A User’s Guide To Dealing With 2017

It is impossible to say just what I mean!
But as if a magic lantern threw the nerves in patterns on a screen:
Would it have been worth while
If one, settling a pillow or throwing off a shawl,
And turning toward the window, should say:
               “That is not it at all,
               That is not what I meant, at all.”

 

It’s tough writing in 2017 about a pleasure hobby like good beer. Remember 2016 when all the celebrities were taking their final exit from this mortal coil? When norms in US politics collapsed? 2016 made sense compared to 2017. Bryan Roth captured that sense of doubt when he struggled this week with what appears to be the word of the moment, authenticity. His coda was excellent: “I have no idea what just happened here.”  

Stan responded in his flickering light bulb of a blog’s Monday links commenting “[b]ut that’s not the rabbit hole. Authenticity is the rabbit hole.” He went so far as to shout out in dispair, even in paranthetically “[i]t might be time to bring back the Good Beer Blog chimp.” Good thing Stonch is off social media for Lent. He haaaates Mr Chimp Head. The inclusion to the right is completely gratuitous.

My take is this. Like J. Alfred above, we search for both a meaning in and a validation of our experience. We humans do that inherently even when we stand in the face of apparent meaninglessness. We seek solace. For some, solace is found in the spectrum that runs from nostalgia to anti-novelty as B+B discussed earlier this week. We hope we can convince ourselves that milds, bitters and stouts without all the phony pricey additives are better. Such things are more grounded, more rooted into… something. Authentic. But, as those of you who like me have participated in construction contracts with grounding issues know, things need to be grounded into something. Not all stone has acceptable conductivity. Authenticity is like that. Authenticity is not a characteristic but a quality of a characteristic.* It needs its own grounding.

Even having made myself a student of brewing history – largely out of sheer dismay at the state of what I saw as good beer culture – I am not sure what that grounding, however, might be. In the face of this year’s confusion, there is such a rush on opportunistic self-congratulation, guru-label affixing and tantrums over what the young and happy are up to. Authority wants its place at the head table despite the sense that the centre cannot hold.** Hasn’t held. Private correspondents still complain that what is considered good writing to the dull editor, under the guise of keeping it light, often seems to seek compensation conformity with an extra expectation of a nod to deemed authority or even a scratched familiar back. Oh dear.

Yet, out there in the actual marketplace what was expected a few years ago is simply no longer a viable expectation.*** Things are far less dull on the ground. The other day, I had a beer so thick and murky I immediately thought that it would be perfect for my kid who likes wheatgrass and kiwi smoothies. Which, when I thought about it, is exactly the point – and its immediate market.

The craft schism has occurred. It is done even if not complete. Not only is it impossible now to be a beer expert it may be impossible to be an expert even in one of the growing number of sub-classes. With all due respect to the honest and excellent exertions of even Mr. B, the beer atlas approach is now too old, too slow. Too big. The global style guide no longer provides hope to those wanting to understand their immediate surroundings. That tower of Lego lays shattered and scattered around the crying child.

This is, however, a situation laced with hope. Two months ago Stan wrote an incredibly (well, if it wasn’t so credible) well put observation in one comment thread that I was busily filling, as I am known to do:

To return to the notion that you “don’t seem to be learning from all this plump and very nicely packaged writing,” doesn’t the reality that you’ve been reading and commenting in this space for so long factor in? I certainly feel that way. There are a lot of things I feel like I’ve been many times over that are “gee, look at that, it’s new” to many others.

 
New! New marketplaces. New techniques. New fans. New interests. What care they for the pioneers and their lessons framed in their acquired comforts?  They might as well be those who invented coke, who first plucked a hop blossom. Who cares? Fortunately, good beer is so forgiving and so varied, the real excitement’s in what’s to be had today and tomorrow. And near. Why buy a plane ticket when a bus ticket will do?

Authenticity? It’s in the context. And more and more that context is local and varied. If you read someone still writing about the beer community or industry in the singular you know they’ve slept through the shattering schism, dreaming their dreams of global conformity. Or wasted time at the moveable buffet meeting the same entourage encountered at the last fest or city. Forget that. Be brave. Explore your own corner of the world instead. Find that dimpled pint of mild or stemmed thimble of fruited gose. See how the new beer fits in your world before wishing away the hours over the pretty story told by someone else about some place else. Dare.

