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Tuesday, February 02, 2016

Why the Beer Matters

Yesterday, I discussed the beer Cartwright Brewing made when it launched an early microbrewery in Portland in 1980. It was definitely the most interesting part of the papers posted by The Oregon Hops and Brewing Archive. But there is an element that's almost as interesting. Chuck Coury, Cartwright's founder, came to the project from wine-making. He'd already seen the change that had taken place in wine, and he gave an incredibly prescient overview of where beer was heading. (Although a small handful of American microbreweries had opened within the year or two before Coury started thinking about opening his own, they were far too new and tiny to suggest that any of his predictions were imminent.)

In the review he made of his own project at the time, here's what he observed about the coming beer market:
  • "There is a market for quality domestic beer. Note the rise in import sales. Compare to the explosion in fine wines. Prohibition theory: America's beer palate is only now recovering."
  • "Not everyone will enjoy your beer. That is good."
  • Things to stress about your brewery: "Local, small-scale production. Traditional/European quality. Re: chill haze and sediment; stress positively as 'real beer.'"
Kurt Widmer at the recent
release of Hopside down.
This is exactly what happened. It's remarkable that he had this insight into the market, because it took the rest of the country more than a decade to catch up with him. For basically all of the 1980s, it was touch and go in terms of whether what he wrote above would actually come to pass. Karl Ockert once told me that when the Ponzis were looking for bank funding to open BridgePort a few years later, the banker said (paraphrasing), "Nobody opens breweries; they just shut them down." But here we are, a generation later, and it turns out there is a market for domestic beer. Not everyone like every brand, and that is good--it means we have a very rich and diverse market. He even correctly identified that elements of craft beer that would be anathema to a large industrial brewery like haze could become a marker for hand-made authenticity.

Which raises the question: why did Cartwright fail?

Part of it was that the market Coury envisioned wouldn't emerge for years. Sometimes visionaries suffer a first-mover disadvantage (you could say Cartwright was the MySpace of beer). But a far bigger reason was the beer. It just wasn't good. There are still lots of people around who remember it, and that's the overwhelming memory; even on Facebook people were recalling the beer with amusement as a crapshoot. Apparently there were a few good batches, but they seem to have been the minority.

When you look at the breweries that survived the 1980s, nearly all of them did so by making very good beer. But it's also true now. A glance at the largest breweries in the roughly "craft" camp (Boston Beer, Sierra Nevada, New Belgium, Craft Brewers Alliance, Lagunitas, Deschutes, Bell's) confirms that quality really helps a brewery. It's not the only thing that matters. Good branding, smart distribution, fortunate brand performance, good location--all these things can really help. Good beer alone is not sufficient to become a big brewery, either; there are thousands of small breweries worldwide, from Block 15 and Breakside to Dupont and Schlenkerla, that make world-class beer. Some breweries making great beer even fail for reasons unrelated to the beer.

But an iron rule is that without quality beer, it's very, very hard to build a successful brewery if you're competing in the "quality" category. (I'd say impossible, but wise hive mind is going to point out a case where it's happened.) Coury understood where the market was headed. Unfortunately, he charged into it with bad beer and that insight didn't do him any good.

8 comments:

Pete Dunlop said...

Coury was working off the same theory as Fritz Magtag, the idea that there was a market for high quality domestic beer. Kurt Widmer studied what was happening with imports and came to the same conclusion. Cartwright probably would have had staying power if the execution had been better. So Coury's legacy is flawed. But he remains one of the most important figures in the history of Oregon beer. Why? Because his failure inspired Dick Ponzi and the Widmers to show you could make good beer on a small scale. The rest of history.

David Chamberlain said...

Wise Hive Mind would be a good band name...

Alan said...

I think if I recall correctly, much of 1980s micro chat was centered around replicating existing models located in Europe, not inventing or even really reinventing anything. That being the case, I am not sure why you call this prescient or consider early micro good beer a touch and go proposition? Low barriers to entry, available expertise and a proven model - plus beer - in the general context of cultural change more open to variety in pop culture experience. When was this going to fail?

Jeff Alworth said...

David: Like.

Alan, I don't recall that at all. Everyone I spoke to from those days report a very different environment. The barriers to entry were huge. It's an expensive business and banks weren't loaning money. No one was making small brewery equipment, so you had to cobble it together--sometimes (usually?) from dairy and other non-brewing equipment. There was next to no available expertise. Even trained brewers like Ockert didn't know how to construct and brew on a tiny kit made of dairy equipment. I don't recall talking to a single brewer who had ever been to a brewery in Europe, much less considered replicating their models. As a consequence, a great many of the breweries in the 80s died.

Jeff Alworth said...

Oh, and malt and hops dealers didn't know how to sell you amounts in the volume little breweries use.

And distributors didn't want your weird, super low-volume product.

And no one understood what this weird beer was nor did they want to drink it. Brewers had to educate the customers they hoped to have.

I will probably remember more of the barriers to entry, but I think this is a decent starting list.

Alan said...

Gosh, except they got through all that and they were built and grew. You've just described starting a business. You should check out how the east coast brewers were so well supported by contacts with small brewers of England and how they in turned shared the knowledge here. Perhaps your set like to grouse about the past a bit. Makes the tale heroic. Geary and Shipyard are a good start for an alternative view.

Jeff Alworth said...

Alan, I have no idea what your point is. No one had any idea what the beer market was going to look like when they entered in 1979-1980. I literally have never found a single person who claimed otherwise. And yes, I've spoken at length with David Geary; I'm willing to bet he would not recognize your recap of the ease with which he launched Geary's. Shipyard was founded in 1992, so I don't even see how that's relevant.

You have so soured on the way people write about breweries than any hint of positive assessment gets you carping about "heroic tales." Cartwright crashed and burned because Coury couldn't make decent beer. In this two-part autopsy, I found evidence that he actually understood the market--which you seem to agree with, since you believe everyone at the time did--but this hardly casts the venture as "heroic."

max den said...

Amazing post

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