It’s easy to look at a seemingly successful large brewing company, see their beers (and those of their acquired brands) on the taps and shelves all over the county, knowing they are also distributed throughout most of the country, and assume all is well. But even though the craft-beer boom is in full swing, with a record number of new breweries opening throughout the nation, the industry has never been more challenging, especially for regional breweries ranking among the nation’s largest.
Last January, Mira Mesa-based Green Flash Brewing—which also operates a satellite barrel-aging brewery in Poway as well as a production brewery in Virginia Beach, Virginia, and a soon-to-open brewpub in Lincoln, Nebraska—laid off around 25 employees. Given Green Flash’s status as the 37th largest craft brewing company in the U.S., this was big news. And so, too, is today’s announcement that the company has made the difficult decision to let go of 15% of its workforce.
That percentage equates to 33 employees. Owner Mike Hinkley says that while no Green Flash tasting room or Alpine Beer Co. (a brand acquired by Green Flash in November 2014) staff will be impacted, it will touch on other departments, primarily those serving business administration functions—marketing, events and the like—in both San Diego and Virginia Beach.
“I am greatly saddened by folks having to leave the company. We simply could not compete effectively with such broad geographic reach,” says Hinkley. “We will soon discontinue shipments to distributors that currently constitute about 18% of our wholesale trade revenue. With that reduction in revenue, we have to reduce expenses accordingly.”
Hinkley reports the company has decided to consolidate distribution, reconfiguring to best serve locales nearer to its production facilities. Moving forward, beer brewed and packaged at Green Flash’s Mira Mesa facility will be shipped to California, Arizona, Hawaii, Nebraska, Nevada, Texas and Utah, while Virginia product will ship in-state as well as to Delaware, Maryland, New Jersey, New York, Ohio, Pennsylvania and Tennessee. According to a press release, the refocus will enhance the company’s operations and ability to provide consumers with fresh beer.
When asked what factors led to the need to reconfigure distribution and consolidate Green Flash’s workforce, Hinkley responded, “The industry has continued to grow more crowded and complex in recent years. Big Beer’s acquisitions and consolidation of the biggest brewers created pressure from the top. Thousands of small brewers opening across the country created pressure from the bottom. Under those conditions, we are pulling back into the territory where we are the strongest and concentrating our resources.”
When asked about the future of Green Flash’s Poway-based Cellar 3 barrel-aged beer operation, Hinkley says it will remain open and that, months ago, the decision was made that, despite management’s belief that the beers are of high quality, the amount of beer that is packaged there and shipped to retailers will be reduced significantly.
Even in the midst of consolidation, Hinkley and company are looking to the future with optimism. The Lincoln brewpub is on-schedule with a February opening timeframe confirmed. Head brewer Jeff Hanson (formerly of Omaha’s Brickway Brewery and Upstream Brewing, and Boulevard Brewing) will create Green Flash core beers under brewmaster Eric Jensen’s supervision, as well as beers of his own devising, and that facility will eventually supply the entire state of Nebraska with Green Flash product.
Should this prove a viable business model, Hinkley says they will look to replicate it elsewhere, but there are no plans for such expansion in the immediate future. For now, the company will focus on its revised approach to distribution—it had distributed to 50 states, 35 more than the count listed on its newly announced business plan.
Last year, Little Miss Brewing debuted in Miramar. Though the brewery has a tasting room built into it, that wasn’t part of the original business-plan. Owners Jade and Greg Malkin, bar-owner transplants from Arizona, intended to keep that purely a production-facility and construct satellite tasting rooms with an activity-fortified bar atmosphere in which to introduce their beers to the public at-large. The couple is currently at work on the first two of those venues, which are located in Normal Heights and Ocean Beach. We recently spoke with Jade to get a better idea of what to expect when those spots open later this year. Read more »
Last week, we provided a sneak peek of Belching Beaver Brewery‘s upcoming Vista brewpub. This week’s follow-up post is about the North County brewing company’s new production facility at 1334 Rocky Point in Oceanside. The new brewery, which is much larger than Belching Beaver’s original location, is equipped with a 30-barrel Prospero System designed by Speakeasy Ales and Lagers, that was selected for its consistency and high-tech software package. The system can pump out 120 barrels in 11-to-12 hours, which is a far cry from what its 15-barrel Vista brewhouse could brew up. That vessel is now under the charge of brewer Peter Perrecone, who will utilize it for production of barrel-aged sour beers, a number of which are maturing in oak at the Oceanside facility.
