Has Discontent Struck Good Beer In A Time of Plenty?

A little bird, or rather an email correspondent, who was present advised me that at the recent Craft Brewer Conference there was a closed session at which at least one well placed big-mid-sized Midwest brewer “sure made for good entertainment at the voting members session of the CBC- you know, the one the toss the media out for”. Apparently, unlike what is seen on the public sessions, issues like the asymmetrical effect of tax breaks and grants are creating divisions amongst those who would like you to believe that they sing all from the same hymnal… and, then, would like to sell you the hymnal so you can keep in tune, too. Interesting, then, to read about one implication arising from this sort of thing as illustrated by one particular expanding good beer market, Ashville NC, as reported today by Bill Night at The New School:

If the $9 Mil for New Belgium that Magee mentioned sounds like a lot to you, maybe you’ll be interested to find that New Belgium actually snarfed up $13 million in total from “the public trough”, as explained in this post on the blog Ashvegas. As far as I can tell, Sierra Nevada wasn’t quite as gluttonous, and only needed a little under $5 million to set up beer camp in North Carolina:

– State of North Carolina: $1M grant to New Belgium
– Buncombe County: $8.5M tax incentives to New Belgium
– City of Asheville: $3.5M tax incentives and infrastructure to New Belgium
– State of North Carolina: $1M grant to Sierra Nevada
– Henderson County: $3.75M tax incentives and infrastructure to Sierra Nevada

You know who should be really pissed about all that money? The small brewers who built Asheville up into Beer City USA.

Redistribution of wealth is tricky stuff and it does not help that those receiving are national craft millionaires even though sometimes it seems they would like us to think that they are hunting for sofa change to try to make payroll. But it does not stop there today as Harry Schuhmacher in the Beer Business Daily touches on more of the questions left unanswered after the recent conference. He discusses questions of tax policy as I discussed here the other day as well as badly made and overpriced craft – and even how succession planning leading to big money buyouts are all discussed. All important big issues that can leave a bad taste… sometimes by actually leaving a bad taste.

But, most interesting to me is the “S” word – smugness. Harry puts it succinctly: “I’ve met a few new craft brewers over the last year, and I get the sense lately that many think they invented beer.” A great direct line. I can’t, however, speak to the truth of it as, being trained in the law, I assume this is a phenomena that is woven throughout all business sectors so I don’t know whether this is new to beer or that the guard has been left down a bit recently. Yet the other sources mentioned above might be indicating that might well be the case. Where does all of this lead? Good beer did well in the recession, expanding market share as the economy took a hit. But that does not mean the industry is immune to all risk.

For me, big business is big business and will act as such. Lobbying and entitlement will benefit the largest most. But the time needs to come when US craft will stop trying to pretend all brewers are small start ups even if only to argue for financing opportunities which can benefit businesses of different scales. Beyond that, the risk of fatigue needs to be addressed – and not fatigue of flagship beers as Harry suggests though that is happening too. Craft beer is starting to act like pre-teen soccer league where everything and everyone is special. Every brewer gets the medal. Every one gets the treat at the end of the game. In the case of craft beer, the treat is unending increased prices and increased sales forever and ever, amen. Nothing works that way.

Change will come and will likely be unexpected. Change may also be brought upon oneself. How would a brewer best situate itself to withstand a shift away from these present times of plenty? Admitting opening how things actually are might be a start.

Big US Craft Apparently Has Bifurcated Lobbyitus

Interesting piece on the impending decisions to be made in relation to Federal excise taxation for beer in the US over at MSN Money today:

…The Brewer’s Employment and Excise Relief (BEER) Act, which is promoted by Washington-based beer industry group The Beer Institute, is expected to be introduced later this year and would reduce excise taxes on beer produced by brewers large and small. Past versions of the bill recommended cutting the tax from $18 per barrel to $9 for large brewers while also cutting the tax for small brewers from $7 per barrel to $3.50.

