beer industry – Beaumont Drinks

February 3, 2015

Yes, Anheuser-Busch InBev Hates Your Beer.

Since its emergence on the North American beer scene in the 1980s and, in force, in the 1990s, what is commonly called ‘craft beer’ has cost the big breweries millions upon millions of dollars in revenue from lost sales. They do not like this.

Sales of Budweiser in particular have fallen precipitously, declining from 50 million barrels in 1988 to only 18 million in 2013. Some of that volume has simply been transferred to Bud Light, for years now the best-selling beer in the United States, while large volumes have also been lost to Coors Light, but some has also gone over to craft beer. Anheuser-Busch InBev definitely does not like this.

Since almost the very start of the craft beer renaissance, brewers and beer marketers have been taking pot shots at the big breweries and their beers, often aided and abetted by the media. While initially it must have been easy for pre-InBev Anheuser-Busch to shrug these insults off, the volume of such criticism now, coupled with the recent boom in the growth of craft beer, must certainly be getting up their corporate nose.

In order to stay relevant, Anheuser-Busch InBev has been forced to spend tens of millions of dollars on brewery purchases, only to have every buy followed by loud and prolonged condemnations. Would they rather have spent this money on increasing sales of their existing brands? You bet your ass they would!

Anheuser-Busch InBev has also spent tens of millions of dollars, if not hundreds of millions, on new product development and marketing in order to have what are, for them, fringe brands that can play in the specialty beer market (which did not even exist as such forty years ago). It’s not hard to imagine they would have rather spent this money on growing their existing portfolio of brands or perhaps developing more logical and demographically-focused line extensions.

So yes, if you drink craft beer, Anheuser-Busch InBev does indeed hate your beer. And if they could end the craft beer segment tomorrow by taking a loss on all the brewery purchases they have made and craft beer-style brands they have developed, I firmly believe they would do so in an instant.

July 29, 2014

No, There Aren’t Too Many Breweries in the United States

Not yet, at least. But for some odd reason, the subject keeps climbing back into the mainstream, most recently in a story by Joshua Bernstein in Bon Appétit online, which when shared on Facebook emerges with the headline “The U.S. Craft Beer Market Is Way Overcrowded – Bon Appétit.”

That sentiment is not actually reflected directly in the story, the online version of which boasts the more equivocal title of “America Now Has Over 3,000 Craft Breweries—and That’s Not Necessarily Great for Beer Drinkers,” but the sentiment has launched a flurry of discussion around the web.

So let’s get this straight: 3,000 breweries are NOT too many for the United States and increased selection is NOT bad for beer drinkers.

Got it? Good! Now, here’s why.

At 3,000 breweries, the United States is now beginning to approach the breweries per population ratio we have in Canada, and in fact, depending on the brewery count for Canada you use – an accurate count in the country is almost impossible to ascertain – could already have reached the same level. But we’re not exactly awash in breweries north of the border, and I have yet to witness the “bloodbath” predicted by Sam Calagione in Bernstein’s story.

That brewery to population ratio, by the way, is about one per every 105,000 people. Which in a global context is actually pretty laughable.

How so? Look at the United Kingdom, for starters, where they boast a brewery for roughly every 55,500 citizens. Or Germany, with one for every 61,500 people. Or little Belgium, where every 70,000 individuals could claim a brewery of their own, should they be so inclined.

And that’s counting only traditional brewing powers. Wade into the numbers of nations that are experiencing their own craft beer renaissances, as is the U.S., and some of the numbers drop even further, like Switzerland, Denmark and New Zealand.

But wait, I hear American brewers arguing, we have the three tier system, which means that distributors are going to fill up and not want to carry any more brands. Which is why, I counter, microdistributors are beginning to appear all around the USA, and will no doubt continue to do so for as long as the demand for their services persists. Besides, more and more states are allowing self-distribution, which is surely sufficient for smaller operations.

But even so, I hear in the distance, it’s not necessarily about the distributors, but the proliferation of SKUs (the acronym for “store keeping units,” the short form for a distinct item in retail sale, such as a bomber of beer, a six-pack or a case, which represent three SKUs even if they are of the same brand). Except that most of these little start-ups are selling not from variety stores or supermarkets, where SKU quantity is an issue, but from their own stores or pubs or one or two of a handful of specialty retailers. And as for bars, well, more taps are coming on-stream daily in the United States, both from new bars and restaurants and existing ones which are changing from regular brews to crafts. (Even Pete Coors sees that happening, although he hasn’t yet quite figured out why.)

