Rumors Of An Anheuser-Busch InBev & SABMiller Merger?

February 2, 2011 By Jay Brooks

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Wow. This rumor is just mind-boggling. It makes the hairs on the back of my neck stand up. But could it be true? According to Harry Schuhmacher at Beer Business Daily, it’s not only being discussed but is considered “likely and lucrative.” Harry’s quoting analysts at Credit Suisse who believe “‘SABMiller selling to ABI would provide SAB management and shareholders an obvious and desirable exit strategy for all involved. The idea of a merger we believe could be sold to both sets of shareholders’ even though ‘this would be a large deal with many moving parts.'” Apparently there’s not much overlap between the two behemoths globally, but in the U.S. it would be more of an issue, with the two companies combining for around 80% of the domestic beer market. That, I imagine, would raise big anti-trust concerns and would loom large in the closing of the deal, which would also most likely lead to massive distributor consolidation. The price being thrown around is somewhere in the $9-10 billion range.

Obviously, there’s a lot more details to be worked out, and many of them are already addressed in the Beer Business Daily piece, which looks at pros and cons for both sides, and likely resolutions of certain issues both companies face. It’s not as far-fetched as you might think on first blush. To read the rest of it, I highly recommend a subscription to Harry’s newsletter.

When Anheuser-Busch and InBev merged, I remember someone joking that eventually there would be just one international beer company and it would just be called “Beer.” I chuckled at the time, but maybe they were on to something. Stay tuned, it’s going to be a bumpy ride.

Walgreens Debuts Private Label Beer

January 27, 2011 By Jay Brooks

The Chicago Tribune is reporting that the drug store chain Walgreens has rolled out their own private label beer in cans, called Big Flats 1901. Walgreens is carrying the new beers in 60% of its nearly 8,000 locations and the average price is about $2.99 per six-pack or 50 cents a can. Around 15 years ago, Walgreens stopped selling alcohol in all (most?) of its stores, but recently starting stocking it again in less than half of the locations.

It would appear that Genesee Brewing in New York, part of North American Breweries, is the contract brewer making the lager beer. The label refers to the it as “Premium Brew” and includes a generic “Genuine Brew” logo and the tagline “It’s the water that makes it.” Supposedly the name comes from the “flat boats that traveled the” rivers in upstate New York “delivering goods to early settlers.” Curiously, the trademark for the name “Big Flats 1901” is owned by the Winery Exchange, which styles itself as a “full-service, value-added, corporate brand beverage alcohol company that sources beer, wine and spirits from the finest regions worldwide.” They’re also located in the same small Marin County town where I live, Novato, California.

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Announcing “High Water Brewing”

January 7, 2011 By Jay Brooks

You may recall the formerly wonderful beers of Valley Brewing in Stockton, California. That was due to one singular reason, their longtime brewmaster, Steve Altimari. Steve’s beers have became some of the most creative, innovative and diverse of any brewer. He perfected one style after another and brewed some truly experimental gems. His Uber Hoppy Imperial IPA was one of the best and his London Tavern Ale, a delicate English-style mild was a great session beer. But back on June 12th of last year, Steve was summarily dismissed under circumstances that could charitably be termed “odd.” I got the full story a couple of days after that, when I spoke to Steve in New York, where he was vacationing with his family. The owners initially told him that they’d sold the brewery (something he himself had been trying to do at that same time) and that the new bosses no longer needed his services. That tuned out to be not true in the least, and they instead brought in a scab brewer who flew in from Bend, Oregon, apparently, to do the brewing. I’m told they also locked Steve out of the brewery and refused to return his personal property that was there, including beer, barrels, etc. The good news was that since he’d been trying to buy Valley brewery, he already had investors and a management team in place.

So it’s six or so months later, and I’m pleased to announce that Steve’s new brewery — High Water Brewing — has begun brewing. They’ve set up offices and cold storage in San Leandro, California, near Drake’s Brewing, whose brewing equipment they’ll be using to make High Water’s beer. They’re also installing their own fermenters on site but will store the finished beer in their separate offices nearby.

