Blog Entries Tagged as beer

Semper fidelis

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Category: General Blogs  |  Tags: beer

A couple of months ago I noted that the breadth of available choices is what makes the U.S. beverage market—especially beer and spirits—the envy of the rest of the world. I witness this as a consumer, as much as I do as an industry observer. I frequent a lot of bars that boast, 25, 50, even 100 tap handles. Their whiskey lists are intimidatingly robust; I don’t think I’ll get to try half of the items on the menu in this lifetime. 

But is such on-premise abundance always a good thing? 

At many of my local haunts, it’s not uncommon for Monday’s chalkboard list of what’s on tap to look nothing like the one on Thursday. There’s a complete turnover. If you happened to like something you tried Monday night, you’re out of luck if you want to drink it again later in the week. And I’m as guilty of enabling this as anyone. My M.O., more often than not, is to try something new rather than default to the familiar. When there’s wait service, the server returns to my table and usually asks, “Could I get you another X?” My response tends to be, “No, this time I’ll have Y.” 

More than a few distributor reps with whom I’ve spoken have admitted that while it’s great that their on-premise accounts are eager to buy so many small, up-and-coming brands, it stresses their entire system to fulfill such variable demands so frequently. It’s not just a huge order of a handful of high-velocity SKUs anymore. It’s an epic series of micro-orders of much lower-volume products. 

Distributors, to their credit, have adapted fairly well to this new normal. 

The real potential casualty in all this, however, is brand loyalty. I know, I know, marketers always tell me “On-premise is where consumers experiment and off-premise is where they’ll buy the six-pack of the beer or a bottle of the bourbon they discovered during the course of their experimentation.” 

But shouldn’t we be worried that, essentially, on-premise is completely ceding any notion of brand allegiance to the off-premise? 

The craft beer world and now, to some extent, the craft spirits talk about the “wine-ification” of their products. The dark side of that dynamic is that when menus turn over so quickly to keep up with consumers’ brand A.D.D. (again, guilty as charged), bar and restaurant patrons are just going to order by style, not brand, as is often the case with wine. I.P.A. will be the new Cabernet. And don’t think that this behavior won’t spill over into the off-premise as well. It already happens off-premise with wine and I have witnessed it on occasion with beer and spirits. Consumer: “Do you have Russian River Pliny the Elder?” Retailer: “No, but we just got a couple of bomber bottles of this double IPA from a new brewery that just opened in Virginia.” Consumer: “Great, what brewery?” Retailer: “I don’t remember.” Consumer: “Whatever, I’ll take it.” 

And with that brief commercial exchange, another tiny nail is driven in the coffin of brand loyalty.  

Three-Tier System: Keep the Baby in the Bathwater

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Category: General Blogs  |  Tags: beer

It always amazes me how quickly people are so ready to throw the baby out with the bathwater when something doesn’t quite work in a manner entirely favorable to them. I’ve been hearing/reading a lot of chatter, particularly in the blogosphere, where folks are taking to task the three-tier system, going so far as to say it should be eliminated. Excuse me?

Look, I am a strong proponent of franchise law reform. In some states it’s next to impossible for a craft brewer or other small alcohol beverage producer to get out of a draconian contract when the supplier/distributor relationship isn’t working out. Now that there are more than 3,100 U.S. small brewers, whose influence continues to grow, I’d like to see them effect real change at the state and federal levels.

But too many people—particular badly informed, one-sided bloggers—equate franchise law reform with dismantling the three-tier system. The two are mutually exclusive.

Ask most successful craft brewers (or distillers and wine makers for that matter) and many likely would admit—albeit sometimes grudgingly—that they would not have grown to the level they’ve achieved without the three-tier system and the work of distributors. Does that mean they shouldn’t be allowed to self distribute? Of course the should. Small producers that operate in states that permit self-distribution have been able to bootstrap themselves to a point where they got on the radar of wholesalers that have been able to help them expand to the next level. Most self-distribution has been out of necessity and once someone else is willing to take it over, the majority of small beverage alcohol suppliers are happy to be out of the distribution business. (Having said that, the three-tier system is far from perfect—at best a necessary evil.)

