According to an article in today’s Toronto Star, craft beer in Ontario is mirroring what’s going on in the U.S. After sales of macro beers have slowed and declined, craft beer sales have risen to take up the slack. Thirty Ontario craft brewers now account for 5% of total beer sales in the province, which represents $100 million and a 17% increase in jobs. That’s an increase of 100 basis points over last year when craft beer in Ontario was at 4% of the total, which is a huge increase in one year.
Spülwasser
According to an article on today’s online version of the Nation, Germans call Budweiser “Spülwasser,” which translates roughly as dishwater and that seems a fair approximation of the flavor. The article concerns Anheuser-Busch’s being the exclusive beer sponsor for the upcoming World Cup in Germany.
The 2006 World Cup will have eighteen premium sponsors who each paid around $40 million for that designation. A German television station nicely summed up the German reaction at the time of the announcement last year when they said. “A cry went out across the nation.” A-B apparently relented and allowed 30% of beer sales to come from German brewer Bitburger. But then Bitburger protested that the name “Bud” was too close to their “Bit” beer and as a result (along with issues regarding Czech brewer Budvar) Anheuser-Busch will only be able to call their beer “Anheuser-Busch Bud” throughout the tournament, which means for all that money they won’t even be able to use their most popular brandname.
I thought the Nation author’s conclusion hilarious. Here it is:
So Anheuser-Busch has paid all that money for a monopoly that has taken away its name and could trigger a demonstration or even rioting by furious spectators faced with no choice but to go dry or drink dishwater.
On top of that, with the start of the quadrennial soccer tourament only weeks away, the protest is not going away. A new group has just put up an amusing website called Bud Out. The group’s apparent mission appears to be simply to get Budweiser out of the tournamanet completely. I know they can’t possibly win, but I love the idea of them trying. They are asking for people to post their own anti-Bud pictures. So far, there aren’t too many up yet but what is there so far is pretty funny.
Let the games begin.
Kung Fu Fighting
Apparently Jackie Chan is a beer person. Who knew? Perhaps it keeps him limber for his fight scenes. A Jackie Chan posted a comment today to my first post about the new cans at 21st Amendment. Jackie also left an e-mail address at goodbeer.com. Now goodbeer.com is the domain name of Speakeasy Ales & Lagers in San Francisco. I spoke to brewery co-owner Steve Bruce this morning and he assured me Jackie Chan does not work for them. I was certainly glad to hear he was still making movies.
Here is the comment from Mr. Chan:
Unfortunately, they [21st Amendment] are not canning the beer with a real canning line; they have an extremely labor-intensive, slow 2-can filler and separate seamer requiring them to physically handle every can and move them around before they are seamed. The air-levels will not come close to that of a real canner (or even a good bottler), there are substantial microbio issues as the system is slow and not sealed, and there will likely be massive variance in carbonation (and probably taste as a result of all the factors I have listed). In a nutshell, these cans will have terrible shelf-stability and it will probably be a crapshoot every time you crack one open.
A real canner is great for beer… but this ain’t that.
So either someone else who works there and wants to remain anonymous is unhappy with the idea of 21st Amendment having beer cans to sell or someone who doesn’t work there wants me to think that. I suppose it could be a coincidence and goodbeer.com was chosen at random but that somehow doesn’t seem likely to me. The commenter certainly sounds knowledgeable and appears to know the basic process, which means he sounds like someone who may be a brewery worker. But Jackie is apparently unaware that I showed the hand canning process in great detail two weeks later, including that it is slow and done by hand. I did pitch in and saw that each can is, of course, sanitized and the process seems as hygienic as any other bottling I’ve seen. There are currently twenty-five small breweries hand canning, three in California, and many more in Canada and abroad. If there really were such a bad sanitary and consistency problem we’d have heard about it by now. And people have been hand bottling 22 oz. bottles for decades. That’s how most microbreweries started offering packages in the 1980s and early 1990s. Many still do. They’d have all the same problems Jackie brings up yet I’m not aware of any endemic problem with hand bottling.
