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Thursday, August 25, 2016

Belmont Station to Host Ballast Point's 20th

Sometimes you have to wonder about equity in the beer industry. Large, well-funded breweries have significant advantages over their smaller counterparts. Besides efficiencies in production and distribution, they have the means to launch big promotional events, for example.

Such is the case tonight, when Ballast Point celebrates 20 years with a tap takeover at Belmont Station. This is no ordinary tap takeover. The folks from San Diego will be occupying 15 of the Station's 23 taps. A normal tap takeover would typically consume 4-7 taps.

"You can't celebrate a milestone like this one with just a few beers," says Lisa Morrison, Belmont Station owner. "So we'll have 15 across a pretty good range of styles. There will be something for everyone."

You may know Ballast Point is one of fastest growing, most vibrant brands in the land. They've only been in Oregon for a few years, but their growth has been off the hook here and elsewhere. That growth trajectory leapt upward last year when the company was acquired by Constellation Brands for a cool billion bucks.

They've mostly gotten a pass from the same craft beer community that crucified 10 Barrel, Elysian and others that have sold out to big beer. Part of that is timing. Ballast Point sold in late 2015, a time when the craft beer community was feeling numb due to prior acquisitions. There's also the fact that Constellation, which owns and markets Corona, Pacifico and Modelo, doesn't own distributors, as is the case with Anheuser-Busch.

Whatever differences of opinion exist regarding Constellation and Ballast Point, they haven't mattered in the least. At a time when the overall growth in craft beer volume is slowing nationally, Ballast Point has been hitting it out of the park. Sculpin IPA is one of the hottest brands in industry growth stats and several others are also doing well.

Even in Oregon, Ballast Point has done well. It's hard to figure. They came late to one of the most competitive craft beer markets in the country with products that are, frankly, overpriced. Yep. In case you don't know, a six-pack of Sculpin will set you back $15. The other brands in their portfolio are similarly overpriced. But it hasn't mattered. The stuff sells. And sells.

Part of that is the beers. They're solid. And not just Sculpin, which is so popular it has spawned a brand family with different fruit twists. Ballast Point also has a strong brand identity, leaning on its connection to Southern California beaches and sunshine. Constellation paid big bucks for Ballast Point because it understands the value of place in a brand's identity. See Corona.

The list for tonight's party includes some of the better-known Ballast Point beers, as well as some that are rarely (or perhaps never) seen here. Take a look:
  • Sculpin IPA
  • California Amber
  • California Kolsch
  • Grunion Pale Ale
  • Pineapple Sculpin IPA
  • Mango Even Keel Session IPA
  • Watermelon Dorado DIPA
  • Grapefruit Sculpin IPA
  • Calm Before the Storm Cream Ale with Coffee & Vanilla
  • The Commodore Stout
  • R & D Coral Wheat Ale with Hibiscus, Pomegranate & Cherries
  • R & D La Premiere de Garde Bier de Garde Ale
  • R & D Schwarzbier
  • R & D Trident Belgian Tripel
  • R & D Double IPA
The party is the only one of it's kind in Oregon, Morrison says. "We were honored when they asked us to host because their beers have done well and we like them." The official celebration runs 5-7 p.m., but many of the beers are on now and some will be on after the event. Should be fun.

Thursday, August 18, 2016

Washington Beer Reinforces the Nature of Beer Industry

History is bunk. Admit it. That's why hardly anyone bothers reading up on the brewing histories of towns, cities and states. There are Pokemon to be caught and Twitter threads to be launched and followed. Who has time to read?

Nonetheless, chump that I am, I bought a copy of Michael Rizzo's book, Washington Beer: A Heady History of Evergreen State Brewing. The book was published earlier this year by The History Press, the same outfit that published Portland Beer in 2013.

For the record, I've never met Rizzo, who lives in the Seattle area. He and his wife, Michelle, host Northwest Beer Talk, a weekly podcast covering craft beer. According to the book, he's worked as an historian, lecturer, school bus driver, tour guide and network administrator.