Regardless of all the above, however, I’ve still the most compelling reason why a beer bloodbath is not forthcoming in my hip pocket. Now pay attention, because here it comes.

Roughly 92% of the overall American beer market is NOT craft.

That’s about 180 million barrels of beer, folks, which is a whole frigging lot! So long as craft brewers continue to eat away at that part of the market, as they have been doing for decades now, there will remain plenty of room in the marketplace for 3,000 or even 4,000 breweries. And for brewers who don’t think they can chip away at that massive core of the marketplace, well, you might as well hang up your wellies now.

November 11, 2013

“More Bad News for Beer” is Actually Good News for Beer

My colleague and friend, Jack Robertiello, recently wrote a story for Nightclub & Bar Magazine entitled “More Bad News for Beer.” I was intrigued and surfed over to the website to read it, and then walked away smiling. Here’s why.

The “bad news” that Jack reports is almost exclusively about the big name, mass-produced convenience beers that we all know and probably don’t love all that much. You know the ones I’m referring to, those that distinguish themselves from the competition by how cold they are, how long they’ve been around or how “innovative” their bottle may be. (Amusingly, the side panel ad that appeared when I loaded the online version of the story promoted the “new bottle” for Miller Lite.) And yes, for such brands the news truly is bad.

At the heart of Jack’s story is a recently published consumer survey reporting declines in the overall popularity of beer and the numbers are indeed, on the surface, at least, bleak. Two percent fewer adults of legal drinking age were identifying beer as their “go to” beverage compared to the same time period in 2012; 21 to 27 year olds were deserting beer in significant volumes, with 33 percent saying it was their favourite alcoholic beverage as compared to 39 percent a year earlier; and three percent fewer men were siding with beer than did in 2012.

Thing is, though, those sad numbers are almost exclusively about big beer. How do I know? Well, check this out: “The major reason given by 21-27 year olds when asked why they are consuming less beer – 39 percent said they are ‘getting tired of the taste of beer.’” Sounds more like comment about a Bud Light or Coors Light than it does a Dogfish 60 Minute IPA or New Belgium Ranger, doesn’t it? And about craft beer, this is about the most negative thing Jack has to report: “…and crafts, while increasing dramatically, offer a wild and ever changing array of selections that can make the average consumer’s head spin.”

Too much selection and variety in craft beer may be an issue down the road, but judging from the bar owners and operators, and consumers, I’ve been speaking with over the last year — not all of them by any means beer aficionados or craft specialists — it isn’t now.

In fact, where bars and restaurants are concerned, variety in craft beer appears to be a big selling point, since people generally go out for experiences they can’t otherwise get at home, ie: new varieties of draught beer. But don’t believe me, believe the Adult Beverage Insights Group of the research firm Technomic, who report that when only bar and restaurant sales are accounted for, craft beer’s overall market share skyrockets from about 6.5 percent to an impressive 15 percent of total beer sales.

So yes, this really is a good news story.

October 25, 2013

Bigger, Stronger, Hoppier…Just Stop It!

In case you missed it, a Scottish brewery called Brewmeister announced yesterday that they had topped their own record for the world’s strongest “beer” – reason for the quotation marks to follow – with a 67.5% alcohol liquid called Snake Venom. The bottle, The Scotsman reports, comes with a warning that no more than the contents of a single, 275 ml bottle should be consumed per sitting.

There is so much wrong with this that I scarcely know where to start. But I’ll try.

First up, unless Brewmeister has somehow come up with a way for yeast to survive in a ridiculously high alcohol environment, this is not a beer and neither is it the product of brewing per se. It is something that was once a beer before it was freeze distilled into a spirit, as are the slew of other “world’s strongest beers” that have come to market in recent years. (I’m looking at you BrewDog and Schorschbräu.) When you brew a beer, you ferment out sugars and produce carbon dioxide and alcohol. When you concentrate that alcohol by eliminating a large amount of the water content, that’s distilling. Period.

Secondly, who cares?! Producing the world’s strongest “beer” is right up there with producing the world’s most caloric hamburger and the world’s most tannic wine. It’s an empty, useless gesture than has nothing to do with the item intended to be consumed and everything to do with laying claim to a pointless title.

Thirdly, this is irresponsible to a massive degree. The one bottle per sitting that the brewery recommends you not exceed contains an enormous amount of alcohol, 185.625 millilitres by my calculations. To put that in perspective, it is the equivalent in pure alcohol of drinking just under 62% of a 750 ml bottle of 40% alcohol spirits, or in other words, enough booze to potentially make a person very, very sick.