And about that 3,100 figure. There would only be a fraction of those brewers thriving in the market if there was no three-tier system in place. One need only look overseas for what could have become of the modern U.S. market (and actually had before Prohibition). Walk into an average bar in many European cities and your choices are limited, for the most part, to the products from one brewery. That’s the tied-house system still at work in those countries. The 21st amendment forbids that in the U.S.. And I think we’ve started to take for granted the diversity that our system has allowed us.

Our system is the envy of the rest of the world, by the way. And the U.S. craft movement has sparked revolutions around the world where small brewers are starting to squeeze their way into the market. It’s a little tougher for them to get into existing tied-house bars, so specialty pubs have started to pop up showcasing those small European brands. But those are still the exception and not the rule and still have a long way to go to achieve broader market exposure.

I’ll leave you with this thought. Just imagine an America where an AB InBev or SABMiller got into the pub and retail business and started buying up local watering holes. Then imagine what the array of tap handles would look like. Where’s that diversity now? 

For Your Consideration...

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Category: General Blogs  |  Tags: beer

We tend to use the term “Emotional roller coaster” so much in our every day lives, both personal and professional, that we’ve become numb and oblivious to just how much of a cliché it’s become. But there really is no better way to describe major global beverage alcohol news from the past month and a half or so. Reading the headlines of the past six weeks has been akin to watching all of the most hackneyed cinematic clichés play out on screen.

There’s the tragic romance in which the overtures of a much more well-to-do suitor (SABMiller) are ultimately rebuffed by the object of affection (Heineken). Of course, that unrequited pursuit may have been in defiance of a forced marriage (AB InBev).

Then there’s the tale of the rebellious, sardonic hipster whose tough, above-it-all exterior really hides a delicate vulnerability (Pabst). That all comes to the surface when the rebel falls for an exotic stranger from a faraway land (Russia).

And, especially this time of year, there has to be plenty of Oscar bait. And who doesn’t like a good, sweeping epic? It’s the story of a nation in conflict (Scotland) and the common hard-working folk (The Scotch whisky industry) just trying to get by as the world around them is nearly torn at the seams. I say ‘nearly,’ as at the 11th hour, that world was forged back together.

Okay, I should get serious for a bit, put on my movie critic’s hat, and tackle each of these in reverse order.

The Scotch Whisky Association sees last month’s “No” vote on Scottish independence as the dodging of quite a bullet. If Scotland had left the United Kingdom, uncertainty and instability in the Scotch market would prevail. Whisky exports already have been falling. If the industry suddenly faced new tariffs as it tried to ship to its biggest markets in the EU—which it would have to go through a potentially lengthy process of rejoining as its own entity—it wouldn’t bode well for the bottom line.

On the Pabst development, I was surprised (well, not really) at how many people expressed shock that the brand that’s enjoyed a renaissance at the hands of American hipsters would be (*GASP*) foreign-owned (and by investors in Mother Russia, no less). To that, I say, “Get over it.” Pabst has been playing ownership musical chairs for years. It’s essentially a trademark holding company, as it doesn’t operate its own breweries. Drinkers shouldn’t get too upset about something as abstract as a trademark. It’ll be business as usual.

As for the AB InBev-SABMiller dance and the SABMiller-Heineken dalliance: That’s a little more serious. If a merger between the two biggest brewers were to take place, it’d essentially create an entity that’s responsible for nearly a third of all beer volume in the world and closer to 40 percent of its revenue. That’s pretty intimidating. But I wouldn’t get too scared because there are far too many regulatory hurdles to jump before such a combination could become a reality. As for Heineken, my hat’s off to the family for, well, wanting to keep it in the family (at least for now). Though, it would’ve given SABMiller a solid and rapidly growing Mexican brand (Dos Equis) with which it can compete directly with the Modelo business that AB InBev now owns.

