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Wednesday, October 18, 2017

Second Profession Brewing: Portland's Newest Brewery

There's a new brewery in Portland. Big surprise, eh? Second Profession Brewing is now open on Northeast Sandy Boulevard, taking over the space formerly occupied by BTU Brasserie. Owner Charlie Goman, a homebrewer with Wisconsin roots, hopes to build a following on the German/Northwest gastropub model.

Charlie Goman
The pub recently reopened under the Second Profession (I'll get to the name) banner and is operating on a limited beer and food menu for the next couple of weeks. They'll hold a grand opening bash Oct. 27-29. In the meantime, they're in soft launch mode, open Wednesday through Sunday, 4:00 to 10:00 p.m.

You may recall the defunct BTU, which operated for a couple of years as a brewpub with Chinese-style food. The food was better than the beer, but the owners were never quite able to successfully meld the business' two identities and the place floundered. Awkward.

Goman had been interested in starting a brewery for several years when he stumbled on the mothballed BTU space. He was bored with his career in copier sales and IT-related work. A whiteboard wish session suggested a future in brewing. A sign on the BTU door said, "Closed for Spring Cleaning," but the place was closed permanently and up for sale.

Goman jumped in, seeing a potentially great location with a brewery already installed. It's no small thing for a brewer to find an arrangement like this. It's similar to what happened with Charles Porter, who was able to access a turnkey brewery for Little Beast Brewing in Beaverton, relieving him of the expense of building a brewery from scratch.

For his part, Goman "loves beer" and "hopes to provide a unique experience" at Second Profession. If you haven't heard something like that a gazillion or so times, you probably haven't been around Portland's craft beer scene very long. Standard schtick. But it might just work out for him.

The revised pub layout is pretty much as it was in the BTU era. It's a bit brighter now, with white walls and modern-themed, German folk artwork. The brewery, a 7 -bbl system, has been cleaned up and tuned up with the assistance of brewery consultant, Marc Martin. It's ready to roll.

Three beers poured at a recent media preview included a Rye-IPA, a Pale and a Farmhouse Ale. All seemed decent enough. More styles are in the works,, including lagers, which were part of BTU's failed plan. The brewery's horizontal lager tanks are designed to make them and lagers will be a nice fit for gastropub fare.

Nonetheless, the future of Second Profession will likely be determined by food, not beer. Why? Because the clientele in this area is more likely to be driven here by food than by beer, regardless of how good the beer may be. Goman intends to offer what I see as stripped down German comfort food. We're talking brats, warm potato salad, garlic fries and a variety of greens. Simple stuff.

This clearly isn't going to be as upscale as Stammtisch or Prost, which is fine for the area and this space. Keep in mind there is no more Gustav's or Rhinelander down the street. That building was demolished months ago. Choices are somewhat limited in this corridor. A place that offers a simplified comfort food menu alongside decent beer has an opportunity to do well.

A potential obstacle is the oddly shaped and visually awkward space. I suspect it was a problem BTU struggled with. The place just looks odd when you walk in, with the bar jutting out into the seating area. To me, the layout is better-suited to a casual pub than a more formal restaurant. So it could work out here. If patrons come, the relatively small size of the space may become an issue. That's a problem Goman would like to have, but we'll have to see how it goes.

The name has been the subject of a social media thread and blog post. It is not particularly well-imagined in my mind. Goman's description of how he came up with it makes good sense...he sees the place as his second career or profession. It's personal. But Second Profession has little pizzazz. It's not a name that conjures up much excitement. Nope.

Of course, it could be worse. As someone on social media commented, the place might have been called Oldest Profession Brewing. That's going to happen one of these days, as the industry gets edgier and edgier. You heard it here first.

Friday, October 13, 2017

Denver's House of Sky: GABF '17

Published in 1978, Ivan Doig's This House of Sky presents a memoir of his life growing up in the Big Sky country of Montana. I was reminded of the book title as I traipsed around Denver last weekend. Denver isn't Montana, obviously, but even in the downtown area, you have the sensation of a very broad horizon.

It took some time for me to fully absorb my experience at the Great American Beer Festival. I was warned upfront that the event is huge and unwieldy, so that part wasn't unexpected. But some aspects of the festival I didn't anticipate.

The Drinking
Having attended the Craft Brewers Conference in Portland a couple of  years ago, I figured GABF to be more of a giant trade show focused on beer than strictly a beer festival. I was correct. Although there was plenty of beer in the Convention Hall, there were also countless vendors showing off a variety of mostly beer-related wares. Trade show.

