Tag Archives: craft beer

One Beer Article You Need To Read And Why, 4/25/17

In my perusal of news stories this morning looking for my One Article, I ran across two things that changed my focus.

One was from Bomani Jones in a series of Tweets about how the news publishing world has changed from the base being the publication to the article to the kernels of information. Here is the end of the Tweet that caught my attention, “…and i think we could objectively say plenty of valuable stuff loses to bullsh_t.” As craft beer fans or just as beer fans in general, we know this is true and we will say that play out as the next couple of years.

The second thing, the one article for the day, is this from one of my favorite websites, brainpickings.com.

In this space, I have often made the point that brewing is a creative endeavor.  Besides the beer, one thing that I love about craft beer is how that creativity bumps up against the business of craft beer.  This summary of physicist David Bohm’s essay On Creativity, captured my attention today as I tried to stay away from legislatures and the alcohol wholesaler lobby.

My favorite part of his summary is Bohm’s description of how a child learns to walk.  I requote it here, “trying something out and seeing what happens, then modifying what he does (or thinks) in accordance with what has actually happened.”

In a perfect world, that is how brewers would approach each new beer they create.  I love the creativity of craft beer while grudgingly accepting the business of craft beer. Again, the fun thing is how the inclination to create runs into the need to move product.

As a brewer, you have to understand your customers also want familiarity because it grounds them and orients them.  If you create a beer and your customers love it to the point that you barely can keep up with demand, as a business you must keep making it. It almost doesn’t matter if you like the beer or even if you viewed as a step towards the creative “oneness” Bohm wrote about.  You keep making it to keep paying rent.

I’ve noticed when people come into the bar and taste beers before they pick one, it seems to me they are looking for the right answer when they aren’t even taking a test.  Bohm was right that as we grow older we become afraid to make mistakes and lose that sense and pure joy in discovery that toddlers have.

The bigger the brewery the greater the fear and consequences of making mistakes.  That is one area the smaller breweries have an advantage over the bigger brewers.  Smaller brewers can afford to be constantly creative and feed the craft beer’s public insatiable search for the next big new thing. If something doesn’t work, they change course quickly.  However, just as important is knowing what you are and making those creative choices within a consistent framework and plan.

That is why the brewers I like and respect most are ones who combine that creativity with a good business plan and have a strong sense of who they are, what they are, and where they want to go.

Beer Counselor Fun Fact, 4/24/17

The article in today’s One Article got me thinking about something.

Here is a fun little fact that many don’t know about how grocery stores work, at least here in NC.  Let me back up.  Retail store shelf space is laid out in these things called planograms.  They are just as they sound: the plan of how each store is laid out.  It is not just what departments are where in each store, but what products and specific brands are placed where on each shelf.  Most large retail companies either have internal groups that handle it or they farm it out to companies that specialize in planograms.

That brings us back to grocery stores and their beer/wine set ups.  These planograms, at least the beer planograms are done by one of the two big beer companies you are thinking about as soon as I said big beer companies.  There is input from the grocery store chain and some chains are starting to put all planograms in house, however still with input from the big beer companies.  By and large however the big beer companies decide how much shelf space everybody gets.  Now, the shelf space is mostly divided up by distributor with the distributors of ABI and MillerCoors brands getting the bulk.  Then it is further divided among their “craft” brands and then finally any craft brands and self-distributed beers.

Now, whereas your frozen pizza shelf placements are mandated by corporate headquarters and stocked by the store, beer and wine are stocked by the distributor.  So, while the main beer sets are set by the planogram and stocked by a distributor, the smaller craft brands are picked at the store level and stocked by whoever distributes that beer.  The grocery store staff doesn’t touch beer or wine.  That puts smaller brewers at a disadvantage.  All the store manager wants to see is full shelf space, they don’t care what is in that shelf location as long as it isn’t empty.  The big distributors that handle the big brewers have sales reps who all they do is work the off-premise accounts like grocery stores ordering and policing their shelf space.  A small brewery self-distributing doesn’t usually have enough people to do that even just for local grocery stores.

That is why all these new breweries are competing with each other for shelf space in places where most beer is sold more than they are competing with the big beer companies.