When In Doubt, Consider A Simpler Answer

I left a comment over at Boak and Bailey in response to their noting this week of that Cloudwater cask story which whipped the British beer discussion out of its holiday slumber. That being said, I am still not sure the Cloudwater story has been properly framed so I am unpacking the comment a bit more here.  For starters, here are two tweets from Jeff that I think better get to a key factor underlying the situation:

 —

The Cloudwater press release was issued on 1 January 2017. They’ve been brewing for 22 month and have announced they are stopping cask production, stating:

We worry that cask beer has backed itself into a corner that risks becoming unattractive to modern breweries. 

I never trust that sort of use of “modern” as it smacks a wee bit of assumed superiority, echoing the new e-conomy of the late 1990s or at least a shortcut being taken. Especially as they don’t quite say they don’t make a profit – just an “insufficient” margin. Then, as you consider that, compare it to the to the brutally honest but tougher news from Dave at Hardknott on the one hand and how under capitalization can force a good brewery to face difficult decisions. Next, consider the positive story from Hawkshead which runs 65% cask that they also call modern beers.

It seems from those business stories that the question could be better asked as why Cloudwater took on cask without the full resources – or apparently a full plan to make it succeed as other success. Is it as simple as that?  I did find Eddie Gadd of Ramsgate Brewery’s tweet a bit telling:

…most new brewers (inc me) don’t look too closely at the numbers during start-up – we don’t want to be put off the dream!

I notice that the Cloudwater press release mentions they are working with Shelton Brothers and I have a suspicion that I have had their beer at the Allen Street Pub in Albany, a cask specialist, where, due to actual friendships, I do not seem at risk of ever being shelted.  Perhaps it was that pint of Black IPA with a balancing splash of someone else’s brown ale to give it some joy.

In any event, the idea that a firm representing about 1/3000th of British cask production not succeeding is cause to raise prices generally is a bit off. It seems from what we are actually being told is that cask places natural productiondistribution and even geographical constraints on the market that the ambitions of international craft can’t overcome or at least cannot easily reconcile without focus and extra capitalization. Makes sense. It is a thing unto itself. Should have been self-evident from proper initial market research.

There is nothing wrong with changing course. Do what makes you money and what you are interested in. But don’t slag the successes of others or blame the market. Congratulate others who succeed where you can’t or shouldn’t have tried.

What A Difference A Year Makes – 2017 Edition

Over the holidays, I was thinking about what to do with this blog in 2017. It’s been a heavy slog over the last few months ensuring the important and favorite and representative bits of bits of 10,000 posts get across the River Jordan to the next bloggy life but that’s largely behind me now. What I need to do now is look ahead and take on the new opportunities that the coming year offers in style. It a bit of panache. Even. Maybe.

A lot can happen in a year. Last year this time we were still in the grip of learning that US craft brewery owners were (horrors!) not all evangelists willing to starve for the cause. No, the sweet taste of gravy was too much for many – or the actual goal all along. Click on the score card and have a look. You’d have a hard time filling that chart out properly now. You might need different colour pens. Funny thing –  no one really cares now. As is often the case with the leadership clique within even a small circle, they are barely missed as others are ready and willing to fill the gap. Beer is nimble like that. Beer itself is a survivor. The survivor. The rest of it all comes and goes.

Not sure blogging is surviving along with it. I could try out a new structural twist like the B+B “Breakfast Debate”… except I am only one person and I wrote my homage in two-fisted dialogue to The Compleat Angler with Max a few years back. But I like the idea. Keeping it fresh. These winter months are great for working on an historic era, for working through a data base. I have a notion to work away at the erroneous ideas that (1) temperance was some sort of trick played on the many by the few and (2) that, contrarily perhaps, it was all that effective. And greater early 1900s social history. I sit above a small outdated law library. It’s great stuff and holds masses of facts proven by evidence, tinged with authority. Rare.

I would also like to figure out a way to crack the nut of getting into the ledgers of contemporary craft brewing. What are they actually up to as businesses? It’s the only way to break the cycle of brewery owner cheery pozzy obvsy bios we’ve been stuck with for the last few years.* You would have thought that the craft sellouts would have taught a lesson but gate-keeping editors will have their way. The narrative must go on. And it will be even more popular in the new Trumptastic era. Boo to the questioners! Down with those losers asking “why?”!  Hmm. I would need to present it at a statistical abstraction. And I would need some helpful assistants in the business offices of craft breweries. Any takers? You can voice flabbergasted serious objections in the comments below and send me your non-disclosure agreement template to beerblog@gmail.com. Let’s talk.