The competing Small Brewer Reinvestment and Expanding Workforce, or Small BREW Act, promoted by craft beer industry group The Brewers Association would cut the federal excise tax on beer from $7 a barrel to $3.50, which is placed on a small brewer’s first 60,000 barrels produced per year. After that initial 60,000 barrels, small brewers must pay $18 per barrel, which would be lowered to $16 under the bill. More importantly, it would expand the tax code definition for a “small brewer” from one that produces 2 million barrels or less to one that produces 6 million or less.

See, this is how relationships end. As the article describes, brewers like Boston Beer Co and Sierra Nevada are active members of both the Beer Institute and the Brewers Association which are lobbying for distinct and conflicting tax regimes. Not sure that this in itself is enough to create “a rift in the beer industry that could signal last call for the ‘craft’ title” as the author suggests but the implications are interesting. First, the government has to decide the matter one way or another. There cannot be two systems of the one excise tax. Second, the actual small craft brewers who make up the majority of the Brewers Association may soon have to decide whether being led by big craft brewers who look a lot like big macro brewers makes any sense. Either way, it won’t be controlled by big craft.

It would be comforting to know that this question was actually being discussed at the Craft Brewers Conference but the Twitter feed for #CBC13 has all the diversity of first night at summer cult camp. Crazy kids. They just can’t stop marketing – even to each other! One can hope that Congress’s governing leaders will have the sense to reject the idea of including the expansion of 2 to 6 million barrel definition of “small”. It is all fun and stuff but, given the state of the nation’s finances, buying into that sort of belief system isn’t very helpful especially given the clear focus offered by the Beer Institute’s characterization of the implications as “a giveaway to a handful of brewers that each are worth more than a billion dollars.” A billion? That’s a large number.

Inventing New Words To Describe Beer And Things Beery

The other day I noticed I have been making up a few more words and phrases to describe what I have been observing in the beer world. Not expecting Websters to give me a call anytime soon but they are useful tools for discussion. Here are a few:

“fan pub” – a pub, tavern, bar that caters primarily to beer nerds. Judgement neutral term at least. Words of affection for best such as Bar Volo.
“scene” – what happens at a good fan pub or pubs. Can be part of a larger healthy diverse interesting community. Too focused to be community in itself.
“national craft” – makers of good beer who sell across USA or Canada and maybe UK. Rogue or Stone or Sam Adams in USA. Question of shark jumping and morph to kraphtt a continuing concern.
“regional craft” – makers of good beer who sell within a US region or Canadian province / region. Bell’s from Michigan or Creemore of Ontario. No requirement for the PR of personality that haunts national craft.
“local craft” – good beer of limited distribution. New Glarus from Wisconsin.
“kraphtt” – non-craft that looks like craft. Long standing new-ism and more and more triggered by beers like Shock Top and Blue Moon.

Do these help? Any more of yours you could add?

Craft Or Kraphtt: Porter, Michelob Brewing, St Louis, Mo.

I was going to write “wow” or something but that wouldn’t quite capture my surprise at how good this beer is. Poured at a chilly cellar temperature, there is an immediate mass of dry cocoa that sits in such balance with that bit of hop, a little java and that little nod to dark plum that immediately lets you know this is no ordinary budget beer. Chalky soft water makes it particularly moreish. In fact, if I had not bought this as part of a $10.99 12 pack at the A-Bay Mart the other day I could have been quite happy to pay $4.99 or more for a 22 oz bomber of this stuff.

Definitely craft. Nothing near kraphtt. Perhaps the most surprising value in beer that I have come across so far. BAers rate widely.

My Deep And Witty Analysis Of The Big Hop Giveaway!

My computer ate it. It was a virtual unified theory of beer blogging, an apology draped in an accusation resting on a question with its feet up on satisfaction. Brilliant. Gone. In sum: I didn’t like their variety packs, the special glass, Utopia, the ’90’s triple bock or their white-like thing; but, once called out, I found liked their value-priced Scotch Ale and premium Imperial pilsner a lot and the ads have grown on me; remember that good business knows it does one good to do good; remember, too, they are a big raft brewer with a range from perhaps some kraphtt, much craft, and some special; I have no idea what percentage of their total hops ordered this giveaway of allotment represents; but in the end it is great to see a breakaway brewery remember that a rising tide raises all boats. Good work, Jim.

The long version was better. An epic.

