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Style Trends for Early 2007

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Here is a chart of the latest style trends broken out by the top 10 selling styles, based on year to date sales as of January 28, 2007, courtesy of DBBB, the Domestic Brewers Bottled Brands. They publish the book, “The Essential Reference of Domestic Brewers and Their Bottled Brands” and have a website, which offers monthly online updates of the book.

The chart is based on IRI Data showing sales of beer from the beginning of the year through January 28th of this year by beer style. IRI is short for Information Resources, Inc., a company that surveys sales of beer (and everything else) from over 15,000 retailers (mostly groceries) in the U.S. As a result, their data is invariably skewed toward the national and regional brands since it doesn’t take into account direct sales and sales from small mom & pop stores. I used to get IRI data from almost every medium to large brewer who called on me when I was a beer buyer for BevMo. And while it’s not accurate for craft beer in specific, it does give you a general idea of certain trends, especially when you follow it over a period of time.

 

Bud TV Under Fire

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The first time I logged into Bud.tv, I had a heck of a time gaining access and proving that I was over 21 despite the fact that I’m more than twice as old as the age of consent. Presumably, that was because I’ve recently moved and I had to use my old information to get in. Frankly, it felt a little creepy thinking they had all of my personal information. I suspect that most people think that’s a small price to pay for keeping minors out of the website. I don’t agree, of course, and have grown weary of having to prove I’m an adult over and over and over again.

But as difficult as I — and many others it seems — found it was to register for Bud.tv, apparently it’s still not difficult enough for the attorneys general of almost half the states in the country. Here are the states who think it’s too easy for kids to get into Bud TV:

  1. Alaska
  2. Arizona
  3. Connecticut
  4. Delaware
  5. Illinois
  6. Iowa
  7. Kansas
  8. Louisiana
  9. Maine
  10. Maryland
  11. Nevada
  12. New Mexico
  13. New York
  14. North Carolina
  15. Ohio
  16. Oregon
  17. South Carolina
  18. Tennessee
  19. Vermont
  20. West Virginia
  21. Wyoming

Plus two U.S. territories:

  • District of Columbia
  • Puerto Rico

    • .

The twenty-three attorneys general have written to Anheuser-Busch requesting “better tools to make sure underaged viewers aren’t accessing its new Bud.TV site.” Apparently name, zip code and birthdate aren’t invasive enough because a clever kid could know that information about their parents or another adult. It seems they won’t be satisfied until at least people have to enter “their name and full address, or a driver’s license number, exactly as it appears on a government-issued ID.” But that’s still not enough, as they’d also like to have a postcard sent to the person’s address or have someone phone the house to insure the registrant is “legal-aged adult, and not a child below the drinking age.” The states believe that because A-B is creating the content for some reason they “have a higher responsibility to ensure that youth are not exposed to the marketing on [their] site.” Using that logic, why haven’t these states sent similar letters to every network and cable channel that creates original programming? Why not hold every media that creates its own content to the same principle? Or are only businesses that advertise as well as “creating the programming” held to a higher standard?

That seems absolutely preposterous, especially when you consider that all this effort is being proposed not to keep alcohol from falling into a minor’s hands, but merely to keep them from watching TV on the internet. To go to such great lengths to keep kids from watching the same commercials they can see by turning on the television seems ridiculous, but all too typical. Of course, there is more than just commercials on Bud.tv. There are also several inane tv-like episodic shows. From what I’ve seen so far they seem more tame than the average HBO show, and with no apparent nudity or swearing. From the descriptions of the shows, it’s possible some have mature themes but it doesn’t appear any worse than the average evening cable show.

But here’s a kicker:

Maine attorney general G. Steven Rowe, who helped to spearhead the effort along with Louisiana’s Attorney General Charles Foti, said he didn’t have any evidence that underage children are accessing the Web site, but said it’s clear that more could be done to safeguard children.

So all this strutting and puffing doesn’t even have any basis in reality. It’s just a headline-grabbing stunt to “protect the children” from a threat that doesn’t even exist.

Here’s how Media Post Publications’ “Just An Online Minute” (free subscription required) for today questioned their logic:

But, while it’s probably true that people under 21 can access Bud.tv’s content, it’s unclear why this poses such a problem for the authorities. After all, minors have been exposed to the company’s marketing for years.

Consider, in addition to advertising on programs like the Super Bowl — certainly viewed by people under 21 — Anheuser-Busch has served as official sponsor of dozens upon dozens of professional sports teams, ranging from the Chicago Bulls to the Carolina Panthers to the St. Louis Cardinals (who play their home games in Busch stadium).

