From Understudy to Star: Craft Brewing's Decade

Craft beer doesn't seem like a recent phenomenon. (For the purposes of this post, "craft beer" means anything made by smaller American breweries from the late 1970s onward.) Most of us will recall hearing something about it before I started this blog a decade ago. Some will remember drinking it back as far as the Reagan administration. But in some very real ways, it is recent. Until the middle 2000s, craft beer was a niche product in all but the beeriest of cities. Let's trot through some numbers to illustrate just how stark the change has been.

This draft array, sighted this week in Yuma, AZ,
is typical of what you used to find--in, say, 2006.

In 2005, craft breweries combined to brew 6.3 million barrels, which was just 3.2% of all beer sold in the US that year. At the end of 2014 (the most recent date with numbers), that figure had more than tripled to 22.2 million barrels, or 11.3%. (Total barrelage was nearly identical for both years at just over 197 million.) When they finally get to totting up the figures for 2015, it should be around 25 million barrels, or 14.5% of the entire market. Since 2005, the craft beer segment's worst year-over-year growth was 5.8%; it fell below double-digit growth only twice, and that was during the throes of the great recession.

In 2006, Oregon was well ahead of most of the country in adopting craft beer, with Portland and Bend leading the way. I couldn't find the statistics for overall consumption in 2005, but I think it was probably close to the national stats we'll see in 2015. In 2006, craft beer was already a generation old, and it had only managed to cobble together a 3% share of the beer market. There was a general sense that it was never going to become a huge player, and when people looked at Oregon's stats, they tended to dismiss them as cultural outliers. No one believed the rest of the country would ever achieve that kind of penetration.

I'd argue that the psychological change in the last ten years has been far greater than even the growth in barralage. In 2006, craft beer could provide owners with a nice little business. No one imagined that it constituted a real threat to mass market lagers. Last year, big breweries paid tens of millions, and in one case a billion dollars for modest-sized craft breweries. Even in 2006, there were craft breweries the size of 2015's Ballast Point and Lagunitas, but the idea that a large brewery would spend half a billion or a billion on them would have been inconceivable. The reason is because the idea that craft beer would one day become the dominant force was also inconceivable. Now it's conventional wisdom, and large breweries are willing to pay a massive premium in order to position themselves to compete in this world in the future.

Beyond sheer growth, there's a change in the distribution of breweries as well. Have a look at the total production by type of brewery. These are the Brewers Association's categories; a regional brewery makes more than 15,000 barrels and a micro makes fewer than 15,000.


Production by Type

_____Regional__Micro__Brewpubs__Contract 
2005___64%______11%_____11%________14% 
2014___79%______14%______5%_________1% 


The share of production by big breweries is now over three-quarters of the market, and that's the segment of real barrel growth. In the coming few years, the percentage of beer produced by the biggest craft breweries will likely pass 90%. In a market where there are fewer bigger players, you'd expect consolidation, and that's what we're already seeing.

One of other interesting trend is the types of new breweries getting founded. If you wanted to identify a bubble somewhere in the market, this might be a place to look. It appears that people are betting on production facilities rather than brewpubs.


Percentage of Breweries by Type

______Regional___Micro___Brewpubs 
2005______4%______25%______71% 
2014______4%______55%______41% 


This again isn't surprising; with all the potential money to be made, starting a production brewery looks like an attractive option. But it means that there will be many more players trying to compete for a piece of the pie dominated by large breweries. I expect that means we'll start to see brewery failures rise in the future--even if, overall, there's not yet a bubble.

In 2006, as I started this blog, craft brewing was just a sleepy little current in the overall beer market--still a "boutique" segment. In the next decade, growth has been so strong that it is now a given that it's the future of beer. Imagine what the next decade will hold.

A Beer With "Lift"

On Saturday I had the pleasure of judging at the evolving Willamette Week Oregon beer awards. During one of the sessions, a judge (I'll let him identify himself if he wishes) was describing why he liked one of the beers. He was praising its liveliness and described the finish as having "lift." It was an adjective that received appreciative nods and smiles around the table.

A beer with "lift?"

Describing or judging a beer can often be a deadening experience, as we default to a list of familiar attributes. But the experience of drinking a beer, particularly a very good or very bad one, sometimes means using the language of metaphor. "Lift" is not a descriptor that will ever be usable in the way "diacetyl" will--it's not a quantifiable quality. But in the case of the beer being described, it was perfectly accurate. We all understood what he meant. It wasn't only liveliness, but the way the beer evolved in the mouth. It went out with a rising, spirited snap, with lift.

I've heard other beers described as having "bass," a kind of thrumming resonance full of deep flavors. It's not only the sense of heft or roastiness, but gravitas. Some beers seem "hollow," in that they have at the mid-palate collapse--perhaps the opposite of "bass." In a world where we use the same, tired old language ("the beer pours out copper and smells of nuts and citrus") it's great to hear new words that capture a beer's essence.

Happy MLK Day, everyone--

Beer Sherpa Recommends: Upright Fantasia

Upright Brewery recently convened a media event to introduce the specialty beers they'll be releasing throughout the year. Upright, for those of you who may not know, is a small brewery that--well, let me tell you an anecdote by way of introduction. During the event we were sampling one of the beers and Willamette Week's Arts and Culture editor Martin Cizmar asked founder Alex Ganum how he planned to market the beer. Mind you, breweries are businesses, an arrangement that obliges breweries to convey their products to consumers in exchange for money. In nearly every case I can think of, the brewery would have had a ready answer. Instead, Alex got a surprised look on his face and admitted he'd never considered the question.

Upright's name is an allusion to the jazz musician Charles Mingus, and never was there a more appropriate choice. Like Mingus, Ganum (and his conspirators Gerrett Ill and Bobby Birk) thinks only in craft, not dollars and cents. Unlike Mingus, Upright's beers are rarely challenging--they are more often compositions of layered nuance and balance. The barrel-aged selections are usually so balanced they don't get mentioned with awe alongside the more famous American wild-ale producers, which are more aggressive. That's a shame, because they are making some of the most interesting and accomplished beers in the country.

Take for example the lineup Upright will be offering this year. Hearts' Beat and Shades are sister cherry ales, the former made with blood-red Chelan, the latter Rainier cherries. Hearts' Beat plays on the depth of fruit flavor, which thrums with tannins and rich flavor, while Shades keys off the fruit's acidity, which tends toward white wine. Fatali Four and Billy the Mountain are longtime faves--well, Billy's a fave to a small group (me included; it's in the Beer Bible), but we really love it. And then there's Oregon Native, which gets its vinousness from the use of actual pinot grapes and aging in pinot barrels. That one, still too young to render a final judgment, has the potential to be a spectacular beer. Rarely do the delicate flavors of pinot noir grapes survive commingling with beer, but in the young version of this one, they were perfectly intact.

But for Sherpa purposes, the beer I want to bring to your attention is another long-time favorite, Fantasia. It's a lightly tart beer made with tons of peaches. It has always been one Upright's signature beers, but five years in and it's still evolving. For this batch, the brewery decided to try to preserve the unique ecosystem of microorganisms that developed as a result of wild yeasts and bacteria from the fruit skins. Birk was tasked with taking off the metal hoops from the barrels and removing the old fruit, then reassembling the barrels in preparation for the new batch of beer and peaches.

