Brookston Beer Bulletin

Jay R. Brooks on Beer

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Number Of U.S. Breweries Reach 1,700

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ba
The Brewers Association just announced that the number of breweries in America has eclipsed 1,700 (and thanks to the other BA, Beer Advocate for the Twitter tip — a Twip?). According to the BA:

The count is at 1,701 operating breweries in the U.S. There are 9 percent more breweries in the U.S. than a year ago. As I blow the dust off the historical records, it appears that there were 1,751 breweries in 1900 and 1,498 in 1910. So we have more breweries than we have since around 1905. My resource for these data points is The Register of United States Breweries 1876-1976 (compilers Friedrich and Bull). There certainly are a lot more diverse brewing styles being offered today, particularly by craft brewers, and I’m betting quality is far greater now than then.

That’s great news. Two months ago when I needed a firm number for an article I was writing, the number was 1,677 so that’s nearly 25 brewery openings in less than sixty days. How cool is that?

Indianapolis Man Wins “Brew Your Cask Off” Contest

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all-about-beer
A couple of weeks ago, All About Beer magazine conducted a contest, to win a trip to the “Brew Your Cask Off” beer festival hosted by Georgia’s SweetWater Brewing in Atlanta, Georgia on March 5, 2011.

The winner had to write an essay explaining what type of cask they’d brew, in 300 words or less. The winner, Matt Robinson, from Indianapolis, Indiana, wrote a poem which won him and a friend a trip to SweetWater Brewery’s cask festival.

From the press release:

Matt will also be a honorary judge for the cask ale competition and be a server for a cask made from his hilarious and precise poem.

Without a doubt one of the most unusual, and clever beer events, SweetWater Brewery’s Brew Your Cask Off features 80 different cask ales made by a full range of celebrities and not so celebrities, including dignitaries from the beer media, non-profits and retailers from the metro Atlanta beer community. All About Beer Magazine publisher Daniel Bradford participated in making a cask named Adam’s All About Beer Ale, after the SweetWater brewer who guided the actual cask ale production. The cask ale festival features a judging of all the casks with the winner getting serious bragging rights, including being brewed by SweetWater Brewery, and the loser getting the much coveted, and highly decorated golden toilet seat.

Matt Robinson will join a collection of very talented palates as a honorary judge helping chose the best cask of the festival. During the festival itself, Matt will have the pleasure of presenting a cask made from the numerous clues he provided in his winning poem.

Runners up included second place finisher Steve Forbes who wrote a passionate sensory entry. Third place went to Michael Iris who described how his hound found an unusual cache of berries that would have made a wonderful cask. Both of these entries and the other finishers can be found at All About Beer.

The winning entry is below. Enjoy.

aab-cask-off

What Cask Should An American Brew? by Matt Robinson

What cask should an American Brew?
But nothing less than around 55 I-Be-Yous!
I would add subtle flavor with East Kents
Perhaps more for hop compliment
Throw in some fuggles and American C’s
Many will say it’s the knees of bees!
Powerful flavor will be most divine
Even with a gravity around one-thousand nine
The grain bill is full of Golden Promise Malt
This great American session cask has no fault
The hydrometer reading will need to state
Around 3.55% alcohol by weight
This may sound like an English creation
With bold American style is my summation
Lovibond sounds nice somewhere near ten
Many hours with our cask we will all spend!
Wyeast numbered Nineteen Forty-Five
Will make our cask come alive!
Gravity-fed like our English brethren
Cask beer please take hold for American beer drinking heaven
Deep in the south in town called Atlanta
Our cask brings so much joy we call it Santa!
All the people will come and stand
To sing play us a song you’re the piano man!

Marin Institute Attacks State Beer Taxes … Again

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Marin-I
Daniel Defoe observed in 1726 that nothing was more certain than death and taxes, and sadly, that still holds true nearly three centuries later. It seems more likely that we’ll lick that immortality problem before taxes ever become a thing of the past. And few taxes are more certain to be under attack than alcohol taxes, a favorite target of the anti-alcohol groups, whose incessant calls for their increase have only grown louder as the economy is in free fall. Because what you want to do in a sinking economy is make it harder for one of the few industries doing well to keep people employed, paying taxes and in business.

But that’s never stopped them before and it’s not stopping them now, as the latest shot over the bow from my friends at the Marin Institute was a press release today, Twelve States Stuck at Bottom of Beer Tax Barrel. It announces their new interactive map of Neglected and Outdated State Beer Taxes.

Here’s the entirety of the press release:

SAN FRANCISCO, Feb. 16, 2011 /PRNewswire-USNewswire/ — Marin Institute, the alcohol industry watchdog, launched its Neglected & Outdated Beer Taxes Map today. This new interactive tool helps those who want to raise beer tax rates to balance state budgets or erase deficits.