I attended Friday evening and Saturday afternoon drinking sessions. The Thursday evening session was out because I wasn't arriving in Denver until too late. My initial plan, on the advice of folks "in the know," was to attend only the early Saturday session. I wound up there Friday evening because I had nothing better to do.

In fact, the Friday session was less of a mess than Saturday afternoon. The crush of beer fans after the Saturday morning awards ceremony created near-gridlock conditions. Getting to medal winners or specific beers you wanted to taste often proved difficult due to congestion. There were just too many bodies in too little space, evidently not a new problem for this event.

What could they do to make it a little less of a shit show? It seems to me they either have to reduce the number of tickets sold or increase the amount of floor space. Because the layout isn't the problem. I do think it's unfortunate that there is very little sitting space, but that sort of fits with the GABF being more of a trade show than an actual festival.

The Awards
I wasn't sure what to expect at the Saturday morning awards ceremony. They eventually handed out medals in 99 style categories, plus the awards for breweries the year in several sizes. I'd watched the GABF awards before via streaming and still had no idea how they would handle the girth of the competition in a realistic amount of time.

Things got off to an awkward start when a large contingent of folks couldn't enter the ballroom because there wasn't enough seating. A number of these folks were hungover or still drunk from a night of imbibing. But never mind. Some stayed in the outer concourse, where the awards presentation could be seen on a screen. Others came in and stood or sat on the edges of the room. Not ideal.

The 99 categories have some redundancy. Follow this link and sort by style if you want to get a feel for that. It's over-the-top to me. But I get it. The Brewers Association wants to keep everyone interested even as the brewery count skyrockets. To do that, they spread the love by adding style categories. There were 12 in 1987, 34 in 1994, 70 in 2006. You get the idea.

It reminds me of my tournament racquetball career. In the old days, you played A, B, C, D or Open. Maybe there was a Masters division. Later, tournament directors added A/B, B/C and a hoard of age group divisions. More people got medals, which kept them playing and coming back. But tournaments became unmanageable. Craft beer appears headed down a similar path.

Navigate to the Beervana site if you want more detailed info on entries by state and winning percentages. There's no reason for me to redo or rethink what Jeff has already done. His piece is based on numbers the Brewers Association grudgingly provided and that were incomplete. There's a bizarre aura of secrecy permeating this organization, unfortunately.

Oregon's big winner was Sunriver Brewing, which collected gold medals for Cinder Beast Red and Fuzztail Hefeweizen, as well as Small Brewery of the Year. Breakside, as usual, entered the fray with four bronze medals, including a bigly one in the IPA category, which had 408 entries. Sort the winners list by state if you want the complete story.

The Miscalculations
When I received the invitation to apply for GABF media credentials, I didn't think much of it. Only I after I gave it some thought did I decide to apply. After my application was approved, I had to decide if I would actually go. A credential only gets you into the festival. The main cost is getting and staying there. Is it worth it?

A friend and fellow writer advised me that he had been to GABF twice, which he figured was one time more than required. I laughed. But I hadn't been and always wanted to go, so I started looking at airfares and hotel rates. Shortly, travel arrangements were made; later I altered them so I would have two full days in Denver. That seemed about right.

There were misques. I didn't coordinate schedules with anyone and I wasn't staying close enough to the Convention Center to randomly join in. I hoped to enjoy some events outside the festival and maybe visit some breweries. Didn't happen. When you don't know your way around, you need to hook up with a group or have a specific plan of action. Significant whiffs on my part.

Of course, it likely didn't matter. The GABF crowd, the industry part of it, anyway, is considerably younger than me. Most places were routinely packed with kids. Although I don't have anything against them, I don't really fit in. That's become more and more apparent over the course of the past year for reasons I don't need to get into here. Nothing to do about it.

Would I return to GABF? Unlikely. If I did, it would only be as part of a group of like-minded folks staying in relatively the same area with plans to attend specific events and visit a list of places. The reality is, much of the action at GABF takes place outside the Convention Center. You need to set yourself up to experience at least some of that stuff.

Regardless of my experience, I have no problem recommending GABF to anyone who hasn't gone. Denver is a terrific city and the spectacle that is GABF is worth seeing. Once, if not twice. 🍻

Monday, October 9, 2017

Gene Clanton, Mentor and Friend

I was slightly woozy Sunday evening, having just returned from a long weekend at the Great American Beer Festival in Denver. I'll be posting a commentary on that experience in due time. Because something more important happened and my priorities changed.