What else can I do? We do? I am interested in another unpopular idea. What is it that makes us lose interest in novelty, makes us find a home in certain pop culture things like beer? Most folk I know have packed in chasing the beery tail. Novelty is for novices. Some lasting things are actually better. Think of it this way. I am a lucky man. I was 14 to 24 from 1977 to 1987 which means I was in the front row to a very strong point in pop and alt** music history. I have not been persuaded since that another period is superior but I also realize its not only the music I heard but that I was that age in my life when it was popular. I would hope those years were golden for each of us – though being 14 in 1977 was pretty sweet. Does the same idea work for good beer? Will we all just end up accepting Rochefort is fabulous or will today’s twenty somethings actually get a bit verklempt over memories of weird fruit flavoured gose thirty years from now? Could you imagine? It’s be like getting nostalgic over Mumford and Sons.

So. Any suggestions? Any idea I might explore? Conversely, any lakes you might, perhaps, direct me to jump into? I am for too entrenched to care if you take offense. Last year saw a peak in the “how dare you!” emails suggesting a personal slight directed to folk I really never thought that much about. Could you imagine thinking that much of yourself that you took the minute and 27 seconds of deep consideration it took from outrage to pressing send? Well, we won’t be having any of that in 2017, will we. Nope! And that is because this is the year where people get a grip, learn we are not each the centre of the beery world and get about doing what needs to be done!

Remember: it is only beer and, by way of corollary, you are only you. Well… fine. Can we at least start with this is the year we give it a try?

*aka “it’s amazing work – but, trust me, everyone is broke.”

**Is it too soon to use “alt” again?

The Fluidity Of Good Beer’s Paradigm Shift

Two bits of related US big craft beer industry news this week. First, Japan’s Kirin has acquired about 24.9999% of Brooklyn Brewery for an undisclosed sum on largely undisclosed terms. Second, Stone Brewery is laying off 5-6% of their workforce. How about we look at the latter first. Part of the news release states in part:

…the onset of greater pressures from Big Beer as a result of their acquisition strategies, and the further proliferation of small, hyper-local breweries has slowed growth. With business and the market now less predictable, we must restructure to preserve a healthy future for our company…

This is interesting. For some time I have been going on about the schism in craft beer. So long I bored myself with the obviousness of it. This statement confirms it. There are three sorts of craft: macro craft, big craft and micro craft. The one in the middle has the shortest shelf life. Boosters will deny it, but the sales slump for big craft has been a thing for a while. So steps have had to be taken and this is what it looks like after things change at the heart of a business. They are not alone. Remember, just last April, Stone tried to suggest that the outside investment funds they took on were “craft” investments. Silly PR committee. No one believed it. The immediate response today from Jason Alstrom reflected what might be going on: “Typical corporate response … Does not sound like Stone at all. They are having a tough time wearing those bigboy pants.” The CEO is blamed but the Board and ownership set out the tasks for the CEO to complete. Likely for very good reasons given the tired brand and founders.

In the other notable story, Brooklyn has taken Kirin’s cash. The transaction’s obvious and awkward effort to avoid hitting the 25% share level led me to review the Brewers Association’s definition of craft. An American craft brewer must be independent and to be independent…

Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcohol industry member that is not itself a craft brewer.

Notice that careful placement of “or” in that definition. Clearly, it is possible to control more of a craft brewery than owning the same relative measure in shares. How does that occur? By the transaction for the sale of shares including a shareholders’ agreement that effectively bars the corporation from doing many things without consent of the otherwise minority shareholder. As a result, the BA’s 25% ownership rule is meaningless in the world of creative financing and investment. Strings shall be both pulled and used to tie things down. Jason Notte commented on Twitter on the distinction between ownership and control as a factor in establishing the independence of a brewery:

I often wonder how deeply @BrewersAssoc dives into the details. They have a lot on the plate without auditing every deal.

The Devil is in the details, they say. If the Brewers Association is not able to keep up with the implications of the realities of business like investment terms why bother having the definition at all. Maybe that is the plan for 2017. These are, after all, the days and months of change. The big names of big craft are mostly moving out as the money moves in. It seems that only the man of yogurt is sticking around to bask in the twilight of these dusky days for big craft even after cashing out in his own way. He must be holding out for something more – but what?