“Just point your cursor at a state and you can see the your current beer tax rate, the year of your last tax increase, and the loss of revenue from inflation,” said Bruce Lee Livingston, Marin Institute executive director and CEO. “We show the twelve states that have hit the bottom of the barrel in beer tax revenues and are the most overdue for an increase.”

The beer tax map quickly reveals states suffering the most from Big Beer’s influence. These are states that have beer taxes stuck at absurdly low rates set as long ago as the 1940s, and even the 1930s. “With almost every state struggling to find new dollars to fund critical programs, policymakers need to stop leaving beer tax revenue on the table,” said Sarah Mart, research and policy manager at Marin Institute.

The web site shows the twelve states with the “worst” beer tax rates in the nation, the “bottom of the beer barrel”: Georgia, Idaho, Kentucky, Louisiana, Michigan, Mississippi, Missouri, North Dakota, Pennsylvania, West Virginia, Wisconsin, and Wyoming. Six states (Kentucky, Louisiana, Mississippi, Pennsylvania, West Virginia, and Wyoming) have not raised their beer tax in 50 years or more.

The worst state is Wyoming, which has the distinction of the lowest tax rate – $0.02 per gallon – set in 1935, during FDR’s first term. Factoring for inflation, the value of Wyoming’s beer tax has decreased 94%. A simple 5 cents per drink increase in the state’s beer tax would yield $7.75 million in new revenue. Considering that Wyoming’s annual budget shortfalls are projected to hit $5 million by 2013, a modest beer tax increase would erase all budget shortfalls in the state, reduce drinking, and increase health and safety a little.

The map shows that in 47 states, the decrease in real value of the beer tax due to inflation ranges from 25 percent to more than 75 percent. “This is such a lose-lose scenario for the states,” added Mart. “States are losing revenue and cutting essential programs, especially those which mitigate alcohol-related harm, while the beer companies reap higher and higher profits. It’s time for states to stop their race to the bottom and raise beer taxes.”

And here’s their colorful map of beer taxes and when they were last raised, minus the interactivity. The interactive version you can see on their website.

mi-beer-taxes-date

But there are so many things wrong with their arguments that it’s hard to know where to begin. So I’ll start by being petty. Look at the first two words of the press release: “SAN FRANCISCO.” The Marin Institute is NOT in San Francisco, but in San Rafael, which is just north of the city in Marin County, hence their name. I’m sure that they used the more familiar San Francisco because nationwide, and especially worldwide, no one’s heard of San Rafael, but I can’t help but ponder that if they can’t even be accurate about where they’re located, what does that say about their commitment to the truth in more substantive issues?

First, let’s assume everything they say is correct (it’s not, but just for the sake of argument). The amounts realized according to their table of the states with the lowest taxes if their state excise taxes were increased by “10 cents a drink” ranges from $15.3 to $333 million, or an average of about $123 million per state. But state deficits are in the billions, with a “b.” The Center on Budget and Policy Priorities estimates around $350 billion. Even if you added up all twelve states, the additional taxes would be less than $1.5 billion, less than half a percent of the total (not a perfect number, but still indicative of the problem). The point is that raising the state excise taxes on alcohol comes no where close to doing anything meaningful about the budget shortfalls facing all but four or five of the states. All it does is punish and weaken one of the few functioning industries in a distressed economy.

Next, let’s talk about the idea that taxes should parallel inflation and be raised to match those levels. If that is indeed a public policy goal, shouldn’t it be applied across the board? If we accept that taxes should be raised every time inflation inches ever higher, then shouldn’t ALL taxes do likewise? Singling out the alcohol industry for such treatment is, again, just punishing one industry because one of their “watchdogs” doesn’t like them, despite all protestations to the contrary. I don’t want my taxes to go up anymore than I suspect you do, but if we need more money as a state, country and society, than I don’t see any other fair way to raise more money. Any scheme that falls disproportionally on any industry is de facto unfair to solve a problem that effects all of society. We should have done away with tax breaks for the rich, but that couldn’t even be talked about, much less implemented. Instead, let’s suggest the heavily regressive taxes on alcohol punish the poor even more than they already do.

The other unanswered question is how high to raise excise taxes and for how long? And while there’s no amount proposed at this time, since they’re merely providing the tools to sow discontent in individual states, I believe that’s because there’s really no amount too high for the anti-alcohol groups. Though unstated, it seems implicit in their rhetoric that no amount is enough and they’ll never be satisfied. I’ve never seen a discussion of what amount they might consider fair enough, or might balance the amount with their ability to stay in business (which is the only way companies could continue to actually pay their taxes). Is there an amount that might satisfy such organizations? If so, I’ve never seen it. Then, if fixing the economy is truly the aim of their proposals, should such taxes only be imposed as a temporary measure until the crisis is over? If you didn’t laugh when you read that, you don’t realize that taxes are almost never repealed, only imposed or increased. What I think this exposes is that this is simply a way to use current circumstances to harm the alcohol companies and make it harder for them to stay in business, falling especially hard on the small brewers.

