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Monday, October 27, 2008

Bud American Ale: the Triumph or Demise of Craft Beer?

I finally got my hands on Bud's American Ale, which seems simultaneously to be: 1) over-compensation for a company that's no longer American, 2) an acknowledgement that new products, not just new ads, are the only way to grow in the US market, and 3) a legitimate beer.

Let's start with the third point first. This is a real craft beer, not just a marketing gimmick. Bud has made a beautiful amber ale with a nice caramel malt note and a lightly citrusy hopping. They have dry-hopped it with Cascade hops (whole hops, apparently). I wouldn't call it a transcendent beer, but if you did a blind taste-test with this beer and several other craft ambers, I suspect it would finish in the middle of the pack. It is, for example, Fat Tire's superior--by quite a margin. I'm not a huge fan of ambers, but if I went to a party and this was in the fridge along with Corona, Widmer Hef, and Fat Tire, I'd be happy to grab the Bud Ale. And I'd enjoy it, too.

It's not surprising that Bud has made a good beer. I don't doubt that if Bud wished, its brewers could instantly produce a dozen excellent beers, and probably a world-class lager or six. The best, most well-trained brewers in the world work for Bud. They don't brew world-class beers because they don't wish to, not because they can't.

Three questions spring to mind: why a craft beer, why an amber, and what does it spell doom for craft breweries?

The answer to the first question seems obvious. While the macro market is flat or in decline, the micro market continues to grow and grow. The US beer market continues to grow slowly, but all the growth is in the craft segment. Bud can continue to buy up smaller breweries piecemeal to get a part of that growth, or take the plunge with their own brand and try to bring the market under the Bud name.

Okay, so why an amber? No doubt there's an easy, flip answer--the focus groups liked it best. (And actually, I bet they did. I bet Bud tried a bunch of ales and came up with this one. I would have loved loved loved to have been among the focus groups so I could see what was in the mind of the giant.) But it also makes sense. If you want to build a market for ales, you want to actually brew an ale. The craft market has proven the enduring popularity of the style, particularly as an introductory beer for new ale drinkers. It's nothing like Bud. Amber ales are especially fruity and ale-y. They exhibit a sweetness totally unlike light lagers--and which totally beguiled an early generation of Oregonians. Add a little dry-hopped Cascade citrus, and you introduce drinkers to the flavor of hops without risking turning people off with bitterness. If you want to create a market by priming the palates of for ales, this is a great way to go.

All well and good, but does it spell doom for craft breweries? If Bud makes a great (and cheaper) amber, will people quit drinking Full Sail's? I would love to hear the beer-economist reflect on this question, but my sense is that it's just the opposite: Bud can reach 100 million consumers who will never otherwise consider a craft beer. And once they've begun drinking Bud's ale, they may well enjoy Black Butte Porter or BridgePort IPA or Roots Heather. If Bud's experiment is successful, they will expand the market for craft beer--one they won't ever be able to dominate in the way they dominate the single-product macro market.

I love that Bud has made a serious beer. It looks to me like a trojan horse that millions of Americans may unwittingly invite into their refrigerators. And once dry-hopped ales get in there, they may never leave.

Update. Maureen Ogle points out an obvious analogy (one I nevertheless missed) to the scenario above: the Starbucks phenomenon.

17 comments:

Joe said...

Interesting take on the beer, can't say I'm going to buy it, but if it comes my way via an xmas party or what not, I'll give it a go. Also totally agree with the idea this will be good for craft beer overall, not just for Bud. Another interesting development is that Bud will be a big and stable buyer of cascade hops due to this beer. Hopefully that will encourage farmers to plant more hops acreage, which would also be good for craft beer.

dr wort said...

Bud's American Ale, which has no defined style name, which is a good marketing ploy because the consumer can place it in whatever category they want... Nice move on Bud's part, someone's thinking!

The beer will introduce more of the world to ALES.... American ales? Well....an American Ale... Maybe not the best American Ale. Either way, it may increase interest in other countries, which in turn may create interest in Craft beers in America. Could be good for all craft brewers that bottle beer, as long as they have access to International distribution! I wonder WHO has a corner of the International Beer Distribution market?? Hmmmm?

...and...just because I love to give ya a bad time Jeff...

Jeff: "Amber ales are especially fruity and ale-y."

DW: There's a quality description of an Amber ale that I've never read before. Can ya describe, "Ale-y" to me Jeff? ;-}

Jeff: "...Fat Tire's superior--by quite a margin..."

DW: WoW! That's not saying much! ;-}

Jeff: "...if I went to a party and this was in the fridge along with Corona, Widmer Hef, and Fat Tire, I'd be happy to grab the Bud Ale."

DW: Not sure I'd want to be going to that party to begin with... The visual is hurting my head and ears... ;-}

Ralph said...

I had a chance to try a Bud American Ale on tap (all over town in your middle of the road bar with a good tap selection). A friend of mine described it best: "It tastes like dust".

I found it to be overly dry and thin. But I'll give them an 'A' for effort.

Eric said...

I found one last weekend at my local supermarket and plan to taste it this week, I will post my opinion on the beer then.

To me the main issue with AB is not the quality of their beer, or the skill of their brewers, it is the size of the company and their anti-competitive practices.

The bottom line for me is I really don't think they care about beer the way you and I do. Anheuser Busch cares about beer the way Exxon cares about oil.

Andrew Self said...

I don't see it eating into the craft beer market simply because the two are fairly separate markets. People who drink Bud pretty much just drink Bud, and people who drink craft beers pretty much just drink craft beers, and there isn't a whole lot of overlap between the two markets.

