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Wednesday, March 25, 2015

Trains, Beer Squabble in the Earthquake State

There's beer on the tracks in California. In what is becoming an uncomfortably common occurrence in craft beer, an established entity is challenging a brewery's right to trademark a brand. A lot of people will be watching to see how it turns out.

Anyone who watches these things is aware of the story. FiftyFifty Brewing of Truckee was hoping to trademark its B.A.R.T. Its application ran into opposition from the other B.A.R.T., an acronym for Bay Area Rapid Transit, the folks who operate a rail system in the Bay Area.

This seems like a bit of an overreach to me. I mean, the FiftyFifty B.A.R.T. is a barrel-aged beer. The other B.A.R.T. is a bunch of stinky train cars. Yet the train people want you to believe the beer people are going to somehow damage the transit brand. Nope, they aren't kidding.

On to the specifics. The train people claim FiftyFifty's use of the B.A.R.T. name is likely to "cause dilution of the distinctive quality" of the B.A.R.T. identity. How anyone would confuse a train with a beer is anyone's guess. But the train people say their brand has been featured in a lot of movies and has earned widespread acclaim that must be protected.

The beer people have their own story and they're sticking to it. They've been using the B.A.R.T. acronym for several years to describe a limited production Barrel-Aged beer that's Really Tasty. Get it? The name also pays homage to a now deceased pup named Bart who once stalked the brewery. So, you see, there isn't any conspiracy on the part of the beer people to muscle in on the train people's territory.


What will happen to the challenge to FiftyFifty's trademark application is uncertain. Ask anyone. These things are almost never cut and dry. The problem for FiftyFifty, as is the case with many breweries, is they simply don't have the liquid funds needed to finance an extended course of litigation to challenge the train people. And the train people know it.

This really just looks like another case of a large entity bullying a smaller one because it can. B.A.R.T., the transit agency, is a publicly-owned system that's been operating since the early 1970s. It has nothing to do with beer and no one in their right mind is going to confuse B.A.R.T., the beer, with B.A.R.T., the transit system.

This is no way to run a railroad, kids.
Another BART

Monday, March 23, 2015

Rising Popularity of Spirits Not Lost on Big Beer

The growing appeal of barrel-aged beer over the last few years has been interesting to watch. It's connected to the rise of extreme beers, in this case beers drenched in booze. This trend is no accident and it's also no accident that the evil empire has jumped on the bandwagon.

We've all seen the barrage of recent reporting on the growth of craft beer, which reached 11 percent share of the beer market last year. That's all well and good. The problem is, beer's share of the overall alcohol market is in decline. It has been for a number of years.

Back in 2000, beer held 55 percent of the alcohol beverage market. Its share slipped below 50 percent in 2010 and stands at around 48 percent today, according to Fortune. So craft beer is gaining an increasing share of a shrinking piece of the pie.

The big winner? Since 2000, it's spirits. Hard liquor held 29 percent of the alcoholic beverage market that year. It reached 35 percent market share in 2014. Given that wine has been mostly flat, liquor's increased share has come almost exclusively at the expense of beer. Big beer.

There are many reasons for the growing popularity of spirits. Part of it is probably generational. Millennials who've never even tried Budweiser love their booze. As well, Prohibition-era restrictions on liquor have been relaxed in a lot of places, making it easier for spirit makers to market their wares.


One could reasonably argue the increased popularity of liquor has helped promote interest in beer cocktails and barrel-aged beer, particularly beer aged in spirit barrels. If you think about it, beer aged in booze barrels is essentially a sort of beer cocktail in the glass.

The ass clowns at Anheuser-Busch are not blind to these trends. That's why they released the cocktail-inspired Rita line, which has seen decent sales success since 2012. In fact, the suits believe Rita would have done even better had she not been damaged via her connection to Bud Light.

I don't know if Ritas are "brewed the hard way," like everything else at AB. That's a tough one. But it's perfectly clear that there's no future in hitching products like Rita to the Bud brand. That's a connection that produces mostly negative reactions, particularly among younger drinkers.