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Initially, they’ll be offering three regular beers:

Hop Riot IPA (7.3% a.b.v. / 73 IBUs)
Retribution Imperial IPA (9.5% a.b.v. / 95 IBUs)
Old and In the Way Barleywine (11% a.b.v. / 95 IBUs)

The beers will debut on draft — 5 & 15.5 gallon kegs — in February during SF Beer Week (yet another reason I can’t wait for SF Beer Week!). Packaged beer, in 22 oz. bottles, will follow in early Spring, most likely in April. You can see the new labels on the website. They’re also still seeking additional investors, and if you’re interested, you can read about High Water’s investment opportunities.

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In the interest of full disclosure, the name High Water Brewing was suggested by me in a post back in June when this all went down, and after an exhaustive search, my suggestion turned out to be the one they liked best. The founders of the brewery were kind enough to thank me by awarding me some shares in the company, giving me a very teeny tiny interest in the company, essentially a symbolic, but very much appreciated gesture.

The BeerNet Power 20

January 6, 2011 By Jay Brooks

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Harry Schuhmacher’s Beer Business Daily earlier today published the results of their BeerNet Power 20. Essentially they polled his many beer business subscribers and asked them to vote for the most powerful people in the beer business. It’s the beer equivalent of Entertainment Weekly’s annual power issue. They cut off the voting last night at 5:00 p.m. and stayed up late counting ballots. It’s their first Power 20 poll since 2006, and quite a bit has changed since then. For those on the list in both 2006 and the new ranking, I’ve included their older ranking in parenthesis.

The BeerNet Power 20

Jim Koch, Boston Beer Co. (8)
Carlos Brito, Anheuser-Busch Inbev
Leo Kiely, MillerCoors
Reyes Brothers, Reyes Beverage Group (14)
Dave Peacock, Anheuser-Busch
Tom Long, MillerCoors (6)
Dick Yuengling, D.G. Yuengling & Co.
Graham McKay, SABMiller
Kim Jordan, New Belgium Brewing Co.
Bill Hackett, Crown Imports (3)
Pete Coors, Molson Coors
Craig Purser, National Beer Wholesalers Association (1)
Luiz Edmond, Anheuser-Busch
Dolf van den Brink, Heineken USA
Ken Grossman, Sierra Nevada
Sam Calagione, Dogfish Head
Dave Casinelli, D.G. Yuengling & Co. (19)
Warren Buffet, Berkshire Hathaway / McLane
Tom Cardella, MillerCoors (12)
Carlos Fernandez, Grupo Modelo
Andy England, MillerCoors

Here’s some observations from Harry about the makeup of this year’s list:

This is the first year that a Busch isn’t on the list. And this is the first year that a craft brewer has achieved the Power 20’s coveted Number 1 poll position: Jim Koch. In fact, in the last Power 20 four years ago, there were only two craft brewers on the list. This year, there are six. And a few Brazilian names have made the list for the first time, and a big investor who is only tangentially in the beer business, Warren Buffet, signaling that readers think he will be a bigger player.

The Top 3 in 2006 were 1) Craig Purser, National Beer Wholesalers Association, 2) August A. Busch IV, Anheuser-Busch Companies, and 3) Bill Hackett, Crown Imports. Curiously, Brewers Association president Charlie Papazian was ranked #13 in 2006, but isn’t on the current list.

New San Diego Brewery In Development

January 4, 2011 By Jay Brooks

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I just heard about a new brewery being planned for San Diego, the Societe Brewing Co. The new venture is a partnership between two brewers, one of whom is Travis Smith. If you haven’t heard of Travis, you will. He brewed at Russian River Brewing for a number of years, before moving south, where he brewed at both The Bruery and the La Jolla Brewhouse.

As of today, he’s just getting started, and when I wrote to ask how far along, here’s what he had to say.

Basically still working on everything. We have money to start but are still raising more capital. We have the concepts done, and are now in the phase were I just need to do it all. I feel like there is so much to do I don’t know where to start.

No estimated opening date yet, but I’ll continue to update Societe’s progress. Join me in wishing Travis the best of luck. Hopefully, we’ll be drinking his beer soon.