It’s hard to imagine that watching a clip on Bud.tv will somehow prove more powerful with minors than the company’s myriad ads and other marketing efforts in the offline world.

There’s nothing I find particularly compelling on Bud.tv, and I’m usually no great fan of A-B’s business practices, but this political stunt by these states is yet another contemptible, shameless and public deceit pretending “it’s for the children.” Curiously, only three of the top twenty beer-producing states (as of 2005 statistics) are among the signatories, but twelve of the bottom twenty are. Coincidence? Most likely not, as following the money will rarely steer you wrong. Notice Missouri is absent from the list of complaining states, as is Wisconsin and Colorado, where the number two and three biggest breweries are located.

So no matter how you slice it, I can’t see where the problem is that all these states were so quick to complain about. First, the attorneys general admit there’s no evidence whatsoever that kids are watching Bud.tv. Second, it’s already more difficult to gain access to the website than any other free site I’ve ever visited. Third, once you make it to Bud.tv, there’s no pornographic, violent or overtly adult content that children need to be protected from. At worst, it’s the sort of stuff you’d see on cable television. If anything, these states’ stunt will probably backfire and generate more buzz and traffic to the Bud.tv website than if they’d just kept their pens in their pockets.

So I find myself in unfamiliar territory, siding with A-B when they say the following:

‘Despite these extraordinary efforts, some have urged us to make the age verification process more difficult and even more invasive of people’s privacy,’ said a company spokeswoman, Francine Katz, in a statement.

I felt the current age verification was already pretty “invasive of people’s privacy,” certainly more than I felt was appropriate or necessary. Think about it this way. The internet, in terms of parenting, is really not much different than television. It is and should be up to parents to decide what their children see and at what age or time in their lives. Trying to protect children from perceived harm is no business of the state or federal government. It’s a lazy parent that wants to turn over control of what their child can watch to the powers that be. I think these attorneys general might want to spend more time with their own kids instead of telling me how to raise mine. Perhaps then they’ll see fit to spend their time and resources more wisely, going after true criminals and others who would do the people of their states real harm, instead of some vague potential for children possibly seeing something intended for adults. Seriously, who would you rather see the top lawyer in your state prosecute; the killers, robbers and rapists or the website that your kids might hack into and watch innocuous short films on a tiny two by three inch screen?

It’s Official! Double-Digit Craft Beer Growth Again!

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The results are in and again craft beer has hit one out of the park. For the fourth straight year, growth in the sale of craft beer has shown signifcant improvement.

From the BA press release:

The continuing growth of craft beer entered double digit territory in 2006, with sales by craft brewers up 11.7% by volume for the year. This comes on top of strong growth in each of the prior three years and illustrates the ongoing surge of consumer interest in craft beers.

“American tastes are clearly changing thus the demand for more flavorful and diverse beers is exploding,” said Paul Gatza, Director of the Brewers Association, which tabulates industry growth data.

The Brewers Association estimates 2006 sales by craft brewers at over 6,600,000 barrels (one barrel equals 31 U.S. gallons) up from an adjusted total of just under 6,000,000 barrels in 2005. The increase totals over 690,000 barrels or 9.5 million case-equivalents. For 2006 craft beer posted a retail sales figure of $4.2 billion.

A strong area of distribution for craft beer is grocery, convenience, drug and liquors stores. According to Information Resources Inc. (IRI), “The beer category reaped growth from import (+10.9%) and micro-brew (+16.9%) products, while suffering losses across domestic and non-alcoholic varieties.”

“Craft beer has become a great American success story and today U.S. craft brewers are being watched, emulated and celebrated globally.” stated Julia Herz, Director of Craft Beer Marketing for the Brewers Association. “Demand has become contagious. Craft beer is satisfying the thirst and beer enthusiasm of a continuously growing number of beer drinkers who are seeking flavor, diversity and value.”

A more extensive release of the 2006 production numbers will be available from the Brewers Association on April 19 at the Craft Brewers Conference in Austin, TX and unveiled in the May/June issue of The New Brewer magazine. The craft beer segment includes 1377 breweries.

The definition of craft beer as stated by the Brewers Association: An American craft brewer is small, independent and traditional. Craft beer comes only from a craft brewer. Small = annual production of beer less than 2 million barrels. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition. Independent = Less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer. Traditional = A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands)

Glass Bottle Workshop for Brewers

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On March 1, the California Small Brewers Association, in conjunction ProBrewer.com, will be leading a half-day seminar focusing on the “resources, equipment and financial requirements of transitioning from pre-pack to bulk purchasing and the supply of glass to the beer industry. Suppliers of glass bottles and other vendors will be in attendance. This forum will be an opportunity for both brewers and suppliers to discuss needs and issues in a positive and constructive conversation.”

