To Beer or Not to Beer. As Strange Brew was a loose parody of Hamlet, I thought I’d peer crazily into the skull of poor Yorick, and try to divine the future. Let’s see if anything that happened last year can be used to predict what might happen in the beer industry in 2007. Here are five things I think will happen this year. Let’s see how I do a year from now. What are your predictions?

 
Craft beer growth will hit double digits for 2006 and also will continue to rise through 2007.

 
Price wars among the large domestic producers and the popular import brands will heat up again beginning in spring or early summer.

 
Mainstream media attention will increase and will actually begin to improve.

 
A-B’s Here’s to Beer PR campaign will either quietly disappear or if the website remains up will not have any new content added now that Bob Lachky is no longer in charge of the effort.

 
Gluten-Free beer made for the growing number of people with Celiac disease will surprise most predictions and become a bigger niche than expected.

As the year winds down, everybody and his brother has a top ten list for the year and I’m no different. It helps, I think, to stop and reflect on what happened over the previous year which puts the whole year in perspective and makes it easier to prepare for the coming one. So here are my choices for the top ten beer stories of 2006.
 

The 2006 Hop Fire: A Yakima hop warehouse owned by S.S. Steiner of Germany caught fire, destroying 4% of the U.S. hop production for the year. October 2.

Gambrinus Loses Corona: After years of successfully selling Corona and building the brand throughout the eastern United States, Grupo Modelo pulled the rug out from under Gambrinus and declined to renew their contract. March 10.

The Lost Abbey: Stone Brewing moved their operations to Escondido and Pizza Port Brewing (now Port Brewing) bought their old brewery in San Marcos. After getting the brewery up and running, Port launched the Lost Abbey label, one of the most exciting new breweries in years. January 31.

GABF Turns 25: This year marked the 25th Anniversary of the Great American Beer Festival. That’s an important milestone because it signals that craft beer has now been around — and popular — for a quarter century. For almost all of that time, GABF has been the biggest festival in the U.S. and the best place to try different beers in one location. September 28-October 1.

The Ram Closes: In May of this year, Charles Wells and Young’s announced that on October 2 they would be merging their two companies. But the biggest part of the story was the announcement that as a part of the merger they would be closing the 400-Year Old Ram Brewery, one of the biggest losses of brewing heritage and a telling sign of how business in general feels about its own history, which is to say not at all. As the science of business grows in sophistication, profit has never before in history been so singularly important. And never before has business seemed so devoid of emotion, reason or even a sense that people matter at all. May 23.

The Empty Glass-Lined Tanks of Old Latrobe: Anheuser-Busch bought the brand Rolling Rock, previously owned by InBev, in an effort to counteract falling revenues to their core brands and keep up their stock’s share price. They did not, however, buy the Latrobe Brewery where Rolling Rock had been brewed since 1939, placing an entire town’s economy and well-being in jeopardy. Preferring to view their decision as a mere externality, A-B took no steps to back up the company’s rhetoric about being a good corporate citizenship. May 19.

Mainstream Media’s Less-Than-Accurate Beer Coverage: With craft beer on the rise and sales of beer manufactured by the large domestic companies slumping, the media in 2006 began paying a bit more attention to beer in general and craft beer more specifically. At least it certainly seemed that way. Unfortunately, while much of the local coverage was good, a lot of the national coverage from the larger, more mainstream media was not. A common problem was hiring wine and/or food writers wholly unfamiliar with beer while beer writers remained underemployed. Sure there’s some selfishness at work, but those of us in this rarified profession would just be happy if beer was reported with accuracy and even a little passion or feeling for the subject matter. A simple sense of respect afforded beer would go a long way, too. But time and time again various big media outlets did such a poor job and spread such misinformation that many of us could not stay silent and frequently wrote letters to the editors in an effort reverse this trend. Did it have any effect Only time will tell. For example, October 9, October 12, October 13, October 27 and November 3.

A-B Troubles & Solutions: Early in the year, Anheuser-Busch reported a substantial 4th quarter drop in income, a trend which had begun the previous year, but which led to all manner of steps by the company throughout 2006 to keep the share price up and keep their distributors and shareholders happy. Just a few of the things A-B accomplished was starting the questionable Here’s to Beer PR campaign; picked up several import brands for distribution such as Grolsh and Tiger; bought Rolling Rock; tried to add brands to their “Craft Beer Alliance;” test-marketed or debuted new products such as the organic Wild Hop Lager, Redbridge Sorghum Beer, along with many others and even started a spirits division (Long Tail Libations); and finally inked a much-rumored distribution deal with most of InBev’s brands. The sheer number of things A-B flung against the business wall to see what might stick was truly staggering. There was something like fifty new products and line extensions. It seemed every week or so there was a new announcement. And for the most part, it worked, as the share price did indeed continue to improve. A-B had to eat some crow, however, when they finally admitted changing the formula for their most popular beers over the years. But overall, things looked rosy again for the world’s largest malt beverage company.

Craft Beer’s Continued Ascendency: For the second consecutive year craft beer led all adult beverages, and showed growth of 9% over the previous year. And by August it looked like for 2006 craft beer was up 11% for the first half of the year. If that figure holds it will mark three consecutive years of good, solid growth. Ten years ago, in 1996, the industry turned downward in terms of growth and after a few down years growth again began slowly several years ago. But now craft beer is the fastest growing segment of the US beverage alcohol industry and is on track to threepeat. This is obviously great news for lovers of great beer and those who believe smaller and regional breweries can better serve the needs of of consumers. This is also undoubtedly the reason that the media is once more paying beer some attention (See No. 4) albeit not always effectively. It’s also one of the reasons people are drinking less domestic industrial light lagers, the highly engineered chemical food products manufactutred by the ginormous multi-national beer corporations.

The Costco Decision: Few court decisions have as much potential to change the way beer is sold across the country. If Costco gets their way, it will be very bad for small breweries everywhere whose access to market and ability to fairly compete with the larger producers will be severely impaired — possibly fatally in some cases. The Washington State Liquor Control Board has appealed the decision and that appeal will be heard next March. April 22 and April 24.

And what will next year bring? See tomorrow’s post with my predictions for the beer industry in 2007.