And fourthly, this kind of “bigger, stronger, hoppier” bullshit is precisely what craft beer is NOT about! Beer should be about flavour, not strength or massive, unbridled bitterness, and headline-grovelling attempts like this simply undermine everything that skilled and dedicated artisanal craft brewers around the world are trying to achieve. As Garrett Oliver once famously stated, no chef goes bragging about how they make the saltiest soup, and neither should anyone proud of their brewing skills be wading into the “bigger, stronger, hoppier” realm.

October 22, 2013

Shifting Sands in the Northeast

Craft beer in North America was born in the west, that much is pretty well documented – Anchor and New Albion in California, Horseshoe Bay and Granville in British Columbia, Yakima Brewing in Washington, etc. It thrived there, too, in the early days as well as still today, but thanks largely to Jim Koch, what we then called microbrews came to national prominence via not the west, but the northeast.

I refer, of course, to the Boston Beer Company, based in and typically associated with its namesake New England city, even if its beers were then, as they still are now, largely brewed outside of Massachusetts. The somber face of Boston Beer’s “Brewer Patriot” Samuel Adams was what introduced most Americans to craft beer, and the expansion of the Boston Lager to state after state after state played a huge role in opening up the national beer market to small, independent beer brands.

It was with this in mind, and after far too long a hiatus, that I returned to the U.S. northeast this past summer. After one hundred-plus beers, about 1,600 miles of driving and a whole lot of thinking, I arrived at the following conclusions and observations:

(Read more at The Celebrator…)

October 22, 2013

Growing Up, Growing Big

Back in the 1980’s and right up until close to the turn of the century, what we today call craft breweries were referred to as microbreweries. The reason for this was that, relative to the massive brewing companies that dominated the marketplace from New York to Vancouver and Rome to Tokyo – pretty much any place beer was sold, in fact, other than Germany – these new, upstart breweries were indeed “micro.”

The above will not come as a revelation to most readers of Ale Street News. What may surprise you, on the other hand, or at least serve as a reminder of something you take largely for granted today, is that the size relationship that defined microbreweries then is still largely true today. Yes, even in these times of exponential growth, of craft market share approaching double digit territory, of Boston Beer’s Jim Koch being ‘outed’ as a billionaire, and of companies opening second or even third brewing facilities, the constant expansion and consolidation of the majors still make the largest of the craft breweries look pretty much, well, micro.

(Read more at Ale Street News…)

September 24, 2013

On Bubbles, Craft Brewers, the BA and Naysayers

On Facebook yesterday, I posted this link. Then all heck broke loose.

(In truth, it wasn’t that big a deal, hence all “heck” breaking loose, rather than all hell.)

Various people chimed in, some of whom mentioned to me privately that they had already taken Mr. Watson to task for what they viewed as, at minimum, a too rosy view of things, and at worst, a full-on effort at propagandizing. Me, I thought it was a pretty decent response to what I’ve been reading in the media of late and hearing from certain brewers for over a year now. (Remember that the BA’s main audience is the craft brewing community – the article actually appears in their “community” section – and therefore it is reasonable to assume that those nay-saying brewers were at least high among their intended audience targets.)

Here’s why:

– There have been plenty stories of late about the craft beer “bubble” and whether or not it shall shortly burst. The article is, to my mind, clearly intended to balance those stories, many of which have repeated what I would view as misplaced assumptions – more about those below – and I think did a reasonable job of it.

– In terms of brewery numbers, what Mr. Watson states is true in that the United States is not even close to brewery saturation when compared to other markets, including Canada, the United Kingdom and Germany. In order for parity with those and other countries to occur, on a brewery per population basis, the U.S. would need to double the number of breweries it currently boasts.

– The suggestion that the market for craft beer is not growing is false. Critics point to the relatively stagnant nature of the American beer market, but that misses the point. Major beer brands have been in free-fall for the past several years – Bud Light has experienced five years of declining sales! – which has freed up major amounts of market share for the craft brewers. (And even so, the U.S. beer market grew 1% last year, which amounts to an additional 2 million barrels of demand.)

– New breweries regularly come to market with small amounts of brewing capacity, as little as a few hundred barrels. As such, the impact of the regularly reported 1,200+ planned – note, not work-in-progress, but planned – breweries will be minor. (1,200 x 500 barrels = 600,000 barrels, and that’s being extremely generous on the production numbers side.)