When institutional racism is mentioned, people believe it means institutions are actively discriminating against people of color, women, or gays/lesbians.  It usually means the institution was set up in a way to often unintentionally benefit the majority group.

Because alcohol laws differ from jurisdiction to jurisdiction even within a county, it was easier for grocery store chains to let the big beer companies and distributors create their beer sets.  When there were fewer than 200 breweries that made sense.  AB gets this Miller gets this and then whatever weird German stuff that makes it over can go here and will put malt liquor and 40s over here for black folks.

Many of the beer and alcohol laws that govern us to this day were written at the same time those decisions were made.  Now, the world done changed and those who benefit the most from the way the things were always done and the way laws are written will not give up those advantages without a fight.  Even if that fight is probably doomed.

 

One Beer Article You Need To Read And Why, 4/27/17

I’m a romantic.  The only way to become truly cynical is to willingly throw your heart out there and to have it stomped on enough times that thick scar tissue forms around it and you so you don’t feel anymore.  Was that TMI?

Anyway, I’m a romantic, but I love stories that take a slightly bent view of romance.  My favorite romantic comedy of all time is Roman Holiday, the one where the guy doesn’t get the girl in the end.  If the news is slow one day I’ll give you my top 5 romantic comedies.

Yet, I continue to digress.  Stories that take a slightly bent view of romance are my favorite.  I like this story about mobile beer canaries precisely because in its unromanticized snapshot of brewery work, it sums up the romance of it exactly.  All the photos of inside the brewery are of guys in dirty rubber boots and overalls who look like they have been there for 12 hours because they have.  For the most part, they wouldn’t want to be anywhere else.

This story also sheds light on the economics of brewery work.  There are more breweries than ever which is great for the consumer, but hard for the brewer.  That is where mobile canning helps small brewers who can’t afford their own canning line.  Mobile canning operations allow them to get their beer canned and ready to sell without the overhead of keeping and running a small canning line somewhere in their facility allowing them to at least attempt to get shelf space in stores, and with so many new brewers out there that shelf space is getting harder and harder to get.

When I really began to understand that craft beer wasn’t just some little thing among a small diehard group of people, but a real industry is when I started noticing all the ancillary businesses popping up around craft beer.  Things like mobile canaries are what makes this more than just some mom and pop operation, but a real industry that politicians are going to have to take more seriously as an economic driver.  Many at the local level do, but that number is much smaller at the state and federal levels.

Craft beer isn’t just some little engine that could anymore.  It is developing into a true economically important business engine for parts of this country.  That isn’t a bad thing.  It also doesn’t mean craft beer is out of the woods as far as its survival.  However, as this story also points out the threat to that survival isn’t just big beer.  It is also its own growth.  Not every brewer that has started in the last 5 years will survive the next 5 years.  Some of those will be good breweries caught in a bad geographic area or who came too late or too early to the party.  However, the majority will be breweries that make mediocre beer, don’t have a brewing plan, or don’t have a business plan.  Or they do have those, but they are unrealistic and poorly executed.

What We Learned This Week 4/21/17

What did we learn this week?

This week we learned that the NC Legislature is a dysfunctional mess.  We already knew that after HB2 where they managed to solve a problem that didn’t exist thereby creating a bigger mess, but the debacle of HB500 is a red underline to go with the yellow highlighter that is HB2.  It isn’t that the legislature didn’t pass HB500 and increase the self-distribution limit for NC breweries and loosen up distribution rights contracts.  It is that the bill was not allowed to come up for a vote. It is that there was no attempt at negotiation on the part of those opposed to the bill.  That is not how you govern.  I used to love politics when you had two opposing parties who had the best of intentions for its constituents. Somewhere in the Clinton administration, both parties stopped caring about the people that voted for them and more about accumulating wins and power and imposing your beliefs on everyone whether they believe the same thing or not.  Anyway, this will end up in state court. Regardless of what the actual effects of the law changes would be, I support raising the cap and I support loosening the distribution contracts.