What all this trouble produces is a beer that smells like a warm, tree-ripe peach on an August afternoon. It tastes the same, and you might imagine a dribble of juice running down your chin. Because of the acidity produced by the wild microorganisms, that flavor and aroma is set and preserved; the acidity also balances the fruity sweetness and gives it a dry, crisp (and balanced) finish. It is hard to imagine anyone who wouldn't smile after a mouthful of this beer, from the most hardened, cynical beer geek to that cousin who only drinks Rainier.

Fantasia goes on sale tomorrow at the brewery, which is open from 1pm to 8pm. There's a three-bottle limit, but you can augment with a nice draft pour while you're there. I believe Four Play was on tap at the event, and that alone is worth a trip to the brewery.

_____________

"Beer Sherpa Recommends" is an irregular feature.  In this fallen world, when the number of beers outnumber your woeful stomach capacity by several orders of magnitude, you risk exposing yourself to substandard beer.  Worse, you risk selecting substandard beer when there are tasty alternatives at hand.  In this terrible jungle of overabundance, wouldn't it be nice to have a neon sign pointing to the few beers among the crowd that really stand out?  A beer sherpa, if you will, to guide you to the beery mountaintop.  I don't profess to drink all the beers out there, but from time to time I stumble across a winner and when I do, I'll pass it along to you.

Ten Years Blogging: The Modern Age of Brewing

I have always had a bit of trouble dating this blog precisely. By the time I started it, I had already been blogging for a few years in the political sphere.* The first post, really just a placeholder, consisted of four words and went live on January 20, 2006. Things sat idle for more than a month. I did occasional beer blogging at BlueOregon, one of the sites I co-founded, and I started moving those posts over here in February. The first actual post came on Feb 26, a review of a now long-forgotten BridgePort experiment called Supris.

My better-looking, younger doppelganger, Bolt Minister.
His career is a study in change. When I took this photo
in 2009, he was at Astoria Brewing. He went on to work
at three (?) more breweries before founding 54-40
late last year.

In the life of a blogger, ten years counts as a significant amount of time. In the life of beer, it's so short you can't even see it. In the life of American beer, it's more than you'd imagine. At the end of 2005, there were fewer than 1500 breweries in the US, which was actually fewer than there were in 1999. Craft breweries made just 7 million barrels then (when "craft beer" was actually a pretty discrete category). They brewed 22 million in 2014 and will probably be over 25 million when we look at the numbers at the end of this year.

Ninkasi is now sells the third-largest amount of beer in Oregon; it didn't exist when I started. Breakside, the Commons, Block 15, Upright, Oakshire, Fort George, Double Mountain, Upright, Boneyard, 10 Barrel--none existed when I started this blog. (You can play this game with a lot of breweries. I just got off the phone with Sam Richardson of Other Half Brewing in NYC, a brewery most big apple beer geeks agree is setting the standard now; they will have their second anniversary later this month.) Back in 2006, only historians had heard the term "gose." No one had heard "session IPA." The concept of kettle souring may have existed, but basically no one knew about it. I certainly didn't. Mosaic and Citra hops didn't exist.

I could go on and on, but I think you see the point. This blog's life corresponds pretty closely to what we might call American brewing's "modern age." When breweries first started opening in the late 1970s, there wasn't any "American brewing tradition." It took at least half a generation before anything really started to change. (Beer in 1982 and beer in 1995 looked a lot alike.) It took another decade for breweries to understand what that change would be and begin to refine it. And it was about the middle 2000s that it came into focus.

Instead of a traditional look back at what I did on this blog over the last decade, I plan to look back at beer over the past decade. It was the pivotal time in American brewing, both as an industry and as a craft. It will be fun and I hope edifying and illuminating to pore over those years and see what we've learned.


___________________
* The Oregon Blog and Notes on the Atrocities had already been born and died, but Low on the Hog was still going strong and BlueOregon was in its heyday and actually affecting the trajectory of Beaver State politics.

Touring the Cascade Barrel Room and Blending Facility

Ron Gansberg (r) gave Edwin Johnson the
hat off his head.

On Monday, I had the good fortune to tour Cascade's impressive new(ish) blending facility in Beaverton. It's a place the brewery hasn't spent much time advertising or opening to the public, but it's big, growing, and really impressive. Brewer Ron Gansberg has something on the order of 1,300 wine and liquor barrels (including a small array of cognac barrels that arrived just recently) and maybe ten medium-sized wine foudres (or foeders in the Flemish) of around 55-65 hectos. (They vary.)

John Holl was in town for a bit over 24 hours and had arranged the tour; I got lucky enough to be offered the chance to chauffeur, which of course meant taking the tour and ending up on an epic bottle tasting as Ron and the gang started raiding the library for vintage rarities. By the end of the tasting, everyone on-site had joined in the fun, and I'm afraid we dented their productivity. Fortunately, a lot of the newer guys hadn't tried some of the older beers, so I think it can be written off as a training/team-building exercise.

 At one point, Ron dispatched one of the guys to go get the last bottle of Blackberry Ale dating back to around 2007 or so. It had been hidden somewhere, and only a couple people knew where it was. We also tasted a Kriek from that vintage, which was spectacular. The Blackberry was never as good as the Kriek--with fruit ales, you deal with terroir and the vagaries of the quality of the fruit in any given year--but drinking it was more sacrament than indulgence. We let the history pass across our tongues and considered the arc of this brewery's history.

Anyway, here is a photo essay of the day. What I didn't capture were large conditioning tanks where fruit was sitting for months on beer--cherry, raspberry, apricot. They don't look all that magestic compared to the French foudres, but one of them contained nine tons of fruit. You had to use your mind to apprehend that majesty. All right, here goes.

The barrels are packed tightly. Once they're in
place, they stay in place.

These foudres should last thirty years.

More after the jump.

Was it Inevitable?

Yesterday I served as the chauffeur for John Holl, editor of All About Beer, and sort of my boss. We began our day at the Cascade barrel-aging and blending facility, which is secreted away in a mostly-undisclosed location off Denny Road in Beaverton. We ended up spending way more time there than we anticipated (the voluble, affable, and wildly entertaining Ron Gansberg gave us a tour and so we lingered). For a nightcap, we dropped by Gigantic and were fortunate enough to encounter Van Havig and Ben Love.

And there I got in an intriguing conversation with Van on the question how national beer preferences emerge. Take any country that makes its own kind of beer (as opposed to making generic lagers) and you can ask the question: why this beer? Why cask ale in Britain? Why dunkel lagers in Bavaria. (Or take the even weirder example of Cologne and Dusseldorf--why a pale ale in one and a dark ale in the other?)

You can do this on down the line. Van and I got in an abstruse conversation about how IPAs developed (we had a heated debate, but by the end I couldn't tell what we were disagreeing about; I suppose that's typical for pubby conversations about beer). We both agree that an American tradition has emerged and that it is characterized by the way Americans use hops. I have harped on this enough I think you all know about it. But Van posed a question that has become my philosophical white whale, the great unanswerable riddle in beer. Was it inevitable that Americans were going to develop in this way?