Relax. I'm not here to review the book. That's not something I do here. I made an exception when Jon Abernathy's book on Bend was published a couple of years back. I did so because I know Jon and because Bend and Portland are invariably linked.

The Washington book is not like mine. Due to the sheer number of breweries Rizzo had to cover, a book similar to mine covering the state of Washington would have consumed 300 or 400 pages. And the publisher does not want books of that length and depth. Why? Because almost no one reads crap like that.

Because I was only dealing with Portland, and also because much of our history is dominated by Henry Weinhard (Blitz-Weinhard, if you prefer), I got to spend a lot of words addressing why things happened as they did. There's a lot of storytelling and historical perspective in my book.

Not so in Rizzo's case. With so many breweries past and present to talk about, he focuses mostly on when, where and who founded and operated the state's breweries. There are only occasional snippets providing perspective on why things happened the way they did.

I'm not a fan of this approach. I understand why it was necessary. But dates, names and places offer only a partial story. Perspective and background are needed. Limiting the scope of the book to Seattle or the Puget Sound area might have been a more reasonable approach, given the required word and page count parameters.

But never mind. The book is what it is and it's definitely worth a read if you're interested in Washington's brewing history and don't mind wading through a lot of facts that are often, though not always, disconnected. You might not mind.

What really jumps off the pages is the predatory nature of the industry. Washington's brewing history is dominated by consolidation in its various forms. Breweries and brands have been bought, sold and otherwise transferred routinely. Iconic brands like Rainier and Olympia are prime examples, but they are nothing more than examples.

This isn't shocking or surprising. A primary feature of the beer industry is that it's a giant pyramid scheme. Brewers are driven to dominate markets and expand into others. Sales growth and improved cost efficiencies lead to acquisition and consolidation. It's the nature of the beast.

Today, acquisitions are in the news. Anheuser-Busch and MillerCoors are buying craft breweries. Many are alarmed. But, really, what we're seeing today isn't new. It's been part of this industry for a more than a century. Washington's history illuminates and reinforces that reality nicely.

Wednesday, August 10, 2016

Merchandising and Modern Craft Beer

As we make our way through summer and (soon enough) into early fall, I see breweries prepping for fresh hop and pumpkin beers. The industry has become all too predictable as it swings from one season to the next, with no one wanting to be left behind in the rush for seasonal beers.

One thing I rarely hear people talking about is merchandising. Craft beer merchandising is exploding. People who drink craft beer (and some who don't) clamor to get their mitts on hats, shirts and a variety of other trinkets sold at breweries, taprooms and stores.

The merchandising concept stared me in the face on a recent trip to Sunriver. During an afternoon in Bend, I watched patrons spend more money on shirts, hats and trinkets than they spent on beer. These were mostly tourists, who have absolutely overrun Central Oregon. Still, I was astonished.

Look, I'm well aware that merchandising has been a part of the craft beer movement since the early days. I have ancient hats and shirts from the Lucky Lab, Bridgeport and the Oregon Brewers Festival, among others. Craft brewers didn't just recently discover they could make money on this junk. But they're tapping into the growing demand with gusto.

The reality is simple. Folks want to identify with their favorite craft brands in basically the same way they identify with bands and sports teams. That means buying logo gear in a variety of forms. And brewers are getting more and more creative about what they offer and how much they charge for the stuff. It's big business.

What this trend has done is put increasing importance on brand identity. If you're a brewer, you want your identity to be more than just unique; you want it to be appealing and trendy. You want something beer fans will want to wear around or show off in other ways. If you can get it into their hands early on when you're new and few are wearing it, so much the better.

Talking with a fellow writer and blogger friend about this, we laughed about the current reality. A lot of new breweries develop their branding well in advance and start selling shirts, hats and such before they even open. He suggested we might be able to create a cool logo and backstory for a fake brewery and make money selling logo items. Such is the insatiable demand for the stuff.