But I’ve had enough of these manipulative, heart-string-tugging films. I’m in the mood for a feel-good comeback story. And that’s exactly what’s happening in Kentucky. If there’s ever been any doubt that the bourbon renaissance is here to stay, just look at what Diageo’s been up to over the past couple of months. The company broke ground on its $115 million Bulleit Distilling Co. distillery and cut the ribbon on the visitors’ center at the rejuvenated historic Stitzel-Weller facility. When the world’s biggest spirits market gives the Bluegrass State and its distilling heritage that much of a vote of confidence, it makes me eager to get off that chaotic emotional roller coaster in favor of another cliché: raising a glass.

Mile-High Musings

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Category: General Blogs  |  Tags: beer

Those who have attended the Great American Beer Festival (GABF) over the past several years will know that the Brewers Association-presented event has grown into much more than the four tasting sessions that accommodate 49,000 brew seekers over a three-day period. It’s become a news-making platform for craft brewers and even the big brewers that extends beyond the walls of the Colorado Convention Center to the rest of Denver and in many cases well beyond the city limits. As always, it was a whirlwind few days for me as, like always, I tried to be three or four places at once so as not to miss anything. While that’s against the laws of physics, I was able to pick up a few tidbits.

Community Support
GABF took place barely a month after the devastating floods in the festival’s home region and the beer community banded together to help neighbors rebuild. The festival had a specially designated flood relief donation area, headed up by two of Colorado’s leading craft brewers, Oskar Blues and Left Hand. Both earlier this year set up their own charitable organizations designed to give back to the community and help in crises such as these natural disasters. Left Hand in May introduced the Left Hand Brewing Foundation and Oskar Blues in September launched Oskar Blues CAN’d Aid Foundation.

Wholesale Honors
Congratulations are in order for Mechanicville, N.Y.-based DeCrescente Distributing Co., which the National Beer Wholesalers Association (NBWA) and Brewers Association selected as Craft Beer Distributor of the Year. The two organizations presented the award jointly at GABF, noting that DeCrescente is well on its way to achieving its goal of 20 percent craft share in its local market by 2018.

Here Be Dragons
Preceded by the type of fanfare, mystery and intrigue reserved for the Seven Kingdoms of Westeros, Cooperstown, N.Y.’s Brewery Ommegang finally revealed on night one (Thursday, Oct. 10) of GABF what the latest addition of its Game of Thrones line would be. Fire and Blood Red Ale will be the third offering in the line officially licensed by HBO to tie-in with its hit series based on George R.R. Martin’s epic “A Song of Ice & Fire” book series. It will debut through Ommegang’s nationwide distributor network in spring 2014, coinciding with season four of “Game of Thrones” on HBO. Ommegang offered GABF attendees a sneak peek at the Fire & Blood’s artwork, which incorporates the series’ three dragons: Drogon, Rhaegal and Visarion.

Life After Death
Finally, I have to give a shout-out to Shmaltz Brewing Co. founder Jeremy Cowan who was showcasing He’Brew Death of a Contract Brewer black IPA. The beer marks Shmaltz’s transition this summer from 100 percent contract-brewed to running its own brick-and-mortar brewery in Clifton Park, N.Y. It’s been quite an eventful year for Shmaltz. Shortly after opening the brewery, Shmaltz announced the sale of its Coney Island brand to Alchemy & Science, a subsidiary of Boston Beer. 

Savor & the City

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Category: General Blogs  |  Tags: beer

The Brewers Association traded the Beltway for Broadway for the sixth edition of Savor, its craft beer/food pairing extravaganza, hoping the one-year detour to the Big Apple would boost craft’s profile in the eyes of the largest media market in the U.S. and, arguably, the world.