Remove some important antecedents. Say Fritz Maytag had decided against buying Anchor and Ken Grossman became an aerospace engineer. Imagine that, instead of providing a market for those lovely Cascade hops that Coors didn't want, those brewers never existed and growers pulled the American-bred hops from their fields. Would we still have gotten here?

You can run this mental experiment with any country. What we know is that regional preferences develop, not why. We can trace the history back, we can look at extenuating circumstances (war, famine, tax law), we can consider local ingredients--but like an onion, we can keep peeling and peeling and never get to that answer. You end up with Cologne and Dusseldorf, sister cities making different beer.

It seems inconceivable that America would end up where we are if you changed up some of those early variable, but I can't seem to find the (math-like) proof that would affirm or contradict it one way or another. 

A Long-Winded Way of Saying: Quit Counting Breweries

On Tuesday, in one of my least-viral posts in recent history, I pointed out that assessing countries based only on the growth in number of new breweries gives you a limited perspective. It's better if you also consider existing breweries and total beer production. Germany produces a ton of beer and still managed to support 1,300+ breweries, so despite its anemic new-brewery growth, you still have to acknowledge its preeminence among brewing countries. Owing to the wild success of that post, I'm back for more.

Now we turn to the US for a similar look at state-by-state numbers. These figures come from a paper in The Journal of Wine Economics from a couple months past. They were working with 2012 numbers, but they still paint a very rich portrait. Here are the brewery counts from that year for the top ten states (they look woefully out-of-date, but probably line up pretty closely with the current top ten and demonstrate a similar distribution).

But now have a look at the top ten states by production (this is craft brewery production only). It paints quite a different picture.

California had nearly three times as many breweries as Pennsylvania in 2012, but actually brewed less beer. (Also not that  theMassachusetts number is misleading. It comes principally from Sam Adams, but of course, the amount of Sam Adams brewed in Mass is a tiny trickle--the state's production is actually south of 500,000 barrels.) Washington made less than a tenth the amount of beer as Pennsylvania. It would be great to run this with 2015 numbers, because the effect would be far more dramatic. Nearly all of the breweries that have opened since 2012 are brewing a tiny fraction of the beer. So all the talk of new brewery openings and total breweries would obscure that fact that two states brew a huge share of all the craft beer in the US, and the top four are far ahead of the rest of the country.

And the effect can get very pronounced the further you go down the list. Illinois, for example, had 59 breweries in 2012, but collectively only brewed 81,000 barrels--less than many larger craft breweries. (North Carolinians, who do a lot of bragging about the number of breweries they have, should probably be a bit more circumspect; in 2012 their 59 breweries only made 156,000 barrels--about a tenth the amount of Oregon.)

If you think I'm on a weird bender about possibly extraneous measures, well ... there's more! Over at All About Beer, I try to make the case that brewery numbers are themselves not terribly reliable. (Barrel numbers, which are tracked by the tax man, are rock-solid.)

If you’re like me, you suspect there’s an actual number of breweries in these locations, one that is knowable and countable, and if everyone adhered to the same rules, we could tot them up officially. We know quarks exist, for god’s sake; surely the number of breweries in London, England can’t be beyond our ken. It kind of is. Here we drop into something like a quantum state, where arithmetic may no longer suffice. There exist what we might call Schrödinger breweries, entities that can simultaneously be said to exist and not. I’ll describe the difficulty by way of example.

All of which is to say that counting breweries doesn't make a lot of sense. Cities and states do not try to burnish their cred by citing stats on the number of restaurants or karaoke bars or pet stores. What we actually care about are important, excellent, interesting, or unusual breweries, right? I propose that we quit harping on total numbers.


Update. In the manner of blogs, this post sort of developed as I was writing it. (Note to self: don't do that.) Let me clarify the actual point by responding to Stan Hieronymus' comment:

"Right now there are four breweries within 3 miles of our house (in St. Louis). If plans for 2 more go through, likely, then there will be 6 breweries. At a personal level, the number matters. And shouldn't beer always be personal? Put another way, the big picture that interests me is a sum of all the little pictures." 

Yes, exactly. My real belief is that there is way to much focus on the number of breweries to the exclusion of other factors. Production is a proxy for popularity at both the market and brewery level. They suggest a market where a lot of people are drinking a lot of beer. Illinois looks like a good beer state until you consider that people weren't drinking the beer. In Stan's example, it's great to have a lot of breweries near your house if they're good breweries. Having a bunch of mediocre breweries is no bonus at all. By only focusing on numbers, we miss other important factors. It should be a consideration, but it should never be the only consideration.

Seeking Sponsors for this Site

As my abortive effort a couple of weeks ago hinted, I am actively trying to earn a bit of revenue here at Beervana. For ten years, this site has been mostly ad-free, an experience I appreciate when I visit other sites without ads. But I'm also a working writer, and I'm going to have to start getting a bit of revenue for the words I write here.

Toward that effort, I am now looking for some sponsors for the website. I am thinking of these folks as "sponsors" because I'm asking a little bit more of them than I would random advertisers. The most important thing a blogger has is his independence and the trust of his readers. I've built up, I hope, that trust over the decade I've been blogging here. I don't do anything like objective journalism, but I hope you believe that I've been transparent in my likes, dislikes, and opinions, and that they come exclusively from my brainpan, not some hidden influence behind the scenes.

For this blog to have any value at all, that transparency and trust will have to continue, so I'll ask my sponsors to agree to advertise with the knowledge that there's absolutely no quid pro quo--they won't receive any special considerations, additional coverage, or favorable content. If there's any value in advertising here at all, it's because people come to read honest opinions.

I firmly believe, however, that that honesty is also good for breweries. Not every beer they release is going to be a winner; not every press release is going to hit the mark. I may mention failures along the way. But that transparency means that, when I do praise a beer or person or brewery, you know it's real praise. Sponsors may not be delighted by every post I write, but if they've followed my content, I think they'll realize the value of having honest brokers out there discussing them and their beer. The internet is choked with social media buzz marketing, lame listicles, and clickbait. Sites with good, informative content are rare and they are a value not just to readers but the businesses they cover.

I've written up some sponsor guidelines to describe my approach. I've also created a media kit so you can see the value of the site and advertising here; it includes information about my traffic and the pricing scheme.

If you are interested in being one of these sponsors, shoot me an email at the_beerax @ yahoo.com. I'll be happy to send you all the information I have.

To all the folks who've read this blog for years, I ask you to be vigilant during this new experiment, to give feedback about how it's going, and to absolutely tell me if you're losing confidence in my independence.  I have also learned in these ten years to trust you to call me on mistakes of fact, judgment, and bias. Please continue.

Thanks and cheers--

Update. I forgot to mention: we'd also love a sponsor for the Beervana Podcast. Everything I said above applies, but of course the medium is different. Give a holler.