We also learned that Boston Beer is quickly moving on from being a craft brewer as well as being primarily a beer company.  This isn’t so bad except that Sam Koch and the rest of Boston Beer haven’t quite figured out that the general craft beer drinking public already think they aren’t craft brewers.  The leadership at Boston Beer is the guy who can’t let go of how great they were in high school or college and don’t understand how everyone else has moved on and doesn’t care about 20 years ago.  I think it is a sign of health and maturity of the craft beer industry that companies like Boston Beer, Sierra Nevada, Bells, etc. are moving on to the next phase of their existence.  The companies that don’t fight that growth, but embrace it and figure out how to use that maturity as an asset are the ones who will continue to grow in the future.

We learned that the Brewers Association does listen to its constituents or at least they are trying to keep themselves from looking like misogynists or worse.  The BA will no longer allow GABF or World Beer Cup winners with “offensive” names to use the medals as advertising nor will they announce the names at the ceremonies.  This is about as much as a voluntary membership organization can do to its members without pissing them off enough to leave.  This is more of a symbolic gesture to announce to brewers that they need to think twice about naming a beer that might offend a segment of the population.  This is an important point to remember as craft beer continues to saturate the 25-35-year-old white male market.  The BA knows the way you continue the growth of craft beer in the future is to attract non-white males to craft beer.  That starts with not offending them before they even walk in the door with the names of your beers.

Hopefully, we will learn more next week.

One Beer Article You Need To Read And Why, 4/20/17

Wooderson is kind of cool.  Yeah, it is creepy he still hangs out with high school girls when he is somewhere in his 20s, but he is still kind of cool mostly because he is played by Matthew McConaughey.  He hasn’t learned Chris Rock’s advice about being the old guy at the club.

I don’t think Sam Koch or Boston Beer company has learned that.  However, circumstances are proving that Chris Rock was correct for some brewers as well as Wooderson or guys like this.

Bryan Roth has written a great blog post about Boston Beer and why it may no longer be considered craft by the Brewers Association long after it is no longer considered craft by most craft beer drinkers.  I posit that the average 26-year-old sitting in a tap room he walked to from his apartment this afternoon thinks of Sam Adams the same as he thinks of Bud or Miller.  It seems at least recently Sam Koch didn’t understand this.  Also, until recently the Brewers Association agreed, literally changing its own rules to keep Boston Beer as a dues paying member.

That time is probably over and it should be according to Roth’s research.  Currently, estimates project that only 57.2% of Boston Beer’s barrel production comes from actual beer.  Why is that you ask?  They produce Angry Orchard and a bevy of hard sodas, teas, and other liquids with just enough alcohol to make the drinker think they are living on the edge.

I think it is harder for larger (and particularly legacy brewers) to change course as fast as the current craft beer scene requires.  I believe brewers like Boston Beer, Stone, Lagunitas, Stone and even Sierra Nevada are in danger.  That danger is not from ABI or MillerCoors.  It is from all the small locally focused brewers who were inspired by Boston Beer, Sierra Nevada and their like.

My advice to those breweries is not really an answer, but it is to be nimbler.  Figure out how to change course and quickly and adjust what you are offering to the craft beer public without changing the core of who and what you are.  The one way to do that is to bring in new, younger leadership.

That doesn’t mean to go out and find some hired gun CEO type to run the business.  It means elevating someone who has been with the brewery for a while and is steeped in what the brewery stands for to a position of true leadership and influence.  That is often the child of the founder like in the cases of Sierra Nevada and Bells Brewery.  In the last few years, both companies’ founders have begun the process of turning over decision-making to their children.  Time will tell if the younger leaders can manage this changing craft beer dynamic.

Valar Morgulis.  No one likes to see companies fail and die.  However, no company (or country) is guaranteed infinite existence.  Just as all men die, so do all companies eventually.  We, the craft beer drinkers of this country must accept this, especially of the next few years because some of the brewers that will go away will shock and surprise us.

One Beer Article You Need To Read And Why, 4/19/17

This week I’ve been concentrating on the future of craft beer after the shakeout it is undergoing is over (here and here).  The more I look at craft beer and its future, the more I think comparing the industry to a young college-aged man is apt.