What’s also conveniently left out of their argument, as always, is the current amount of taxes paid by alcohol producers. There’s more taxes paid on every bottle of beer than any other consumer good save tobacco. Those two products are the only remaining items that pay excise taxes, at both the federal and state level. And while I think most would agree that smoking offers no health benefits, beer (and alcohol more generally) in moderation most definitely does. If you drink one or two beers a day, the odds are you’ll live longer than either a teetotaler or a binge drinker.

I’ve tackled this before, so if you want background on the issue of beer taxes, see Abe Lincoln On Beer & Politics and Here We Go Again: Beer & Taxes.

How much does the brewing industry pay? As of 2008, business and personal taxes accounted for $35,283,148,850, consumption taxes account for another $11,172,946,867; or a total of $46,256,095,717 annually. The total economic impact of the beer industry alone pumps $198,152,918,964 into the national economy each year. And all those figures are not including wine and spirits which would push it significantly higher.

I think Defoe’s quote needs modifying to reflect modern society, adding that few things are more certain than anti-alcohol groups using a recession to further their own narrow agenda of making the alcohol industry pay for their perceived sins. I think I need one of Moonlight Brewing‘s tastiest beers, their black lager, Death & Taxes.

Mutineer Magazine’s Holiday Comedy Festival In Wine (& Beer) Country

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mutineer-comedy-fest
This should be a fun — and funny — event. Mutineer Magazine is hosting a comedy event to benefit A Child’s Right, an organization with a mission to ensure children have access to safe drinking water. The Mutineer Magazine Holiday Comedy Festival will take place at the Jacuzzi Family Vineyards in Sonoma on December 11, beginning at 7:00 p.m. In addition to Jacuzzi wine, tequila from sponsor Don Roberto and beer from Lagunitas and Firestone Walker will also be served.

The evening of stand-up comedy will include comedians Ben Morrison (host), Bryan Callen (co-headliner), Natasha Leggero (co-headliner), Ben Gleib, Greg Wilson, and Daryl Wright. In addition, the winner of a Laugh Factory contest is scheduled to appear. Also special guest Jonathan Goldsmith will appear. He’s the Dos Equis spokesperson for the “The World’s Most Interesting Man” advertising campaign. You can read more about each performer at the Mutineer event website.

Tickets are only $35 and can be purchased online.

mutineer-comedy-fest

From the press release:

RARE LAUGHS, SPECTACULAR BEVERAGES

Performing against this fantastical blue backdrop (blue for water relief, naturally!)? An all-star lineup of standup comedians and special guests, no shortage of Hollywood-style glamour (think paparazzi-style photogs on the blue carpet) and outstanding libations from some of the finest names in beverage. It’s all in line with the publication’s rep for pushing boundaries and exceeding expectations where drinks and lifestyle experiences collide, and looks to be one of the wildest nights wine country will see this side of 2011. Los Angeles-based funnyman and festival host Ben Morrison – known as well for being Ashton Kutcher’s right-hand man on the hit MTV show “Punk’d” as for his prolific appetite for Single Malt Scotch – says, “It’s a totally rare opportunity to see this caliber of comedic talent all under one roof, in one night outside of Hollywood.”

Even better: it’s for a good cause.

LAUGHS TO BENEFIT WATER RELIEF

The festival is an ebullient catalyst for Mutineer’s 2011 trek to Nepal, where magazine staff, select “cultural influencers” and beverage industry reps will install five water filtration systems on behalf of relief organization A Child’s Right. The systems will provide clean drinking water to 25,000 children for ten years. To bring the full impact of the outreach home to readers, magazine editors will blog about the trip along the way and report on the endeavor with significant coverage in the May 2011 issue. Kropf sees it this way: “There’s nothing funny about the need for clean water. But bringing top comedic talent – and lots of laughter – to wine country to raise funds for water relief among at-risk kids? Priceless.”

FUNNY, SEXY & BLUE ALL OVER

Officially on the program roster: Cocktails by presenting sponsor Don Roberto Tequila and other select purveyors in the beverage tent, festive surprise guests, base-thumping holiday soul and funk beats, and lots of laughs. As for the show itself, the endlessly funny Natasha Leggero (as seen in NBC’s “Last Comic Standing,” Comedy Central’s “Reno 911” and “Ugly Americans”) and Bryan Callen (“MadTV” and “The Hangover”) are set to co-headline an elite group of seven Hollywood humorists, all of whom have pledged to share with guests their most amusing insights into the theme of thirst. One of the comedians for the evening will be a wild-card performer selected at a Mutineer-sponsored search contest at LA’s Laugh Factory November 18, 2010, and a special appearance will be made at the festival by Jonathan Goldsmith, who famously portrays “The Most Interesting Man In the World” in Dos Equis’ advertisements.