Spooling through social media posts, I learned my old friend Gene Clanton passed away Sunday morning. I was surprised, not shocked. Gene was 83, but I knew he had moved from Pullman to North Carolina earlier this year. He had family there. I never asked, but I suspected he was ill.

I first met Gene in 1976 while an undergraduate at Washington State University. He became one of the most significant influences in my approach to thinking and writing. If you see anything you like in these pages or in the articles I write for various publications or in my book on Portland's beer history, it's largely due to Gene's influence. He did not teach me how to write. That I learned. He taught me something far more important...how to think.

He was teaching a History 210 class on the JFK assassination when we met. I was as intrigued by the topic as he was and we quickly developed a rapport. I would stop by his office to talk even after the semester ended. Two years later, I took an upper level class focused on the same topic.

We lost touch after I graduated in 1979, but renewed our connection when I entered graduate school in 1983. The History graduate program was quite small, which gave students the opportunity to become well-acquainted with professors. Having known Gene before, we took up right where we left off.

As I navigated the program, I eventually chose to work with another professor, Ed Bennett, on a diplomatic topic for my Masters. Gene was on my MA committee and never voiced a concern about that choice, though I'm sure he thought I should have delved into something more serious. It was his style not to meddle.

I finished my MA in 1986. Soon thereafter, I had to decide what to do about a PhD. I decided I would work with Gene on an unspecified Cold War topic. We had many discussions about possible research paths and scenarios. But I became wary of the projected PhD job market and realized I would probably never complete the program. Gene had to have known, but he never said a thing.

While I was bumbling on in the PhD program, I decided to circle back and get a high school teaching credential. Gene, who had taught at the high school level and knew the downside, told me what to expect, but refused to push back. When I started writing opinion pieces for the Daily Evergreen, he frequently hit me up with suggested topics. Here and there, I chose to use them.

Gene was a gentle soul, but he was not a wimp. They had a policy of reviewing the work of graduate students in the History department each semester. At the end of one semester, someone in the department issued an unfavorable review of my work. The problem was, I had only worked with Gene that semester. It was a "scandalous normality," he said. The negative comment, we knew, was political, an inappropriate reaction to my opinion writing in the Evergreen. We challenged the Director of Graduate Studies, who hid like a baby behind his desk and refused to explain.

After I left WSU at the end of 1988, my PhD plans were shelved, for good as it turned out. But I kept in touch with Gene through his retirement in 1997 and beyond. We exchanged letters, phone calls, emails and, eventually, social media banter. I visited when I was in the Palouse country and he once flew his plane to Vancouver for lunch.
Senior picture, 1952
I had a particularly poignant visit in September 2008. Gene and his wife, Jane Ann, were living in a duplex in Northwest Pullman. She was ill with some form of dementia and he was determined to care for her as long as he could. I had met Jane Ann during my graduate school years, but she didn't know me well. While Gene was off collecting some item, she whispered to me, "He's a really good guy." Of course. Jane Ann passed away in 2014 and I don't think he was ever the same.

Sadly, I didn't see Gene often enough in recent years. My trips to the dry side were reduced after I was laid off in 2009. I met him at a Pullman watering hole several years ago and we had a great conversation over several craft beers (this is a beer blog, after all). One of my biggest regrets is missing a planned meetup with him last October. I misjudged my arrival time at the pub where we were to meet and he had gone. Efforts to connect by phone flamed out. Now he's gone. Damn.

Gene's published works on the Populist movement of the late 19th century, his specialty, are highly regarded in the academic community. He was a meticulous researcher and thinker, and I believe his body of work is and will remain relevant to historians investigating Populism or that period of American history. I believe Jane Ann assisted him in that work. That's how they rolled.

I never met Gene's two kids, Spencer and Kimberly. They would have been young adults during the years when I was closest to Gene. There are apparently grandchildren and great grandchildren. To the family, to the former students and colleagues he touched during a celebrated teaching career and to the friends he leaves behind in Pullman and elsewhere, we are left with only the memories.

We've lost a fine man.

Thursday, October 5, 2017

Questions, Thoughts on the Road to GABF '17

I'm packing my bag for a few days in Denver and wondering what the Brewers Association will have to say about the challenges facing craft beer. The industry is still growing, but growth is slowing and there are some dank undercurrents swirling around in the background.

One challenge is the blurring of what craft beer is, a reality in the wake of buyouts that have happened over the last few of years. It used to be easy for consumers to identify and differentiate craft beer and fake craft beer.