The latest big idea from Anheuser-Busch is all too predictable. They're rolling out Oculto, a tequila-flavored beer targeting younger drinkers. Tequila has been gaining popularity with that crowd, so the move makes some sense. Early Reviews of Oculto aren't good, but never mind.

Oculto will display no clear connection to Anheuser-Busch. The label features a white skull printed directly onto a clear bottle. There will be no mainstream ad campaign. Instead, the AB brass hopes to generate a positive social media vibe by sending agents wearing masks into clubs frequented by Millennials to spread the word.

Will young drinkers be tricked into buying a product that caters to their tastes, but blatantly contradicts their brand preferences? Stay tuned.


Thursday, March 19, 2015

Churchkey Returns with Changes, Challenges

Most who stop by here will recall the initial release of Churchkey beer in 2012. It came in a flat top steel can, not exactly standard packing in the beer industry since the 1960s. You had to pierce the top of the can with an old-fashioned church key opener. Just like yer grandpa did.

The steel can novelty didn't garner much traction. There were problems with bulging cans and oxidized beer. Imploding sales forced the company to pull beer from shelves. It really only had a presence in hipster-fueled bars in places like Portland, San Francisco and Seattle.

Late last year, Churchkey announced that it would return to the market. They ditched the steel can in favor of an all- aluminum version. The flat top remains, meaning you still need that old fashioned opener. I'll get to why this is a bad idea shortly.

Other changes are in play. Adrian Grenier (Vincent Chase on Entourage) assumed control of the venture when he bought out founding partner, Justin Hawkins. The beer, once brewed under contract at Two Beers Brewing in Seattle, is now being produced at Cold Spring Brewing in Minnesota.

Make no mistake. The current rendition of the beer, developed by Portland's Lucas Jones and Sean Burke, is plenty good. I didn't think so the first time around. The new Churchkey is a clean, straw-colored pilsner with a bold flavor profile. At least they got that part of the equation right.

The can still doesn't make any sense. Going with aluminum instead of decrepit steel was a smart move. So why keep the silly flat top, which requires the old opener? If you don't have the right version of the old opener, you may pierce the sidewall of the can, which is considerably softer than the top. I don't understand. The flat top is a failed novelty. Dump it.

Pricing in another concern. Suggested retail will apparently be around $11 a six pack. That makes about as much sense as the flat top. I have no idea what kind of retail reach Churchkey will attain, but I think the price needs to be a couple of dollars lower for it to attract a following. At $11, there are too many great alternatives for less money.

The Churchkey folks say they will be launching in a number of states, including Oregon, Washington, California, Idaho, Arizona, Minnesota, Nevada and others. The rollout isn't exactly proceeding at light speed, but they apparently do have a plan. Which suggests they still believe in the marketability of an overpriced beer in a novelty package.

At some point you have to wonder if this is some sort of tax shelter.

Tuesday, March 17, 2015

Brewing Icon Ockert Sets Brewing Workshops

Author and visionary H.G. Wells once said or wrote that, "History is a race between education and catastrophe." I'm pretty sure he didn't have brewing or operation of a brewery mind when he thought that up, but you get the idea.
Ockert in 1984

With the education motif in mind, Karl Ockert is offering two workshops that serve as bookends for the upcoming Craft Brewers Conference in Portland. The first workshop, Ingredients to Brewhouse, happens on Monday, April 13. The second, Fermentation to Finishing, is on Saturday, April 18. Both will be held at the Lucky Labrador Brewpub on NW Quimby.

There's a whole lot of info on these workshop's on Karl's website here, but the basic premise of these courses is to provide practical, relevant information to those who are operating breweries, considering the possibility of starting a brewery or otherwise connected to the industry.

It may seem a laughable concept at a time when a seemingly endless string of breweries are opening and succeeding, but breweries can and do suffer through difficult times. Some fail. Very often the problems aren't strictly related to bad beer. Nonetheless, there are right and wrong ways to approach the brewing process.

When it comes to brewing, there may not be many folks more knowledgeable than Ockert. He received his brewing education at UC Davis and went on to become founding brewer at Bridgeport Brewing. Later, he became involved with the Master Brewers Association of America, where he served as Technical Director 2010-2014. His resume is 30 years deep.