A CHARITABLE GIFT EVERY HIP HOLIDAY REVELER CAN EMBRACE!

Best part of all? Festival guests will know that they’re laughing and sipping in the name of charitable water relief. And thanks to the show’s top-shelf talent, delicious drinks, eye-popping blue décor and insanely affordable ticket price — Mutineer tagged entry at a rightly reasonable $35 to make the show as millennial-accessible as possible — it looks as though everyone gets to have the last laugh come December 11. Cheers to that.

Are You “Porter Worthy?”

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porter-worthy
I might have ignored this press release from Yuengling Brewery had it not been for one personal detail: my son is a porter. How could he not be “porter worthy,” whatever that means? Apparently it means “good deeds,” so that may leave my Porter out, after all. He’s just mostly good, like any 9-year old boy.

What Yuengling is doing is recognizing that “good deeds happen every day thanks to the selflessness of friends, family and, sometimes, perfect strangers. But most of those good deeds go unrecognized — until now.”

A new campaign from Yuengling seeks to shine a spotlight on the individuals who go above and beyond. The campaign, for Yuengling’s Porter beer (also its oldest beer), is called “Porter Worthy” and is inspired by the porters of 19th century England, who would toil day in and day out transporting travelers’ luggage through the cobblestone streets of London. Each month on Yuengling’s Porter Worthy blog, we’ll recognize a Porter Worthy Person of the Month, who will receive a prize signed by Dick Yuengling himself.

From the press release:

“Depth of character allows ordinary people to do extraordinary things on a daily basis. These are the achievements we call ‘Porter Worthy,’ and we want to give these achievements the recognition they deserve,” said Yuengling Marketing Manager Lou Romano. “That’s where Yuengling Porter comes in. It’s a reward that’s special, yet accessible.”

According to Romano, the Porter Worthy campaign was inspired by the beer’s namesake, the strong, hard-working porters who carried travelers’ heavy baggage through the cobblestone streets of 18th century London.

The blog and Facebook page will feature Porter Worthy persons identified by the Yuengling team but also will recognize a “Porter Worthy Person of the Month” based on reader nominations. Monthly honorees will receive, among other prizes, a personalized award signed by brewery President Dick Yuengling.

Yuengling Dark Brewed Porter is available in 13 states and Washington D.C. The Porter Worthy campaign is scheduled to run indefinitely with Porter Worthy nominations open to people around the world.

porter-worthy

As beer promotions go, it’s hard to fault one that tries to find and honor people for doing good in the world, no matter how small the deed. Yuengling describes being “porter worthy,” as “a special tribute for those who have carried a heavy load, picked up extra work or gone out of their way to help.” They continue:

That could be you, or someone you know. Each month, we’ll select a different “Porter Worthy Person of the Month” based on the nominations you send us. Those selected will have their story told here on PorterWorthy.com and will win a limited edition Yuengling Porter hand-signed by Dick Yuengling.

So nominate a friend, family member, co-worker or even yourself. Remember, a Porter Worthy action isn’t necessarily monumental. It could be a small gesture. But large or small, doing something Porter Worthy means making a difference when it matters most.

Under the Influence of Recession

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california
The California Board of Equalization — our taxing agency — yesterday sent out a press release with the results of a study they did on drinking trends in the state based on the collection of excise taxes. The release, Under the Influence of Recession: BOE Answers the Question, “Do People Drink More During an Economic Downturn?” is available as a pdf from the BOE’s newsroom page.

Below is the press release, which reports the overall findings:

There are no consistent patterns in alcohol consumption or spending on alcohol during recessions, a report released today by Board of Equalization (BOE) Chairwoman Betty T. Yee concludes.

The November 2010 edition of the BOE’s Economic Perspective newsletter looks at alcohol consumption data during the recessions of 1970, 1973, 1980, 1981, 1990, 2001 and 2008. The Economic Perspective is a quarterly publication produced by the BOE that looks at economic factors of interest or that influence California economic activity. The November edition looks exclusively at the issue of alcohol consumption during the seven recessions of the last 40 years.

“Economic data compiled by the Board of Equalization contains a wealth of information for estimating revenue impacts and other analyses that serve the agency’s tax administration mission,” said Chairwoman Yee. “In this case, the figures do not indicate any generalized patterns of behavioral change in alcohol use during bad economic times.”

The BOE report notes several ways consumers would be expected to react during recessions: First, total alcohol consumption per capita may fall during the recession, as consumers would have less income to spend on alcohol. Second, consumers may substitute less expensive brands of alcohol for more expensive brands or less expensive ways to consume alcohol for more expensive ways, such as more off-premises consumption during recessions, as opposed to in bars and restaurants. Third, consumers may change the kind of alcohol they drink, for example switching from distilled spirits to less expensive alternatives such as beer. The fourth response, based on psychology more than economics, would be that consumers “drink away their sorrows,” and increase alcohol consumption during recessions. The data show examples of all four kinds of responses during recessions. The most consistent response, occurring in four of the seven recessions studied, was lower growth in on-premises alcohol consumption.

