Craft Beer Growth Influenced By Acquisitions

USA Today writer Mike Snider reported this week that, “Big beer’s acquisitions of craft breweries caused slowing growth for smaller, independent brewers in 2016.

“Craft brewers sold $23.5 billion in 2016, according to statistics released Tuesday by the Brewers Association. That amounts to 21.9% of the $107 billion U.S. beer market. That’s up from 19% last year — and continued growth from the 10% that craft brewers held in 2012.

“Craft beer makers increased volume output by 1.4 million barrels to 24.6 million barrels. That accounts for about 12.3% of U.S. beer production, up slightly from the 12.2% craft brewers had last year.”

The article noted that, “But the loss of craft breweries acquired by major beer makers such as Anheuser-Busch resulted in 1.2 million fewer barrels in the craft beer segment, the association said.”

Mr. Snider added that, “Among the major acquisitions in 2016: Anheuser-Busch’s purchase of Virginia’s Devils Backbone Brewing Co., and MillerCoors’ Tenth and Blake division’s acquisition of a majority stake in Terrapin Beer Co., of Athens, Ga.

“That hasn’t stopped the opening of new breweries across the U.S. During 2016, 826 new breweries opened, bringing the number of operating breweries to 5,301 (97 closed).”

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CAFO Legislation Introduced in Illinois State Senate

Tom Lisi reported this week at WSIU Radio Online that, “Ten years ago, Cindy Bonnet found out she was getting new neighbors in Nora, Illinois: 10,000 cows. It’s what’s known in the industry as a ‘concentrated animal feeding operation,’ or CAFO: basically a big cow warehouse, with a giant trough under it to catch their waste.”

The update explained that, “Democratic lawmakers with districts in Central Illinois say they’re sponsoring several pieces of legislation to deal with a number of problems related to CAFOs. Senator Dave Koehler of Peoria is sponsoring legislation to address concerns over water and air pollution. He says there are many CAFO’s across the state that are not even registered.”

Mr. Lisi added that, “Farmers from Fulton County voiced their opposition at public hearings before a new CAFO site was built. They say the decision was ultimately left to county officials, and the hearing decision was nonbinding and ignored.

“The Department of Agriculture declined to comment on the complaints of public hearings on CAFOs. A spokesperson emailed the following statement. ‘The [law] requires the Department to review all relevant materials and testimony before making a final decision. If a proposal is in compliance with the rules and requirements set forth in statute, it will be approved.'”

And a news release this week from state Sen. Koehler stated that, “New legislation aimed at protecting the environment in rural Illinois was unveiled in the Illinois Senate today. State [Sen. Koehler] unveiled a package of legislation that would make changes to the regulations governing Concentrated Animal Feeding Operations, or CAFOs.”

“Joined by farmers from all across the state, Koehler introduced the legislation to bring transparency to the process of planning and expanding hog farms,” the release said.

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Bill Seeks to Create Urban Agriculture Zones

Alex Ruppenthal reported this week at WTTW Television Online that, “A Chicago lawmaker hopes to break up food deserts and put vacant lots to use by establishing urban agriculture zones that would incentivize the sale of locally grown foods.

“In February, state Rep. Sonya Harper, D-Chicago, introduced a bill that would allow counties or municipalities to create urban agriculture zones made up of organizations or individuals who grow produce or other agricultural products, raise or process livestock or poultry or sell a minimum of 75 percent locally grown food.

“The zones would work similarly to Tax Increment Financing districts, which receive subsidies to encourage redevelopment and community-improvement projects in areas in need of revitalization, said Jen Walling, executive director of the Illinois Environmental Council, which supports the legislation.”

The update noted that, “According to the bill, sales tax from agriculture products would be deposited into an urban agriculture zone fund, and monies collected in the fund would be specified for a county, municipality or school district.

“Harper said the money could be used in a variety of ways, such as for educational programs focused on nutrition or to support businesses and farms.”

The WTTW item added that, “Harper resides in her native West Englewood, where residents lack access to healthy, affordable food.

“‘I’ve lived in a food desert for the past 40 years, so it’s an issue that is very personal to me,’ she said. ‘A lot of people highlight the crime in these areas, but a lot more people are dying from preventable [causes] than from bullets.’