Things have gotten more complicated as craft beer has gone mainstream. We now have a large pool of craft consumers, many of them not particularly experienced or knowledgeable, looking at shelves and tap handles with almost unlimited choices. It's easy to get lost.

Obviously, the Brewers Association has rules about what constitutes independent craft beer. But those rules are relatively unknown outside the geek crowd and, anyway, a lot of consumers couldn't care less about who owns the brewery that makes the beer they drink.

The Brewers Association's recent response to this quandary is the Independent Craft seal shown above. Qualified breweries can acquire the seal and put it on packaging, post it around their pub or brewery and use it in other ways. Some 2,000 independent craft breweries are evidently using the seal, according to this report.

Naturally, there are differences of opinion regarding the value of the seal. Some don't like the design. They wanted something fancier. Terrific. For its part, big beer complains that consumers don't care who makes their beer as long as it's quality. Dandy. And not really a surprise.

I'll be interested to hear what more the BA has to say about the seal and their continuing effort to promote independent craft beer by making it easier for consumers who care to differentiate between independent and non-independent craft. Enough said.

A far more serious issue is the slowdown that's currently in motion. I'm reading reports of significant cutbacks and restructuring of sales organizations at regional and larger craft breweries. These reports are appearing in some of the pro newsletters and are pretty reliable.

The slowdown at larger craft breweries is a symptom of the explosion in the number of breweries...more than 5,000 by the end of 2016. Craft beer, which derived fast growth largely via large regional breweries for many years, has gone local. Consumers can in many cases find the beer they want in or near their neighborhood.

I'm not sure many of us predicted that trajectory. Not that long ago, we were watching big craft brands like Sam Adams, Sierra Nevada and others put up exponential growth numbers. There was no apparent end in sight. But things have shifted, driven by consumer tastes for local beer.

This development has put a squeeze on large breweries and, as discussed here recently, extends to some established, smaller breweries. One of the reports I'm reading says New Hampshire-based Smuttynose, which sold 51,000 barrels in 2015 and invested $18 million in a new brewery to support additional growth, has laid off staff and encouraged others to pursue other opportunities.

The theme at work is that large and small breweries are having a tough time selling their beer in distant markets, where we have to assume new, local breweries are soaking up share. Smuttynose is responding to that challenge by actively shrinking its distribution footprint. It isn't alone.

This situation is creating anxiety in the industry. What's going to happen to breweries that assumed debt to finance the brewery expansions that are now underutilized due to declining sales volumes? That's certainly the case with Smuttynose. What happens to that capacity? What about the debt, in cases where that's an issue?

I'm not sure the Brewers Association will have much to say about the emerging reality. It has actively encouraged the culture of new breweries, despite the fact that large regional breweries have been the primary growth drivers. Now things have shifted and some in the industry have painted themselves into corners. Not ideal.

Maybe there's a masterplan I'm unaware of. We shall see. For now, it's time to finish packing my knapsack and prep for travel. I understand the beer in Denver is lovely this time of year. 🍻

Thursday, September 28, 2017

Fresh Hop Season, 44 Years Ago

It's fresh hop season, part of the beer cycle we've somehow managed to construct in recent years. These beers aren't my favorite, though I seem to like them better now than I did a few years ago. Anyway, I'm not here to talk about fresh hop beers. Because it's also football season.

Sooner or later I had to get around to talking about football. Not the modern game, with its multiple game costumes and giant disparity at the college level. Or the NFL's problems managing the behavior of its players (no, I'm not referring to the national anthem protests).

Some 44 years ago this fall, I was closing out my high school football career. You might say football was in my DNA. My dad was a dedicated fan until the day he died. The first TV we had in my family when I was a small child was purchased so my dad could watch football games.

Later on, my dad took me to football games at Kezar Stadium in San Francisco. Maybe you remember that place, now gone, from the first Dirty Harry movie. When we moved to the Inland Northwest, I became a fan of nearby Washington State, where I eventually attended college. Later, we got the Seahawks.

Growing up in smalltown Clarkston, Washington, I fully expected to play high school football when it was my turn. Somehow I never played Pee Wee football. That was an inexcusable oversight because a lot of my friends played. I mingled in non-organized games.

My freshmen year of high school was an awkward time for sports in my school. I don't recall the details, but the school district was short on funds. As a result, there was no freshmen football. If you were a freshmen and you wanted to play football, you had to make the junior varsity.