The Glass Bottle Workshop will be held at the Lagunitas Brewery located at 1280 N. McDowell Blvd. in Petaluma, California. The seminar is free to CSBA members and registered ProBrewer.com users. The course fee is $50.00 for all others. A beer social will follow. To attend, you must pre-register by calling 530.265.0422.

Oregon Beer Up 16%

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An Oregonian Bulletin friend (thanks Jim) sent this in. Today’s Oregonian has a two-part piece by John Foyston, a veteran newspaperman and long-time advocate of good beer. The first part, Oregon beers grow by hops and bounds, details some great news about sales of Oregon beer in 2006, where again record growth ocurred for at least the third year in a row.

From the article:

Craft brewers in the state made 3.5 million gallons more beer last year than in 2005, a 16 percent increase and the third year in a row of double-digit gains. This at a time megabrewers such as Anheuser-Busch Cos. and Miller Brewing Co. have struggled to maintain their revenues and market share.

According to figures released this month by the Oregon Brewers Guild, the state’s 79 breweries produced about 792,000 barrels of beer in 2006, or 24.5 million gallons. That’s up from 21.1 million gallons a year earlier, and makes Oregon one of the leaders in a craft beer segment growing faster than any other part of the U.S. alcoholic beverage market.

The second part is a nice profile of Portland’s Amnesia Brewing.

Nano Breweries

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Last week in the northwestern Washington Tri-City Herald there was a nice profile of a small Washington brewery, Laht Neppur Brewing, which is the last name backwards of the owners, Court and Katie Ruppenthal. The brewery is located in Waitsburg, Washington, which is in the southeastern part of the state, a little bit north of Walla Walla. The Ruppenthal’s brewery has been open a little over six months, having sold their first beer last June.

According to the article, they first thought most of their sales would be to local bars and restaurants but the brewery in their converted workshop has become a popular local hangout in its own right. Several of their popular beers sell out before they can be delivered outside the tiny brewery. But the Ruppenthal’s brewery is very laid back, with customers able to cook their own food on the grill. It’s become a community center of sorts.

Given the recent discussions about children at beer places, this passage lept out at me.

Children are welcome and even have their own toy boxes and a tiny broom to push around the broken peanut shells that litter the concrete floors. “We have a cement floor and metal furniture,” Katie said. “It’s not like, ‘Oh, they’re going to break something.”

But earlier in the article, co-owner and brewer Court Ruppenthal muses that his brewery is more like a “nano brewery” than a microbrewery, which started me thinking. A microbrewery is defined as a brewery that “produces less than 15,000 barrels of beer per year.” There are a few other bits to the definition, but that’s the main distinction. Above that are regional breweries (up to 2 million barrels) and then, simply, breweries (or big or national ones, with over 2 million barrels). There are only four breweries making more than 2 million barrels per year, and 53 that produce between 15,000 and 2 million (according to the 2006 figures from Modern Brewery Age). So out of roughly 1400 U.S. breweries, only 57 are large, leaving around 1,343 microbreweries (including brewpubs, whose definition has to do with their percentage of packaged beer sold).

So it seems to me on a practical basis, the term microbrewery doesn’t seem as useful anymore, or at least seems to need some modification. The various sizes of the remaining breweries and some patterns there seem to suggest some changes to the definitions. For example, below 15,000 annual barrels there are only five that brew more than 10,000 each year. Looking at the next 5,000 barrels down shows another big drop off, with only 19 breweries producing between 5,000 and 10,000 barrels per annum. So that means there are still a whopping 1,319 breweries that make less than 5,000 barrels per year.

If we keep going, only 10 make between 4,000 and 5,000 barrels annually, 16 between 3,000 and 4,000, and 17 between 2,000 and 3,000. This means 1,276 make less than 2,000 barrels of beer each year. Fully 67 breweries make more than 1,000 barrels so that’s still approximately 1,209 below a thousand barrels per year. The reason for doing all that math is to show that the overwhelming majority of breweries make a very small amount of beer each year. This is not to take anything away from their efforts, but in terms of what’s important to their interests, I have to believe they’re different from that of the larger concerns. There’s such a wide range of sizes within the definition of microbreweries that there must be a correspondingly varied set of issues they face, as well.

So I’m not quite sure where you’d draw the line, though at either 2,000 or 1,000 seems prudent. Those breweries, I think, we should define as nano breweries. Technically, the prefix “nano” means one billionth but more colloquially simply is used to denote the very small (as in nanotechnology). Fittingly, the Jargon File says the following about nano:

– pref. [SI: the next quantifier below micro-; meaning *10^(-9)] Smaller than micro-, and used in the same rather loose and connotative way. Thus, one has nanotechnology (coined by hacker K. Eric Drexler) by analogy with `microtechnology’; and a few machine architectures have a `nanocode’ level below `microcode’.