“The proposed bill is the latest attempt to increase agriculture and farming initiatives in Chicago.“

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Lawsuit Challenges Minnesota’s Out of State Restrictions on Grapes for Wine Making

Meagan Forbes (an attorney at the Institute for Justice’s Minnesota office, which represents Alexis Bailly Vineyard and Next Chapter Winery in their case) indicated this week at the Minneapolis Star Tribune Online that, “If you’re looking for a Cabernet, Tempranillo or Malbec at your favorite Minnesota farm winery, chances are you won’t find one. And it’s not Minnesota’s harsh winters that are to blame. It’s Minnesota’s harsh regulatory environment.

“Unlike craft brewers — who are free to import a variety of hops and barley from anywhere they please — Minnesota farm wineries are legally required to make wine with a majority of Minnesota grapes. This law props up the state’s grape industry at the expense of farm wineries, wine drinkers and our state’s economy.

“It’s time to set our farm wineries free.”

Ms. Forbes noted that, “The rise in Minnesota farm wineries has closely corresponded to the availability of Northern grape varieties — the only grapes that can grow in the state’s cold climate. Farm wineries, however, are not required to grow their own grapes, and many struggle to grow even these Northern varieties in Minnesota. Yet, when farm wineries turn to other growers to purchase additional grapes, the law forces them to buy from Minnesota growers.”

“Thus, the state cripples farm wineries’ ability to access the ingredients they need to blend and make the broad variety of wines their customers want,” Ms. Forbes stated.

The opinion item added that, “Minnesota shouldn’t be boxing farm wineries in with this kind of protectionist law. That is why Alexis Bailly Vineyard and another farm winery, Next Chapter Winery, have filed a federal lawsuit challenging Minnesota’s winemaking restriction under the U.S. Constitution. Their suit asks a simple question: Why can’t Minnesota farm wineries make wines with grapes from other states?”

“While wine may get better with age, Minnesota’s protectionism surely does not. Let’s lift these unnecessary restrictions and unleash the passion, creativity and energy of our Minnesota vintners,” Ms. Forbes said.

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Some Tech Companies Look to IPOs Instead of M&A

Bloomberg writers  Alex Barinka, Alex Sherman, and Alistair Barr reported this week that, “When it comes to choosing an exit, some closely held technology companies are betting they can get richer valuations from a public listing than from being acquired.

“Okta Inc. is one of at least five sale targets worth $1 billion or more — public or private — to have held deal talks in recent months that have fallen apart, people with knowledge of the matter said. The enterprise-software company based in San Francisco is now marketing its initial public offering to investors.

“Separately AppNexus Inc., the New York-based advertising technology company, pursued what’s known as a dual-track process, according to people familiar with the matter, in which a company pursues both a sale and an IPO to determine the best exit.”

The Bloomberg writes noted that, “Until recently, startups could count on generous private funding, with the associated generous implied valuations, and avoid the perceived hassle of being accountable to public investors. If a company had both exit options on the table — an IPO or an outright sale — the sale option looked attractive.

“The pendulum is starting to swing the other way, according to Lise Buyer, founder of IPO advisory firm Class V Group.”

The Bloomberg article added that, “The shift is at least partly due to the success of some recent listings, Buyer said. That includes Snap Inc.’s IPO, which was 10 times oversubscribed, people familiar with the matter have said, and has soared as much as 59 percent above its IPO price. Cloud-software maker MuleSoft Inc. jumped 46 percent in its debut this month.”

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Advertising Agency That Marketed Roundup Target of Lawsuits

Bryce Gray reported last week at the St. Louis Post-Dispatch Online that, “A fresh round of lawsuits against the herbicide Roundup also target a new locally based defendant: St. Louis advertising firm Osborn Barr, which marketed the product for years.

“The 231 cases filed last week in the 22nd Circuit Court in St. Louis are among the latest to emerge against Monsanto, the Creve Coeur-based agribusiness company that developed the weedkiller and is listed as a co-defendant with Osborn Barr. The filings echo hundreds of other active cases alleging that glyphosate, Roundup’s active ingredient, is carcinogenic and tied to cases of non-Hodgkin lymphoma — an association Monsanto strongly disputes and that is also the topic of competing findings of scientific groups assessing cancer risk.

“While existing lawsuits focus on holding Monsanto liable for cancer allegedly linked to glyphosate, the inclusion of the advertising agency that helped market Roundup is a different approach in the legal battle, according to the prominent environmental attorney Robert F. Kennedy Jr., who is working with a Los Angeles law office, Baum, Hedlund, Aristei & Goldman, on the cases.”