Coming into three-a-day practices without any formal football experience was a shock. The running, the calisthenics, the weight of the equipment and the August heat combined for not a lot of fun. But I wanted to play and I stuck with it, somehow making the team.

I don't remember playing much that first year. There were freshmen who did play, mostly guys who had played Pee Wee and had experience and talent. I was probably fast enough and agile enough, but I was behind the development curve of organized football.

By the time I was a junior, I had caught up a bit. Off-season practice, weights and beer helped. You laugh, but you knew beer would be mentioned. One of our coaches quietly advised some of us to drink beer and work out in the off-season. He said we'd gain strength and stay quick and agile. Some of us did our best to accommodate his suggestion and, honestly, it was good advice.

I started out my junior year playing quarterback. During the season, I eventually played wide receiver, running back, safety and a few other positions. It was defense where I probably played the best football of my life. I was on the field a lot, playing both ways and getting exhausted. There were certainly a few concussions. But I'm fine now. Trust me.
Preparing for my senior season, I lifted a lot of weights and drank a lot of beer...Lucky Lager, Hamm's, Schlitz, Coors. Only the best. I figured to play defense, but worked on improving my throwing accuracy in case I got the opportunity to play quarterback. We had a new coach coming in and expectations were high.

One reason we had a new coach is that Clarkston had failed to beat cross-river rival Lewiston for more than a decade. Lewiston was then and still is considerably larger than Clarkston. But Clarkston had quite a few good teams that couldn't find a way to beat Lewiston. So our veteran coach resigned or was forced out. Sometimes, you just gotta go.

The 1973 season was an up and down affair. We won a game, lost two, won one, lost one, won two. Facing Lewiston in our last game, we were sitting on a 5-4 record. Our rookie coach didn't hesitate to remind us on several occasions before the game that 6-4 was going to sound a lot better than 5-5 when we recounted the season in future years. Sure enough.

Of course, beating Lewiston had been a goal of my class since grade school. We had watched a string of really good Clarkston teams lose to Lewiston for years. It seemed like there was some kind of jinx at work. We were determined to beat the odds and the jinx, somehow. I'm sure we weren't the only bunch kids packing around that idea in Clarkston schools.

For its part, Lewiston had suffered through a bad year under a flashy new coach. As always, they had a ton of talent. But the guy hadn't figured out how to use it. That led to dissention in the ranks and some good players had quit the team. It looked like they might be an easy mark. We knew better, though. We'd seen too many sketchy Lewiston teams beat good Clarkston teams.

To make a long story short, we wound up winning the game 13-7. The margin of victory would have been greater, but one of our wacky star players tossed the ball in the air short of the goal line on what would have been a touchdown. Dumb. Anyway, the long Lewiston drought was over and Clarkston finally had bragging rights for a year. There was celebration. And beer.

As luck would have it, my own senior season was TKO'd before it started. Working on a piece of farm machinery over the summer, I suffered a hand injury that required surgery. It was my right hand, my throwing hand. The caste came off just before fall practice began. I would not be playing quarterback. Indeed, it was a stretch to think I could play defense with that hand. But I tried.

So that's the way it was 44 years ago. The fresh hop beers we're all drinking today have almost nothing in common with the junk I and my jarhead friends drank way back when, either to bulk up or to celebrate. My how times have changed. For the better, at least in beer terms. 🏈

Friday, September 22, 2017

Kona and the Case for Transparency in Beer Labeling

The case of some Californians who filed suit against Kona and the Craft Brew Alliance for deceptive labeling is emblematic of a problem that isn't new in beer or craft beer. Consolidation, marketing and the chase for production efficiencies have undermined honest labeling.

You may be aware of Kona's plight. Earlier this year, two California beer consumers filed suit against Kona and corporate parent, the CBA, charging they had been tricked into thinking Kona is made in Hawaii.

In fact, all packaged and draft Kona sold on the mainland is brewed at CBA facilities in Portland, New Hampshire and Tennessee. (With the closure of the old Redhook brewery in Woodinville, packaged Kona is no longer produced in Washington, if you're wondering.)

There's a bit of a back story, if you don't mind a slight detour. Years ago, before it became part of the CBA, Kona began using Widmer and Redhook to brew its bottled beer for the mainland and Hawaii. Whether you were buying bottled Kona on the Big Island or in Phoenix, it was produced on the mainland. Yup.