Of course, everyone is entitled to their opinion and it’s not really my job to defend canned beer. I think it’s an interesting trend that’s not likely to go away anytime soon so I personally thought it best to learn as much as I could about it. And I also wanted to keep an open mind since I, too, have long thought the can inferior to the bottle. But through this adventure that’s starting to change. Plus, we’ve all seen so many bottling lines that I thought this was something different and worthy of attention.
When I told Steve Bruce why I was calling him, he didn’t think anyone from Speakeasy would have send that message. And overall, I tend to agree with him. I like Speakeasy and I love their beer. Big Daddy and Double Daddy are two of my favorite big, hoppy beers. I wish them all the success in the world and would do whatever I can to support them in their efforts to bring good beer culture to the masses. So it certainly seemed odd that whoever sent it used their domain name.
In the end it’s hard not to view this comment as sour grapes, regardless of its origin. And that brings me to the point of this dreary post. Infighting. Which from now on I will continue to refer to as Kung Fu Fighting in honor of Jackie. Both Sam Calgione, of Dogfish Head, and Dave Buhler, of Elysian Brewing, in their respective speeches at the opening of this year’s Craft Brewing Conference stressed the importance of the craft industry working together. It’s been a subject we’ve all been talking about at least as far back as Kim Jordan’s keynote address at the New Orleans CBC three years ago, though the idea of course was not original to her. In fact, as long as I can remember one of the things I’ve liked best about the craft beer industry is that it’s like an extended family. Brewers help each other because most realize we’re all in this together. When one succeeds we all succeed.
I know, of course I know, that that’s a romantic ideal that’s not exactly the reality we face. There is Kung Fu Fighting. There always has been and there probably always will be. Even the closest family members sometimes root for or revel in the failure of their siblings. We don’t want to believe it’s true but sometimes it is. But doing so is counterproductive, in my opinion. Otherwise we’ll never reach a tipping point where a majority of Americans realize what we already know: that better beer and the culture of great beer enhance the pleasures of this life. Good beer makes almost everything a little better. The food we eat, the company we keep, and our enjoyment of life are all improved by having a vibrant beer culture. Don’t think so? Imagine your life if all you could drink was American-style lager and virtually nothing else was available, roughly the situation our parents lived through. My father thought Heineken was the pinnacle of what life had to offer. Today, I wouldn’t drink that swill on a bet. Can you imagine a world with no organic food, no slow food movement, no great coffee, no gourmet cheese, no artisanal breads, no fine wine, and no craft beer? So many different kinds of products have evolved over the last few decades that it’s almost unimaginable to think of life without them. How dull would our lives be if reduced to only Maxwell House, Wonder bread, Kraft cheese, Blue Nun and a Schlitz.
But here we are. We have choices that were unthinkable a generation ago. Whole new industries have grown up before our very eyes. But the makers of all the mass-produced foods and beverages have not gone away, nor will they anytime soon. They are huge, massive companies with immense resources. And they’ve been losing market share for decades. They have but one goal in mind: to crush their competition and get back on top. In our case, it’s the big breweries, both domestic and foreign. They’ve turned beer into a commodity, a highly engineered food product. In my opinion, beer is best when it’s a balance of art and science, and the big breweries have raised the science of brewing to such heights that the art has been lost in the process. Technicians work at big breweries, artisans at craft breweries.
