Category: General Blogs
If there’s one theme that sticks in my head from last month’s Craft Brewers Conference (CBC) & BrewExpo America in Denver, it’s quality versus quantity. Or, more specifically, how much does the latter help or hurt the former?
The quality issue has been a running theme at the past handful of CBCs and has been a core talking point in Brewers Association director Paul Gatza’s annual State of the Craft Brewing Industry address. And it kind of has to be, especially when you’re bringing quantity into the equation. By quantity, I mean, of course, the exploding number of new breweries getting into the craft business year after year. Just last year the number of new craft operations surged by about 15 percent to 2,768 at the end of 2013.
It’s exciting but it’s also somewhat frightening and that sentiment’s certainly not lost on the folks at the Brewers Association. It’s a segment whose key players have survived and thrived largely because of an uncompromising commitment to quality. The pioneers got in the business when there was no bandwagon on which to jump or wave to ride.
But now, as everyone from financial community to amateur brewing hobbyists are hip to the accelerating growth of craft, there could be many getting into the business without getting their heads around what’s truly involved. I’ve spoken to more than a few people who’s said, “I’m a pretty good home brewer and my friends said I should start a brewery. So I did.” And more than a few others among the moneyed classes who’ve said, “I hear craft brewing’s hot, so I’m going to invest in it even though I don’t know much about it or really care all that much about beer.”
I can somewhat relate with the first group. It wouldn’t be immodest of me to say that the dozen years I’ve been writing about beer (not to mention every other beverage) that I know slightly more than the average consumer about it.
But I could never claim to know as much or more about beer than actual brewers or authors who’ve had several books published on the topic—many of whom I count among my friends. The friends not involved in beer in anyway, however, think I know “everything” about the beverage because I know a few more things about it than they do. So I’ve had them tell me on more than one occasion, “Hey, you should start a brewery.” Umm, no. There are two types of insight my experience has afforded me. No. 1: Running a brewery is hard work. No. 2: The more I learn about brewing the more I learn how little I know about brewing.
So it scares me when folks say they’d committed their every penny to a business based on nothing more than the urgings of less-knowledgeable friends.
Don’t get me wrong, I’m thrilled that there’s so much interest in craft beer and so many new players. I fell in love with craft beer my first year at Beverage World and the rise of the segment over the past decade-plus has paralleled my own personal beer geek adventure.
This is personal for me. I don’t want this surge in quantity to be at the expense of quality. Because it’s quality that really makes craft...well, craft.
Category: General Blogs
I have to be honest; I really hadn’t given marijuana or any form of pot legalization much thought before this year. I’ve more or less been indifferent on the whole movement, as I don’t really have any skin in that game, personally or professionally. It wasn’t until I attended Harry Schuhmacher’s Beer Industry Summit at the end of January that it started occupying any space in my brain because it seemed that a disproportionate number of attendees were talking about it—the stuff had just become legal in that big beer state of Colorado only a few weeks before. Some pondered whether it would be a competitive threat to the beer business.
The short answer, in my take-it-with-a-grain-of-salt opinion: of course not.
This isn’t 1933 when suddenly a substance that the public had, for 14 years, been clamoring to make legal again (and only became illegal in the first place because savvy, manipulative advocacy groups that didn’t represent the majority of the U.S. population wanted it that way) was once again legit. The three-tier system was born. The beverage alcohol supply chain was defined for generations. And, technological advances, consolidation and SKU proliferation nothwithstanding, it’s still pretty much the same system it was 80 years ago.
The logistics and infrastructure of pot are a lot more, well, foggy (pun intended). Also, for those avid beer drinkers who also partake of the wacky weed on the down-low, it’s hardly ever been an either/or proposition when it comes to bongs versus brews. And, if you’ve spent as much time hanging around brewers as I have, you’ll know many of them are pretty flexible when it comes to their philosophies on pot.
Then there’s the obvious fact that consumers enjoy beer, especially craft beer, for its flavor and refreshment, not primarily for its intoxicating effects. Few talk about the subtle notes of citrus and chocolate when toking on a joint.
That’s not to say there aren’t some dangers inherent in the legalization debate. Schuhmacher, of Beer Business Daily fame, pointed out that a major talking point among weed advocates is that it’s safer than alcohol. Rhetoric like that is something folks in the beverage alcohol business really don’t need in their lives. All that it does is provide fodder for neo-Prohibitionist organizations (Alcohol Justice comes to mind), allowing them to just sit back and watch the alcohol industry and marijuana advocates destroy each other. Sort of a passive “divide and conquer.”
In my view the beverage alcohol industry should really just stay out of the pot debate and focus on the things it does best—product innovation, logistical excellence and corporate citizenship. Let it play out organically. If it does become a legal reality nationwide, there’ll be room enough for everyone. There may even be cross-merchandising opportunities. After all, a cold, refreshing beer comes in handy when a munchies-stricken consumer needs something to help wash down that impulsively purchased tube of Pringles.