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Travis “MacGyver” Smith showing off the cork gun he made with spare brewing parts lying around the Russian River brewery. It shot a beer cork a pretty fair distance and would pierce cardboard at 100 feet.

BA Revises Craft Brewery Definition

January 3, 2011 By Jay Brooks

Surprising no one who’s been paying attention, the Brewers Association today announced the revision of the definition of what it means to be a craft brewery, at least as far as the trade organization is concerned. In order to advocate for any specific group, it’s useful to know who is eligible to be a member. In 1976, Congress arbitrarily chose 2 million barrels for a tax differential and ever since the part of the definition that denoted a “small” brewery has been one making less than 2 million barrels annually.

From the BA press release:

In the BA’s craft brewer definition, the term “small” now refers to any independent brewery that produces up to 6 million barrels of traditional beer. The previous definition capped production at 2 million barrels.
The association cited several reasons for the change, including the recognition that “small” is a descriptive term relative to the overall size of the industry.
“Thirty-four years have passed since the original small brewers tax differential defined small brewers as producing less than 2 million barrels,” said Nick Matt, chair of the Brewers Association board of directors and chairman and CEO of F.X. Matt Brewing Company. “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production.”
Matt added, “The craft brewer definition and bylaws now more accurately reflect and align with our government affairs efforts.” On the legislative front in 2010, the Brewers Association supported H.R. 4278/S. 3339, which sought to update the cap on an excise tax differential for small brewers to 6 million barrels per year in production for their first 2 million barrels.
Retaining Market Share for Craft Brewers
The industry’s largest craft brewer, The Boston Beer Company, is poised to become the first craft brewer to surpass 2 million barrels of traditional beer within the next few years. Loss of The Boston Beer Company’s production in craft brewing industry statistics would inaccurately reflect on the craft brewing industry’s market share.
In addition to Boston Beer, the current growth trajectory of other sizable BA member breweries places them on a course approaching the 2 million barrel threshold in the coming years.
“With this change to the craft brewer definition and BA bylaws, statistics will continue to accurately reflect the 30-year growth of market share for craft brewed beer,” said Matt. “Brewers Association statistics on craft brewers will continue to keep pace with the growth of the industry.”
Craft brewed beer market share is now approximately five percent of the U.S. beer industry, and growing. The BA has a stated mission of helping America’s craft brewers achieve more than five percent market share by 2013.
Matt added, “Rather than removing members due to their success, the craft brewing industry should be celebrating our growth.”

Make A Pipe Dream Come True: Invest In Pipeworks Brewery

December 11, 2010 By Jay Brooks

Looking for a unique gift for yourself or a loved one? Why not invest in a brewery? Seem like a pipe dream? Well, then the Pipeworks Brewery may be for you. Two self-avowed beer geeks living in Chicago, Beejay Oslon and Gerrit Lewis, are trying to raise enough money to make their dream of starting a small brewery a reality. They’re using Kickstarter to raise the $30,000 they need to fund their little brewery. So far, they’ve raised just over $17,000 with 20 days to go. That means they need to find another $13,000 before the end of the month.

Kickstarter is great. I’ve contributed to help fund projects before using it and it’s a great tool for microbusinesses and microfinancing. It’s a fun way to help people out, even strangers, if you like their idea. I’d encourage you to check out all the cool projects trying to get off the ground there. There are projects in Art, Comedy, Comics, Dance, Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Technology, Theater, and Writing & Publishing. For each project, the people lay out their idea and provide different levels of investment for you to pledge, and usually each level of participation gets you something related to their idea as a thank you. There’s a set time within which they have to reach the amount of money they need. If they don’t reach their goal, you don’t pay a dime, but if they do then your pledge kicks in and then (and only then) your account is charged. It feels very satisfying to help someone realize their dream, or at least kick start it. Not only are you helping fund an idea you believe it using alternative financing but you’re also building community at the same time.