The November Economic Perspective also notes that in terms of national spending patterns on alcohol, prior to the 2008-09 recession total U.S. spending rose 2.4 percent. In contrast, during the 2008-09 recession, U.S. spending on alcohol declined by 1.7 percent.

The Economic Perspective newsletter also notes:

  • Alcohol consumption nationally is at a 25-year high, based on a Gallup survey released in the summer of 2010, with 67 percent of Americans drinking alcohol.
  • Federal Health and Human Services data show a low of 1.96 gallons ethanol consumption per capita in 1954 (a recession year) and a high of 2.76 gallons in both 1980 and 1981 (both of which were recession years).
  • The data show that California alcohol consumption has generally followed national trends in the last 20 years. California per capita consumption, like the U. S., reached a low point in 1998, then started gradually trending upward.

The report points out that historical data show that when confronted with a recession, people who drink alcohol have responded in a variety of ways.

Various Responses Represented in Recessions

The data show examples of all four kinds of responses during recessions. The first consumer response, less growth in total alcohol spending, occurred in 1973, 2001, and 2008. Chart 3 shows these changes in total alcohol spending for each recession. The second kind of response, lower growth in on-premises alcohol consumption, occurred in the recessions that started in 1973, 1980, 1981, and 2008. This appears to be the most consistent response, happening in four of the seven recessions.The third response was seen in both of the 1970s recessions. Beer consumption went up in the recessions of the 1970s, while distilled spirits consumption went down. This kind of response has not happened since the 1970s. And the fourth response, significantly higher total alcohol spending during a recession, happened in 1970 and 1990.

boe-2010-2

And here’s some interesting tidbits from the Economic Perspective newsletter:

Average total U.S. ethanol consumption per capita is tabulated by decade in [the chart below] to track long-term trends. As shown in the chart, average ethanol consumption per capita for the first nine years of the first decade of 2000 was similar to that of both the 1960s and the 1990s. The recent decades with the highest consumption were the 1970s and the 1980s.

boe-2010-1

And here’s some more from the newsletter on alcohol and the economy.

U. S. Alcohol Drinking rate at 25-Year High

A Gallup survey released in the summer of 2010 indicated that 67 percent of Americans drink alcohol, the highest percentage recorded since 1985.1 Is there some kind of statistical relationship between alcohol consumption and economic growth? Do people drink more during recessions and associated periods of high unemployment rates?

Do We Drink More During Recessions?

To answer this question, this article reviews long term and short term trends in alcohol consumption and analyzes changes before and during the recessions we have had since World War II.
According to Gallup:Despite some yearly fluctuations, the percentage of Americans who say they drink alcohol has been remarkably stable over Gallup’s 71 years of tracking it. The high point for drinking came in 1976-1978, when 71 percent said they drank alcohol. The low of 55 percent was recorded in 1958. When Gallup first asked Americans about drinking, in the waning days of the Great Depression in 1939, 58 percent of adults said they were drinkers.

Gallup reports also note that the percentage of Americans who say they drink alcohol has been in the low 60s fairly consistently since 1947.

Gallup Data Show Alcohol Use Unrelated to Recessions

Based on these data, it would appear that prior to 2010 there was little, if any relationship between the percentage of people drinking and economic conditions. The economy was not in a recession during the 1976-1978 period, when the highest percentage of adults defined themselves as alcohol drinkers (71 percent). In fact, the economy was growing rapidly, with real gross domestic product (GDP) increasing an average of 5.2 percent per year during this three-year period. This is well above the 2.9 percent average annual growth rate experienced by the U.S. economy since 1945. The economy was in a recession from August 1957 through April 1958, about the time of the lowest percentage of adult drinking in Gallup’s records (55 percent).2 If anything, these extreme points in the Gallup poll results seem to indicate that people drink more when the economy does

Other Measures of Alcohol Consumption

Polls such as those done by the Gallup Group measure how prevalent drinking is. Other measures indicate how much alcohol is consumed. These include ethanol (pure alcohol) content, gallons of liquid by type of product, and spending in dollars.

Health and Human Services Alcohol Surveillance Reports

The U.S. Department of Health and Human Services (HHS) periodically does surveillance reports of state and national alcohol consumption in terms of gallons of ethanol content of beer, wine, and distilled spirits per capita for those over age 14. Sources of data include state government revenue agencies and various industry sources. The most recent HHS report has these annual data from 1934 through 2008.3 The data show no obvious correlations with recessions. For example, in 2001 (the most recent recession covered by these data) total U.S. ethanol consumption from beer, wine, and distilled spirits was 2.18 gallons per capita,

Alcohol Consumption Rising Since 1998

The HHS data show that total U.S. ethanol consumption reached its most recent low point in 1998, at 2.14 gallons per capita. It has been slowly trending upward since then, reaching 2.32 gallons per capita in 2008. As shown in Chart 1, wine and distilled spirits were responsible for the increase in U.S. per capita consumption from 1998 to 2008.