New Brewery Numbers Do Not Tell the Whole Story

Ron Pattinson has a nice post today that looks at the growth in European breweries by country in the five years between 2009-2014. What jumped out to him was the tiny growth (2%) in the number of breweries in Germany. He ran, Pattinson-style, a table with raw numbers. Allow me to render that statistic visually (click to enlarge):

It's true that the growth of 2% lags the rest of Europe. But percentages can sometimes be a little deceiving. The 21 breweries Germany added weren't that far behind the 24 Ireland added--but that was good enough for 92% growth on the Emerald Isle.* So what if we instead look at total breweries? How does Germany fare then? Quite a lot better, as you'd expect.

That brings me to my final visualization--and probably the most illuminating. We often look at brewery counts as a valuable metric for ... something. (I do it too, and I don't know why it's so compelling). But what if we look at the actual amount of beer a country produces rather than the number of breweries? Does that shed light on matters? It does.

(There is one final number crunch I could have shown, but it's not dramatic; it compares the production to population, but the differences weren't large. Italy was a bit of an outlier on the low side and the Czech Republic on the high side, but most were within close range of each other.)

The moral of the story is this: new brewery numbers are not a good measure of the entire health of a local beer market. You have to look at the total number of breweries and total production of those breweries. No single number tells a complete enough story on its own--you really need to look at all of them together. All countries went through massive consolidation in the 20th century, but Germany less so. It stands to reason that Germany would be repopulating its breweries more slowly now. (Which is not to say that Ron's initial observation isn't interesting--it is. And many would love to see more rapid growth of young, adventuresome breweries in Germany.)

_______________
*As commenters on Ron's post noted, those numbers are probably not quite accurate. It turns out counting breweries is a real challenge for existential and semantic reasons. More on that in due course.

The Argument Against (Henry's Hard Soda)

There is a lot to be said about the wave of consolidation among the larger American craft breweries right now (and I will say some of it later this week). In the meantime, I offer you a case-in-point for one of the reasons that argues against selling your brand, and particularly your name, to another company. Once it leaves your possession to become a brand in someone else's portfolio, terrible violence may be done to it. I forthwith offer you Henry's Hard Orange Soda (in a classic corporate move, where marketing precedes everything else, the website is not yet live). The bold is mine.

Today, MillerCoors proudly unveils Henry’s Hard Soda, a new line of deliciously refreshing hard sodas made with real cane sugar. Crafted for beer and non-beer drinkers alike with 4.2 percent alcohol by volume, Henry’s puts a playful spin on familiar flavors with Henry’s Hard Ginger Ale and Henry’s Hard Orange Soda.

“One of the main reasons why I love this product is because life is busy with work, kids and bills, but there’s always time to sneak in a little fun with friends,” said Bryan Ferschinger, MillerCoors senior director of innovations. “Beer is great, but now we also have Henry’s Hard Soda – an option that gives a little more flavor and excitement.” 

The new hard sodas are inspired by the spirit of Henry Weinhard, a brewer known in the Pacific Northwest for making flavorful beers and great soda for over a century. When Portland unveiled a new public fountain in 1887, Henry offered to pump beer through the fountain for everyone to enjoy. Today, Henry’s fun-loving personality lives on in this refreshing hard soda. 

MillerCoors will support Henry’s Hard Soda with a national marketing campaign, kicking off at the end of the month with advertising on primetime networks and high-profile cable partners such as ABC, FOX, TBS, Food Network, and Bravo. A custom digital presence in top pop culture sites, traditional print media support, dual-language public relations programming and influencer initiatives complement the rollout.

Henry is now a playful cartoon figure, like the Hamburgler or Twinkie the Kid. All he needs now is a catchphrase. Sad face on behalf of all the good citizens of Portland.

The Year in Pixels

Below I offer a year in beer, filtered through the particular lens of my perambulations. There's an unexpectedly large number of All About Beer editor John Holl in here. With CBC in Portland, OBF, GABF, and me visiting the East Coast, I got to see him more often than usual. There is a more national theme this year, as I wandered about on my book tour travels. But also shots of brewers in lederhosen, brewers playing banjo, and very small brewers in skirts. There are technology shots, bar shots, people shots, and even one art shot. All in all, a very good year.

They're mostly chronological, so have a look.

How my year, and 47th birthday, started out.

Early last year, Alex Ganum captured Willamette Week's Beeer
of the Year with Engelberg Pilsner.

The release of Pliny the Younger at Roscoe's.

Niki Ganong released her book.

Espied at FH Steinbart, my local homebrewing shop.

Oregon brewing royalty at CBC: Rogue's John Meier (l)
and Pelican's Darron Welch (r)

An Honorary Satori (Plus Other 2015 Highlights)

Back when this blog started, 3,633 days ago*, I used to do a year-end award for the best new beer released that calendar year. I managed to keep it alive through 2011, when the sheer force of new releases overwhelmed me. In 2012 I gave a sort-of Satori to Occidental Brewing for excellence in lager beer, and general overall awesomeness. Since then the Satori has been dark...

Until now.

It's certainly not that things have gotten easier. It's now so impossible to keep up with beers--so much so that the New School declared Occidental, my 2012 Satori winner, the second-most "most underrated brewery."  The winner, absurdly, was my 2009 Satori winner, Upright Brewing. Apparently we can not only not keep up with new breweries, what to speak of new beers, but now we're losing track of beloved existing breweries. But I digress.

This year I wanted to make special note of a new brewery here in town that should quickly jump to the top tier of must-see stops on a visit to Beervana. That brewery is Culmination, which opened over the summer. I haven't seen such a confident and sure-footed debut of a new brewery since--well, probably since Upright. Brewer Tomas Sluiter had toiled for years at Old Market Brewery, making beer for folks who had fairly pedestrian tastes. For special events, he was sometimes given the green light to make something to age in a barrel, or ferment with wild yeast, but I don't think too many people expected him to be harboring such ambitious goals.

All that time making golden ales and porters gave Sluiter the time to envision a truly adventuresome lineup, and when Culmination launched, it had an impressive array of yeast-forward beers designed to please palates. I've never seen fewer than three saisons on tap, in all colors of the beer rainbow. There's usually at least one wild ale on tap, and generally a spiced ale or two. Of course, he also dabbles a bit in hops, and it's here where he made perhaps the biggest impression. His regular IPA is in fact fairly irregular--and has become my favorite hoppy ale in the city. Euphoric IPA is made with Brettanomcyes (the chalkboard inevitably says "Brett IPA," and I bet half the people ask--"who's Brett?"), but most people would be unaware of the yeast's contribution. In the manner of modern IPAs, it's incredibly tropical, with layers of fruity flavors and clouds of citrusy aroma. The strain of Brett he uses accentuates this, but you don't have to know it's there. What you find is a deeply pleasurable, approachable beer. The Satori is typically given to a beer, so consider Euphoric IPA this year's winner.

I've been very impressed with his saisons, as well, and the black saison is a perfect winter beer. He also has a penchant for dark ales--no longer particularly popular, but personal faves of mine--and treats like the recent chocolate stout were good, old-school fun. From top to bottom, the beer list has been impressive.

Culmination has been getting a lot of press as one of the best new breweries this year, which is an accurate but understated compliment. Culmination is one of the best breweries in Portland, and if you haven't checked it out, do so at your earliest convenience.