Ontario: Golden Beach Pale Ale, Sawdust City

kwakAh, my least favorite glass ever meets my favourite brewery of 2016. I got the Kwak glass likely the best part of a decade ago and had to wash a decade’s worth of dust off it to celebrate or mark or mourn today’s news. I am not sure I deeply care as I have never liked the beers of Bosteels all that much – though I liked Kasteel in 2004. Jeff has some of the early reports. Suffice it to say that the Great Satan now has a maker of muted B grade Belgian malty things in its portfolio. My world has not altered.

Which is not what I said when a number of mid-central Ontario’s Sawdust City beers started showing up in tins placed on retail shelves here in south-eastern Ontario. Great value at about $2.75 CND each, they all have more then held up their end of the bargain. This 4.5% ale pours a swell yellow gold with a rich white head. On the nose there’s plenty of weedy herb along with a fair chunk of white grapefruit rind over a cream background. The swally is interesting. A brightly ringing bitterness elbows out a modest lemon cream cake foundation. Lots of dry white grapefruit pith from the four hops named on the side of the can. Busy but still attractive. Especially on a day that is hitting 102F with the humidity.

You know, I’ll pour the next beer in another glass and put this monstrosity away likely until I hit my sixties. It’s all more than a little overdone, pointless marketing for a brewery that really hid in a safe spot in the market. Now owned by the forces of evil. Or of the future. Or just of reality. Gnashing over it all is a bit like being angry about that goldfish that died back in junior high. Things change. Things you have ultimately little to do with. Good beer, however, keeps showing up. Like this one from Sawdust City.

Not So Much A Bursting As A Great Dissipation

monkey4Ah, Mr. Chimphead. A serious point must be about to be made. But being August, there is not much out there to read, not much worth writing about. People rightly have other things to do. But Bryan Roth has posted a useful examination of the use of the word “bubble” that gets the juices flowing. He did so hard upon Stan posting a piece pleading (maybe rhetorically) for the cause of “craft” based on its persistent use. And he did so perhaps not coincidentally after Lew was quoted extensively on the need to kill off the word. For Stan, the mere fact of use conveys a certainty of some meaning. For Lew, there is simply no need for the word: “I’m holding a smart phone in my hand. If I want to know, I just thumb it in.” To be honest, I find these sorts of conversations appear amongst the All About Beer set rather regularly and I usually assume they are fillers until a real topic comes along. Quantity sometimes is a quality. What we have at this moment, however, is an opportunity to discuss how words are used to see if we can see what might actually be going on. So… let’s do just that.

I have looked back into this blog’s archives and those of others to see what can be found of assistance – not to mention making sure I did not write something entirely contrary to what I am suggesting here. It is easy to trace to way that “craft” was thrown away. It’s illustrated in one sentence from 2012 that I discussed here:

The large, multinational brewers appear to be deliberately attempting to blur the lines between their crafty, craft-like beers and true craft beers from today’s small and independent brewers.

“Craft” was botched by the Brewers Association in two main ways. First, it was made mutable. It could be uniquely redefined by their sole higher authority – and then was redefined regularly. Second, as we see above, like the man who lends his rake to the new neighbour never to see it again the BA extended “craft” to big beer by attaching a mere “y” to it. And the BA did not just give large multinational brewers the gift of “crafty” but they reinforced the point by creating the concept of “craft-like” too. Prior to that point no legitimate voice on the small brewer side was admitting that big beer was making a product similar to the beers of BA members. Then their very voice of authority confirmed that some of the Evil Empire’s beers were like craft. No one remembered the underlying intention of drawing a line. As Jordan wrote two years ago there is no such thing as an evil milkshake. All that the BA achieved with “crafty” was bringing macro into the club. Way to go.

Since then, we have seen “craft” not only extend to include these beers of big brewers but also things which were not considered well-crafted beer just a few years ago. Beers with facile fruit flavours to attracts folk who have no interest in beer. Beers made so poorly that the question is now legitimately discussed as to whether “murk” is now a style. The concept of “craft” takes in such a wide range of beverages now – even casually invading the distinct realms of cider and sake by times – that its meaning has been diluted and dissipated. It now includes so much meaning – so many meanings – that it no longer has little specific meaning. If you doubt that such a thing is possible, look up the word “jack” in the dictionary.