So in computer or math parlance, nano is directly below micro in terms of size. Next below nano is actually “pico,” technically meaning one-trillionth, but at some point it might also be useful to have microbreweries, nanobreweries and picobreweries.

But for now I’d argue for dividing the current definition of micros into two, with micros being breweries that produce between more than either 1,000 or 2,000 barrels per year and nanos being breweries that produce less than 1,000 or 2,000 each year, along with all of the other current parts of the definition. And since there are so few breweries between 10,000 and 15,000 barrles per year, perhaps the upper microbrewery/lower regional boundary should be changed to 10,000. The reason for doing this, I think, is in terms of not just size but the way in which these different size breweries function, are organized and approach the market, which I believe is radically different between all of the divisions. Thus it would make sense to start talking about them as separate parts of the beer industry, in much the same way we do now with the big breweries, regional breweries and microbreweries.

Anybody else have any thoughts or comments to add?

EU Court Upholds Price Fixing Verdict

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The European Court of Justice upheld a 2005 price fixing verdict against the French company Danone. A fine of €42.4 million ($54.2 million U.S.) was imposed after being found guilty of participating in a Belgian beer cartel in which one of their subsidiaries — Alken-Maes — colluded with InBev (then still Interbrew) to control pricing in the Belgian beer market. According to the EU’s prosecution, the two companies “struck a general non-aggression pact to fix retail prices, to share information on sales volumes and to limit investments and advertising in hotels, restaurants and cafes from 1993 to 1998.”

This was Danone’s second such fine, the first being in 2004 when the EU fined them €1.5 million ($1.95 million U.S.) for a similar scheme in France with Heineken (who owned 30% of the French market). At that time, Danone also owned Kronenbourg, which had 40% of the French beer market.

In 2000, Danone sold off all of it’s breweries, French and Belgian, to the British Scottish & Newcastle.

Bud TV Launches Tomorrow

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Today’s Super Bowl extravaganza will feature something like thirty confirmed advertisers, with the lion’s share going to Anheuser-Busch who is expected to air around ten spots, to the tune of $2.6 million per thirty-seconds. Undoubtedly at least a few of those will feature content from A-B’s new online channel, Bud TV, which will debut tomorrow. The site will feature the commercials from the Super Bowl along with original web series such as:

  1. Afterworld: A science-fiction show, partially animated.
  2. Blow Shit Up: Just what it sounds like, the audience submits stuff they’d like to see blown to bits.
  3. Finish Our Film: A spoof of reality shows and a making-of-a-film documentary that will be produced by Matt Damon and Ben Affleck’s production company.
  4. Futureman: Another science-fiction show, though presumably a comedy.
  5. Happy Hour: This show will feature up-and-coming and wannabe stand-up comics.
  6. Ice Vision and Chef: A mockumentary about the attempted comeback of a defrocked superhero.
  7. Replaced by a Chimp: A comedy in which real people’s jobs are replaced by a monkey.
  8. Truly Famous: Another spoof of reality and celebrity shows.
  9. What Girls Want: A female version of “Queer Eye” with a trio of lovelies giving dating advice to some hapless schmo.

Anheuser-Busch is spending a lot of money on it, approximately $30-40 million over the first year of Bud TV. But that’s a drop in the bucket of A-B’s staggering billion dollar plus annual marketing budget, although A-B has also announced they will be reducing the portion of their ad budget usually reserved for network television shows. Still, about $600 million will be spent on more traditional advertising.

Later “channels” on Bud TV reportedly will likely include the following.

  1. Bud Tube: Consumer-generated video, including homemade ads for Bud or Bud Light.
  2. Reality Programming: One show is a live version of The Dating Game show from the 1970s aired from bars and restaurants in 25 cities. Another is “Fool’s Gold,” in which contestants can only take as much gold out of the dessert as they can carry and survive, while a half-crazed miner tries to thwart them.
  3. News: Updates on news and unusual events, designed to give viewers something to chat about over a beer.
  4. Sports: Sports will be featured in some fashion.
  5. Hollywood: Celebrity coverage.

You do have to register so they can be assured you’re over 21, which does seem a little weird since the tv commercials at least can be seen by anyone with access to a television. It appears that after inputting your name, birthdate and zipcode that BudTV accesses a database to confirm that information. Mine, for example, didn’t match at first because I’ve moved within the past year and I was then prompted to insert my previous zipcode. I know I lean a little heavily on the paranoia side, but I find it a little troubling that they have at their fingertips the information to confirm my identity and rough age.