A lot else happened in 2015, and here are a few of the highlights

Kurt Widmer
At some point I hope to have a proper post up about the influence of one-half of the titular Widmer Brothers. Kurt announced that he was going to retire this year, concluding a 31-year run with the brewery he founded. It opened within months of BridgePort in 1984, and quickly became a part of the fabric of the city. Despite those 31 years, Kurt is still relatively young, and I hope he enjoys his well-earned retirement, with our many, many thanks.

Honest Pints
For a very brief moment, it looked like honest pints might become the law of Oregon. Didn't happen.

Deschutes Fresh Squeezed IPA
Traveling around the country was a useful perspective-giving exercise. I learned many things, but one was relevant to Oregon. Basically, no one beyond a buffer of a state or two away has ever tried Oregon beer. Rogue is very like the only beer a, say Wisconsinite, will ever have encountered. This I knew. What I did not know is that Deschutes has begun pushing ever further out, and in many of the more beer districts, riding the success of Fresh Squeezed IPA. I saw it on tap throughout the Midwest. Here in Oregon, we have gotten used to these fruit-juice IPAs (the "fresh squeezed" of the title). We are still a few years ahead of other states, and so this is a radical beer in far-flung markets. Not surprisingly, people rave about it. It's the kind of beer that hints at the huge potential of hops to go beyond bitterness. It's a great beer and a great ambassador for Oregon.

Cannabis
Oregon legalized it. Almost nothing changed.

Kettle Souring
Rarely does a brewing technique deserve special attention at year-end best-ofs. But this year we must acknowledge the debt the brewing industry owes to kettle souring, that process of acidifying a wort with a lactic fermentation and then using the soured mash in beers like gose, Berliner weisse, and dry-hopped sours. All three of those styles were hugely popular in 2015--gose grew the fastest of any style, Berliner weisse the third-fastest--and follow a trend led by brewers here. In April, Gigantic's Ben Love, The Commons' Sean Burke, and Breakside's Ben Edmunds gave a talk on the process at the Craft Brewers Conference, illustrative of how well-established the practice has become here. It's a great, natural way for breweries to use lactic acid to acidify beers exactly the degree they wish. You can tinge a saison with crispness or make a Berliner weisse screamingly tart--and everything in between. Expect this to become a universal, common practice in the US in the next decade.



Some Guy Released a Book
You may have heard about it. 

Consolidation
You couldn't end a round-up of the year's activities without noting the trend toward consolidation within the craft-brewing segment. Just a quick glance at a list of the largest U.S. breweries demonstrates what's happened. The three largest US beer companies are still makers mainly of mass market lagers, but half of the next eight—all one-time craft breweries—are partially or entirely owned by large multinational beer companies. To add a cherry on top, Reuters recently reported that employee-owned New Belgium was courting a buy-out suitor. (Which goes to show that employee-owned companies may be especially vulnerable to buy-outs; earlier in the year, Oregon's employee-owned Full Sail sold out to a private equity firm.)

None of which should really bother us. I would expect that consolidation will continue to proceed apace. Anheuser-Busch InBev's strategy is to create a network of "craft" brands that it can use to create a national all-ABI family of products. That will streamline business at both the wholesale and retail levels. But there's little reason to think that it will damage the market or make good, experimental beers harder to find. Indeed, for the foreseeable future, big companies are going to be emulating the craft brands, trying to make the edgy, experimental beers that craft drinkers want. Remember the old cliche, which fits the moment perfectly: Bud couldn't beat 'em, so they joined (or bought) 'em.

That's it for 2015. Onward to 2016 . . .
_______________
*Look for special 10th anniversary blogging in the new year.

Good Beers 2015

This past year was an odd one for me--a good portion of the best beers I tasted came from breweries beyond Oregon. I spent six weeks on the road, traveling to 24 cities in 18 states (plus DC), and managed to drink a beer or four at each stop. What I enjoyed is illustrative of what's available in American craft brewing right now. We can't really hope to keep abreast of the beer scene anymore, with upwards of a hundred thousand different brands being made last year. (Rough math: if the 3,800 breweries last year made an average of 26.3 different brands--which sounds about right--we had 100k beers in 2015.) The best we can do is sample and hope to have found a few big winners. Here are mine.

• Block 15 [forgotten name] saison. One of my first events was at Block 15, at their new Taproom outside of town. It's a great facility and they pour a nice selection of the kind of beers I think of when I think of Block 15--saisons, sours, barrel-aged beers. I had a couple beers that evening, including a summery saison that was kissed by Brettanomcyes. Delicate, fresh, tropical, and it drank way underneath its heft. I was reminded why I think this is one of Oregon's best breweries.
• Russian River Beatification. In Corte Madera, I had a wonderful event at Book Passage, in which the bookstore had four beers available for tasting. My event became that tasting, which included a porter, two IPAs, and Russian River's Beatification--the batch that hadn't even been released to the public yet. About halfway into the first beer--Russian River--I realized I could talk about the beer from the point of view of what the dominant ingredient contributed, and people were wowed to learn how much yeast can do for a beer. 
• Fremont Interurban. The Book Larder in Seattle arranged to have growlers of Fremont Brewing. I am ashamed to say I'd never had Interurban IPA. Vivid, Northwestern, sessionable--a great beer.





A typical blackboard, this one at Ale Yeah! in Decatur, GA (note gose).



• Revolution What the Helles. I made a special trip out to Revolution when I was in Chicago, and on the whole I was underwhelmed. (Top to bottom, Goose Island, where my event was, had more accomplished and daring beer.) But they had a helles that saved the day. It wasn't particularly authentic, but it was just perfectly made in terms of balance and pleasure.
• Urban Chestnut [forgotten name] corn lager. This was an evocation of a classic American pale lager made with corn, and it showed how well corn works when people are trying to make a good beer with it. Supremely crisp, but with a hint of sweetness, all of which made for a perfect platform for zingy little hops. 
• Schlafly Lemon Basil Gose. Gose was the big surprise on my trip: I would estimate that at least 75% of my stops had one on tap. My fave, and perhaps my favorite beer on the trip was Schlafly's gose, which had a perfect savory-tart-sweet balance point. It was in so many ways not like beer--it was like a beery Gatorade on a hot day--and yet I couldn't imagine anyone not liking it. I loved it.
• Other Half Brett IPA. I managed to get half a glass of this elixir as the keg blew, and it was one of the highlights of the trip. Other Half is the beer geek's choice in the Empire state, and they really had this beer dialed in; it was all sticky tropical fruit and deep aromatics. I suspect no one knows what the "brett" meant, but I bet they love this beer. 
• Hidden Springs Berliner Weisse. Tampa, Florida, unexpectedly had a fantastic beer scene. My event was at Hidden Springs Ale Works, which was just a few months old. Nevertheless, the brewery had already dialed everything in. The IPA could have come straight from Portland, but what really caught my eye was the tropical-fruit Berliner (there was more than one fruit and I forget which ones). Even in November, when I visited, the city was 85 degrees. What you want is something like this that can both impress with its intensity, but also slake a mighty thirst.
• Ardent Single Hop IPA. In Richmond, VA, I did another guided tasting at Ardent Craft Ales, a wonderful newish brewery there. As I was talking, I got off on an IPA jag (I was supposed to be talking about saison) and the brewery folks ran back and got tasters of an IPA so people could see what I was talking about. They brought out one of their single-hop IPAs (they did a long series), and I think it was with El Dorado. Whatever the reality, it was a perfect example of the (new) American penchant for late- and dry-hopping beers to tease out insanely intense flavors and aromas. 
• Fullsteam Wild Sacch beer. In Durham, NC, the Fullsteam Brewery is trying to isolate a wild Saccharomyces strain to use as a house yeast. We generally think of Brett when we're thinking wild, but standard Sacch start out that way, too. The beer they had made was a session ale that had something of a saison and something of a kellerbier in it. Crisp but slightly funky, hazy, and rustic. 
• Atlas Brew Works Home Rule Lager. Maybe it was just because I was tired and that point a bit sick, but my last stop, which I enjoyed with my brother- and sister-in-law, really hit the spot. Lightly sweet, a bit cakey, and laced with just enough herbal hopping to keep it interesting, Atlas was a perfect final beer for the trip.