The annual rite of late spring had made its home at Washington, D.C.’s National Building Museum—save for its inaugural edition, which was at the Andrew W. Mellon Auditorium.

“Being in New York puts craft brewers on center stage,” Brewers Association craft beer program director Julia Herz told Beverage World during the event at Manhattan’s adjoining Metropolitan Pavilion and Altman Building. “In D.C. we had Brewers on an amazing stage, but New York is a great home for a year and we’re reaching a different audience.”

The organization already had hosted 6,500 at the Craft Brewers Conference (CBC) in the nation’s capital in late March and decided one event in the first half of 2013 in the District was enough. Savor had provided an opportunity for brewers to meet with their legislators, but CBC fulfilled that objective this year.

 “Why not come to the biggest media and food market?” Herz added.

Missing from last month’s event were the National Building Museum’s stately, atrium-style high ceilings and towering columns, but the classy, low-lit cocktail party vibe was still intact at the New York venue. As was the foodie’s paradise of culinary creations prepared under the direction of chef Adam Dulye, designed to pair with everything from a pilsner to a Russian imperial stout.

But despite New York City’s cred as a media and gastronomic center, the city still lags behind cities like Portland, Ore, Philadelphia and Chicago when it comes to being considered a “beer town.” That’s been gradually changing, especially with the efforts of established locals like The Brooklyn Brewery—the No. 11 craft brewer in the country this year celebrates its 25th anniversary—and Sixpoint Brewery. And a few new ones are opening in the city each year. Additionally, distributors like Manhattan Beer and L.Knife-owned Union Beer have been leading wholesalers of craft. New craft-centric beer bars seem to be opening every month as well; a local organization has created the Good Beer Seal to recognize such destinations.

Still, New York’s been a tricky market, especially when you consider how much competition there is for the drinker’s attention. And, of course, space isn’t something that’s in particular abundance in New York City.

Many craft breweries outside the region—including larger, established ones like Savor supporting brewery New Belgium—have yet to enter the market.

John Bryant, co-founder of Spokane, Wash.-based No-Li Brewhouse had considered the market, but has been hanging back, largely because of packaging issues.

“We were looking at New York and we were advised early on that the 22-ounce bottle package, which is what we’re in, wasn’t really relevant to the city,” Bryant explained as he poured from those same bottles of No-Li’s Jet Star Imperial IPA and Wrecking Ball Imperial Stout. “The were saying a lot of the smaller stores, up and down the street, are carrying six-packs, but they weren’t doing a lot of 22s on the shelf….But we’ve since been learning that with the 22, people are actually starting to experiment more.”

Bryant said he hoped Savor would attract a new level of attention. “Savor is in the capital of media, food and culture,” he said. “Boston’s great and North Carolina’s great, but New York’s where trends start.”

Eugene, Ore.-based Ninkasi Brewing Co. isn’t available in New York either, but part-owner and founding brewer Jamie Floyd was sampling Believer imperial red ale and Tricerahops imperial IPA, with an eye on the bigger, national picture. “It’s kind of more for the broader, national exposure,” Floyd revealed. We also spend a lot of time as a company working on food and beer pairings.”

As for entering the New York market, “We never say never,” Floyd said. “We’ve talked about it but we’re not looking for East Coast distribution at this point. We’re in the process of a $20 million expansion right now and that will allow us to continue to fill in more of the West Coast.”

One West Coast brewery that is available in the city is Hood River, Ore.-based Full Sail, though it took about 24 of the company’s 26-year history to finally get there. Founder and CEO Irene Firmat was pouring a pilsner from Full Sail’s LTD series and its Pub Series extra special bitter. “[Savor] is a celebration of beer and food and taking seriously, but still having a whole lot of fun,” Firmat said. Full Sail’s Savor participation extends back to the first edition in D.C. back in 2008. So which host city does Firmat prefer?

“I’m a native New Yorker,” she said, “so I’m a little biased.”