“Bubble” is starting to reach “craft”-like meaninglessness. Look again at Bryan’s post. In it he discusses, quite acceptably, that the measure against which the posited “craft beer bubble” is to be judged is the growth in the number of craft breweries in the United States and their ability to sell expensive beer. He does not mention the ability of most of those brewers to sell and actually rely upon revenues from relatively inexpensively priced good beer. He also quotes from the BA’s Tweeter-in-Chief, Bart, for whom I have a growing fondness largely based on his intelligent responsiveness to inquiries. When he was discussing bubbles last week, I asked a few questions to narrow exactly what he meant when he used the word “bubble” in this context. His answer was that “most common usage in econ is an asset price bubble” in relation to “collective brewery equipment” as it covers both number of breweries, their capacity and level of investment. He indicated his understanding was that lots of breweries [were] using equipment as collateral for loans.

We can see that “bubble” is being used in two very different ways by Bryan and Bart. And they are not mutually incompatible. The increase in the number of small entrants to the good beer market should be expected to be a pre-condition to a later “asset price bubble” in relation to “collective brewery equipment.” There may be other meanings. Retail price collapse is one. We have seen a form of that with the slowing or even halting of inflation. Craft beer prices hikes five to eight years ago would not be accepted today. But that was a time when people could suggest with a straight face that value was not to be a consumer’s consideration when approaching craft beer. “Bubble” can also mean a conceptual collapse. Craft’s bubble could burst were the sector to splinter along the faults seen now: macro crafty, big, craft, actual local micro continue to have less and less in common. The word would burst in the sense that it no longer had a center upon which the all these different forms could latch onto and hold.

For me, “craft” has suffered a conceptual dilution in the same way that “IPA” has. I wrote about this three years ago. The success of the word as a word is in large part due to its failure in maintaining precision. Has the same thing happened to “bubble”? In the rush to set up straw man arguments “bubble” gets trotted out, defined to the proponent’s convenience and then knocked down in yet another moment of triumph for craft… whatever that is… too? Think about it. Isn’t discussing the bubbles in the craft beer market about as precise as a discussion of positives in politics? How useful is that? You know, in many contexts and for a number of purposes – very.

Is 2016 The Year That Craft Beer Became Boring?

It’s a concern if this recent report is anything to go by:

In the last four weeks, he added, the largest four BA-defined craft suppliers — Yuengling, Boston Beer, Sierra Nevada, and New Belgium — were down a combined 4 percent. “I don’t think IRI has Yuengling in their craft, but the other three are 33.9 percent of IRI’s craft cases right now,” he wrote in an email. “Add in Blue Moon and Shock Top and you’re looking at 48 percent of IRI ‘craft,’ which is down 8 percent in the last four weeks. That’s going to pull hard on any number.” Indeed, volume sales of mainstream craft flagships like Sierra Nevada Pale Ale, Boston Lager, and New Belgium Fat Tire were down 5.9 percent, 13.8 percent and 5 percent through May 15, respectively.

Not to come off as being all neg on craft beer, it’s good to note that cider is bottoming out, too. I was thinking about that while I was reading Bryan Roth’s bit about selling to Millennials, aka thems who everyone else used to call Gen Y. The Roth report warns that craft brewers fail to focus on this era’s set of young, fun, unburdened, disposing of disposable income cohort at their peril. Yet half way down the argument there is one of the scariest statements I have seen embedded in an info-thingy from the BA: half of craft beer purchases by Millennial males are brands the buyer never heard of before. Holy frig.

I am told the Cedar Waxwing is a bit of a rarity among bird. They lack a strong sense of territory. “Nomadic, moving about irregularly; both breeding and wintering areas may change from year to year, depending on food supplies.” Drifty drifters, they can take off in a flock heading in one direction and, if there is enough food on the path, keep on for miles. Then they shift aimlessly off onto another path, happy as long as there is something new to chew. Were they the cider drinkers? The buyers of big craft flagships? Are they now making 2016 the summer of hard soda?

If I am honest, I am one of them. Gen Y yoof is just Gen X yoof with more money. Hard to shake the drift habit. Other than a modest if constant Dewar’s habit, I hardly ever get only the same strong stuff on my weekly trip to the power house. I’ll buy anything in a pretty wrapper from any brewer with a reasonable reputation – except if it’s fruit flavoured, of course. No one needs that. Being an early Gen Xer, I have shared with my Gen Z teens a sense of disorder and unreliability. Both Ramones and tweed. The garden remains half planted. I root for whoever’s doing well in the NBA.