– New outlets for craft beer sales are coming online on a very regular basis. As someone who has worked with hospitality companies numerous times over the past several years and annually speaks at conferences involving top hospitality executives, I have seen the interest develop and grow first hand. I noted last year that when the restaurant company Darden (Olive Garden, Red Lobster) bought the multi-tap chain Yard House, it represented a sea change in the market for craft beer. That Yard House has been Darden’s top performing brand over the last year only cements that observation.

– To suggest that the graph Mr. Watson presents is comparing apples to oranges – ie: financial data to brewery numbers – is to miss the point. In my view, he is clearly observing that the shape of the dotcom bubble and the craft beer “bubble” are apparently quite different.

Of course, none of the above is to suggest that unrestrained growth in the craft beer sector is sustainable indefinitely – you’d need be an idiot to infer that. But the likening of the current times for craft brewing in the United States to a “bubble” connotes the idea that the “bubble” is about to burst, and I’ve seen nothing that suggests it will any time soon. Mr. Watson’s analysis might be the most cogent or thoughtfully presented, but its conclusion is, I believe, correct.

There will be failures in the craft brewing sector. There may even be a number of them within the next, say, five or seven years, but even a few hundred mostly small and off-the-radar breweries going out of business is not about to burst any “bubble.” Craft beer is on track to continue its growth – all market indicators suggest as much, including the travails the big brewers in North America are experiencing these days – and that means there will be market share to fill, as much as 2 million barrels this year and perhaps as much or even more in 2014.

It will require a lot of brewery expansion à la Sierra Nevada and New Belgium, plus a large number of new brewery arrivals to fill that capacity. The thirst is evident, and I see nothing to suggest it is even close to being fully quenched.

July 12, 2013

On Cider (Briefly)

I notice that Carling (MolsonCoors) is poised to unveil a new cider in the UK. This, of course, follows that company’s lead in Canada and also Labatt (Anheuser-Busch InBev) with its Keith’s brand of cider.

All of which makes me wonder why some people, presumably perfectly reasonable folk, would draw the conclusion that the ability to make a mass-market lager qualifies a company to also make a cider. I’d understand it if the move went from beer to whisky, since the start of distillation is essentially brewing, but other than having yeast ferment sugars, there is very, very little to connect the brewing of a beer with the creation of a cider.

I have not tried the Molson Canadian Cider, and am in no great rush to do so. I have tried the Keith’s Cider and found it to be rather unfortunate, sad enough to place last in a blind tasting of a dozen of so major and minor label ciders, in fact. I see no reason to expect anything different from the Carling cider.

Brewing ain’t cider making, folks. Leave each to the experts and stop expecting sheep’s milk from a cow’s udder.

June 19, 2013

Oh No! A Future with Fewer Cheap MillerCoors Beers!

The US-based bastard stepchild of SABMiller and MolsonCoors, MillerCoors, has announced plans to streamline its portfolio by discontinuing some of its “economy” brand line-up. (Read: Ditching some of the cheap beers.) This led me to wonder just what they might be jettisoning, so over to the MillerCoors website I surfed.

The company says that the move will allow them to focus on core economy brands like Keystone Light and Milwaukee’s Best Light, and will also expand the Hamm’s brands, so it’s a cinch those are sticking around. So scrolling through the “Our Brands” section, I come to the following:

Ice beers: Remember the ice beers of the 1990s? I do, but I was being paid to pay attention to such things back then. Well, anyway, apparently MillerCoors still has four — count ’em, four! — of the things in their portfolio: Icehouse, Milwaukee’s Best Ice, Mickey’s Ice and Keystone Ice. I’m thinking at least two are set for the high jump. (As an aside, I always loved the terminology behind these beers, which suggests they are “brewed below freezing,” never mind the physical impossibility of such a feat.)

Red Dog: Holy crap, MillerCoors still makes Red Dog. Not for much longer, I’m guessing.

Mickey’s: Hard to believe that the venerable Mickey’s Wide-Mouth — forever etched in my memory as the skunkiest beer I have ever encountered — could be discontinued. But then again, MillerCoors has given it one of the most minimalist websites you’re ever likely to find from a big company, so maybe they’ve tired of the whole thing.

Magnum Malt Liquor: When you have Olde English 800, do you really need Magnum? Perhaps not…

Steel Reserve: I admit that I haven’t the faintest idea what this family of three brands is all about, except that apparently it’s been around in various forms since 1998. Maybe or maybe not.