The article indicated that, “The filings on behalf of 136 plaintiffs argue that for two decades, Osborn Barr represented Roundup as a product that created ‘no unreasonable risks to human health or the environment.’ The firm stopped marketing the product in 2012.

“‘It was integral to the marketing of glyphosate,’ Kennedy said of the ad agency. ‘There was no way for our clients to understand the risk they were taking because of the deception of Monsanto and Osborn & Barr.'”

Mr. Gray explained that, “Osborn Barr declined to comment on the matter, citing the ongoing nature of the legal cases. Scott Partridge, Monsanto’s vice president of global strategy, said the arguments seeking to implicate Roundup’s marketers felt ‘contrived’ and that Monsanto’s policy has long been to put all ads through a “rigorous process” to ensure accuracy.”

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Atlanta’s Director of Urban Agriculture: Urban Ag Can Transform a Community

Andrew Alexander reported earlier this month at the Atlanta Journal-Constitution Online that, “At first glance, the urban Atlanta neighborhood of Washington Park doesn’t seem a likely place for an organic farm. But at the corner of Lawton Street and Westview Drive in west Atlanta, the non-profit organization Truly Living Well’s new Collegetown Garden brims with organic cabbages, kale, turnips, beets, carrots and more, all thriving in tidy rows of planter boxes. Pear, plum and apple trees blossom radiantly in the early spring sun, and a busy hive of honeybees buzzes away nearby.

“‘This can really be a lighthouse for nutrition for this neighborhood,’ says Mario Cambardella, the City of Atlanta’s first director of urban agriculture. Some might zero in on the signs of urban neglect and decay just outside the garden gates, but Cambardella is quick to point out the historic homes, the nearby elementary school and, on a street-facing the end of Truly Living Well’s new garden, the site of a future farmers’ market for the food being grown there.

“‘This is really building the local food economy. Urban agriculture can really transform a community.'”

The article noted that, “Cambardella was hired by the Mayor’s Office of Sustainability in 2015 to help guide projects like the Collegetown Garden to success. In the new position, Cambardella is responsible for a wide range of activities related to urban agriculture in the city, including agricultural policy development. He cultivates partnerships with local non-profits like Truly Living Well and also assists individuals and organizations in navigating the often byzantine process of permitting and zoning related to starting their urban agriculture projects.”

Mr. Alexander added that, “One goal is to transform Atlanta’s urban food deserts by bringing local, healthy food within a half-mile of 75 percent of all residents by 2020. ‘I have to show up everyday and give 110 percent,’ says Cambardella. ‘I have to be looking toward 2020. That’s a goal worthy of working toward.’

“And in the end, for him, urban agriculture is about far more than just food. ‘If we can fuel this type of activity, we can really build up points of access,’ he says. ‘And it’s about more than just lettuce. It’s the eyes on the street, it’s the kids coming to play and learn, it’s all these forces for good that create growth and cultural understanding. What’s coming out of the ground has so much value.'”

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Rusty Patched Bumblebee, First Officially Endangered Bee Species in the U.S.

Associated Press writer John Flesher reported last week that, “The rusty patched bumblebee on Tuesday became the first officially endangered bee species in the continental U.S., overcoming objections from some business interests and a last-minute delay ordered by the Trump administration.

“One of many bee types that have suffered steep population declines, the rusty patched has disappeared from about 90 percent of its range in the past 20 years. It previously was common across the East Coast and much of the Midwest, where it played a crucial role as a pollinator of crops and wild plants.

“Its listing as an endangered species means the U.S. Fish and Wildlife Service will devise a plan for returning the imperiled bee to ‘a healthy and secure condition,’ the U.S. Department of Interior said. ‘We will work with stakeholders to ensure collaborative conservation among landowners, farmers, industry, and developers in the areas where the species is native.'”

The AP article noted that, “Scientists say disease, pesticide exposure, habitat loss and climate change are among possible reasons for the decline of the bee, named for the rusty reddish patch on the backs of workers and males. Most of the grasslands and tallgrass prairies where they once thrived have been converted to farms or urban areas.”

Mr. Flesher added that, “The bee’s endangered listing, approved by the service shortly before President Barack Obama left office, had been scheduled to take effect Feb. 10. But the Trump administration, which has pledged to pare back federal regulations, said it would postpone the listing until Tuesday. Some environmental groups had feared it would be canceled altogether.”