I also had great beer at Boulder, New Belgium, Goose Island, Yazoo, Magnolia, and at various pubs in Brooklyn (things got a bit away from me there), but those are the ones that really stood out. It has become pretty easy to find good beer in this country of ours. You no longer have to be in a town like Portland to do it.

Thanks For a Lovely Year

Yesterday as I was idly scanning through Twitter while attempting to endure the assault of pre-movie ads at a Regal Cinema*, I came across this little gem:

It hadn't occurred to me until that moment that my book would be playing a bit role in people's Christmas mornings across America or--more meaningfully--that people would actually be excited to receive it. As so often this year--as I trotted around the country hawking my book, as I read (mostly positive) reviews, as I received well-wishes from friends and family--I found myself flush with gratitude.

Writing is not a solo endeavor. It is an act of communication, and isn't whole or complete until someone reads the written words. The meaning exists in trust between reader and writer, and both contribute to that meaning. Once a sentence is put to paper, it begins a life that will only be complete when someone else reads it and it becomes transmuted in her mind. The writer never has the final word; the reader does. The text then goes on to live a separate life outside the control of the author. Whether a book becomes beloved, reviled, or ignored is entirely dependent on public, in the thinking and discussing and considering done in the months or years after publication.

I had two books out this year, and one of them has managed to begin living its separate life. (Cider Made Simple--though I think a book equal in quality if not scope to the Beer Bible--may end up in the "ignored" camp.) The gratitude comes because I see all those lovely readers out there giving it that life.

Thanks thanks thanks thanks--it's been a special year.

_____________________
*I've basically scrubbed Regal from my life, except on Christmas day, when it's generally the best/only theater option available. Christmas-day movies are, for this Buddhist, a tradition going back two decades.This year it was Star Wars.

About Those Ads

Okay, so it looks like I won't be using Google ads on the site. Apparently the content of this blog is too scandalous for the tender souls in Mountain View:

We did not approve your application for the reasons listed below

Drugs, drug paraphernalia, alcohol, beer or tobacco: Google believes strongly in the freedom of expression and offers broad access to content across the web without censoring search results. However, Google policy does not permit the placement of Google ads on sites promoting illicit drugs, prescription drugs, drug paraphernalia, sales of hard alcohol, tobacco, or tobacco-related products. We've found that your site contains content of this nature.

What's ironic is that moments after I started using Google ads, I considered dumping them because one appeared that advertised "Find sexy Thai women" or something, which seemed pretty tawdry. So, for the near future, this gorgeous blog will be unsullied by ads. I'll try to figure something else out eventually. (If you're interested in advertising here, shoot me an email.)

A Holiday-Buying Spree

Wow. The world's largest brewery has, in just five days, added three new breweries to its craft portfolio. Last Friday it was Arizona's Four Peaks. Yesterday we learned that AB InBev had snapped up London's Camden Town Brewery. Today it was Colorado's Breckenridge:

Anheuser-Busch has made a play for a piece of Colorado's craft brew market, snapping up Breckenridge Brewery for an undisclosed sum, officials announced Tuesday.

Breckenridge, which sells its beers to 35 states, is on track to produce 70,000 barrels of beer in 2015. Earlier this year, Breckenridge departed its downtown-area Denver digs for a 12-acre brewery and restaurant in Littleton. The 25-year-old company is Colorado's sixth largest craft brewer by barrels produced, according to The Brewers Association data.

We were playing a little game on Facebook of trying to guess which brewery would go next. It's possible someone might have rung in with Breckenridge (one commenter was on the right track with Avery and Great Divide), but the damn thing happened too fast for a robust sample to gather. I will leave you with the newly-updated map of the Little Buds and their national distribution:

Various comments/questions. (1) Interesting that ABI seems to be focused on blue states (a fact made more obvious by my use of an electoral college calculator to generate these maps)--does this mean North Carolina or Florida is more likely to be the first southern state than, say, Georgia? (2) Some enterprising young journalist (Bryan Roth?) should look to see what the distribution ramifications are in these states. I continue to believe that's a huge part of this equation. (3) Which brewery is next, and (4) how many breweries do you expect ABI to buy stateside before it feels it has collected enough to make a big push into the craft segment?

New for 2016: Ads!

On December 1, I turned in the manuscript for another book. It was an opportunity to think about the next book ... or not. In the near term, I'm going to look for other options, which means I need to earn pennies where I can. I have tinkered with ads once in the past, but abandoned them because we are talking pennies--and because they junk up a blog. Beggers writers can't be too choosy though, so for the near future, you'll be seeing these delightful opportunities featured on the blog. I highly encourage you to click through and explore them to see if, for example, QuickBooks or hipster eyeglasses are right for you. Or at the very least, forgive me for this transgression.

Four Peaks Down

And so it goes.

Anheuser-Busch InBev is buying Arizona's largest craft brewer and brewpub owner, Four Peaks Brewing Co. Founded in 1996, Four Peaks produced 70,000 barrels of beer this year. Financial terms of the sale set to close in the first quarter of 2016 were not disclosed. Four Peaks is the sixth brewer to join A-B's craft and imports portfolio, The High End. The other craft brewers A-B has acquired in recent years are: Goose Island Beer Co., Blue Point Brewing Company, 10 Barrel Brewing, Elysian Brewing Company and Golden Road Brewing. 

At this point, the only game worth playing is guessing (1) what AB's ultimate strategy is, and (2) which states they'll target next. Here's the current state-by-state map of Bud Micros (Little Buds?)--and you can see that Four Peaks marks ABI's first foray into a red state. I do find it interesting that their focus has been on the West Coast.

I wonder if this has to do with distribution complexity. Do these states have more distributors? If so, it would make sense that Bud is using the Little Buds to coax their distributors into dropping independent craft breweries. Any theories?

Reinheitsgebot RIP?

I am currently finishing up a print article for All About Beer on the subject of Reinheitsgebot--which as many of you know, turns 500 next year. By one of those strange coincidences of the universe, Stone brewing yesterday released its first Berlin-brewed beer. I don't want to step on the thesis of my article, but all this did get me thinking. As I talk to German and German-American brewers about the legacy and significance of Reinheitsgebot in its native land, everyone seems to agree that something's gotta give.

