych-out highlighting an interesting problem in craft beer today: Private equity funding craft breweries is nothing new, but after craft beer’s initial boom, less-than-ideal situations are beginning to reveal themselves once the dust settles. Investment groups that rushed to get a piece of the craft beer pie are losing their appetites, and the money is starting to dry up. Is Storied slashing its Deep Ellum deal the first crack?

The Dallas brewery’s case is a cautionary tale, and one that we’ll likely hear more versions of in the coming months and years.

And, speaking of which, whatever happened to Stone Brewing’s “True Craft” fund?

#CraftWine: Behind the Times?

Wine, haven’t you learned anything from beer?

Despite the ongoing battles of the beer world, February 9 saw the launch of a new non-profit organization out of Portland, Oregon: The Craft Wine Association.

We get it. Slap “craft” on a product and consumers are alerted to a company’s responsibly sourced, ethically produced, small-scale, allegedly higher-quality goods. Perhaps more significantly, such a distinction lets people know that a company’s product is built on its own dime — or, you know, the dime of private equity, or investors that aren’t industry members or monopolizers.

But does wine really need a craft distinction? Like the Brewers Association, the Craft Wine Association seeks to close the gap between small producers and uneducated consumers. Also like the BA, the new organization has launched a Certified Craft Wine seal for independent wineries to use on their bottles, so shoppers can easily identify which vino is legitimately small-scale.

Some wineries, like the Craft Wine Association’s inaugural member, SOGGÉ of Somerset, California, see the new distinction as a necessity.

“The American wine industry is dominated by high-volume, mechanized, and formula-driven producers,” Joseph Soggé, founder and winemaker, said in a press release. “Certification is a significant differentiator in a complex and, often, confusing marketplace.”

Sounds familiar. We love the mission to educate consumers about the products they’re buying. We love supporting small and independent businesses, too, when what they’re producing is good. And we imagine that many of the soon-to-be-designated “craft” winemakers are making some pretty good stuff, and maybe even doing great things for the category.

At the same time, we can’t help but scratch our heads about this one. Who is this designation really for?

“Millennials are expected to have the most spending power of any generation in 2018, and craft wines epitomize their values of community, simplicity, and authenticity,” said the release. “[H]owever, the complex regulatory environment can make these wines difficult to find. 84% of Millennials believe they can digest a brand’s entire story at first glance, making the messages the Certified Craft Wine seal communicates paramount.”

All right, millennials, let’s see if craft wine is what you’re looking for. And to wine producers large and small: Let the games begin.

,


Share This!