I don't know. I home-brewed for a lot of years. My beers were decent enough. Had I ever considered the possibility of opening a brewery, I suspect these workshops would have been highly useful. Prospective attendees can sign up for one or both programs.


Saturday, March 14, 2015

In Search of Great Beer on the High Desert

There''s always been something about Central Oregon's grubby John Wayne motif that appealed to me. Familiarity breeds comfort, I suppose. See I was raised in Eastern Washington, an intellectual desert flush with rattlesnakes, rednecks and cowboy politics. Not necessarily in that order.

My first trip to Bend/Sunriver was in 1993, a ski trip that included a visit to the Deschutes Public House. It was a heavy snow year and the area's desert character was obscured by white stuff. That wasn't quite the case last week.

A friend who lives in Bend told me they're caught in a sort of political DMZ. Visitors from liberal Portland see the area as cowboy conservative. Folks visiting from the eastern part of the state see Bend as a haven of limp-wristed socialists. "We're stuck," he says.

I was wresting with that thought as we headed back to Portland Thursday morning. About that time I spied a birther sticker on the back of a junk pickup. Central Oregon: Love it or leave it, I guess. But never mind. On to the beer.

Sunriver Brewing
I last visited Sunriver Brewing roughly a year ago. At the time, they had made the transition from having their beer contract-brewed by the now defunct Phat Matt's of Redmond. What they were pouring at the time was pretty solid, I thought.

There was evidence of more progress a few weeks ago when I tasted Vicious Mosquito IPA at Belmont Station. It held up well next to some pretty good beers. Word got out and people were lining up to order this stuff. The keg kicked in a hurry.


So it figures that these guys have experienced rather steep growth over the past year. They brewed less than 1,000 barrels in 2014, according to OLCC stats. But they expect to triple that in 2015, having added fermenters and staff that will allow for full-time production.

Bottling commenced in late 2014 with the IPA and Shred Head Winter Ale, another solid beer. Their SUP Summer Ale will replace Shred Head in the next mobile bottling cycle. They hope to begin canning two brands later this year.

The packaged beer isn't widely available at this point. Some grocery stores in Bend and Sunriver have it. Here in Portland, I've seen it only in bottleshops. A bottle of the IPA (bought in Portland) did not come close to matching the draft version of the beer. I have no idea why. Maybe it wasn't fresh.


Regardless, Sunriver Brewing is kicking some serious ass. The pub has established itself as a destination in Sunriver Village, once a virtual beer desert. Hopefully, we'll be seeing some more of their beers on draft, bottles and cans in Portland.

Deschutes Mountain Room
When you think of Deschutes, you think of a gigantic craft brewery whose beers are sold everywhere. They are, in fact, a lot more than that, at least in my view. Their specialty beer program produces some spectacular results. Beers like The Dissident, Mirror Mirror and The Abyss, for instance.


Since that first visit so long ago, I had stopped by the Public House numerous times. The Mountain Room didn't exist for a lot of those years and I had never visited until this trip. The place is an illuminating example of high-end marketing.

They offer tours of the Deschutes production facility, but I arrived late and without a reservation. That left me to hang out in the tasting room with a hoard of tourists. The Deschutes folks are quite accommodating, providing four complimentary tasters. They got even more accommodating when I saw they were pouring The Dissident and Jubel 2015. Both are fantastic.


The Mountain Room strikes me as a bit of a tourist trap. There's a lot of schwag for sale and the prices aren't the best. I spoke to some folks who had really no knowledge of Deschutes beers beyond the standards and were confused about those. Clearly, I'm too used to hanging out with beer geeks in Portland.

I was surprised to hear the beertenders telling customers that bottles of specialty beer could only be had in this shop. That clearly is not the case. Beers like The Abyss, Jubel 2015 and others can be had at many bottleshops. I later saw bottles at a store in Bend. Negative style points.

