Brew Talks Boston 2023: A Conversation with the Massachusetts Brewers Guild

Speaker 1 [00:10] Hey everyone. We are live in Boston. This is Brew Talks presented by Dogfish Head and sponsored by the Reyes Beer Division. I'm your host, Justin Kindle. I'm gonna turn this over in a little bit to Zoey Lacata, but thank you to everyone who came out today and support for the Massachusetts Brewers Guild, some of the proceeds. Yeah, give it up for the guild. Some of the proceeds of this ticket that you got today are going to the guild and we've got the guild president here. We're gonna talk to him in a minute, but, you know, I want to give a shout out first to the Brewbound team who is doing all the things behind the scenes so Zoey and I can be up here and do this thing. So, please give it up for them. I also want to shout out some of the guilds that traveled from across New England to be here today. It's super cool that you came out, so we want to appreciate you. We appreciate you being here and supporting us, supporting the Mass Guild and everybody else. So give it up for them as well. So we have 3 conversations today. The first is gonna be me and Adam up here from Castle Island. We're gonna talk about the guild's priorities and just the state of Massachusetts. Then I'm gonna turn this over to Zoey and she's gonna talk about what's next for the hazy IPA style. She's got great panelists from Vitamin C, Boston Beer's Downtown Brewery. Uh, the Samuel Adams Brewery, uh, Worm Town, and, uh, Mighty Squirrel. And then we're gonna take a networking break for a few minutes. So if you're watching at home, stick around. And then I'll be back up here and we're gonna talk state of the industry with Dogfish Head, Bump Williams consulting. Burke Distributing and Total Wine and more. So lots to come here, but let's get started. Adam Romanow, Castle Island founder, the Massachusetts Brewers Guild president, thanks for being here.

Speaker 2 [02:16] My pleasure. Thanks for having me.

Speaker 1 [02:21] So, we know the craft market has taken some lumps lately. The news today is that anchor in San Francisco is going to cease operations. They're gonna be liquidated. That's the big news. And, you know, this is a story that's playing out across the country. But, you know, when you temperature check the health of the Massachusetts scene, what are you getting back? What are you hearing?

Speaker 2 [02:48] Yeah, we actually just recently completed a health of the industry survey. This is something that we at the guild do every single year. Um, and there was, to be clear, a little bit of mixed messaging, but by and large, a number of our members are still, still feeling upbeat and positive about the industry. Uh, about 50% of our members are actually growing year over year revenue. Um, we're seeing people looking to expand. Half of our members are looking at expanding next year with additional locations. So there's definitely a lot of positivity. Um, but we are also seeing some of our members who are seeing sales decline, some who are worried about the amount of debt that they're carrying, uh, so it's a little bit of a mixed message. One very consistent trend that we've seen, which I'm sure is a surprise to nobody tuning in right now, uh, is that members have seen a big shift in their sort of revenue makeup where wholesale revenue is starting to become a smaller piece of the pie and the direct to consumer revenue, predominantly taprooms, becoming a larger piece of the pie. That's, that's kind of the one. Very consistent message that we're seeing, but on the whole, I think, you know, it's, it's cautious optimism mixed with, um, you know, keeping an eye on the news trends because they do get a little scary when you hear about a legend like Anchor closing their doors.

Speaker 1 [03:57] So as the guild president, what do you tell them? You know, what do you tell your members who are, you know, in some ways hurting as you laid out and some of them are thriving, but, you know, what's the message to them that you wanna provide today?

Speaker 2 [04:12] Uh, the message is, is pretty simple to me, quite honestly. It's stay the course, but get focused, get lean, know who you are, know what your brand is, understand your portfolio, what that mix is and what your approach to market is. I know these seem like really simple building blocks, um, but quite honestly, the tailwind that we've had the last several years isn't really there anymore. So there's still a good reason to stay optimistic, but it's a really good time to kinda drill into the core of your business, the core of your brand. And work what's working.

Speaker 1 [04:44] A little more on that focus point because that's something you and I have talked about before and I, I really like that. So how is Castle Island getting focused and simplifying?

Speaker 2 [04:56] So we haven't always embraced this mentality, but our current mode of thinking is really less is more, um, so we're looking at everything from the portfolio that goes out to wholesale, the portfolio that stays in the tap room. Um, even our event programming in the tap room, we're, we're kind of turning over every stone and saying, does this still make sense to do? Does it fit within our brand? Do we see some sort of an ROI, not, not always a financial ROI, although that's obviously key as well, but are we getting some sort of lift somewhere from it? Um, if we are, then we keep it. If we're not, then we look at maybe replacing it or just discontinuing it altogether. Um, but for anyone who's ever heard of like the parking lot exercise, you basically take everything you're doing, you put it back out in the parking lot, and it doesn't come back in the building unless you can justify a reason for doing it. We're sort of doing that on a day by day rolling basis right now.