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AgriTourism: Opportunity- But, “It’s a Whole New Business”

John Holland reported on Friday at the Sacramento Bee Online that, “At last check, the Modesto area had no Disney theme parks, cable cars or mountain peaks — little to catch the typical tourist’s eye.

“It does have fruit and nut growers, wine and cheese makers, and other producers of food and drink in abundance. And the area could get a greater share of California’s visitor spending if this were marketed well.

“A meeting Thursday explored how produce stands, tasting rooms, festivals and other ventures could increase farm income in the Northern San Joaquin Valley. Speakers also warned of county rules designed to protect the countryside from traffic, noise, trash and other impacts.”

The article noted that, “The meeting was the latest in a series put on by the University of California Small Farm Program and the UC Cooperative Extension. It drew a few dozen people to the Stanislaus County Agricultural Center, off Crows Landing Road.

“The audience heard about Dutch Hollow Farms, which offers tulips, pumpkins and other seasonal attractions just northeast of Modesto. And about R.A.M. Farms, just east of Turlock, which has corn and hay mazes, pumpkins, ice skating and more.

“Agritourism also can be an event, such as the annual Pick & Gather at Riverdance Farms.”

Mr. Holland pointed out that, “Stanislaus County zoning rules encourage farm-related activities on ag land, said Angela Freitas, director of planning and community development. She noted how they were tweaked last year to prevent weddings in the wrong places.

“Farmers also need to assure safe handling of food, proper training of employees, and insurance policies that cover what is planned on the farm.

“‘When you get into agritourism, you’re in the hospitality business,’ said Penny Leff, coordinator for this effort at the Small Farm Program. ‘It’s a whole new business, and you have a bunch of new things to learn.'”

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Tech Marketers See Opportunity in Fashion Startups

Emma Jacobs reported yesterday at The Financial Times Online that, “Luckily for [Michael Malinsky, co-founder and chief executive of KF Beauty which owns the Wunderbrow product], the perfectly arched brow is a dream pursued by legions of others. Wunderbrow’s Instagram feed is a steady stream of so-called influencers, such as Amadea Dashurie who has 620,000 followers, and CC Clarke with 780,000. Then there are the YouTube stars like GlamLifeGuru, with 2.5m subscribers and Roxxsaurus, with 1.6m. They command the attention of the right demographic, influencing the buying decisions of Wunderbrow’s target audience: teenagers and impeccably made-up young women getting ready for a night out. Many demonstrate the art of the brow groom with enthusiasm, applying the Wunderbrow with a mascara wand.

“Big eyebrows as big business is a relatively recent phenomenon, driven by social media. As befits such a market, perhaps,  Mr Malinsky, does not have a background in beauty or fashion but in internet marketing. Pull the curtain aside on this beauty start-up, and what you see is essentially a tech marketing business — albeit one that now sells its products at traditional retailers, such as Boots and CVS. Since 2015 the company has sold 2m brow enhancer kits — eight times more sales in 2016 than the year before. Last year, Mr Malinsky and his 10 employees moved from central London into the Shard skyscraper, just south of the River Thames. Today, there are 35 London employees. There is also a small team in Miami, Florida.”

The FT article explained that, “Charlotte Libby, global colour cosmetics and fragrance analyst at Mintel, the market research company, traces the turning point for brows to 2012. The market was partly fuelled by make-up experts on YouTube and Instagram, bringing professional beauty tips to a wide audience. But perhaps more important were the aesthetic demands of selfies. ‘When you view your face through a lens, then fuller brows frame it,’ she says. This is more than just another fashion trend. ‘It’s about defining a facial feature for Instagram.'”

Ms. Jacobs noted that, “Start-ups like Mr Malinsky’s jostle with large cosmetics companies, such as Estée Lauder and the LVMH-owned Benefit. Legions of high street brow bars offer treatments designed to wax, thread, colour and sculpt the furriest of features. Mr Malinsky is relaxed about the competition, insisting it helps to build the eyebrow category. ‘They’re creating a bigger pie for us to potentially have a bigger piece,’ he says.”

Yesterday’s article added that, “‘When done effectively [online marketing] can yield a very high margin, at very little upfront investment as you do not need to have inventory, support or any equipment,’ [Malinsky] says. ‘The downside is you are ultimately building someone else’s business.'”

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