Meanwhile, master brewer Troy Smith is full-time at the new brewery, which he, his father and a single assistant assembled, piped, welded and got up-and-running mostly with their own six hands. Completion of the Oceanside brewery will allow Belching Beaver to up its production to 40,000-barrels-per-year. Should they max-out the facility, they’ll be able to get to 100,000 barrels annually. Now, they are able to distribute beers to Northern California, a territory they’ve eyed for a long time. They will start with the Bay Area, then simultaneously expand into Sacramento and Bakersfield as well as Idaho and Washington. The idea of opening a facility in Arizona and self-distributing is also appealing to ownership.
Currently the Oceanside facility is not open to the public, however, that will be rectified in the near future. A tasting room is planned, initially as a small patio at the front of the building, though they hope to eventually install a second-story catwalk that will allow visitors to tour the brewery from above and view all brewing, cellaring and packaging operations. The latter will be done using an atmosphere-controlled GAI bottling system (replacing Belching Beaver’s Meheen bottling line at its original brewery) that can fill a palate’s worth of glass in 30 minutes. It will allow the company to finally launch six-packs of 12-ounce bottles of company mainstays, Peanut Butter Milk Stout, Hop Highway IPA and Me So Honey, followed later by Beaver’s Milk milk-stout, Dammed and Great Lei IPA. Also coming are more 22-ounce beers, including a chocolate-peanut butter stout called Viva Le Beaver and brews from a rotating milk-stout series as well as a rotating coffee-beer series.
When Belching Beaver’s impressive growth is pointed out—the company plans to grow to 80 employees by the close of April—co-founder Tom Vogel downplays it, citing the much faster growth of entities such as Modern Times Beer, Saint Archer Brewery and, more recently, Coronado Brewing Company. According to Vogel, Belching Beaver is still a little company just trying to make its way while striving to make better beer. And as for those who might see production-growth and new venues as signs of a potential sale, he says that will never happen, stating, “First off, no one will want to buy a company called Belching Beaver. Secondly, I’d be the first one they’d replace and I happen to love my job.”
Should one ever doubt the power of social media, all they need do is reference the maelstrom of mixed-support, outrage, wonderment and disbelief that erupted when Jonathan Buford, the owner of Arizona Wilderness Brewing Company, posted photo of his and Mike Hess Brewing Company’s personnel huddled in MHB’s North Park brewery, along with the announcement that the two businesses would be merging. This will not be happening.
Mike Hess Sales Manager Greg Hess confirmed this morning that Buford’s post and his subsequent share on his personal page, were meant to merely get beer fans’ attention. With that accomplished, the duo and their respective breweries will go about publicizing something very close to their collective hearts, raising money for the Wounded Warrior Project. Their method for doing so, the carrot-like enticer that is the almighty mullet.
Arizona Wilderness Brewing (AWB) has set up a crowdfunding campaign page on crowdrise.com. The mission is simple—if the campaign is funded to the $5,000 mark by the time Arizona Wilderness Brewing celebrates its two-year anniversary on September 4, Greg Hess and the “beards” at AZB will don mullets. AZB will also match the donation to up the total going to Wounded Warrior to $10,000.
The photo that set the Interwebs on fire was taken during a collaborative brew day when Mike Hess Brewing and AWB crafted a Berliner weisse called My Other Vice, which will be on tap during the anniversary celebration in Gilbert. So, no earth-shattering news to report…but we’ll take heart-warming over hysteria-inducing any day.