Does the wise business person chase that market or aim for something a little duller and more reliable? You know, soon Millennials won’t be the new market entrants. My kids will. Millennials? They’ll start having kids and paying the bills. Settling and settling down. Maybe by then they’ll need a flagship of their own. Something to remind them of when they were young. Or maybe sherry. Maybe the 2010s are the decade of fino sherries. Maybe.

This Is Reasonable Proof That Big Craft Is Losing It

This first hint something stunned was up came in a tweet from Andy Crouch:

Ha ha ha true craft beer. I give up.

Now, before you jump to “haters gonna hate” have a look at this response to that tweet: “Stopped saying “craft”, feels good.” That from the first guy I heard “haters gonna hate” from. You know big graft has already lost its grip when a man of faith such as an Alstrom mocks it. What’s the news they are discussing? This:

…Stone will be participating in True Craft as a founding member. The new venture has received an initial $100,000,000 brought forth from an investor group committed to the long term model. True Craft will welcome a handful of the best craft brewers in the business alongside Stone Brewing. Each brewery may participate in True Craft and in turn the company will provide minority investments to its members with minimal stipulations. All breweries will be aligned in the philosophical mindset of banding together to preserve craft while retaining full soul and control of their businesses for years to come. “This is about setting up a consortium so we can not just survive, but continue to thrive in a world in which craft is being co-opted by Big Beer,” said Steve Wagner, Stone President and co-founder. “This allows companies like Stone to follow an ethos that involves independence and passion for the artisanal. By investing in True Craft now, we can be confident that our vision is locked in beyond our professional lifetimes and we feel privileged to help others in our industry do the same.”

One of the more disappointing things about writing about beer for over a decade is how many folk writing about beer have little interest in studying history or understanding business – let alone tackling the reality that beer and brewing sits in an very wide intersection of human activity that has been regulated in our tradition for at least the best part of a thousand years. It’s a story like this that has the wheels, however, to interest an amateur brewing historian who practices in public construction and commercial law. Let me explain.

See that figure up there? $100 million. Sounds like a lot. Sounds like someone thinks that will make some sort of change. Don’t count on it. Long time readers will recall an early post of mine sweetly titled “Beer is Bigger Than…” in which I pointed out that all beer in Canada in 2003 was worth $7,864,437,000.00. It was bigger than wheat, charity and the Government of Nova Scotia. Thirteen years later, not much has changed. Beer is big and $100 million USD probably now represent maybe 1.5% of the Canadian brewing market. Expect the US market to be ten times that and in the NATO region market maybe double that again. In the global marketplace the fund is piddly. About the cost of building two 18 story apartment buildings or one water treatment plant for a small city. And that’s in Canadian funds – which is about 80% of US right now.

Not only is the fund small, notice also that it is an investment fund. It’s not a grants fund. The capital is to be recovered. A month ago, Jim Koch of Boston Beer was telling a tale of woe about the effect rapacious private equity will have on craft beer. We are toldFunds have finite lives…When those fund lines get to the end, [fund managers] have got to sell those assets.” It’s reported as doomsday. They sky is falling. Well, if it’s true of a professional fund then that reality is going to be true of this one, too. Interest will have to be paid and at some point the fund will cash out. These monies, too, will need to be repaid – passion or no passion.

And it’s also up against clever competition. Recently, the Boston Globe profiled private equity firm Fireman Capital Partners, the investment folk behind the expansion of Oskar Blues and the cash injection into Florida’s Cigar City Brewing. You think those guys are shaking in their boots over the prospect of a rival fund based on Stone’s ethos? Hardly. The experienced private equity players will out bid and out run their deals. It’s their business, not a hobby or a faith-based act of grace. While True Craft may “welcome a handful of the best craft brewers in the business alongside Stone Brewing” we are all too well aware that many of the best craft brewers have already made their minds up and moved elsewhere – whether under the wing of big beer or in partnership with existing private equity.