But after several years when the industry was losing ground — when the predicted shakeout took place in the late 1990s — craft beer suddenly stabilized and started a slow steady period of growth again that has continued to the present. And it’s been growing slowly now for a number of consecutive years and in fact even the gains have been increasing. We’re still a drop in the barrel compared to the Goliaths. Fourteen-hundred breweries still account for less than 4% of total beer production in the whole country. And now in the last year the biggest Goliath, Anheuser-Busch, has engaged in price wars with the other big breweries and is losing revenue. In fourth quarter last year they experienced a 54.7% drop in income before taxes. To keep their fingers in the dyke, the big breweries have been signing distribution deals (or in some cases trying to) with both import beer and microbreweries. At least one has tried a half-hearted PR campaign to celebrate beer in general. And we’re seeing more stealth micros, products from the big breweries masquerading as craft beer. So despite having a market share the size of a gnat, the giants are coming after us. What will be most important in the coming months is how we respond.
That’s why this morning’s comment rankled me so much. Because whatever prompted it and whoever posted it, at first blush it appears to be Kung Fu Fighting. It appears to be another brewery raining on the parade of another’s good news, throwing water on a fire just as it’s being built, or just trying to spread dirt on a fellow craft brewer. Whatever your metaphor, I don’t think it’s good for the industry to have any infighting, no matter how juvenile. We should be helping one another, not putting each others kegs in the street, so to speak. We need to all stick together and work together toward the common goal of reaching more and more people until we reach a tipping point of critical mass. Where is that point? I don’t know, but I believe we’ll know it when we get there. And in the meantime, no one, not even Sierra Nevada or Boston Beer, is big enough to reach enough people alone. We need each other, now more than ever. I hate war metaphors, but if there is an “enemy,” the enemy is out there. He most definitely is not or should not be among us. We cannot afford to engage in martial arts. We can’t be fast as lightning against each other because yes, it is a little bit frightening. And we’re going to need expert timing for the coming battles. We have to stop Kung Fu Fighting.
As I see it, there won’t be a better time to start working together then right now. This is it. Or at least this could be it, our time. This could be the moment we look back on and say this is when it all began. 2006 was the year when things started to change. The year when the media started paying attention to craft beer, when consumers in ever growing numbers started seeking out beer with flavor. The year when people choose the perfect beer to have with their ham, instead of trying to force wine to do a job it’s not well suited to do. The year people stock their kitchens with several types of beer glasses so they’ll be prepared when friends drop by with a bottle of Cuvee de Tomme or Pangaea to share. But in order to attain a goal of that magnitude, we unequivocally MUST work together as brothers and sisters on a quest, be able to trust one another implicitly and take pride and celebrate the successes of our brethren.
“You may say I’m a dreamer. But I’m not the only one.” Hey, it’s a better song than Kung Fu Fighting.
Let’s eradicate Kung Fu Fighting in our lifetime.
National Distributing & Republic Beverage Merge
A merger was announced today between Republic Beverage and National Distributing Company. The two giant beer distrubtors will be merging to create what I believe will be the second largest beer distributor nationwide. Republic Beverage distributes in Alabama, Arizona, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, Texas, Virginia and West Virginia. National Distributing currently distributes in Colorado, Florida, Georgia, Maryland, New Mexico, New York, Ohio, South Carolina, Virginia and Washington D.C. Together, one company will reach nineteen states plus the District of Columbia. Is that good for the industry? I don’t know, but my gut tells me it’s probably not going to help small breweries.
From the press release:
Tom Cole, chief operating officer of Republic Beverage Company, and Charlie Andrews, chief operating officer of National Distributing Company (NDC), jointly announced today an agreement in principle for a merger of their respective companies. The combined organization will have approximately $4 billion in sales, covering over 20 states including the District of Columbia.
Tom Cole stated that the two organizations are a natural fit due to their shared supplier alignments, complementary geographic territories, and a shared strategic vision. Charlie Andrews added that, as it approaches a true national organization, the company can more effectively serve the needs of suppliers and retailers alike. He also noted that the companies are aligned with a common vision of building premium branded wines and spirits through best in class practices. Tom and Charlie will jointly lead the integration and transition process.