So those are my guesses. Any alternate theories out there?

June 5, 2013

A Word About Gluten

Some people, still a relatively small but by all accounts growing percentage of the population, have sensitivities to gluten. I know and have known several such people and have seen the effects on their health first hand. Of this there is no doubt.

Others have jumped on the “Wheat Belly” bandwagon and decided for reasons of their own to eliminate gluten-containing grains from their diets. Which is, of course, purely their personal choice and fine and dandy by me.

Although it is the first group that has much more to lose by ingesting gluten, it is the latter group that, to my experience, is more active in questioning issues of gluten in alcohol, and in some instances, perpetuating mythologies. So for the record, here are a few points about glutinous booze:

1) Beer contains gluten. Major brewery beers contain gluten and craft beers contain gluten. Wheat beers and rye beers and stouts and light beers and pretty much any other kind of beer you can name contains gluten. Period.

2) Gluten-free beers are, of course, the exceptions to the above rule. Unfortunately, very few of them taste much like actual beer. (Although not all, as per point 6 below.)

3) Distilled spirits, of whatever sort, do not contain gluten. This is because the process of distillation specifically involves the separation of alcohol from everything else, including the gluten in glutenous grains. But don’t believe me, believe celiac.com!

4) Flavoured spirits may or may not be gluten-free, since said flavours are generally added post-distillation and few offer any details as to what is used in their flavouring. The same applies to liqueurs.

5) Wines are gluten-free, including Champagnes. Since they are made purely from grapes, I don’t understand why some people insist on challenging this fact.

6) Although I have not personally tasted all the gluten-free beers on the market today — as a class, it’s growing almost exponentially — the best I have sampled are those of Quebec’s Les Brasseurs Sans Gluten, marketed under the Glutenberg label. In particular, their seasonal Belge de Saison, a 7% alcohol ale brewed with Meyer lemon, is far and away the finest, more a “good beer than happens to not contain gluten” than any other I’ve yet tried. It deserves to be a widely-sold, year-round brand.

April 4, 2013

To Hell with Part-Time Beer Writers and Contract Brewers!

Provocative title, yes? Good, because that’s what it is meant to be, but imagine for a second if I really meant it.

Imagine if I wrote a column about how important it is that every person writing about beer should be doing it as their sole source of income, with no “day job” or sidelines to keep the rent/mortgage paid and the lights on. Now imagine further that I implied through said column that those who do not write full-time are somehow less worthy than are those few of us who do, and that the fruits of their labours, ie: the articles and reviews they pen, are therefore by definition second class.

You’d probably think at best that I was rather full of myself, and most likely also that I’m an ass. And so you should.

Now change the above scenario to brewing rather than writing, and brewers in brick-and-mortar breweries and contract or so-called “gypsy” brewers rather than full- and part-time writers. Only this time you needn’t imagine it because it’s happening now. Again.

I’ve been writing about beer for 23 years, so I’ve lived through all this a few times now, and I’m here to tell you that it’s an utterly undignified debate. It smacks in turn of protectionism and claims of superiority, or at least greater legitimacy, and it is utterly meaningless to the vast, overwhelming majority of those who drink craft beer.

Why? Because like me, most of them don’t care whether the beer was born in a wholly-owned or sometimes borrowed brewery. They care whether or not it is good. Period.

Is there reason for the craft brewing industry to be debating owned breweries versus contractors – what Tim Webb and I have dubbed ‘beer commissioners’ – and “gypsies”? Yes, there may be, but internally. It’s a brewer-to-brewer and owner-to-commissioner debate, folks, and something that only looks petty and mud-slinging to outside entities. And what’s more, it will have no positive effect on the audience for your beer, so there is zero benefit to making it public.

(To those that say this is a fight for legitimacy and that the public will turn against beer commissioners if they know the true nature of what they do, I have three words for you: Boston Beer Company.)

When the craft beer biz gets together, as it did last week in Washington for the 6,400 person strong Craft Beer Conference, there is a tendency to forget that much of the beer drinking world is still blissfully unaware that alternatives to Bud and Coors Light even exist But it remains the reality that only the very fringe of the beer cognoscenti, itself a tiny, tiny minority of beer drinkers, is interested in this sort of internal debate. For the rest of the world, all that matters is what is in the glass.

Or, to return to my imaginary example, what’s on the page. And so far as I’m concerned, that’s the way it should be.