What does it mean? Maybe nothing. But probably it means craft beer has attained a cultural relevance nearly on par with sports and music. Having reached that place, we see a growing emphasis on being the first to wear schwag from breweries that are newer or yet to open. It's similar to being among to first to wear a shirt advertising a hot new band or sports team that's doing well.

This is all fine and dandy, right? Except that it works to the advantage of newer places that may not be all that great, aside from a spify logo, and to the distinct disadvantage of established places that may not be seen as cool, trendy or relevant at this point.

But all's fair in love and beer. And that's the state of modern craft beer. Take it or leave it.


Monday, August 8, 2016

News Register Publishing Acquires the Oregon Beer Growler

Gone for a week of Labrador chaperoning in Central Oregon, I managed to mostly stay away from beer destinations in the area. Not such a bad thing, honestly. Each day my email inbox filled with messages deserving comment. But I had no time. Until now.

You certainly know of the Oregon Beer Growler, the beer-centric publication founded in 2012 that covers our beer scene. Last week came news that the OBG has been acquired by News Register Publishing of McMinnville, a family-owned firm with roots in the area dating to 1866.

In a press release sent to "past and prospective clients and distribution points," president and publisher, Jeb Bladine, announced acquisition of the Beer Growler's name and publishing rights from founder Gail Oberst and owner Will Oberst (Gail's son).

I do not know the circumstances surrounding the sale of the Beer Growler. Was it sold because it was doing well or because it wasn't? Inquiring minds wonder, but that's not the sort of information you're apt to find in a press release happily announcing an acquisition. Particularly if the news is bad.

Bladine said they hope to retain the services of some of the OBG's "favorite contributors." Continuity is a good strategy, for sure, and it will be a neat trick to swing given the Growler hasn't been paying staff or freelance contributors in recent times. Perhaps things were not going so well.

I've discussed the reality of beer writing here in the past. My experience is that beer-centric publications are slow to pay. I've had national magazines fail to pay for articles for months after publication. I suspect there's such a large pool of competing writers that publishers aren't worried about timely payment. It's a good reason to avoid this type of work as a vocation.

You might say the Beer Growler took the slow pay thinking to a new level by not paying at all. They did so without notice. I know because I wrote an article for a recent issue. There typically aren't contracts with this kind of writing. You pitch an article and an editor accepts (or rejects) it at an agreed upon rate, which is pretty low in the case of the Growler. In this case, I later learned they weren't paying right now. Other contributors confirmed they were months behind.

Word is, the News Register folks are assuming no responsibility for the debt of the previous owners. Which means Mr. Oberst is stuck with past bills. Regular contributors and staff who continue on with the magazine will probably be compensated for past work. Others may well be out of luck, although there's been no formal announcement along those lines.

My own view is the Beer Growler has evolved and is better today than it was four years ago. Editor Andi Prewitt does a nice job procuring and managing good content. I know she's excited to work with the News Register folks, who have prior experience in this area, having produced the Oregon Wine Press for the past decade.

I'm not sure we need more beer publications here. Virtually every print outlet in the area has jumped on the craft beer bandwagon, often with less than stellar competence. But I hope things work out for the new Beer Growler, that they continue to evolve and improve. Paying contributors and staff in a timely manner would be a nice start.


Thursday, July 28, 2016

Odds and Ends: Report from the 29th OBF

The 29th Oregon Brewers Festival blasted off yesterday with the brunch, parade and ceremonial tapping of the first barrel, this one provided by host brewery, Laurelwood. There was a large, but mostly quiet crowd on hand to kick things off.

Wednesday might just as well be called "industry day" at OBF. Because there are countless industry-connected deadbeats hanging out drinking beer, networking and seeing the sights. That includes the so-called beer media, which is always well-represented. Trust me.

This is my 25th OBF, 24th in a row. I missed 1988 (not yet here), 1989-1990 (here but not yet paying attention) and 1992 (mysteriously out of town). A lot of things have changed over the years, The event has grown and evolved.