Flying Dog Buys Frederick Brewing
The Denver Business Journal is reporting that local brewery Flying Dog has purchased Frederick Brewing of Maryland, which will henceforth be known as Wild Goose Brewery. They currently brew under the labels Wild Goose, Blue Ridge and Crooked River. According to Flying Dog President Eric Warner, “Wild Goose will continue to make its craft brands such as Wild Goose and Blue Ridge, but also will make Flying Dog labels by a special licensing arrangement. The brewer expects to begin production of Flying Dog beers in June.”
My earliest memory of Frederick Brewery was that in 1997 they were the first to brew a hemp ale, Hempen Ale, which garnered them a certain amount notoriety … and sales.
All It Takes Is More Fun: The Clueless Business Press
Those of us who have been writing about and/or closely following the craft beer industry for any length of time are often left exasperated by the mainstream media’s coverage of beer. If they cover beer at all, the number of amateurish mistakes that are made are legion. In fact, I’d go so far as to say mainstream beer coverage contains more errors than correct information. It’s that bad most of the time. They sometimes do more harm than good because spreading bad information is sometimes worse than ignoring us entirely. There are exceptions, I know, but they are just that: exceptions to the rule. Usually mainsream media outlets, again if they write about beer at all, tap one of their food or wine writers. Occasionally, that writer cares about about beer or even — dare I say it — likes the stuff. But not usually. More often they feel as if they’re being punished for some other misdeed, as if pulling beer duty is akin to being sent to a kind of literary Siberia. And more often than not the writing reflects that. It drives us more than a little nuts. When beer writers get together at events it’s usually the number two subject (number one is the location of the free food) that’s discussed time and time again. Tom Dalldorf, publisher of the Celebrator, and I have talked endlessly about this problem. Lew Bryson recently ranted nicely about it in his monthly Buzz column.
Don’t expect anything that broad here, I just read something that got me pissed off again and it started me thinking about this subject again. It was by an AP business writer by the name of Libby Quaid. A quick search reveals she writes about a disparate range of subjects from beef and madcow disease to Condeleeza Rice rebutting Colin Powell. The piece that got me going is called “Once-flat beer sales beginning to revive” and in it she’s billed as, of all things, an “AP Food and Farm Writer,” whatever that means. Apparently it means she doesn’t know anything meaningful about beer.
The gist of her story is that beer sales have “gone flat” but are now trending up again. But by “beer sales” she actually means beer sales from the large breweries since craft beer sales have had good positive growth over at least the last two years.
She begins:
Beer sales had gone flat, while wine was flying off the shelves. So beer makers decided to steal a page from wine’s marketing manual and create new packaging, flavors and drinks. Now beer is coming back.
As her only evidence, she cites ACNielsen figures and the article includes a graph. Now I’m not an AP writer so perhaps I missed the class on how to read one of these complicated graphs, but look at the figures for “mainstream beer” which is what she’s talking about when she cites only A-B, Miller and Coors in the early part of the article. Is it just me, or are the fgures for sales this year over last year showing sales declining? But beer is coming back, she says. She continues.
But not beer from major breweries. It’s imports and craft beer that are showing growth, even according to the only evidence she cites for the opposite conclusion. This “strong sales” is due to “new packaging, flavors and drinks.” For additional authority she quotes Nick Lake, who’s a Vice President of New Business Development at ACNielsen. But she refers to him first as a “beer expert at ACNielsen.” That’s laughable especially when he claims “[t]he major brewers ‘blended, became the same,'” as if it just happened. It’s hard for me to place much stock in a “beer expert” who doesn’t know that the major brands have been making American-style light lagers that have pretty much tasted the same for decades, perhaps beginning as long ago as post-World War 2 or some sixty years ago. But in the context of this article, he makes it sound like something the breweries did last year as a business tactic that’s now backfired and they’re in the process of reversing themselves again. |
While beer is still preferred by more than half of all Americans, wine and spirits drinkers have been increasing. This is happening, our esteemed food and farm writer tells us, because, as she puts it, “[b]asically, wine seemed to have gotten more fun.” Now I like wine. I drink it reasonably often. And I’ve been to organized wine tastings, wine festivals, and commercial wine competitions. But they are all quiet, serious affairs compared with even the average beer festival. Saying wine is more “fun” than beer can only be said with a straight face by someone who does not really know what good beer culture is and has the potential to be. I just spent the weekend camping at a brewery with hundreds of brewery people and their families, drinking, eating, talking, laughing, playing disc golf, and enjoying the sunshine outdoors. Down the road at the several Anderson Valley wineries that dot the area you could probably hear actual crickets chirping, it was that quiet by comparison. Now I realize she’s talking about just the big guys again, but that also means she’s missing the whole picture. She’s talking about three breweries and ignoring what’s going on at fourteen hundred of the rest of the breweries across the country.