In college, I remember bitching about my favorite bands selling out when they had the temerity to sign a real contract for real money with a real record label.  I remember wondering why women would get offended at sophomoric jokes about women and would use silly gay slurs when talking to my friends.  I remember being young and trying to figure out how to live a life that combines what I believe with finding a job that will pay me actual money.

Look at craft beer at the moment.  We have craft beer drinkers and fans who swear off any beer that takes a dime of “corporate” money while attacking anyone who doesn’t share their vitriol.  We have brewers who can’t understand why women and a growing number of men are offended by some of the, at best, insensitive names of beers and their accompanying labels.  We are watching craft beer grow up in front of us like a parent watches their college-aged son grow up and it is painful at times.

Today, I have two articles that I think speak to the growth and maturity of craft beer in different ways.  The first is about Brewdog.  This article that confirms what I have believed about Brewdog from the beginning which is while I believe that have a core set of values that centers on independence, much of what they say and do is simply self-promotional b.s.  They seem to care as much if not more about people talking about them then they do the independence they espouse.  They are the punk band you grew up liking because they seemed so real.  Then, you found out that was all part of the plan to get signed to major label.

The second article is from a panel Jason Notte participated in recently centered on what is currently happening in craft beer and how that will affect the industry’s future.  I take away two things from the article.  One, near term, we will see a shakeout of the smaller breweries who fail to consistently make quality beer.  This is similar to what happened in the late 90s/early 2000s shakeout.  The breweries that couldn’t produce enough consistent and consistently good beer closed leaving a core of brewers and breweries who led the charge to today’s explosive growth.

Two, many of those breweries that survived that period have become midsize/regional brewers and they are the most vulnerable in this new world order.  With the huge number of breweries, it benefits breweries to either be extremely small and local, part of a loose confederation of mid-sized breweries, or be owned by a huge conglomerate.  Trying to go on your own as a midsize/regional brewer like Stone has its pitfalls, at least in the near term.  I will be very interested to see how all the Colorado and west coast breweries building breweries on the east coast fare long-term.  Remember, Flying Dog tried this before eventually shutting down their brewery operations in Colorado.

This is a wonderful time to write and think about craft beer.  It is at a flection point where things can go many ways.  This is what I believe will happen.  The midsize/regional brewers like Stone, New Belgium, Deschutes will either join together or they will be purchased outright by the huge conglomerates.  At the same time, all the small local breweries that serve their city and maybe a few surrounding counties will continue to thrive because they serve the local need for fresh beer and an authentic experience.

One Beer Article You Need To Read And Why, 4/18/17

“Every time I call it a game, you call it a business. Every time I call it a business, you call it game.”

Today’s article is a clip from one of my favorite movies, North Dallas 40.

This is inspired by two things.  First, me wanting to explore what may happen to craft beer as it matures as an industry.  Here is yesterday’s post to start that off.  Second, it is inspired by a Twitter argument I watched happen last night between craft beer fans and writers.  It is the same argument that has raged in art circles for centuries.  At its heart is the, “You’re not (fill in your art form) enough.”

In craft beer, this usually manifests itself when someone, usually a writer who focuses on the business aspects of beer, talks about beer in a sometimes clinical manner that doesn’t scream “death to macrobeer.” This leads to them being called a sellout or worse yet a trader to craft beer.

Here is my take on this argument.

I started out my working life as a grant writer whose favorite job was working for McColl Center for Art + Innovation.  It is an artists-in-residence program here in Charlotte.  Working there gave me the opportunity to watch artists up close and see how the process works in real life and not in the romanticized version of art we all grew up with.

Real artists don’t sit around waiting for inspiration.  They work all day everyday at their craft.  The most successful of those artists know that at least 25% of that work is selling their art as well as the idealized version of themselves that patrons want.  The best artists not only understand their art, but they understand their place in the greater art world as well as the worth of their work.

I think brewers are as much craftspeople and artists as the painters and sculptors I met at McColl Center.  That doesn’t mean I think every brewer is a true artist just as I know not everyone who sells a painting they created is a true artist.  Some are individuals who found they have an affinity for something and have decided to monetize it as best they can.  Does that make them bad people? No.  It does mean that while their beer or their art is financially successful, it doesn’t inspire the way it should. The thing is, that is probably the majority of what is being sold and it is necessary for the industry to function.