Today’s New York Times magazine has an in-depth piece called Brew Tube about the venture.

The Bud TV host greets you and talks you through how to use the website.

Dutch Wonderland to Join the Modern World?

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Every state’s alcohol laws are arcane little systems of dysfunction and no two are exactly alike. I grew up with the laws in Pennsylvania, which have to be near the top, at least in terms of how seemingly bizarre and arbitrary they are. Until very recently, you couldn’t get a drink on Sundays, due to archaic “blue laws.” It’s also a case state, meaning you can only buy beer by the case, except in bars that can sell you a six-pack often at wildly inflated prices.

Pennsylvania is also know for it’s Amish, or Pennsylvania Dutch, population, and I grew up right near these communities. In fact, my ancestors who emigrated to the state in the early 1700s were Anabaptists from Bern, Switzerland. They settled in Bernville and for generations were Mennonite farmers. There’s also a cheesy theme park in the area, near Lancaster, called Dutch Wonderland. All of this has little to do with the story, except to explain why I’ve called the entire state “Dutch Wonderland” ever since I moved away from it over twenty years ago.

One of the odder features of the state, which ended when they introduced photo driver’s licenses, were PLCB cards. These were essentially “drinking cards” which served no other purpose than to legally allow you to enter a bar or other place where alcohol was served. A few weeks before turning twenty-one, you filled out a form and dropped it off at your local “State Store,” along with a pair of headshots from one of those old photo booths that dispensed a sheet of four photos for half a buck. Then on or after your birthday, you picked up your card back at the shop. After your driver’s license also included a photo, there was no need to keep making the drinking cards and they were discontinued. None of this has anything to do with the story, either, I just find it fascinating the lengths states will go to keep minors from obtaining alcohol. It was a pretty elaborate and complicated system. And at the time I was quite indignant because I was also in the armed forces and could never understand the logic that allowed me to die for my country but denied me the right to drink a beer. Plus it’s the weekend and my mind is pretty tangential, jumping from thought to thought without much regard to where it’s leading me.

Alright, back to the main story, and it’s a somewhat familiar one. Every few years it seems Pennsylvania flirts with the idea of changing their liquor laws in some fashion, but it never seems to go anywhere. Now it appears that finally the times, they are a-changing. On February 1, a convenience store in Altoona sold the first beer (sadly a 12-pack of Coors Light) in that type of store. There are still some pretty arcane rules at work such as having to keep the beer separate from other sales and using different cash registers — meaning you have to ring up your purchases twice at the same location at two different cash registers. But now that the Sheetz chain has opened the door, others are considering following suit, such as Wegmans and Weis.

Naturally, the current beer distributor system, through their lobbyist organization, the Malt Beverages Distributors Association of Pennsylvania, is opposing this change because it threatens their monopoly. I can’t say I blame them, but for most people the present system is a pain in the neck and makes it difficult for the brewers themselves, too. The writing may finally be on the wall on this one. I know if I still lived in Dutch Wonderland I’d be arguing hard for this change, especially having tasted the world outside Pennsylvania where alcohol is more freely available. In virtually every neighboring state, beer can be purchased in grocery and convenience stores. Most of the arguments against this change are the same old nonsense about protecting children.

As the Pocono Record editorializes:

Nonsense. Other states where private enterprise extends to alcohol sales have no higher rates of alcoholism, nor has there been a problem with cashiers’ age. These problems are surmountable if Pennsylvania, the do-anything-you-want state in so many other ways, could once get past the idea that government alone should decide when and where citizens can buy beer, wine and liquor.

The real motivation for the perpetuation of the PLCB is political power over an entrenched bureaucracy, not protection of citizens. Pennsylvania should leave the vending of alcoholic beverages to bar and restaurant owners, wine sellers and grocers and other merchants. These capitalists can decide, based on sensible rules and consumer demand, their hours and their prices. Competition would produce a much more consumer-friendly system than what we have now.

But now it’s up to the state’s Commonwealth Court, who has before it a case filed by the Malt Beverages Distributors Association of Pennsylvania seeking to keep the status quo intact for 1,100 beer distributors and 300 wholesalers. So far, experts seem to be leaning toward the court ruling against the distributors. They point to the fact that last year the court would not issue an injunction stopping Sheetz with going ahead with their plan. While certainly not dispositive, it does seem to be a positive sign. It will likely be a few months before the court is expected to decide the case. Until then, Dutch Wonderland will join the modern world, whether briefly or permanently, by allowing beer to be sold in the wider world.