Evolution and Growth Potential in the Craft Brewing Industry

About the Episode

Beer is one of the oldest food products in the world. Lawyer and craft brewer Kevin McGee of Anderson Valley Brewing Company explores the excitement of the craft beer industry and gives a brief history from Prohibition to today. He discusses the definition and concept of craft beer, what draws consumers to craft beer, the influence of private equity investments and how this changed the industry, pricing pressures, the evolution of distribution channels, and the future of this rapidly evolving industry.  

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In this Episode

1:13 How did Kevin McGee get into the food & beverage sector?
9:39 What is a nanobrewery?
14:09 What is craft beer?
16:34 How did the concept of craft beer start?
20:38 What percentage of products produced by the craft beer industry is sold in the foodservice sector versus in the retail environment?
23:40 What challenges exist in growing a small brewery beyond a single location?
30:47 Are there any segments of the food and beverage industry that are comparable to craft breweries?
32:28 Is there less brand loyalty with wine than with beer?
37:16 Are craft beers pulling market share from major players like Budweiser, or are they creating new market share?
40:33 The economics of production: Wine vs. Spirits vs. Beer vs. Craft Beers
42:26 How steep is the learning curve in beer production?
46:21 What is the standard cost of goods sold in the beer industry?
52:06 What is drawing investors to the craft brewery industry?
53:22 How will the M&A environment change over the years for the craft beer industry?
55:21 How does a recession impact the craft brewery industry?
58:45 How is craft beer being accepted by consumers on a global scale?
1:01:30 How has the craft brewery industry’s market changed over the past 20 years?
1:05:30 Are there conflicts between beer distributors and consumers?
1:11:40 What is the future of the craft brewery industry?

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Acronyms or Terms Used in This Episode

  • On-prem = On-premises
  • Off-prem = Off-premises
  • DO = Dissolved Oxygen
  • FMB = Functional Malt Beverage
  • RTD = Ready-to-Drink Beverages

Meet Our Guest

Kevin McGee

Kevin McGee

President & CEO of Anderson Valley Brewing Company

Kevin McGee is the President & CEO of Anderson Valley Brewing Company of Boonville, California, and the Founder of the Healdsburg Beer Company of Healdsburg, California.

The world’s first solar-powered brewery, Anderson Valley Brewing Company, has been making world-class beer since 1987, when it was one of only 20 craft breweries in the country. Today, the brewery leads the industry in responsible brewing and environmental sustainability practices and is widely recognized as one of the craft beer industry’s true pioneers. Healdsburg Beer Company was founded in 2007 when Kevin turned his garage into a licensed and bonded commercial brewery and then single-handedly operated the brewhouse out of it for 14 years.

Kevin has been working with beer and wine businesses for over 20 years in a variety of capacities. He is a graduate of the Executive Program at Stanford University’s Graduate School of Business and has been practicing law for over 25 years. Kevin’s background includes being the personal legal counsel and business strategist to wine industry legend Jess Jackson, founder of the Kendall-Jackson wine empire, and serving as CEO of a wine and hospitality-focused private equity firm spread over three continents.

Kevin previously worked as a prosecutor for San Mateo County and for The City and County of San Francisco and spent eight years teaching Gang Violence law and trial skills for the California District Attorneys’ Association.

Location Location: Northern California
Website Website: www.avbc.com

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