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For the Pipeworks Brewery project, you can pledge as little as $5 or as much as $10,000. There are a dozen different levels available you can choose from to help them get started. You can read their story at the Kickstarter website, where they also post regular updates. But here’s the short version:

Pipeworks began as…
the dream of a couple of beer geeks right here in Chicago. Beejay Oslon and Gerrit Lewis started their adventures in fermentation within the plastic buckets and stovetop kettles of the home brewer. The two met while working at West Lakeview Liquors, a mom and pop liquor boutique on the north side boasting one of the best beer selections in the world. It wasn’t long before they began dreaming up plans for their own craft brewery.
In January of 2009, after some persistence, the Pipeworks boys landed an apprenticeship in Belgium with Ratebeer.com’s 2008 Brewer of the Year, Urbain Coutteau of De Struise Brouwers. Living and working alongside Urbain, the Pipeworks crew honed their skills,learning the traditions of Belgian brewing while mastering some innovative new techniques. To document these brewing adventures the boys started the popular Buckets to Barrels Blog hosted on De Struise’s site.
Pipeworks is…
— Beejay Oslon, a native of Chicago who began home-brewing while attending art school. Beejay serves as the head brewer, with over five years of experience in both brewing and craft beer retail. Through his experiences as a fine artist and graphic designer, he also serves as the creative director for Pipeworks.
— Gerrit Lewis, a transplant from the brewery-rich Colorado, armed with a sharp palate and lust for everything beer.He spends his time (and lots of his money) visiting at least one area beer store a day, seeking out the newest craft beer releases. Gerrit attended Loyola University Chicago Business School and considers himself a savvy and aggressive fresh-faced marketer.

And below is funny video that should get you fired up about their project.

To learn more about Pipeworks Brewing Co., you can visit their website, their blog or their Facebook page.
pipe-brew-drink

Brickskeller Sale Update, Will Remain A Bar

December 10, 2010 By Jay Brooks

While the fate of the Brickskeller pub in Washington, D.C. has been mostly rumor, today local FM radio station WTOP 103.5 revealed the names of the new buyers and some of their plans for the iconic building at 22nd Street NW. According to WTOP News:

Megan Merrifield and her husband are buying The Brickskeller, a haven for beer lovers on 22nd Street in Northwest.
When Merrifield takes over the property later this month, they will be changing the name to “Rock Creek” — and that’s about it. “We are buying the Brickskeller with the intention to keep the regulars that are going there, going there. We will offer them their favorite beers,” Merrifield says. “The bar may get some new hardwood floors and a facelift for the bathrooms.”

The report adds that December 23 is the expected closing date and that the new owners hope to re-open just a few days later, possibly as soon as the 26th. The Merrifields also own several area hotels, such as the Windsor Inn, Embassy Inn and the District Hotel.

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Dave Alexander examined one of the bottles in the Brickskeller’s large cold storage area as the Washington, D.C. beer landmark, with more than 1300 selections on its beer menu, turned fifty years old in 2007. (PHOTO BY GREGG WIGGINS)

Brickskeller To Close

December 8, 2010 By Jay Brooks

Rumors have been flying around for months, and now it looks like it’s just about official. The world-famous Brickskeller pub in Washington, D.C. on 22nd Street NW will be closing shortly.

brick-menu

Opened by Diane Alexander’s family in 1957, and operated for many years by her and her husband Dave Alexander, the building will apparently be renovated and turned into a boutique hotel. The Alexander’s will retain the rights to the name and most likely moved the Brick to another location. As far as I know, their other location, RFD, is unaffected by the deal and may at one point even transition into the new Brickskeller.

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Bob Pease, COO of the Brewers Association (left), with Dave Alexander at a Brickskeller event this July.

The Washington City Paper blog Young & Hungry floated the rumor at least as far back as early October. Yesterday, the DC Beer blog tweeted that a “credible source [told them] that The Brickskeller will shut it’s doors for good on 12.18.” Young & Hungry picked it up from there and so has TBD Neighborhoods. And All About Beer publisher Daniel Bradford posted the news of a pending Brickskeller sale on his Facebook page. Between that, and my own unnamed sources, it looks like this is going to happen. I haven’t had a chance to talk to Dave Alexander yet, but I suspect that’s the next call. It will be sad to see the Brick gone. The last time I was there was July and it was great seeing the place packed for an event with several of the brewers attending SAVOR.

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