Platypus Pub
I arranged to meet up with friend and fellow author/blogger Jon Abernathy Wednesday evening. After looking over the online tap lists at some Bend watering holes, I suggested the Platypus Pub. This was going to be a chance for us to talk about all the money we've made writing about beer. Oh boy!


The Platypus, if you don't know, is located in a building that was apparently once a church. I'm not sure what happened to the church because churches don't close in Bend...they expand. An Italian restaurant occupied the space prior to it becoming a combination pub (downstairs), homebrew supply store and bottle shop (upstairs).

We enjoyed some fantastic beers as we talked about which investment firm to entrust the millions we've made on our book projects and blogs. I had Double Mountain Kriek, Boneyard Notorious and Hop Valley Alpha Centauri. Jon had some other equally impressive beers. Good times.


As things wound down, we found ourselves looking for something light. An order for Trummer Pils was placed and shortly regretted. I approached the bar and asked the beertender to deliver two PBR pounders, instead. No problem, she said.

That was my last of many beers on what was a decent beer and ski vacation. Photos were taken and posted to social media, completely overlooking the fact that a number of quality beers were consumed that evening and during the trip as a whole. Oh well. Until next time...



Sunday, March 8, 2015

Morrison Exits Beer O'Clock Radio

After six years on the air and more than 300 shows featuring interviews with some 500 guests (many repeats), Lisa Morrison has left the building. Her run as the host of Beer O'Clock radio came to an end on Feb. 28. More on the future of the show later.

Beer O'Clock, the only weekly beer show on commercial radio in these parts, aired Saturday afternoons on KXL and attracted some 25,000 listeners a week, Morrison told me. That estimate doesn't count listeners on the Radio NW Network, where the show aired on nine more stations, or podcast listeners.

The decision to stop doing the show was not made lightly. Morrison is not the type to quit anything. But her responsibilities have changed since she became majority owner at Belmont Station two years ago. There's less time for the radio show and doing it on the cheap wasn't an option.

"I'm really not the type to 'mail it in' so I decided I should end the show rather than drag it out without devoting the time it deserved," Morrison says. "I'm plenty busy at the Station and I'm hoping this change will allow me to strike a better work-life balance. I feel like a load has been lifted from my shoulders."

There were a number of entertaining and memorable moments over the years.

"One of the funniest moments was when Sam Calagione (Dogfish Head) was doing a phone interview while parked on the side of the road in Delaware. A cop came up to make sure he was okay. We ran the entire interview, including his interaction with the officer. It was too funny."

Of course, some moments were more serious than funny. Morrison conducted the last interview with the late Don Younger, which ran shortly after he passed away.

"Doing that interview with Don and running it after he died was heartbreaking and poignant. Listening to his comments after the fact made me wonder if he knew his time was short. I miss him every day."

Gauging Beer O'Clock's legacy and impact on the craft beer scene is tough. It's probably best seen as one spoke in a wheel with many. But the show was most definitely a place you could depend on to find out what was going on in and around the industry.

The origins of Beer O'Clock date to early 2009. It evolved from a show called The Libation Station, on which Morrison worked briefly with Bruce Bjorkman,. When KXL decided to drop the show, Younger negotiated a deal whereby Morrison would do a beer show and pay for the air time with advertising dollars. Younger agreed to sell the advertising.

"That was about when the smoking ban kicked in," says Morrison."Don fell into a funk and I found myself creating, hosting and producing a show with nobody to help with sales. I didn't really like being on the radio, but I saw an opportunity to educate a potentially large audience and spark excitement about craft beer. So I dove in. The rest is history!"

Showing off her book in 2011
After announcing she would leave the show, Morrison received a flood of comments and thanks from fans sad to see it ending. A number of people said the show was a good companion while traveling, driving, running, cleaning house, brewing, etc.

"I hope it brought people together and made them smile," Morrison said. "One of my greatest memories is my 70-something neighbor telling me she didn't like beer, but loved my radio show and the stories brewers and others had to tell. I always kept that in mind and made an effort to balance the geeky stuff with down-to-earth information."

Morrison isn't going away. She'll continue on in her role as beer ambassador extraordinaire. When she isn't thinking up ways to improve Belmont Station, she'll continue to write articles for a variety of beer-centric publications and promote good beer in other ways. It's in her DNA.