Brewing for the mainland on the mainland makes sense, right? Much more efficient. The Hawaii strategy was evidently driven by production efficiencies here and the fact that Hawaii at the time (perhaps still) had a 50 cent per case tax on empty bottles entering the state. It was apparently more efficient to brew and package the beer here and ship it to Hawaii.

I don't have the labels to prove it, but my recollection is that Kona has always represented itself as being produced in Hawaii, regardless of where the beer was actually produced. I'm always amazed that many are unaware of that deception, even in the beer geek crowd.

In recent times, Kona has increasingly cashed in on its connection to place, in much the same way that Corona and other Mexican imports benefit via that connection. As referenced many times in these pages, Kona is the only brand floating the CBA boat at the moment. Consequently, it has been useful to maintain the fiction that the beer is produced in Hawaii.

Back to the lawsuit. The plaintiffs claim the Hawaiian imagery found on the packaging, the map of Hawaii and address of Kona's Hawaiian brewery, as well as the invitation to visit said brewery, qualifies as false and deceptive advertising.

I went to my nearby ghetto Fred Meyer to investigate. Sure enough, there's a map of Hawaii and invitation to visit the brewery on the 12-pack box. There's also nothing on the packaging to suggest the beer is produced anywhere other than Hawaii. Once you open up the box (or six-pack), labels on the bottles list the various places where the beer may have been produced.

The CBA pointed to the bottle labels in an effort to get the lawsuit dismissed. No dice. The judge noted that the labels are not visible on the outer packaging and ruled the map of Hawaii and invitation to visit the brewery are enough to make a reasonable consumer believe the beer is produced there.

This case is now headed to the discovery phase of litigation. Kona and the CBA will soon be forced to decide if they will risk a court case or negotiate a monetary settlement. The expense involved in such cases typically causes defendants to pursue a settlement at this point, sources say.

Whatever happens, the CBA will surely revise Kona packaging to avoid similar legal entanglements going forward. It would be nice if the entire industry would take a look at labeling practices. Because Kona is far from the only example of intentional chicanery.

The Baby Buds come instantly to mind. Some portion of their beer is now produced in giant factory breweries, yet they maintain the fiction via labeling and advertising that they are still small local brands. Some legacy macro brands, now owned by big beer, do something similar.

Transparency in beer labeling and packaging is good for consumers. The reason we don't have it is there's money to be made in not being transparent. Regulations preventing the practice either aren't stiff enough or aren't seriously enforced. That leaves lawsuits as the lever of change.

How many lawsuits will it take to affect change? Maybe a lot of them. Fine with me. Nothing wrong with challenging misrepresentation and duplicity.

Saturday, September 16, 2017

Big and Old Craft Brewers Grapple With Sour Times

You've heard the bad news. Craft growth is slowing. Heads are spinning trying to figure out how to jumpstart an apparently sagging industry. Places are closing their doors or begging to be graciously bought out by big beer. Gloom and doom.

Except maybe things aren't quite what we've been led to think they are. It's true that overall craft growth is slowing, down to something like 5.5 percent year to date. Also more failures. What many don't realize is that big craft is dragging the rest of the industry down. Yup.

If you exclude the imploding sales of brands like Blue Moon, Sam Adams and Sierra Nevada from the picture, you discover craft dollar sales are up more than 11 percent on the year. Including those players puts growth at the already noted 5.5 percent.

Those are national numbers, but the picture in Oregon isn't much different. Deschutes, our top brewery by volume, experienced an 18 percent decline in sales June 2016 to June 2017. Full Sail, Rogue, Portland Brewing and Bridgeport are all down. Widmer, if it's production showed up in OLCC stats, would certainly show the same trajectory.

In actual fact, the trend goes beyond a turn away from big craft. We see it in industry stats due to its impact on big craft, but it is affecting established craft breweries widely. Once respected local brands are seeing declining numbers as consumer tastes shift to what's new and shiny.

That's not something you can verify with national stats. But there's plenty of evidence in Oregon stats. For the same June to June period mentioned above, a number of older local breweries, including Lompoc (-12 percent) Laurelwood (-15 percent), Double Mountain (-8 percent) and Alameda (-20 percent), are losing ground.

Over that same period, you see significant growth for relative newbies Pfriem (+55 percent), Crux (+127 percent), Ecliptic (+81 percent), Block 15 (+63 percent), Sunriver (+54 percent), Buoy (+38 percent) and Breakside ((+22 percent). Several established breweries, including Pelican and Silver Moon, show solid growth, clearly outliers among the older set.