Maybe my favorite part of that clip is when Matuszak says, “Job. Job. I don’t want no fucking job. I want to play football, you asshole.”

Anyone who makes their money in craft beer holds that sentiment dear to their heart. Whether they are an artist or not.  I do.  I have had real jobs.  They suck.  Whenever I’m annoyed by my job, I think back to almost all the other jobs I’ve had and I thank the stars that I run a craft beer bar instead.

I also think that anyone who pays their rent and buys food thanks to their job in craft beer lost their rose-colored glasses about craft beer long ago.  Just remember, you don’t have to lose the fun of craft beer or think of beer simply as a widget to be made and sold to think of ways that you don’t go broke doing this.

There should not be a dialectic between the art & craft of craft beer and the business of craft beer.  For any brewery to be successful and for the industry to be successful as it matures there must be a marriage between the two.  The artists I worked with those years ago taught me that.

One Beer Article You Need To Read And Why, 4/17/17

This feels good.  I’ve spent the last two weeks moving across town.  It is never the physical aspect of moving that upsets my balance.  I am a creature of habit and when you move all your habits get disrupted.  From the direction you drive to and from work, to where you shop and eat, to the sounds you hear as you try to sleep, moving is a disruption.  However, disruption is good.  It changes what you do, how you do it, and it shifts your perspective on many aspects of your life.

American craft beer has spent the last 20 years disrupting the whole beer industry.  As craft beer has expanded almost exponentially the last 5 years, many of us who have been around since the last “great expansion” have been fretting over another bubble bursting.  However, we may have had it wrong.  This article from The Motley Fool has a better term for what is coming: shakeout.

The difference between now and the bursting bubble of the late 90s is that the beer industry has matured and changed.  As the article points out, the coming shakeout will be a continuation of the consolidation we’ve seen begin with the mega-brewers buying up regional breweries and those same regional breweries consolidating themselves to protect against outside purchase.

With such explosive growth over the last few years, we have seen a lot of breweries enter the market who have no business being there.  Those breweries will be the leading edge of the coming contraction.  Of the ones I’ve seen shudder in the last 18 months or so, the most common reason is poor planning.

We all know the apocryphal story of many breweries that started as a home brewing enthusiasm that leads to good beer and friends deciding to pool their money and resources to start a brewery.  That is a dream that dances around the back of almost every home brewer’s mind.  That is a great story, that can go one of two ways that are mostly dependent upon having a good plan.

From my vantage point on the bar/retail side of craft beer, I encounter a lot of small breweries who either self-distribute or are starting to work with a distributor.  Some of the things I’ve noticed about the breweries have come and gone in just the 2.5 years we’ve been open

  1. Inconsistent beer. It is either, they have one good beer and the rest are mediocre at best or they have a few good beers, but they taste different with each batch.
  2. No plan for their beer. What is your brewery’s aesthetic as far as beer and personality? What is your plan for your core/year around beers?  What is your plan for your seasonal beers? What is your process for creating new beers?  Then, how will you market them?  That is why you need to know how your beer and your brewery’s personality are tied together as your business front face.
  3. No distribution/unrealistic distribution plan in your business plan. I’ve seen many breweries come into the Charlotte market with unrealistic expectations.  This market is immature in two ways. One, the craft beer drinking community is very young and new to craft beer.  Two, most the breweries in the market are less than 10 years old.  The market is also very locally focused (meaning Mecklenburg County) and very IPA and lighter craft beer focused.

I want to spend the rest of the week exploring these three points and how they may affect the next couple of years of craft beer.  Also, now with the move over, I have a new part of The Beer Counselor colony that will start in May.

One Beer Article You Need To Read And Why, 3/8/17

I thought this would be shorter since I got home late from closing the bar.  I was wrong.

This article is interesting not because the information is surprising. It isn’t and it has been out in the public for a week now.  What interests me is how the Craft Freedom group has changed its approach over the last two years.