Craft Or Kraphtt: Sam Adams Scotch Ale, Boston Beer, Mass

Stan was rightly giving me grief the other day or at least a lesson in life when I spoke of the Sam Adams line of beers. I didn’t mean to be mean and I am a delicate flower in the face of such dressings down – but, as you all know, I am working with what I am thinking about beer pricing and value. To that end, I’ve suggested five general categories of beer quality. What is the goal of the five point scale? I suppose it is as useful as a Top 25 Brewers list or using the numbers 1 to 10 to rate a beer: it is a means to give order to things. And it is supposed to give order based on deeds not claims – sure, subjectively (as that is the essence of the experience of beer) but not to bash as I live in a post-sticks-and-stones universe. Further, taking up the challenge of Matt at Rutgers, I drove into another country and bought up not six not eight but seven different Boston Beer brews to make sure I had a clue.

Scotch ale is something one would think is very important to a Scot yet it is neither the national drink or the other national drink. There are plenty of examples in the archives and they share that sweet, toast and smoke malts the style is known for. Surely a nod to style that is otherwise defective can send a beer teetering from craft down into kraphtt, no? So – what with this one, 5.4% with a best by date of April 2008? If smell alone could win the day (and who amongst us has not thought that thought before?) this one would surely stand proud as craft with the deep apple butter aroma it gives off. Chestnut ale under a rocky lacing tan head, goes down in a rich wave of sweet malt (butterscotch, pear, apple butter, licorice, and maybe even blackcurrent) tempered by the burnt toastiness of blackened malt with a hint of twiggy hops, perhaps Fuggles, in the end. A lovely brew. “Tha’s a braw bricht brew the noo!” Oor Wullie would say…if he ever grew up to be old enough to try one.

A solid effort and one that makes me offset the same brewer’s white ale over there on the other side of line between craft and what is not quite craft. And, as part of a variety twelve pack for 14.99, great value. 19/20 BAers agree.

Boycott!!!

The exceptionally well-named Yates on the States, the tale of a family man from Manchester, England living in Minnesota, has raised this banner. It leads to an interesting consideration of the global brewing industry.

Yates’s complaint is that cask conditioned Boddington’s ale will no longer be made as the Manchester, England factory – the Strangeways Brewery – that makes it is being shut by its Belgium based parent, Interbrew. For 200 years, Boddingtons has only been made at Strangeways. From what I read, I understand what is at risk is the cask conditioned version of the brew, the real ale with live yeast in it, as opposed to the industrial kegged or canned versions with forced C02 carbonization we see on our shelves around the world. As a general rule, real ales take time to make, do not travel well and, if they do travel, they are expensive, like the six bucks Canadian I pay for a quart of Rogue. Kegged and canned beer is built for the tractor trailer ride.

If my reading on the brewing industry has taught me anything it is that mergers and consolidations have been the stock in trade for brewers for ever. I noted this as a complaint in my review of Martyn Cornell’s excellent Beer: The Story of the Pint but now I see it as simple reality, the nature of the flux in one end, the industrial end, of the industry. Consider this. I go to check the Interbrew website and the company itself has consolidated and is now called InBev, which is about as imaginative as LiqCo or HoochInc. It brews 13% of the world’s beer. It owns the Keiths I drank as a kid but which now gives me the willies when I smell it, the Rolling Rock in portland’s fridge, and the Hoegaarden and Leffe which have both been praised here. On the one hand, if it were not for the efforts of Interbrew, I would never have tried brews like Boddingtons or Leffe. In fact, the LCBO shelves are stocked with many InBev products, making the purchaser’s job an easy one. On the other hand, I would have had a chance to try other smaller brands since killed off in the churning mill that is the merger game – but only if I travelled to where those products are made. So, when brewery mergers kill off your local favorite, either an entire brand or a real ale version of it, it is an actual but local crisis; when it adds a great new style to your shop, it is a blessing but, really, only as a start to new hunting when travelling.

The conundrum of standardization and globalization. I will leave it to you to consider Yate’s call when deciding what you reach for when you reach for a beer.ill leave it to you to consider Yate’s call when deciding what you reach for when you reach for a beer.