Speaker 1 [05:45] You're the Marie Kondo of. Brewing at this point,

Speaker 2 [05:48] right? That's the nicest thing anyone's ever said to

Speaker 1 [05:50] me. Thank you. Uh, that's why I'm here, you know, uh, uh, the other thing I wanna get into is the guild's legislative priorities, and that really boils down to two things brew pub self-distribution privileges and farmers' market sales privileges. Where are those two items at this point?

Speaker 2 [06:08] Uh, so the legislative process, especially in the Commonwealth, as everyone knows, is a long and grinding process. Uh, we've got 2 years to get these goals over the threshold. Um, right now we've been attending committee hearings. Uh, we've had a ton of meetings with our state legislators trying to get them up to speed on what exactly these issues are. We have some fresh freshmen legislators this year as well, um. Which happens every 2 years, but when you get new blood in, they may not know what the issues are. So we still have legislators at the state level who think that breweries can self-distribute as brew pubs or that they can sell beer at farmers' markets. Um, consumers also think that that's the case, and it's not. Uh, so we have our work cut out for us to continue educating the consumers, continue educating the legislators, and continue to fire up our member base to get out there and help champion, champion these across the goal line.

Speaker 1 [07:00] On the surface, those don't appear to be too big of asks. I, I mean, as an outsider looking at that, but, you know, what, why is it hard to get those two over the hump at this point?

Speaker 2 [07:12] Yeah, I mean it, we'd like to think that they're reasonable asks. Um, the brew pub self-distribution issue, um, candidly impacts a fairly small subset of the breweries in the state. I think they're about 50-ish, uh, licensed brew pubs in Massachusetts out of about 220 licensed breweries altogether. Um, so we're talking about a legislative priority for a smaller section of the membership. That makes it a little bit tougher for some of the non-Brewhub members to get fired up about. As for farmers' markets, that's something that would benefit all of us, um, but we really need to do a better job as a guild of getting our membership energized and really, uh, campaigning to see these things through. Um, there is a little bit of opposition, but the, the work rests on our shoulders.

Speaker 1 [07:56] What's the challenge in getting everybody galvanized because it's sort of that, you know, rising tide lifts all boats type of proposition.

Speaker 2 [08:05] I mean, I think the challenges of the last several years haven't helped, um, in the pantheon of priorities and the fact that there are still unfortunately 24 hours in a day, uh, you gotta prioritize what matters most to your business, um, and much as I hate to say it, I think that these are not the highest priorities for everyone, um, or at least high enough to, to really see them through, but you know, again, as you said, they're, they're pretty simple asks, um, and they will make a huge difference to the members that we have that, that care about them. And the other thing that we're not talking about is they make a huge difference to the consumers. Um, if a consumer can buy beer at a farmer's market, if a consumer can get a brewpub's beer at the bar next door to the brew pub and not have to worry about it traveling 100 miles round trip, which could damage the beer, but it certainly adds cost and all that, that benefits consumers as well. So the other thing we need to be doing is really more consumer outreach and the guild is doing this right now. We've got two petitions online, one for each of the legislative agendas that we have. We're also dumping a fair amount of money into a video marketing campaign to educate consumers and again those wonderful legislators on what these these bills are all about, uh, and we're hoping that through better engagement, uh, with those three groups, the members, the consumers, and the legislators we can see this through.

Speaker 1 [09:19] So final question for you, is there anything else that you expect to be added to the guild's agenda in the upcoming years?

Speaker 2 [09:27] Um, nothing immediately on our radar. That being said, it doesn't mean that we can take this time to rest on our laurels. This is actually one of the more important times to get down to work and start reinforcing those relationships with the state legislators. Uh, they were, those relationships were really critical during the pandemic when all sorts of pandemic related efforts were being put into place but needed legislative support. We could pick up the phone and call people we already knew to help get that done. That's where we're at right now. We're, we're sort of in the entrenched and, and reinforced phase.

Speaker 1 [09:54] Well, thanks for doing this, Adam. We always appreciate you giving your support to us and, you know, sharing what's going on here in Massachusetts. So thanks for doing it.

Speaker 2 [10:04] My pleasure. Thanks for having me.