Wrapping Up the 2022 Craft Brewers Conference

Justin Kendall [00:07] Hey everyone, we are here at the Craft Brewers Conference 2022 in Minneapolis, Minnesota. My name is Justin Kendall, and I am the editor of Brewbound, and I am joined by my colleague Jess Infante, the managing editor of Brewbound. How you doing,

Speaker 2 [00:21] Jess? I'm great, Justin. It's nice to be here. How are

Justin Kendall [00:23] you? I'm doing well. Are you enjoying the Craft Brewers Conference?

Speaker 2 [00:26] Yeah, yeah, it's always nice to see everybody. Uh, clearly a really good turnout this year. Uh, we just had a craft brewers conference in September in Denver, but, uh, now we're back on. The BA's regular spring schedule for CBC. So nice to be here.

Justin Kendall [00:40] Yeah, and we're told that about 10,000 people are here. Uh, I can't remember how many are international, they said 10%, about 10%. So lots of folks here. This, uh, trade floor is bustling. I don't know if anybody's buying anything, but we can find that out later. Um, we got out of the general session a little bit ago. Bob Pease opened it up, the president and CEO of the Brewers Association. And Bob was a little bit optimistic.

Speaker 2 [01:06] Bob was very optimistic. Bob acknowledged the struggles of the past two years. It's certainly not been easy for for any industry, but particularly, uh, very much felt by the craft beer industry in terms of the pandemic closing the on-premise supply chain issues, uh, crunch for workers, inflation. Uh, a million things have really made life a lot more difficult for everybody in this industry, and Bob acknowledged that, but he did say that the past 12 months have really improved, at least for the Brewers Association as a trade group. Uh, they laid some people off in the beginning of the, uh, pandemic due to the loss of revenue. From in-person events, but they've been able to start rehiring. They've added a headcount in terms of, uh, diversity and inclusion, uh, technical brewing, external HR state and government affairs. So, uh, he said the organization's been stronger than ever.

Justin Kendall [01:54] Yeah, Bob really hit on the state and government and affairs, especially direct to consumer shipping and sales. That seems to be one of the priorities of the brewers Association for this year, and they really have beefed up that, uh, the, uh, state and federal affairs staff. They've got Mark Sorini now. They've got Nancy Palmer. They've got Sam Dewitt on. Staff Nancy was the executive director of the Georgia Craft Brewers Guild, so she's back in the fold doing things now and yeah, they hit on the, the need for more restaurant, uh, revitalization revitalization fund money, getting that replenished. They hit on the treasury report that came out by. About competition.

Speaker 2 [02:35] So speaking of, uh, government funding, which you just mentioned, uh, BA, uh, board of directors Chairman Garrett Marrero, the co-founder and CEO of Maui Brewing, said in his address that $1.5 billion of government aid has gone to craft brewers through, uh, both the Paycheck Protection Program and the Restaurant revitalization fund. Uh, however, a lot of people that applied for and were approved for funds from the RRF were shut out because the fund had. Out of money now there's a bill that's working its way through Congress that would tap that fund up back up. Uh, it was recently passed by the House and now we're waiting to hear on, on what happens for the Senate, but whether or not more government funding comes through has yet to be seen, but also could be really important. It certainly could help, as Chief economist Bart Watson said, make or break a lot of brewers, uh, futures this year. Yeah,

Justin Kendall [03:22] and Bart really hit on this being a make or break year for craft brewers. His presentation was more, you know, glass half full versus glass half empty, and I kind of lean a little more glass half empty. Uh, there was, there's just a lot of supply chain issues. There's price issues out there right now. Everybody's taking price. That was a, uh something that Bart brought up and really he, it felt like Bart gave people the green light if they were on the fence about. Taken price to go ahead and do it.

Speaker 2 [03:56] Yeah, he absolutely did. Uh, one thing that Bart said when he started talking about the pricing portion of his address was if you have an increased price, why? Uh, Bart pointed out that the overall beer category in the last four weeks of scan data price has gone up about 5%, but for BA defined craft brewers, that number is less than half, only 2.3% price increases across the board for BA defined craft brewers, and we know that consumers typically are willing to pay more money for what they think to be is a better product. So certainly it seems like if you haven't taken price yet, now is definitely the time to do that.

Justin Kendall [04:29] And in a conflicting sort of manner, you, you don't. Know whether we're heading into a recession or not, and that was something that was surprisingly not brought up during any of the talks today.

Speaker 2 [04:40] No, we did not hear the word recession once.

Justin Kendall [04:42] So another thing that came up was Bart mentioned that brewers are really going to have to look for new niches for growth. We're in a maturing market. It's just not the same. You can't rely on everything you relied on in the past, and so you're going to have to look to new areas and that might be outside of, you know. IPA, right,

Speaker 2 [05:01] yeah, Bart did call on the fact that one thing that is really a huge plus among the craft beer industry is innovation. And while Bart did mention that he doesn't, he, Bart joked that he could be retiring and still be saying years from now that IPA grew again, but he also mentioned fruit and sours as being a style to look out for them, one that's been growing in popularity. So we could see, you know. I don't think anything will ever topple IPA from the top of the craft throne, but certainly there's a lot of room for innovation.

Justin Kendall [05:29] Yeah, and he also hit on low and no alcohol products, and we know about the growth of non-alcoholic beer in recent years, like even off of a very small base, but athletic brewing has really made a name for themselves and crossed that 100,000 barrel threshold, so it can be done. It's just not easy to make a really good non-alcoholic beer.

Speaker 2 [05:49] It is very difficult to make a good non-alcoholic beer,

Justin Kendall [05:52] so the message coming out of the craft. Brewers conference here is the brewers Association is stronger. Its members are stronger. They're coming out of survival mode this year, so we'll see how things pan out the rest of this year as more challenges are presented. So that about does it for day one of the Craft Brewers Conference. We're gonna wrap it up and we'll be back with more on Brewbound.com. So look for all of our coverage of the Craft Brewers conference there.