When the group first started, it was a lot like Mr. Smith Goes To Washington.  There seemed to be a naïve belief that if they brought their case to the state legislator they would win hearts and minds with the power of their argument.  What they found was, yes, many legislators agree with them.  However, many of those same legislators get donations from the distributor/wholesale lobby and individual distributors.  Those legislators could not make the leap to pissing off major contributors.

What Craft Freedom has done this time is continue to lobby to the legislators, but they have also taken a more proactive media approach. They are attempting to go around the money to the people and appealing to them with a fairness argument.  They are arguing that breweries should have this freedom and to deny them that goes against our basic principles.  Of course, people vote against the principles and best interests every day. I think they can win enough votes to raise the cap to 100,000 barrels.

The unspoken part of this is what interests me most.  If and when this bill passes, how does that change the contract negotiations between breweries and distributors?  For breweries with large ambitions, this artificial cap at 25,000 makes it imperative that they sign with a distributor.  Unless you come into the negotiations with the buzz of a Wicked Weed, you are at a disadvantage.  You must sign with a distributor.  By raising the cap, you give breweries a little more leverage to make the distribution deals a little fairer.

NC beer distributors are not equal.  I suspect the opposition by the wholesaler’s lobby group is driven by a small number of large distributors and not the majority of their sales force or the smaller distributors that dot the state.  That is why I think their real opposition to the law isn’t the possibility of losing potential breweries, but to losing that contract leverage and opening the door for their big national beer companies to strike out on their own and open their own distributorships.

In the end, I don’t think the big distributors give much of a damn about whether Olde Mecklenburg, Red Oak, or any of the big self-distributing breweries who have shown no inclination to ever sign with them do once they hit 25,000 barrels. It is about keeping hold of that unfettered 20%-40% they can milk from every brewery that signs with them and keeping the “incentives” from the big beer companies flowing.

Now, I’m going to go read some of this.  I’m in heaven already.

 

One Beer Article You Need To Read And Why, 3/7/17

This is just like the bar I would open if I could.  A library with good books for people to read while they drink, good music playing over the speakers just loud enough to be enjoyed but not too obnoxious, and 12 taps of good beer.

Sometimes I think we have lost that kind of pub culture in the US.  I know we haven’t, there are places in every town where you can go and have a pint or three and not be annoyed by a bunch to 26-year-olds trying to hang on to their college years by doing body shots at 4 in the afternoon.  However, I think it is dying.

With the rise of craft brewery taprooms, bars are slowly disappearing.  That is a shame. Taprooms are a wonderful place to try a brewery’s beers.  The beer is going to be at its freshest since it only has to go from the brewery a whole 100 yards to the taproom and not sit in a warehouse waiting for delivery.  Most are comfortable places that extend the breweries ethos and brand.  A bar is a different place.

A good craft beer bar should be a gathering place for the neighborhood and for the local craft beer community. It should be neutral ground for all the distribution reps and brewery sales reps to gather, drink, and shoot the shit.

A good bar shouldn’t have loud obnoxious music playing at 2 in the afternoon.  It should feel like your living room or den.  A place where you are comfortable enough to talk to the person sitting at the bar next to you or sit quietly in a corner reading a thick great novel.

I’ve been lucky enough to find a place like that everywhere I’ve lived.  I’m even luckier to work in a place like that right now.

There was a Miller or Bud commercial a few years ago, for one of their ill-fated forays into specialty beers.  I don’t remember which one and neither do the people who bought and drank it.  Anyway, the commercial was a bunch 25-year-olds dressed in their best night club gear in a dark club with EDM playing trying to look cool drinking this crappy beer.  A description of the commercial I read said something like this a “bunch of people I don’t want to hang out with drinking a beer I don’t want in a place I would never go.”

A good bar is a great place for a writer.  They can be left alone to read or write if they want to. They can watch the world and the customers as they come in and interact.  Where do you think characters come from? And they can engage with a cross section of humanity if they so choose.  Without bars, we would be missing a lot of great novels and short stories.

Anyway, read this if you haven’t read it before.  It is about a café in Spain and not a bar, but it is the same general idea.