Finally, look again at one last loony line in the press release: “This allows companies like Stone to follow an ethos that involves independence and passion for the artisanal. By investing in True Craft now, we can be confident that our vision is locked in beyond our professional lifetimes…” Question #1: is Stone the central recipient of funding or an investor in the dreams of others? What is really going on? Question #2: can you see the oxymoron? How can one be independent and also go along with a “vision… locked in beyond our professional lifetimes” when that vision is someone else’s vision? The guy looking forward to retirement’s vision. Who needs that? The greatest thing at the moment in good beer are the thousands of actual small brewers coming forth independently in a complex wave of entrepreneurial vitality. They don’t need Stone or its money. It is a rather modest proposition to set up a small brewery and, in the right market, one that usually is greeted with enthusiasm by the buying public. Unless you suck.

It’s the same as it ever was. Same as it ever was. At the macro level, brewing is a business that undergoes continuous change that is usually misinterpreted as failure. Folk say temperance caused the collapse of breweries leading up to prohibition. It was actually the explosion of the railroad network in the latter 1800s which unleashed basic commercial efficiencies. Hooray for cheaper good beer for all! Folk suggest the old guard of big craft represent some sort of guru class who carved a niche of good beer forgetting that the entire world of consumer goods has raced towards diversity and excellence over the last four or five decades. The big craft era of 2005-15 is relatively late to the game. And, let’s be honest, if these guys didn’t become the millionaires and billionaires someone else would have. It’s not like they invented beer. Folk will say that good beer is in crisis and point to this odd news as some sort of life raft in an ocean of evil big beer and big money. Have none of it. This is just the new boss meeting the old boss all in the great cause of money. Which is good. Because that is success.

Rejoice. Big craft is dead. Brewing continues to move on and on, becoming more affordable and more excellent and more diverse and more interesting because this era of craft is dead.

Is That A Downward Or Sideways Craft Trend?

More bad news for craft in the media today. Over on Facebook, Lew shared stats reporting that on-premise US drinks sales were weak during the first 13-weeks of 2016. Total beer sales were particularly slow, declining 3.1% year-over-year. This was against particular trends showing Mich Ultra up 6%, Corona brands up 3.5% and Stella up 3.7%. Blue Moon dropped 3% while Sam Adams lost 13%. Conversely Goose Island was up 18% and Ballast Point a whopping 42% on-premise. That’s a pretty major set of shifts in the hospitality side of the beer trade. The not-good-news for beer continues as the Wall Street Journal tolds us late this afternoon that:

…for the first quarter ended March 26, Boston Beer reported a profit of $7 million, or 53 cents a share, down from $13.7 million, or $1 a share, a year earlier. Net revenue slipped 5.4%, to $188.8 million. Core shipment volume decreased 6%, to about 830,000 barrels. Boston Beer said it would focus increasingly on finding ways to cut costs and become more efficient after several years of rapid growth and capital investments.

That’s not good either. Big sales drop. Cutting costs and making efficiencies is not a growth strategy so much as one to slow a retraction. The article suggest job cuts are coming. No wonder James has been “trying to silently decrease his company’s share” as I noted last MayStaff, too.* I followed up with Lew and wondered if it was possible to break out the numbers he had into three classes – macro owned craft, big BA craft and little local craft – to see how broad this pattern was. But numbers are not kept like that given, as Lew said, I just made those classes up. To be fair, I didn’t just make them up but point taken.

Does this matter to you, the beer buyer? Likely not. This is not a bubble bursting. It’s a market shifting as they do. The sky’s perhaps not the limit quite as the BA promised in 2014. That’s fine. Many assumptions usually do not hold and the assumption that craft is marching in a straight line directly towards a 20% market share by 2020 is likely one of those that won’t pan out. But perhaps it’s still going to turn out to be the limit in a way – except that it’s made up of macro owned Goose Island instead of big craft’s Sam Adams. Would you care?

But maybe things develop in a different direction. Lew’s best point was in his reply to a comment: “I think it’s spirits that are taking the share. The thousands of smaller brands are still pretty damned small, and bourbon/Irish is on fire.” Change always comes and usually does so in large part unexpectedly. Craft beer could well split into local and macro with only big craft fading, too big and familiar to be considered authentic as the WSJ suggests. Link that to a far greater shift to wine or spirits coming out of nowhere. Could happen. Macro craft would like it to happen. Could be working towards just that right now. Will that matter much to you? Likely not other that it will be you buying the macro craft, wine or hard liquor. You’ll be happy.

*Shares dropped over 3% while the markets were open today and then another 10% after hours.

The Great White Male Hero Theory Problem