Lowest and Highest Alcohol Consumption

The lowest U.S. total ethanol consumption since the end of World War II was 1.96 gallons per capita in 1954 (a recession year, with a recession running from July 1953 through May 1954). The highest consumption was 2.76 gallons per capita in both 1980 and 1981 (both recession years, each with six-month periods of recessions).

On additional interesting findings is that during a recession, they did note that people tend to go out less frequently, meaning sales of alcohol at restaurants and bars decline, but based on the uptick in retail purchases of alcohol for home consumption it’s essentially a wash. But that means, as we’ve seen brewpubs and restaurants struggle a bit while package craft and regional breweries have had solid growth.

The BOE study concludes that “there appear to be no consistent patterns in alcohol consumption or spending during recessions. Recessions are all different; some last longer than average, some are associated with more than average job losses. Alcohol consumption responses during recessions are also different, and not very predictable. The historical data show that when confronted with a recession, people who drink alcohol have responded in a variety of ways.”

Customer Satisfaction With Beer Continues To Fall

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acsi
The American Customer Satisfaction Index (ACSI) today released their latest findings for a variety of products, and beer again continued to drop. I should point out, however, that the ACSI tracks only the big brands. As far as I can tell, they do not track any craft brewers. Since they refer to “Corona, Heineken, and Samuel Adams” all as “smaller brands,” I feel confident that very few, if any, craft breweries are on their radar. As a result, these findings — while interesting — are only relevant for the big picture and don’t reflect the continuing gains and positive growth in the craft sector.

From the press release:

Beverages: Anheuser-Busch Tanks
Beer drinker satisfaction falls from its all-time high in 2009 by 2.4% to 82, driven by a sharp decline for Anheuser-Busch products. Last year, shortly after its acquisition by Belgian InBev, Anheuser-Busch recorded its best ACSI score ever and captured the industry lead. Now that gain evaporates, as the company drops 4% to an ACSI score of 82. Sales of the Budweiser brand fell by nearly 10% over the past year, the largest decline on record, as younger drinkers have increasingly turned to microbrews and low-calorie products. A-B’s weakness is Miller’s gain. Without improving, Miller claims the top ACSI spot among brewers, unchanged at 83. Molson Coors also remains unchanged, stalled at the bottom of the industry at 81.

And here’s additional analysis from a second release:

Beverages
Customer satisfaction with beer fell from its all-time high in 2009 by 2.4% to 82, driven by a sharp decline for Anheuser-Busch products. The rest of the measured brewers—Miller, Molson Coors, and the aggregate of smaller brands such as Corona, Heineken, and Samuel Adams—held to the same scores received one year ago.

In 2009, a year after its acquisition by Belgian InBev, Anheuser-Busch advanced to its best ACSI score ever and captured the industry lead at a record 84. In 2010, the gain has evaporated as the company lost 4% and slid to 82. The number-one seller of beer in the United States also has struggled with sales of its Budweiser brand. Sales of the brand fell by nearly 10% last year, the largest decline on record, as younger drinkers have increasingly turned to microbrews and low-calorie products.

Miller is a beneficiary of A-B’s plunge. Miller assumes the industry lead in customer satisfaction by standing still at an ACSI score of 83, sharing the top spot with the aggregate of smaller brands (also unchanged). A year ago, Molson Coors slumped to the bottom of the industry. The company is stalled there for a second year at an unchanged score of 81. Value for money remains a challenge, as consumers are increasingly price sensitive and Molson Coors brands tend to be higher priced than many of its competitors’ brands.

Guinness Foreign Extra Stout Finally Coming To U.S.

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guinness-white
At long last, Diageo has announced that Guinness Foreign Extra Stout will be returning to the United States. Discontinued after Prohibition in 1920, it’s been 90 years since it was legally available here. Thanks to Beer Advocate for the tip.

From the press release:

Tuesday, September 28th is National Drink Beer Day! As if you didn’t already have reason to raise a pint, GUINNESS Irish Stout is proud to announce its U.S. launch of GUINNESS Foreign Extra Stout (FES) on October 1st. The fullest in flavor of the GUINNESS brand variants, GUINNESS FES is carbonated unlike the nitrogenated GUINNESS Draught with which most Americans are familiar. The specialty beer is 7.5% ABV and possesses strong, roasted aromas followed by a unique bittersweet taste. Foreign Extra Stout is already a favorite of many around the world, making up 45% of GUINNESS sales globally, and is sure to be a favorite of beer aficionados here in the U.S.