Oh, and I think she defines “fun” as “cute critters on the label, easy-open screwcaps and cans and party-friendly boxes.” My mistake, at first I thought she meant actual fun, not that kind of fun. Even so, a walk down any decent beer aisle and you’ll see that beer labels have been defining that kind of fun for years, too.
But then she contradicts herself again, saying:
For beer, new packaging includes Heineken’s keg can for the fridge, which gives people draft beer at home. Coors sells a cooler box with 18-ounce plastic bottles that is ready to be filled with ice and taken to the beach or a barbecue. And Budweiser comes in new sturdy aluminum bottles that are like a cross between a can and a glass bottle.
So even under her strained definition of packaging as fun, beer is “fun,” too. Although Heineken’s keg can has been around for years, maybe even a decade, and doesn’t give anyone anything near “draft at home.” It’s the same horrible beer they sell in a regular can or bottle.
Ms. Quaid continues. “Beyond packaging is flavor.” Really? How astute. But wait, it gets better. “For Anheuser-Busch, maker of Budweiser, that means Bud Select, a light beer with a more robust taste.” Stop, I’m laughing too hard now. Bud Select … robust taste … ha ha ha …. If that’s what passes for robust flavor kill me now.
My point is that this so-called journalism is so bad that it paints a completely distorted picture of an entire industry. The author may know business. She may know the food industry. She may even know a little about the big breweries. But she appears to know absolutely nothing about beer. Now perhaps I shouldn’t be so harsh. Perhaps she didn’t ask for this assignment and did the best she could. Perhaps. But if this is the best the Associated Press could muster then I weep for the state of journalism today. Of course, I do that almost every day anyway.
But is it really too much to ask that our mainstream media pay even some attention to what more than half of their readers drink? And when they do deign to cover it that they do so with at least a modicum of accuracy. But most newspaper people will tell you that beer drinkers don’t read newspapers. Wine people do. So that’s the general reason given for why beer gets such short shrift. Because they’re bowing to what their readers want. In their mind, people want to read about wine but don’t want to read about beer. It reflects the same general prejudice that beer is not worthy of study, that it is inferior to wine or that it has no story to tell. Once upon a time, people thought the same thing about American wine. When small wineries in Napa and Sonoma counties began making world class wines, the press took up their cause is still talking about it today. When the same thing happened with beer beginning in the early 1980s, the press did cover what they then called the microbrewery revolution. But for reasons I’ve never understood they abruptly stopped, as if it was a novelty or fad whose time had passed. Of course, while they weren’t paying attention craft beer continued to grow in size, quality and prestige. Small American breweries today make some of the finest beers in the world and have the international medals to prove it. Yet nowadays, getting a newspaper or television station to regularly, consistently, fairly and accurately cover beer is as rare as a 1968 vintage bottle of Thomas Hardy’s Ale. If our mainstream media cared about beer even a fraction of the way they feel about wine, then more people would know how rare that is.