One of the things casual bystanders probably aren't aware of is the extent to which OBF is much more than just a beer festival. Countless private parties and sideshows litter OBF week. In effect, the festival is the central event in a sea of unconnected spin offs. Craft beer is big business and Portland is a central player in that business. Which means the money flows.

But never mind the details. You aren't interested in the politics of the Oregon Brewers Festival or the economics of the beer industry. You don't know how lucky you are. Below are some of the things you may want to know about the festival.

Tasting Packages
Unlike most modern festivals, the OBF does not require you to purchase a tasting package. So you won't have to shell out $25 for a shoddy package that includes a mug and 10 tokens. Instead, you can buy a mug for $7 and tokens for $1. Yes, you can buy a package. But you don't have to. I talked to several people who didn't know that.

Water
It's always a good idea to stay as hydrated as possible while tasting/drinking beer. Watering stations are scattered around the park and you can buy outrageously priced bottled water from the various food vendors. A better idea is to bring your own. They have not always allowed it, but you can, in fact, bring in water. Do it.

Bike Parking
Unbeknown to me, the bike parking area moved. In recent years, it was located at the Northeast corner of the park. I expected to find it there yesterday. No luck. And no signage telling me where to find it. The gate staff could give me only a rough idea of where to find parking. Well, it's at the Southeast corner of the festival space, on the other side of the Morrison Bridge. FYI.

The Beers
I think they've upped their game this year. Between the 88 or so beers pouring in the main tents and the 25 or so pouring in the International Tent, organizers have done a nice job in terms of variety and quality. Also value. I didn't see a single multiple token beer. That doesn't mean none exist; it simply means the majority are one token beers. Nice.


Recommendations
It's a bit of a slippery slope recommending beers to folks who certainly have different likes and dislikes. Plus, I tasted only 30 or so beers, out of more than 100. It's fairly condescending for anyone who hasn't tasted all or most of the beers to recommend anything. Still, I can tell you what I did like.

A good place to start your tasting is with 54°40' Brewing's Ultra Pilsner, an easy-drinking, refreshing interpretation of the age-old German style. This beer's light enough (5.1% ABV) that you could easily drink a full mug. Best move on and return later.

For hopheads, I recommend High Desert Diesel by Sunriver Brewing. This is an Imperial IPA that clocks in at 8% ABV, so be careful. It leans on nine hop additions for aroma and flavor. I'd guess this is a bigger version of the popular Vicious Mosquito, a favorite of mine. Another IIPA, this one from Melvin Brewing, 2X4 DIPA (a whopping 10% ABV), is also a winner.

Some will say a summer beer festival is no place for stouts and similar dark beers. Not so. There are two stellar stouts pouring on the south side, Dragon's Milk Reserve (10% ABV) by New Holland Brewing and Serpent's Stout (11% ABV) by Lost Abbey Brewing. Both are excellent. I also ran into a nice Baltic Porter from Japan's Baird Beer in the International Tent.

With respect to sours, I tasted or shared tastes of maybe 10. Most lacked fruit character and were simply sour. If that's what you're looking for, great. I enjoyed Breakside's Pomegranate Gose (4.6% ABV), which is moderately tart and refreshing. I also liked Green Flash's Passion Fruit Kicker (5.5% ABV), an unfiltered wheat beer highlighted by notes of passion fruit and subtle white tea.

I don't like to dwell on beers that sucked or weren't quite right, but there are always a few. One of the more notable ones was Sagefight from Deschutes. It's supposed to combine citrusy hops with sage and juniper berries for flavor. But it somehow collapses into a murky, bitter mess. Surprisingly bad. I had to dump it. Best avoid.

With all that said, there are plenty of great beers to try. As always, the best times to attend will be Thursday, early Friday afternoon and Sunday. Things tend to be a bit crazy under the tents Friday evening and most of Saturday. There's a lot more info on the event site here. You knew that.