GUINNESS Foreign Extra Stout (FES) is brewed with the highest hop rate of all the GUINNESS variants. The generous hop additions express fully the beers distinctive character and flavor while also prolonging shelf life in warmer climates, as hops are the best natural preservative for beer. GUINNESS FES is uniquely different from GUINNESS Draught both in taste profile, color and ritual.

Brewed for more than two centuries, GUINNESS FES dates back to 1801. Known as West India Porter until the mid nineteenth century, FES was an export beer brewed with extra hops, giving the beer a more intense flavor and higher alcohol strength. The extra hops also acts as a natural preservative for beer, allowing it to survive long journeys overseas.

It’s nice to see a good decision by Diageo on behalf of the Guinness brand instead of gimmicks like Guinness Extra Cold or Guinness Red.

guinness-foreign-extra-stout

MillerCoors Launches Craft & Import Division

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tenth-blake
While MillerCoors had already announced their intention to start up a new division dedicated to its smaller brands and imports, today they announced that Tenth and Blake Brewing Co. was open for business. There’s no website yet, but there is a Facebook page.

Here’s the press release:

Tenth and Blake Beer Company Opens for Business

Earlier this summer, MillerCoors announced plans for a new company focused on craft and import beers, aimed at strengthening relationships within the beer industry and enhancing the overall segment’s volume and growth. Today, to reflect the passion, great brewing tradition and entrepreneurial spirit of its beer brands, the company announced its new moniker. Tenth and Blake Beer Company is now officially open for business.

“This is a unique and exciting period in the beer business,” said Tom Cardella, the company’s CEO and President. “With the added focus on our craft and import brands and the talent within our brewing network, Tenth and Blake Beer Company has the opportunity to make an impact and continue to help grow this segment. We’re made up of passionate brewers and merchants of the world’s finest specialty brews, and we look forward to celebrating the joy of beer with beer drinkers throughout the U.S.”

The organization wanted a name that reflects its great beer heritage from MillerCoors, while highlighting its unique and differentiated position in the industry. The 10th Street Brewery in Milwaukee brews Leinenkugel’s and various specialty beers. And Blake Street in Denver is home to the Blue Moon Brewing Company at the Sandlot. These facilities will be primary sources of many of the company’s brews, while serving as incubators of ideas and future beers.

The company’s network of brewing expertise extends beyond Denver and Milwaukee, with the Leinenkugel’s Brewery in Chippewa Falls, Wis. and the AC Golden brewery in Golden, Colo. In addition to craft brews like Blue Moon, Leinenkugel’s, and Colorado Native, Tenth and Blake Beer Company features top imports, such as Peroni Nastro Azzurro, Pilsner Urquell and Grolsch.

“Employees of Tenth and Blake Beer Company will take beer passion, education and capabilities to the next level,” Cardella said. “All team members will participate in training at one of our breweries, take part in beer merchant sessions and go through sales training to better understand and serve our customers.”

As an independent yet connected company, Tenth and Blake will own the strategic business drivers — marketing, trade marketing and an independent sales organization dedicated to the craft and imports business. The company will in-source other capabilities from MillerCoors, including legal, communications, HR, marketing services and consumer insights.

Hmm, I’m not sure what to make of that. Is it an admission that such a large, global company is too big to think small in the way one needs to for promoting and successfully selling smaller, niche brands? Or is it simply easier to parse out the tasks to two independent groups, one that has to think big picture, freeing the other to think small and more local? On the other hand, with sales of core brands flat or soft, perhaps it makes sense to give more focus to the smaller brands that actually are doing well.

Harry Schuhmacher from Beer Business Daily, reports that “Tom, in a letter to distributors obtained by BBD, writes that they have built a team of ‘brewers and merchants of the world’s finest specialty brews, celebrating the joy of beer with our customers and consumers’ to build a ‘deeper relationship’ with customers.” That sounds a little too rah-rah for my tastes, but then that was probably its intention.

Schuhmacher spoke to Tenth and Blake head honcho Tom Cardella, and he told him the following:

Tom says that their “entire team will participate in specially designed on-boarding programs that will include spending several weeks working inside our breweries and being certified in our beer merchant training. And everyone from the janitor to the CEO will go through sales training to better understand and serve our distributor and retailer customers. We will be an organization of merchants sharing our love of our great beers and creating value in the market.”

The new unit will have a “dedicated new sales organization” that will bring “focus” and they will provide a “dedicated supply chain function to ensure coordination of the fine motor skills needed to service smaller specialty brands” while still providing the services of a big corporation with regards to “legal, communications, HR, marketing services and consumer insights.”

The new unit will develop “distributor beer merchants (DBMs) in a whole lot of markets working side-by-side with you, our distributor partners.” DBMs will be “soley” dedicated to their import and craft brands with dedicated brewery “managers” who will “own and execute the craft and import portfolio for each of their respective management units, delivering wins to our general managers.”