"Younger drinkers increasingly view legacy brands as stodgy or uncool," says Andy Crouch in this month's BeerAdvocate magazine. "A new disruptive wave of young brewers, keen on brewing to their own tune, entered the marketplace with little care or respect or concern for their elders."

The result is that older craft brands large and small are being displaced. Craft beer has become a part of pop culture among the younger generation, which views established brands like Deschutes, Sierra Nevada, New Belgium and Sam Adams as ancient and irrelevant. It's similar to disrespecting the music of a prior generation because it's old. You know the drill.

One could easily argue that small, local brands have more flexibility in addressing the current trend than big craft. After all, it's easier to alter the course of a small boat than that of an ocean liner. In beer terms, changing course means embracing trendy styles like hazy IPA and refreshing a antiquated brand identity with local consumers. It's not easy, but not impossible.

Big craft is in a more awkward position. We're talking in about beer portfolios that are well-known across countless markets and in many cases hopelessly outdated. It's not that easy to erase embedded brand identities and rebuild cool with the young audience that's driving craft beer's growth.

There's desperation out there, as outlined in Crouch's column. New Belgium released a disastrous line of fruit flavored IPAs and plans to extend the Fat Tire line with a Belgian-style white ale. Yummy. Sam Adams is hawking a line of alcoholic seltzers. Embarrassing.

Price is one area where big craft might attack. They're big enough that they could reduce retail prices in an effort to win back business. But reducing prices is more likely to further damage already imploding brands. And you aren't going to win over millennials who regard you as out of touch with discounting. Is there a Plan B?

For a while I've wondered if big craft will follow the example of big beer and start buying up smaller breweries. There's been some of that already. Green Flash bought Alpine a while back. New Belgium recently bought San Francisco's Magnolia Brewing. Should we expect to see more deals like that down the road? I haven't a clue.

The only thing I do know is these are tough times to be a legacy craft brewer.

Tuesday, September 5, 2017

The Commons: When Things Go Wrong

When Portland Beer was published back in 2013, I held the release party at The Commons original location on Southeast Stephens. That place had become a regular stop on my travels and I knew Mike, Josh, Sean and Travis well. Despite dreadful weather, the party was a success.

Following several years of solid success, the collective decided to move to a significantly larger space where they could increase production and seating capacity. I don't recall anyone in the beer community questioning that decision. It seemed to make sense, given their apparent trajectory.

Of course, we now know things didn't work out. When news broke that The Commons would close and relinquish its space to San Diego's Modern Times Beer, the hyenas began howling about why this had come to pass. Poor planning, poor execution, poor strategy. Pick your poison.

But these situations are rarely as cut and dried as some would have us believe. In the case of The Commons, I suspect there are variety of explanations for the calamity. And not all of those explanations are readily visible, even to folks in the beer community.

I first sensed that things were not quite right when I visited The Commons soon after they opened on Belmont in 2015. The main pub area had an unfinished feel. A satellite seating area upstairs was off limits to the public due to fire code. Without expensive sprinklers, the area was unusable.

During a visit several months later, it was clear to me that the building did not have sufficient ventilation. I eventually learned they couldn't put commercial rooftop units on the building without reinforcing the infrastructure, a monumentally expensive undertaking.

More recently, I learned they had brewed an IPA. Say what? That came as a shock to me because I knew it was something Head Brewer Sean Burke never wanted to do. Soon enough came news that Burke himself had bounced from the company. I guessed the IPA wasn't his idea.

The early intel told me the guys were overextended and at risk. Sure, businesses often function at a basic level when they're new or making a big transition. You put some things off until you have a cash flow. But appropriate ventilation and seating are requirements, not luxuries.

Then came the seemingly endless construction in the area. Several nearby buildings were leveled to make way for condos or apartments. An area that was busy and congested before the construction became increasingly problematic in terms of access and parking. Bad for business.

There are those who believe they needed a full kitchen and pub food to make the space viable. That was never part of the plan. The Cheese Annex, operated out of a tiny kitchen on a lease basis by Steve Jones (Cheese Bar), was a makeshift arrangement with limited offerings.

The food argument segues into another facet of The Commons masterplan. Until late in the game, they did not offer mainstream beers. So offering mainstream pub fare probably wouldn't have done much for them. They certainly knew this, which is why a kitchen was never part of the plan.

Not offering mainstream beers may have been a fatal error once they moved to the larger space. I took non-geek friends and family to The Commons on several occasions. There was nothing for them on the beer menu. Food choices wouldn't have mattered. They wanted to go elsewhere.