Monday, July 25, 2016

The Irony of Boston Beer's Sagging Fortunes

These are interesting times for the Boston Beer Company, producers of Sam Adams beer, Angry Orchard Cider, Twisted Tea and several other fizzy drink brands. Once upon a time, Boston Beer was one of the hottest commodities around. These days, not so much.

If you watch stocks, you may think Boston Beer is fine. Its stock price rose 15 percent, to $190, last week, thanks mainly to a better-than-expected earnings report. As with all things, it sometimes pays to look a little deeper for a better understanding of what's happening.

Boston Beer financials aren't in great shape. Revenue and profits declined 3 percent and 11 percent, respectively, in the second quarter of 2016. But Wall Street was expecting even deeper declines. Instead of the expected $239 million in revenue and $1.95 per share profit, BB had nearly $245 million in revenue and $2.06 per share profit.

How they managed to generate revenue and profit is an interesting matter, which we shall soon get to. Because Boston Beer sales-to-retailers declined 5 percent in Q2. Shipments were down 100,000 bbls and operating income fell $16 million (23 percent) during the first half of the year.

The only growth in the BB portfolio is coming from outside Sam Adams and Angry Orchard, its best-known brand families. Sam Adams was down 6 percent by volume in IRI through July 10 and the on-premise picture is apparently worse. The Angry Orchard family, a significant growth driver in recent years, took a 20 percent hit. Meanwhile, the Twisted Tea family was up 13 percent.

How do you beat earnings expectations when your flagship brands are tanking? Simple. You cut advertising, promotional and selling expenses. Several reports say $8 million in cuts were spread between media/advertising/promotion and lower freight costs due to lower shipping volumes. Hey, fewer sales can be helpful!

These kinds of things obviously aren't sustainable. Sooner or later, they have to get the big brands moving again. And they know it. The plan, if you want to call it that, is to give Sam Adams a facelift with new packaging and advertising in the second half of the year. They'll also invest in Angry Orchard in hopes of returning that family to growth. At the same time, they expect to further reduce costs. You read that right. They plan to do more with less.

Their prospects are not good. You might say Boston Beer is the victim of its own success. Founded in 1984, it eventually became a national leader in the movement toward better beer. Sam Adams gained a following because consumers realized they were getting a product that was better than the swill sold by big beer. In effect, Sam Adams helped launch the craft beer revolution.

Ironically, the growing popularity of better beer helped spawn an explosion in breweries. Today, Sam Adams has to compete with more than 4,200 craft breweries around the country. Given the opportunity to purchase local beer, a growing number of consumers are doing just that. The result is that many large craft brewers are seeing significant declines. Sam Adams is one of them. I've mentioned this trend several times, most recently here.

The popularity of Angry Orchard Cider undoubtedly helped ease the pain associated with the escalating decline of the Sam Adams family. But the entire cider segment has lost momentum in recent times, thanks largely to the very fickle and promiscuous nature of younger drinkers who have moved on to hard sodas and other flavored fizzy drinks.

It's hard to see a way out for Boston Beer. Chasing the fickle and fast-changing tastes of Millennial drinkers is a sketchy proposition. Even if they reinvent the Sam Adams brands with a robust line of hoppier and seasonal brews, it's tough to see a viable way for them to successfully compete with the increasing number of well-made, local craft beers.

There is, of course, the possibility that Boston Beer could acquire smaller brands. They've bought breweries and brands before. Again, I'm not sure how that would work for them in the current context. They aren't in the same league as Anheuser-Busch, which has a vast distribution network. Boston Beer is a different kind of animal, entirely. Still, they could give that strategy a whirl.

Some of my industry friends have suggested that Boston Beer might be sold. That's a thought. But to whom? We're talking about a company whose most prolific brand families are in virtual free fall. And the challenges are not going away as more breweries open and other competition stiffens. Again, you wonder who would want to buy a collection of brands that are declining in value.