And the Milwaukee Business Journal added:

MillerCoors’ 10th Street Brewery in Milwaukee brews Leinenkugel’s and various specialty beers, and Blake Street in Denver is home to the Blue Moon Brewing Co. at the Sandlot. The facilities will be primary sources of many of the company’s brews, while serving as incubators of ideas and future beers, the Chicago-based brewer said.

MillerCoors also operates the Jacob Leinenkugel’s Brewing Co. in Chippewa Falls and the AC Golden brewery in Golden, Colo. In addition to craft brews like Blue Moon, Leinenkugel’s and Colorado Native, Tenth and Blake Beer Company will be responsible for imports such as Peroni Nastro Azzurro, Pilsner Urquell and Grolsch.

Actually, according to the Facebook page, here’s the list of beers Tenth & Blake will be responsible for:

  • AC Golden brands (see below)
  • Aguila
  • Batch 19
  • Blue Moon
  • Colorado Native (AC Golden)
  • Cristal
  • Cusquena
  • Grolsch
  • Henry Weinhard’s
  • Herman Joseph’s (AC Golden)
  • Kasteel Cru
  • Killian’s
  • Lech
  • Leinenkugel’s
  • Peroni
  • Pilsner Urquell
  • Sandlot brands (Brewmaster’s Special, Ski Brews, Barmen, Championship Amber Ale, Right Field Red, Slugger Stout, Power Alley ESB)
  • Tyskie
  • Winterfest (AC Golden)

That should keep them busy.

tenth-and-blake

A Done Deal: NAB Buys Magic Hat & Pyramid

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The deal that was rumored late last month is now completed. North American Breweries has bought the Magic Hat, Pyramid and Portland breweries. The deal includes three breweries, five alehouses and one retail store.

From the press release:

According to Rich Lozyniak CEO of North American Breweries, the new beers add craft brewing credibility, and variety to the beers currently offered by the company. “We are really excited to add Magic Hat, Pyramid and MacTarnahan’s beers to North American Breweries. All three brands have a rich history of craft brewing that helps us gain acceptance in that tight-knit community,” said Lozyniak. “By having more beers to offer our customers, wholesalers and retail accounts, we can better compete with the multi-national mega brewers who dominate the U.S. beer industry.”

Along with the new craft beer offering, North American Breweries also imports and sells Imperial, Labatt Blue and the Labatt family of beers. Out of its Rochester brewery it makes and sells the historic line of Genesee beer, Dundee Ales & Lagers, the Original Honey Brown Lager and Seagram’s Escapes.

“The industry has taken a turn away from the mega brewers. We have a collection of regional and heritage brands that position us well among today’s beer drinkers,” said Rich Lozyniak. “At a time when the overall beer industry is in decline, we’re growing across brands which essentially created a great opportunity to collaborate with some of the best craft brewers in the business.”

According to the company, the heritage and brand position of Magic Hat, Pyramid and MacTarnahan’s will be closely guarded. “The credibility that these brewers have developed in the craft beer segment is key to our success. We will work hard to carefully maintain and grow what was passionately created by people who love to drink and brew beer.”

The new brands mean the addition of three new breweries, one each in: Portland, Oregon; Berkeley, California; and Burlington, Vermont. Magic Hat is the 10th largest craft brewery in the country, while Pyramid is the fifth largest. Both companies have a strong following of loyal consumers who love the craftsmanship that go into each unique beer.

Together Magic Hat, Pyramid and the Portland Brewing Co. (MacTarnahan’s) employ about 600 people. Currently, North American Breweries has approximately 500. “We’re a hardworking group of people with a strong track record of brewing beer, building brands and executing in the marketplace,” said Lozyniak.

Interestingly, the press release also includes NAB’s plans and their promise, presumably to consumers and fans of the brands they’ve purchased. That’s not something I’ve seen before, and it suggests they understand how brand perception effects how a particular brand performs, especially to beer geeks in the craft beer world.

North American Breweries’ Plans for Magic Hat, Pyramid and MacTarahan’s

  • The beer will remain the same: it will be brewed by the same people in the same breweries, using the same recipes, ingredients and commitment to artisanship as it has always been.
  • All breweries, Alehouses and the Artifactory will remain open. They provide a unique opportunity to sample and showcase the company’s best beers and brewing capabilities. Through the retail locations, we can talk to customers about the beers they want us to make.

North American Breweries’ Promise

  • We will communicate regularly and openly to our employees and at times — the media — about our business.
  • We put a very high value on our people and believe they are key to helping us compete with the mega, multi-national brewers who dominate the U.S. beer industry.
  • We will grow our brands by introducing them to new consumers and in new geographies through a focused sales and distribution effort.
  • We believe in working with one another to make our company great. We regularly adopt best practices company-wide.