I’m joking, of course. Stay away from the pot, kids
So we are supposed to believe that suddenly the entire world is shunning a refreshing Pepsi or Coke because they have a lot of calories, but can’t wait to get their hands on a Subway sandwich filled with Fritos, or an indulgent new nachos you can gobble up on the go from Taco Bell?
Which is it, because, at least in my mind, the two trends seem to be telling me two things at once—and this is driving me slowly crazy!
Are we really seeing consumers the world over suddenly turn against carbonated soft drinks, or is there something else going on here?
Activist investor Nelson Peltz believes it’s the latter. He would like to see PepsiCo split into two parts: one for its food business, the other for its beverages. And he wants this not because he thinks the beverage part of the business would then slither away into a corner and die like some zombie from “The Walking Dead,” but because he believes it would then be able to thrive under a more “focused leadership.”
I’m inclined to agree with him. And this is despite the synergies “The Power of One” — where PepsiCo’s food and beverages have been used together in some powerful promotions—have brought to PepsiCo. The reason is that in this day and age—“The Age of Creative Disruption”—it’s not hard to see why more intense focus can only benefit a beverage business.
I’m writing this, after all, in the days following the announcement that Comcast plans to buy out Time Warner. And the news just broke that Netlfix is paying Comcast to ensure its pipeline into homes remains free of disruption by the increasingly powerful Comcast. And NBC just noticed how a vast number of its audience turned to their iPads, mobile phone and computers, instead of their TV’s, to watch the Olympics live. And I can go on and on...
Talk about creative disruption!
Our industry’s “creative disruption” can be seen in the interest in the handcrafted and the local over the distant and impersonal. It’s in the craft beer renaissance, where small brewers are giving entrenched global brands a run for their money. Case in point: I recently dined out at a newly opened gastropub in my Queens, N.Y. neighborhood and was able to savor the pub’s new house beer, brewed by the nearby, and newly opened, Queens Brewery. You can’t get much more local than that.
And that’s just beer. We haven’t even touched on the increasing number of new functional beverages—everything from beautifying drinks, to drinks that help you think better, sleep better, or stay alert longer. Or how about the premiumization of just about everything? Think Starbucks’ experimentation with handcrafted sodas.
So it may be that the pickle CSD finds itself in today isn’t so much about consumers running away from high-calorie sodas (as the mainstream media loves to so dramatically describe it) as it is about them just enjoying all the new choices they have.
Beverage companies that can focus 100 percent on navigating their way through all the new opportunities created by this creative disruption probably have a big advantage going forward.
Ever get the feeling you’re being followed? That’s exactly the sense I’ve been getting recently from a certain herbal digestif that’s been popping up in my many travels for the past year. I’m talking about Fernet, the classic spirit whose flavor has been described as a cross between black licorice and minty-fresh mouthwash. It’s enjoying a renaissance of sorts, clues of which it seems to have planted, “Doctor Who”-style—at various points in space and time for me to see.
It started last year in Buenos Aires. Before I departed for South America, the spirit barely had been on my radar, little more than a curiosity that I’d see behind the bar at some taverns and Italian restaurants. But as I was researching local tipples in Argentina I discovered that it’s enormously popular there. Italian immigrants and their descendants comprise a significant portion of the Argentine population. They pretty much brought the spirit with them.
Several months later I was in San Francisco and there it was, just about everywhere I turned—not just in bars but in ads for Fernet Branca, the leading brand, strategically posted throughout the city (I never noticed the ads all the other times I’d been to San Francisco, so it supports my theory that some nefarious time-jumping force had retconned it into my personal chronology). It’s had quite the cult following there since pre-Prohibition (and during). I asked my cousin, Tom, a previous resident of the Fog City (now residing in Los Angeles), what the deal is with Fernet. “It’s a restaurant industry thing,” said Tom, an accomplished pastry chef. “Everyone in or around the restaurants in SF drinks it...Hang with any cook and you’ll wind up drinking some.”
And, last fall, when I was in Denver for the Great American Beer Festival, a friend told me I just had to try Odell Brewing Co.’s porter aged in, you guessed it, Fernet barrels. The best way I can describe that combination is to ask you to imagine eating a handful of Andes Candies and Good ‘N’ Plenties at the same time. Not quite, but that’s about as close as I can get. But good on the Fort Collins, Colo.-based brewery for being at the forefront of a spirit-ual renaissance.
And a true renaissance it is, as noted by the folks at Sensient in last month’s issue detailing the flavor company’s 2014 Taste to Trend report: “Long seen in a small number of cocktails, Sensient researchers report that Fernet has taken the bar scene by storm. Bar patrons appreciate the vintage feel of classic cocktails, but with a contemporary spin.”
In light of that, I suspect that a great many consumers will be experiencing that “am I being followed?” sensation this year—all the way to the bar.