Please don't feel sorry for Boston Beer. The company has made oodles of money for its executives and investors. Founder and chairman Jim Koch has a number of quirky, nuanced views that make him a sort of lightning rod in the industry. But give Koch credit for helping start the revolution that is now squeezing his company out of the market.

You have to appreciate the irony, if nothing else.

Tuesday, July 19, 2016

Oregon Brewers Festival Rolls on at 29

It's a bit hard to fathom. The Oregon Brewers Festival is celebrating 29 years. Some 80,000 craft beer lovers will descend on Waterfront Park to enjoy five days of fancy suds and sun. For the unknowing, the festival runs Wednesday through Sunday, July 27-31.

The beer landscape has warped since that first OBF in 1988. Back then, there were seven craft breweries in Oregon. Today, Portland has 65 breweries and there are 30 more in the metro area. The state is home to nearly 250 breweries. The country will soon have 4,300. Shazam!

As the brewery count has climbed, so too has the festival count. Hundreds of "festivals" now dot the Portland calendar. I don't even want to consider how many events populate the state and national calendar. A calculator might be helpful, if you want to do that.

But the Oregon Brewers Festival is one of the oldest and largest in the country. It is, quite simply, the event that provided much of the form modern events have copied. Sure, there are differences in size and shape, but the basic form mostly starts and ends with the OBF.

For many years, the OBF was the only serious show in town. We didn't have umpteen beer festivals a week. We didn't have specialty beers coming out of our ears. We also didn't have social media, which has helped magnify the event crush. Craft beer was mostly a novelty in that bygone era. That's obviously changed.

The OBF has rolled with the punches to some extent. They've rearranged the grounds to allow for easier movement under the tents and (they hope) near the taps. The International Beer Garden is a recent addition, designed to showcase what's happening around the world. This year's IBG will feature 25 beers from Japan, Germany and The Netherlands.

Of course, significantly altering the culture of an event of this size is tough...like turning an aircraft carrier around. Some geek types see the OBF as less relevant these days. These are the folks who chase rare specialty beers and gum up social media with their commentaries. I prefer to see OBF as a constant, a place where you can enjoy good beer in a great venue. Also a salute to the past.

They'll pour 88 beers from independent craft breweries this year. Independent has become an increasingly important OBF theme in light of buyouts by Anheuser-Busch and others. When you look at the event program, you won't see beers from 10 Barrel or Elysian or Goose Island, all fully owned by AB. You also won't see beers from Ballast Point, fully owned by Constellation Brands, or Lagunitas, half owned by Heineken. Good philosophy, I think.



The glass/mug is changing again this year. For the first 25 years, the fest used murky, white plastic mugs. In 2013, they switched to a glass glass to avoid odors from off-gassing and to allow better views of the beer. The glass lasted just two years (although I do have a nice collection at home for tasting parties, thanks to Art Larrance).

Due to some "problems" downtown, Portland Police and Portland Parks banned glass from all parks. So the OBF switched to a clear plastic glass last year. Not bad. This year they're bringing back a mug, now in clear styrene plastic. If this mug is more substantial than last year's flimsy plastic glass, it will be a nice win for everyone.

I'm not going to comment on the beers. The list is plain enough to see on the website and what you drink will depend largely on what you like in a beer. There are plenty of styles to go around this year on a list that isn't dominated by IPAs. I expect to seek out darker, sour and barrel-aged beers, but that's subject to change.

You know the rest of the story. The festival features live music, food booths, craft vendors, a craft soda garden and homebrew demonstrations. It doesn't cost a penny to enter and roam the grounds, but you'll have to buy a mug ($7) and tokens ($1 each) if you want to sample beers. It remains one of the better festival values, I think.

In case I haven't provided enough info here. there's always the event website here, as well as the various social media feeds on Twitter, Facebook and Instagram. I have not received word regarding the presence of Pokemon species in Waterfront Park, but I'm sure they're around.

Happy hunting!