We may be well into the first month of 2015, but 2014’s industry lessons have helped us set our sights on another great year of helping our clients better prepare and equip themselves for success in a growing market. The business of craft beer has always been a serious matter to die-hard enthusiasts and brewers, but now the economics are more important than ever. Welcoming craft beer’s continued growth as an overall positive trend, we also recognize the challenges that come with competition among a symbiotic yet increasingly crowded industry. We see 3 major legal themes emerging in the coming year: mergers and acquisitions, trademark scarcity and a continued explosion in auxiliary industries.
News of 10 Barrel Brewing’s acquisition by Anheuser-Busch late last year brought out a frothy fervor amongst admirers and detractors alike. However, the deal is instructive to both large and small breweries about the increasing competitiveness of the beer industry. Sales like this one demonstrate the ballooning power that the craft beer segment wields in the larger beer market. Though craft’s slice of the proverbial pie remains a minority one, the fact that so-called Big Beer is not only taking note but making sweeping purchases of craft breweries shows that this is an industry that has real legs and will continue to expand. With acquisitions reported to be in the tens of millions of dollars, sales like 10 Barrel’s are proof that craft beer is no longer just a cadre of homebrewers armed with hard work and a killer recipe; it’s a complex, maturing industry where the books matter as much as the brew.
Whether craft brewers eye a future buy-out or choose to remain stalwart independents, 10 Barrel’s sale reminds brewery owners everywhere that there is serious money to be made and, now more than ever, the business needs to be just as well-crafted as the brews.
One particularly sticky wicket amidst this craft beer explosion is the increasing scarcity of available trademarks. Cosgrave Vergeer Kester beverage practice group spearhead Russ Rotondi previously touched on this matter in his piece about brewery branding, and his advice is more important than ever. His helpful tips for securing a trademark for your next great branding idea are paramount for breweries with more competition opening their doors every day. Without a trademark, your perfect name, logo or slogan is as good as gone. In an industry where even the name of a beer style is called into question by trademark holders, as was the case in a redacted lawsuit filed by Lagunitas Brewing Company against Sierra Nevada Brewing Company for the use of “IPA” in a certain typeface, the money brewers spend on name research both in-house and through an attorney can only benefit the brand. We predict 2015 as the Year Of The Trademark Squabble.
Finally, we welcome another banner year for the brewing-related industries of Oregon. Customers who purchase a 6-pack of craft beer off the shelf not only get tasty beer, they also support an entire chain of secondary and auxiliary businesses that help make that beer what it is. These ancillary businesses include hop and barley growers, metal fabricators who make brewing tanks and equipment, mobile canners and bottlers, local designers who help brand the beer, livestock farmers who feed spent grain to their animals, and the small towns and big Oregon cities alike that see beer tourism, just to name a few. Oregon businesses benefit from craft beer’s boom. While the “rising tide lifts all boats” mentality seems uniquely well-suited to such a collegial industry as craft beer, its effect on the beer business may be more complicated than it seems. With equipment on 15-month waiting lists at some local factories, hops being grown on exclusive contracts, and more competition for brewing jobs, we see 2015 as a year of both cooperation and friction among brewers, as the necessary tools and ingredients to turn water into beer become harder to come by. Hopefully, this means that supporting industries will continue to grow in both size and number to accommodate changes in craft beer and, likely, the remarkable resilience of craft brewers will continue to bring continued success.