Speaking of New Beer Can Technology
Speaking of new technologies in beer cans, according to New Tech Spy, Miller Brewing will be experimenting with cold can technology for their beer cans sometime mid-next year. Cold can technology is a can that at the push of a button lowers the temperature of the beer inside by 30 degress in about three minutes. Sounds like a gimmick to me, but who knows? Maybe people really will pay more to be able to quickly chill their beer to the point where they can no longer taste it. It can only improve the American-style lager inside.
Washington State to Appeal Costco Decision
The Washingon State Liquor Control Board anounced their decision yesterday to appeal the recent Costco decision that would tear down the three-tier system currently in place in Washington State. This news is according to an article in today’s Seattle Post-Intelligencer.
Anheuser-Busch to Purchase Rolling Rock?
Forbes magazine reported today that Anheuser-Busch is close to a completing a deal with giant international beer conglomerate InBev to purchase the brand Rolling Rock. Rolling Rock is brewed by Latrobe Brewing Co. of Pennsylvania. The information Forbes cited comes from De Standaard, quoting Caroline Levy, a UBS analyst.
UPDATE: In the earlier Forbes article InBev had declined comment but has now done so, which has generated a new updated article about the future of Rolling Rock.
Coalition of the Willing Shrinks to One
Back in early February I commented that the Here’s to Beer campaign, which was originally supposed to be a coalition of the nation’s breweries, was only Anheuser-Busch and the Beer Institute. Since this propaganda campaign was so obviously an A-B driven effort, I further commented that I felt this tainted the objectiveness of the Beer Institute. It turns out that they agreed, because it was reported today in a Business Week article that “The Beer Institute trade group yanked its logo off the campaign after the first television ad ran during the Super Bowl. The institute would not say why.” Anybody have a guess?
So the Here’s to Beer propaganda is now officially just an A-B effort. A-B “Vice President Bob Lachky said the company is happy to carry the banner for all brewers nationwide.”
From the article:
“The reality of it is, this program really doesn’t need brewer support,” Lachky said. “We kind of always envisioned this thing as being an Anheuser-Busch-led initiative.”
That must be why he spent a great deal of time flying around the country trying to convince other brewers to “set aside their differences and fight the common enemy of wine and spirits” and craft brewers. It’s called spin because that sounds so much better than not telling the truth or saying they were wrong.
As I’ve said before, the funny thing is that the basic idea of promoting beer is a good idea. It’s just that A-B is the absolutely worst company I can imagine to take on this task. They could make decent beer but instead make a highly engineered food product. You don’t ask Wonder Bread to teach people about what great bread is. It’s too bad the Brewers Association doesn’t have the kind of money needed to do television ads, because I can envision a group of regional breweries doing pretty effective PSAs. A concerted effort that taught people what good beer really is would have enormous long term benefits for craft brewers as a whole. But TV is a game only giants can play, so that’s not really feasible at this point.
Also from the Business Week article:
While brewers are sitting out the campaign, Lachky said Anheuser-Busch is focusing its efforts on beer wholesalers. Next week, the company will launch a Web site called http://www.herestobeermarketing.com* that will offer beer wholesalers free promotional materials.
“The thing we learned as we went along is that the real audience of this is the beer distributor,” Lachky said.
I guess going directly to their consumers didn’t work very well, so they decided on the distributors instead. At least they’re already motivated to sell beer, after all that’s their job. But it sure seems like all they’ll accomplish is promoting their own brands. I’m sure all the A-B houses will embrace this program — they’ll probably all but have to — but I can’t imagine the Coors, Miller or independent distributors will have much incentive to use A-B produced marketing materials. But that’s said sight unseen, so who knows. It will certanly be interesting to see what they come up with.
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*Note: the website is not only not up right now, but the domain name has not even been registered. Business Week listed the new domain as herestobeermarkerting.com and I assume they meant herestobeermarketing.com without the errant “r.” Just to make sure, I checked both spellings and neither one has been registered. But it does strike me as odd that a week before its announced launch in a major business magazine, I could still have registered the domain name myself.