People who currently drink beers like Budweiser might try American Ale and start buying more craft beers--or even just American Ale exclusively--but I don't see people who currently drink craft beers stopping their purchases of craft beers to drink more American Ale. I think in the end, it will serve more to introduce people into the world of craft beer, and not lure people like us into Budweiser's lagery grasp.

I think it's a good first step for Budweiser, but I don't see small brewpubs going out of business because everyone's out buying American Ale, instead.

Aaron said...

I was at my local watering hole chatting with the bartender when the AB distributor paid a visit and dropped off a couple bottles for evaluation. the bartender was kind enough to pour a sample for me.

the smell reminded me of killian's red, and I was hopeful. the front had a hit of caramel malt, but that quickly disappeared into a thin-bodied base with just a hint of hops that tailed off into a clean but very dry finish.

I can understand not wanting to shock the lite lager drinkers with anything too big, and the malt/hop balance is suitable, but it really tasted watered down to me and only a shadow of what it could be. it's a step up the interesting chain from budweiser, but still below mactarnahan's and well below full sail.

Alison said...

"This is a real craft beer, not just a marketing gimmick".
I am curious as to how you define "craft beer". I have seen many definitions but personally adhere to Beer Advocate's definition: "Beer brewed in limited quantities often using traditional methods". When I got to try a taster of the American Ale, the rep couldn't tell me what went into the beer, but I know that AB's lagers (and most macros) usually trend away from traditional by adding cost-cutting ingredients like rice. And I don't see any evidence that Bud is producing the American Ale in limited quantities.
Are you equating craft beers to microsbrews? I like the idea that this could be a bridge to micros for those who traditionally drink macros, but I don't foresee it becoming groundbreaking enough to do so. There are plenty of people who drink Coors-owned Blue Moon but don't ever bother to try hefs or even American wheats brewed by local brewers.
Those people who do branch out from the macros usually gravitate toward the breweries that have extensive distribution (at least in the US) and only barely qualify as "micro" - breweries like Sam Adams, New Belgium, and Widmer. I happen to like beer from all three of these breweries, but I know many people who do not deviate from either Boston Lager, Fat Tire, or Widmer Hef. These beers should be MORE likely to engender branching out than a product from AB, and yet for a lot of people it hasn't happened.
I am sure that drinking American Ale will cause a few people to try other ales, but I don't think that it will cause a mass conversion to micro consumption.

Joe said...

Allison's comments made me think of something I read awhile ago, but can't place, about the rice in Budwiser. I could be wrong here, like I said, I can't place the story, but what I recall was that at the time of origninal formulation, rice was a premium ingredient and more expensive than barley. As time has past that has obviously changed but I think, if true, would at least mean we should give AB a break about using "cheap" ingredients. Ah, who am I kidding...

Ryan Hirscht said...

I've seen the prices of BAA in the stores, and it's closer to microbrews than macrolagers. Supposedly, the pilot brewery in St. Louis is pretty impressive, sort of a Richie Rich version of a mad homebrewer's kitchen, so I'm not surprised if they designed a decent-tasting ale. Despite the $$$ the company spends on advertising they've made few inroads with craft brew lovers, so the fact they're not putting a false brewery name on the product shows a bit of confidence. I'm not running out the door to buy any, but I'm with Jeff in that I would drink it if it were offered at some social engagement.

Anonymous said...

The only memorably good beer I've ever had from the A-B diaspora was their American Hop Ale, brewed at their Merrimac NH plant back in the late '90s. Of course, A-B got bored with specialty-copycat projects around that time and quickly shelved it. I suspect the same will happen with this bandwagon-hopper.

Alison said...

Joe,
If I am not mistaken, rice was originally used in beer during Prohibition to keep the ABV below the legal limit. When Prohibition ended, Budweiser continued to be brewed with rice, and AB claims that it is because it gives the beer a "lighter taste".
Whether you would argue that "lighter taste" in the case of Bud translates to "tasting less like beer", is a matter of personal opinion.

Eric said...

Barley adds two types of sugars to beer, some are fermentable others are not, depending on the mash selected by the brewer. Rice is considered and adjunct. Adjuncts generally add only or primarily fermentable sugars to beer, and do not add to the body of the beer. Rice is not used because it is cheaper per pound, but because it adds alcohol without adding body to the beer, which is great for lighter beers.

Maureen Ogle said...

This is in response to Joe's comment: He may have read about rice in my book (Ambitious Brew: The Story of American Beer).

In Chapter Two of the book, I discussed in detail the creation of American adjunct-based lagers, brewed with rice and corn, in the 1870s.

At that time, beer was not yet the national drink, and most brewers were German immigrants.

Those beermakers had a number of reasons for adding these adjuncts, the main one being that they tried to make a lighter-bodied beer that would appeal to American palates. The beers cost more money to brew, but were wildly popular with consumers.

Thanks to these beers, the mostly German-immigrant brewers were able to expand their audience well beyond what had been a limited, German-immigrant base.

Joe said...

Thanks Maureen, I haven't read your book, but I will now.

dr wort said...

Rice was added to add alcohol without using the more scarce Barley during the wars. Rice was a cheap starch source, starce from the rice converts to alcohol when fermented, but is pretty much flavorless with the exception of a crisp bite. Rice was used to cut corners during hard times and was continued to be used because the alcohol wasn't missing, so the soldiers coming home different notice much. In a nutshell... ;-}

dr wort said...

Ooops! I think Maureen's book may be a little more exact.. ;-}

Anonymous said...

I prefer Buds foray into the Mexican beer arena with their Bud Burrito Ale. Heavy on the hops with just a hint of beans and cellantro. Unfortunately it is in limited release and only available in Tijuana and Compton, California.

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