There is a current of change running through the center of the beer industry that is not only changing the way beer is made (in small batches to be sold locally), but the kinds of beer (vivid flavors in place of blander, industrial ones). Germany has been somewhat immune to these forces, both because it already had a robust network of local, small-batch breweries and because Germans have long been proud of the quality and superiority of their beer--thanks largely to the marketing success of Reinheitsgebot. But it hasn't been entirely immune, and small breweries have been opening and making what other countries call "craft beer," often in styles not native to Germany. The introduction of Stone beer will only accelerate the process.

None of this spells the death-knell of Reinheitsgebot necessarily. I've spoken with brewers who feel that it's due for an upgrade for the 21st century. The notion of "purity" isn't impossible to police, but the definition may need tweaking; brewers aren't using henbane quite as much as they used to, and cherries and coriander seem fairly wholesome. There may be some wiggle room. In any case, I guess the upshot of all this is that at exactly the moment we're celebrating this wonderful, weird artifact from the early 16th century, there may be some hard discussions about how much longer it should be embedded in the German tax code.

No doubt we'll come around to this topic again soon enough--

Two a Day

As I traipsed around the country on my book tour, I found myself regularly saying something like, "there are 3,500 breweries in the country"--usually by way of an excuse for why I hadn't tried a certain spectacular local beer. It turns out I was 644 breweries off. Today the Brewers Association pegged the figure at 4,144. If you're wondering why they've chosen the odd timing of early December to make this announcement, it has to do with a certain historical precedent:

As of the end of November, there are now 4,144 breweries in the country, topping the historic high of 4,131 breweries in 1873.

That official figure from 1873 is somewhat fishy (record-keeping wasn't quite as precise during the Grant administration), but it's good enough for press releasing. The more important stat is in a bullet list within the release, and helps explain how I could be off by so much when I talked about brewery figures:

Brewery openings now exceed two a day.

I was apparently using a figure that was grossly out-of-date: ten months. Is it sustainable? Are we in the midst of a bubble? Questions for another day. For the moment, just rest in that two-a-day stat; the emotional truth of it is startling.

Me, I'm off to the Holiday Ale Fest.

When I Climbed the Mountain

The writing life is filled with peaks and valleys. I've been bumping along at high altitude lately, but no time was more exhilarating than the day I woke up in Tampa, Florida after a book event, got on a plane for Atlanta, was picked up at the airport and zipped downtown to CNN. I was there to do the spot you see below--two and a half minutes of very fluffy commentary on winter ales and "light beers." (When asked to do light beers, I selected session IPAs, which was my own subversive contribution.)

At CNN, they take your pic and give you a lanyard and then you go through a pretty serious security screening. The spot we did took maybe an hour, and I got to joke around with Coy Wire, a former NFL player who hosted the piece (a down-to-earth, self-effacing guy), and a couple of producers they roped in to taste the beer. Afterward, I was shuttled to Decatur for another Beer Bible event, and I was on a 10 pm flight to Nashville for the next book event. For one marvelous day, I felt like quite a big shot.

Anyway, there it is, my 2.5 minutes of fame on national TV. The piece ran several times yesterday, and now I have it for posterity.

ON-AIR GUEST

With Coy Wire on the set.

It's Hard Out There For a Publisher

This is a slightly random aside, but I wanted to draw your attention to a great post about the state of the internet over at Talking Points Memo. For those of you who don't read political blogs for fun, TPM may have escaped your notice. It's a left-of-center site that grew out of a personal blog by Josh Marshall. (As an aside to the aside, the site was my introduction to blogging. I'd never heard the word "blog" until Paul Krugman called attention to some of the work Marshall had been doing on the coded racist words of then Majority Leader Trent Lott. Within a month, I had started my first blog.) Like all news/opinion sites, it has struggled in the age of social media.

What's changed in the last 4 to 5 years is the inroads social media sites have made into the paid advertising space. Much as Craigslist virtually destroyed the classified ads business that local newspapers owned, a site like Facebook can deliver ads more efficiently and cheaply than most traditional advertisers. 

The great liberation brought about by the internet made it possible for someone like me to put my voice in front of (potentially) the whole world--a phenomenon new in the world. But if you envision the structure of media as a funnel, where the voices of the public are the wide end, and the media gatekeepers act as the narrow end, what happened with the internet--and especially, with social media--was the elimination of that narrowing. Now all people can connect with all people, which means the writer in this equation isn't very important anymore. Josh' perspective is that of he publisher, but since we can all now be publishers as well as writers, it may be a distinction without a difference. Writers and publishers are still casting around now to figure out how to make a living. Many of us develop nervous tics because it seems like our societal value is approaching zero. Though from a purely academic perspective, the changes are fascinating.

Which I suppose is about as good a place to segue to links as any. Today at All About Beer I discuss a significant epiphany I had in Miami, Florida on the subject of beer. True story.

So join me back in the Abbey Brewing pub. Most beer culture in the world right now has its roots in European brewing. Abbey reflected that—with a healthy dose of American sprinkled in. As I mentioned, Miami is loaded with culturally-specific businesses, so there’s nothing out of the ordinary about a European-American pub making up part of the tapestry. And yet, in that moment, I realized how much American beer culture—especially craft beer culture—carries with it this European valence.

We also have the latest Beervana Podcast up and ready to caress your ears in our dulcet tones. In this latest episode, we discuss wintry beers, touching on topics like wassail, Lamb's wool, glühkriek, bière de Noël, and of course, price elasticities. We have also slightly tweaked the format to include news and beer recommendations (an extension of the "Beer Sherpa" feature birthed here on this blog) as well as a a "mailbag" feature, in which we are attempting to draw you into the discussion. We welcome questions, comments, criticisms, witticisms--anything that inspires you. Email us at the_beerax @ yahoo.com.

Let's Make a Deal

Many of the recent craft-brewery buyouts have been like shiny objects to attract our gaze, but lacking in any real value. One buyout is mostly like the next. When Constellation purchased Ballast Point on Monday for a billion dollars, though, it was more than just clickbait. It makes us consider what things are worth, and that made us consider seriously where the beer market is headed. Constellation wasn't a pundit talking about where the market was headed--they pontificated with their dollars. All of which brings me to a question.

Constellation paid a massive premium on the assumption they can build it into a formidable national brand and get a share of the growing craft pie. So, if you had been one of the C-level executives at Constellation (CEO, CFO), would you have recommended this deal?

The way you answer the question depends on how you weight several variables: 1) where the market is headed; 2) how strong Ballast Point's brand and beers are compared to other craft breweries you'd consider buying; 3) how much the market actually favors local ownership (which is to say: will locals abandon it because it's a national brand; will non-locals embrace it in an environment of localism?); and 4) whether the Ballast Point brand can translate easily into a national brand, and 5) whether Constellation has the infrastructure to support a national brand. There may be other factors as well, some unknowable (like the way the deal was structured), but these give you an idea of the calculation.

