Craft changes on tap

In­dus­try group in Texas re­vises mem­ber­ship rules as Gran­bury brewer sells a stake to MillerCoors

Houston Chronicle - - BUSINESS - By Ron­nie Crocker

On the same day a Texas craft brew­ery an­nounced it is be­ing ac­quired by in­dus­try gi­ant MillerCoors, the group that rep­re­sents the state’s craft brew­eries said it’s chang­ing the def­i­ni­tion of what it means to be a mem­ber.

The rule change, ap­proved unan­i­mously by the Texas Craft Brew­ers Guild board, would limit full mem­ber­ship to brew­eries with no own­er­ship or con­trol­ling in­ter­est “by an al­co­holic bev­er­age in­dus­try mem­ber that does not oth­er­wise qual­ify un­der this def­i­ni­tion.”

That would dis­qual­ify Re­volver Brew­ing Co., which on Thurs­day said the craft and im­port di­vi­sion of MillerCoors is pur­chas­ing an own­er­ship stake for an undis­closed amount. Re­volver, based south­west of Fort Worth, could opt for a newly cre­ated as­so­ciate mem­ber­ship, but it would no longer be able to vote on guild mat­ters or par­tic­i­pate in its leg­isla­tive ef­forts, guild Ex­ec­u­tive Di­rec­tor Charles Vall­hon­rat said.

The rule change had been un­der dis­cus­sion for about five months, and the tim­ing of the an­nounce­ments was co­in­ci­den­tal, Vall­hon­rat said, adding that it is not meant to pun­ish brew­eries that sell to a larger com­peti­tor. He said the change re­in­forces the guild’s com­mit­ment to smaller, in­de­pen­dently owned brew­eries that rep­re­sent the fastest-grow­ing seg­ment of the beer in­dus­try but lack the re­sources of global con­glom­er­ates and of­ten have dif­fer-

ent le­gal and reg­u­la­tory goals and pri­or­i­ties.

The change also re­flects the evolv­ing U.S. beer land­scape as more craft brew­eries are ac­quired by be­he­moths such as MillerCoors or An­heuserBuschInBev. At least 14 such deals have been an­nounced so far across the U.S., the Brew­ers As­so­ci­a­tion re­ports.

“I think it’s clear that the big brew­ers are in­ter­ested in ex­pand­ing their craft port­fo­lios,” said Brock Wag­ner, owner/founder of Hous­ton’s Saint Arnold Brew­ing Co. and a guild board mem­ber.

“It’s a lot eas­ier to buy a brand than to build one. I’m not sur­prised by the an­nounce­ment.”

Wag­ner said the new def­i­ni­tion is meant to cre­ate “as bright a line as you can” even as in­vest­ments by ma­jor brew­ers, pri­vate equity fi­nan­cial groups and in­ter­na­tional own­ers have blurred the lines that were fairly clear just a few years ago, be­fore crafts be­gan to eat into the do­mes­tic mar­ket share.

In 2015, for ex­am­ple, craft beer grew 13 per­cent by vol­ume, even as the U.S. beer mar­ket over­all shrunk 0.2 per­cent. Craft mar­ket share reached a record 12.2 per­cent.

Craft brew­ers brought in a lit­tle more than $1 of ev­ery $5 spent on beer last year, ring­ing up $22.3 bil­lion in sales.

Vall­hon­rat said the Texas Craft Brew­ers Guild, whose mem­ber­ship has like­wise bal­looned to in­clude more than 200 brew­eries and 80 to 90 sup­pli­ers and other al­lied trade groups, wanted to re­it­er­ate its com­mit­ment to brew­eries that do not have the back­ing of large cor­po­ra­tions and yet “bring a lot of di­ver­sity to the in­dus­try.”

As­so­ciate mem­bers can still par­tic­i­pate in the guild’s ed­u­ca­tion, safety and mar­ket­ing ef­forts.

Other def­i­ni­tions for be­ing a guild mem­ber re­main the same: A brew­ery must be li­censed to op­er­ate in Texas, pro­duce fewer than 2 mil­lion bar­rels an­nu­ally and de­rive the ma­jor­ity of its beer “from tra­di­tional or in­no­va­tive brew­ing in­gre­di­ents and their fer­men­ta­tion.” That does not in­clude fla­vored malt bev­er­ages.

The only other Texas craft brew­ery af­fected by the rule change would be In­de­pen­dence Brew­ing Co. of Austin, Vall­hon­rat said.

Cal­i­for­nia-based La­gu­ni­tas Brew­ing, which is half-owned by Heineken, this sum­mer en­tered a strate­gic al­liance with In­de­pen­dence.

Re­volver founders Grant Wood, Rhett Keisler and Ron­nie Keisler will re­main in charge of their brew­ery af­ter its ac­qui­si­tion, Wood said Thurs­day.

The most im­me­di­ate change, he said, is that within the next two months the beer will be­gin dis­tri­bu­tion through whole­salers that rep­re­sent MillerCoors. He said the deal also gives Re­volver more re­sources to ex­pand.

Re­volver broke ground in Gran­bury in the spring of 2012 and has grown rapidly since sell­ing its first keg that Septem­ber.

Last year, it made 22,500 bar­rels, in­clud­ing five year-round beers and other oc­ca­sional re­leases. It is in the midst of an ex­pan­sion project that will dou­ble its pro­duc­tion ca­pac­ity.

In the Hous­ton area, Re­volver is best known for its Blood & Honey.

Richard W. Ro­driguez / Fort Worth Star-Telegram

Rhett Keisler is a co-founder of Re­volver Brew­ing Co. in Gran­bury. The craft brew­ery on Thurs­day an­nounced it is be­ing pur­chased by brew­ing gi­ant MillerCoors.

Re­volver Brew­ing Co.

Re­volver Brew­ing Co. opened its brew­ery in Gran­bury in 2012. Its deal with MillerCoors is one of a grow­ing wave of agree­ments by ma­jor brew­ers with craft brew­ers.

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