For my part, I seldom listened to Beer O'Clock. I'm not sure why. I was one of the 500 guests, interviewed when my book came out in September 2013. I knew of Lisa by way of her book, Craft Beers of the Pacific Northwest, several years before I got to know her personally. She truly is one of the great people in craft beer. I join many in wishing her well in radio retirement.

As for Beer O'Clock Radio, KXL is currently searching for a new host, according to programming directer, Scott Mahalick. I have no idea what they plan to do in terms of format or name, but they clearly intend to carry on in some fashion. Good news for beer fans.

Wednesday, March 4, 2015

The Great Train Wreck Revisited

Last week's piece on the dysfunctional situation with Anheuser-Busch, Maletis Distributing and 10 Barrel drew a firestorm of traffic here. I suppose a lot of people enjoy seeing big beer flounder. The post was shared on a few sites and attracted some comments, some of them fairly naive.

It turns out some people out in the national audience don't understand the situation on the ground here in Portland. They also don't understand the concept of branch distributors and why Anheuser-Busch wants all of its brands to run through those wholesalers.

Maletis, Craft and Portland 
One of the more interesting comments came from someone who thought I was drastically underestimating the value of the AB portfolio to Maletis. The implication, of course, is that Maletis would be DOA without all those great AB products.

I actually explored this issue a while ago. After looking at IRI data (tracks beer sales in grocery chains) and talking to some industry folks about draft sales (not part of IRI), I concluded craft's share of the Portland market is greater than 60 percent.

Actual IRI data puts Portland's craft share at around 45 percent. But IRA does not track sales at specialty stores like New Seasons and Whole Foods, or at bottleshops like Belmont Station, Tin Bucket and Beermongers. When you extrapolate for what's missing, you quickly realize craft's share is in the 60 percent range, at least.

Draft is a harder nut to crack. But Portland is a huge draft city. The national average for draft consumption is around 30 percent. Industry sources told me it's 50-60 percent by volume in Portland, greater than 60 percent in dollars..and growing. That's fairly shocking.

Something to keep in mind is the overall numbers look a bit different outside Portland's core. Yellow beer retains a greater following in suburban and rural areas, and Maletis does distribute there. They surely have greater success with their AB book out there. I admit it.

Nonetheless, the dollar volume within Portland's core suggests the Maletis craft portfolio is worth more than the AB book. Could they survive if they lost their AB portfolio? Tough question. Perhaps more importantly, could they survive without their craft portfolio? I bet not.

Branch Distributors vs Maletis
Another of the more interesting comments concerned the issue of why Anheuser-Busch would want to move 10 Barrel to a branch distributor, in this case Western (formerly Morgan). I mean, Maletis already distributes AB products. Why not just let them hang onto 10 Barrel?

That viewpoint completely misses the point of owning distributors and buying up craft brands. Anheuser-Busch has a history of leveraging every possible advantage. In fact, an AB sales exec recently said he wants all of their owned brands handled by branch distributors. Any other arrangement, he said, is unacceptable.

You need to read some of my earlier posts if you don't understand why AB wants it this way. It isn't strictly about the small percentage they're losing when an independent like Maletis sells a brand like 10 Barrel. It's much more about control and leverage.

Buying distributors and craft brands is part of a vertical integration strategy that AB naturally denies it's pursuing. But we know how it works because we've seen it in action here in Oregon and in other places around the country.

After acquiring Goose Island, AB pushed distributors to heavily discount kegs of Goose as a means of undercutting craft brands and winning tap handles. A lot of independent distributors balked. There's very little skin in it for them. But branch distributors have no choice. They have to tow the company line. This is why the AB brass wants their brands handled by branch distributors.

The fact that Maletis is holding onto 10 Barrel and distributing it within Western's territory is comical. The big shots in St Louis must have steam rolling from their ears and noses. They could fix the problem by paying Maletis for the rights to 10 Barrel. But they refuse to do so. Why? Because they already paid for that goddamn brand!

Such a marvelous little train wreck.