If you think Ballast Point's brand can become one of the small number of successful craft brands, that the craft market will be much larger than it is now, and that the focus on localism is overblown, a billion dollars doesn't look like a bad bet. Well?

A spirited discussion has been going on at Facebook for a couple hours, so you might prefer to comment over there.

The Point Made More Fully

Here.

Many observers believe this is further evidence of a bubble in the “craft” segment—the outrageous prices paid for breweries remind them of mortgages in 2007. Of course, that’s always possible. If the market flatlines tomorrow, Constellation will lose big on the deal. But consider: since 1990 or so, the overall beer market in the United States has remained a pretty steady 200 million barrels. (Per-capita beer consumption has declined, but the population keeps growing.) In 1990, pretty close to 100 percent of the market was mass market lagers. By 2015, the 200 million barrels of mass market lager had shrunk to about 175, and that drop-off curve gets steeper each year. They are currently hemorrhaging two or three million barrels a year, and if trends continue, that number will grow faster.

Big beer companies are well aware of these trends, and they’re asking themselves the same question: How much of the market 10 years from now will still be mass market lagers?

Read the rest.

Big Beer Bets on the Future

Another week, another buyout, another yawn. Except not this time, because the topline number has startled even cynical old beer writers like me:

Corona and Modelo beer brewer Constellation Brands Inc (STZ.N) said it will buy San Diego-based craft beer maker Ballast Point Brewing & Spirits for about $1 billion to compete in the fast-growing craft beer market.

A billion here and a billion there and pretty soon you're talking real money. Some quickie comments as the news comes in.

The Rationale

Ballast Point is one of the strongest brands in the US. There aren't a ton of top tier brands out there, so it makes sense that Constellation paid premium dollars for it.

The Valuation

On the other hand, the brewery only made 115,000 barrels and was only the 31st largest craft brewery in the US last year. Which means Constellation paid super premium dollarsar--far in excess of the current value of the company. (No financials were disclosed on the Lagunitas deal, but reports said Petaluma's--and Chicago's--finest was also valued at $1 billion, and it brewed five times as much beer in 2014 and has far greater capacity.)

The Radical Shift in the Market

All of which leads me to this last point, which is one I think most people haven't fully digested yet. Big beer companies are betting on the steep decline of mass market lagers in the US. I constantly get asked whether we're in a bubble or not, and this should be gold-plated proof: we're not. A permanent upheaval has begun in the beer market, as mass market lagers get replaced by what we formerly called craft beer. Whomever can hoover up market share on the full-flavored ales and lagers  will be the big winner in the marketplace of 2030. And if you don't believe me, believe AB InBev, Heineken, MillerCoors, and now Constellation, who are paying way, way more for breweries than their absolute 2015 value. 

The reason is because they're betting on the future, and they're betting on "craft."

Update. I elaborate on this post at All About Beer: "Betting a Billion Dollars Against a Bubble."

You Can't Recycle Originality

Martyn Cornell, who surprised me by admitting he as an MBA, just reviewed the new book by BrewDog's James Watt. It's a fascinating dissection not just of the book, but the business of beer. Here's his final paragraph, which is a great place to start a discussion:

Will someone who buys Business for Punks, given luck, be able to turn themselves into the next BrewDog? Well, no, probably not, or not in the UK beer market, because as far as what BrewDog now represents, there is only room for one iconoclastic, rule-breaking, self-proclaimed punk brewery, Dickie and Watt spotted that gap in the market and filled it extremely successfully. We may well see firms start up that will be “the BrewDog of grocery retailers”, “the BrewDog of software manufacturers”, even “the BrewDog of estate agents”. But no sector, I suggest, can sustain more than one marketing guerrilla, and guerrilla marketing is what BrewDog does brilliantly and what its fans respond to enthusiastically.

I'd take this a step further. In the business of beer, it's very difficult to follow the blueprint of any successful brewery. They're all more or less singular achievements that are very difficult to replicate. Here in Oregon, Ninkasi Brewing pulled off the neat trick of going from start-up to powerhouse in just a few years. Founded in 2007, it was able to become one of the top-three breweries in just five years. Surely there are lessons in the Ninkasi approach? Let's look at how they did it.

First, founders Jamie Floyd and Nikos Ridge took advantage of a bizarre anomaly that existed as late as 2007 in Oregon: the city of Eugene, the state's second-largest, had very few breweries and none that had become the dominant local player. Second, they came of age just in the moment that IPAs were not only becoming ascendant in craft brewing, but going through a big change in form. All of Ninkasi's early beers were hoppy and captured the zeitgeist for the "new" IPAs (which have since gone through another iteration in evolution). Of course, the brewery also had great branding, a great sales force, and great beer--necessary but hardly sufficient elements for success. In other words, cribbing notes from Ninkasi wouldn't be much help to a brewery today.

Here are some of he biggest American breweries: Boston Beer, Sierra Nevada, New Belgium, Lagunitas. Could you imagine trying to replicate the elements of their success? Try building an empire on an amber lager or amber ale today, as Boston Beer and New Belgium did. Lagunitas sells a certain California ethos as much as it does beer, but imagine trying to replicate it now. Sierra Nevada might be the one model a brewery could replicate, but the benchmarks--extraordinary quality standards with landmark beers and quiet consistency over the decades, looks like a daunting task.

I get that business books always take the shape of a kind of long-winded humble-brag about how an entrepreneur did something. But by the time you get to that phase of the business, the lessons are too particular to really benefit anyone coming up. There are a ton of things you have to do just as a matter of course for any business. But the secret sauce that leads to exceptional success in the marketplace is almost always a spark of originality that captures the imagination of customers. And you can't successfully recycle originality.

When Giants Join Forces

Q: How many Elysians could AB InBev have purchased for the price of one SABMiller (minus MillerCoors)? A:

1,700

(Not everyone is amused.)

Counterfactuals

A little Saturday morning chin-scratcher for you to mull. Stan links to an article about the famous "judgment of Paris" in the wine world and wonders:

What if Fritz Maytag had not bought Anchor Brewing in 1965?

What if the committee charged in 1906 with interpreting the meaning of the Pure Food and Drug Act had decided to implement some sort of legal differentiation between all malt and adjunct beer, or enacted a proposal that lager beer be required to lager at least three months? (Both were considered and rejected.)

What if the USDA had not released the Cascade hop variety in 1972?

In comments, I suggested that there is no analogue in the beer world. It's just impossible to imagine that beer would remain the one product immune to the post-industrial return to quality and diversity that came to all the other products on the grocery shelves.

But there's a side debate here--one Stan and I have been batting back and forth for years. When we look at the landscape of American brewing now, what we see is a fully-developed American idiom: hoppy ales made with neutral yeasts and base malts, accented (if at all) with just a bit of caramel malt. Whether the name on the package is IPA, double IPA, white IPA, Session IPA (etc), that national lineage is always evident. I have argued to Stan--who has steadfastly remained unconvinced--that there is basically one source for all that. So let me put it out to you, and you can line up in the Stan, Jeff, or alternative camp as befits your reading of history:

What if Ken Grossman had never made Sierra Nevada Pale? (And as a corollary: Sierra Nevada Celebration?)

Discuss.