There's an argument floating around that The Commons should have jacked up prices to make their beers seem more special, such as Cascade, Hair of the Dog and others do. The idea is that they might have changed the perception of their beers by charging more.

The problem is, the beers probably could not have fetched significantly higher prices. That's not to say they weren't and aren't pretty great. Are they in the same league as the fruit-infused, barrel-aged stuff offered at high price points by others? I'm not so sure.

There are unknowns. Owner Mike Wright evidently got divorced a while back. We don't know what effect that had on the business or its cash flow. It's also true that craft beer is slowing and many brewers are showing flat or declining sales. Did that play into what happened? Hmmm.

By all accounts, The Commons was highly successful in its original location. The space was smallish, but friendly and homey. Wright didn't own the building, but the overhead had to have been low. Enjoying their eccentric beers while perusing the brewery had a definite cool factor.

Everything flipped in the move to Belmont. They got more production space, but expenses increased dramatically and the new place never lived up to the charm of the old one. Which left them stuck with a boutique product in a much larger space with much higher overhead.

To make a go of it there, they needed to sell a whole lot more of their beer or cater to a more general audience. That would have meant mainstream beers and food. Except for the 11th hour foray into IPA, they did none of those things.

People sometimes become rigid in business. Overconfidence, ego or lack of capital are some of the reasons. I don't know what happened at The Commons. But a new space with significantly higher overhead likely required a different approach than the one they had used on Stephens.

The cautionary tale, for anyone who cares, is that taking on significant debt in an industry prone to shifting tastes and fickle patrons is a risky business. If you're going to go down that path, build some flexibility into your plan so you don't find yourself in a financial rabbit hole.

It isn't clear what will happen to The Commons. Beginning in January, Modern Times will lease the space from Wright, presumably shielding him from mortgage payments. Once the dust clears, he may decide to reinvent the business in a smaller venue similar to the old place.

A lot of people would gather around that. 🍻

Tuesday, August 29, 2017

For Anheuser-Busch, One Good Deed is About it

Our frenemies at Anheuser-Busch are in the news. Seems they delayed beer production this week so they could can water for hurricane victims in Houston. Good PR. Too bad that's not the only coverage they're getting. Because, like always, they've been up to no good.

Earlier this month, Henri Reuchlin, Chairman of the European Beer Consumers Union, which represents consumer groups in Europe and monitors the activities of big beer, sent a letter to ABI CEO Carlos Brito requesting assurances regarding the beer giant's global intentions.

Reuchlin's letter rakes ABI over the coals nicely, describing a litany of abuses and underhanded practices. "All of these examples suggest the policies currently being adopted by your company tend mostly to work to the disadvantage of consumers, or at best to pay the consumer little regard," he concludes.

Not exactly news, eh? If you follow along here, you probably know about Anheuser-Busch's illegal and anti-competitive practices in this country. They're getting pinched by regulators on a regular basis, forcing them to come up with creative defenses. And pay fines.

A little over a year ago, the good folks at AB were caught violating Washington state pay-to-play rules at a couple of concert venues in Seattle. What they did was pay exclusive promotional fees in order to secure placement for their own products, while blocking competitors.

The result was a relative slap on the wrist in the form of a $150,000 fine. A spokesperson for the company subsequently said they didn't agree with the allegations and were working with the State Liquor Control Board to figure it all out. Right.

A few months later, in September, the US Securities and Exchange Commission hit AB with a $6 million fine for bribery. The SEC found the company made illegal payments to officials in India to boost sales and production. The company also tampered with a whistleblowing employee, entering into an agreement prohibiting the person from communicating with the SEC about violations.

In fact, despite employee complaints and SEC directives, Anheuser-Busch failed to establish internal controls to detect and prevent improper payments. Instead, transactions involving promoters simply weren't monitored or recorded properly. Hmmm. Why do you suppose they would do that?

There's more. This past March, AB reached a $400,000 settlement with regulators in California after an investigation revealed AB-owned wholesalers had been illegally providing refrigerators, television sets and draft systems to Southern California retailers. They knew the law and simply failed to abide by it. Business as usual.

More recently, regulators in Massachusetts charged Anheuser-Busch with illegally giving away nearly $1 million worth of equipment in the form of branded refrigerators, draft towers and coolers to hundreds of retailers in 2014 and 2015. The charges came as a result of a 14-month investigation into pay-to-play practices in the state.

The best part of this story is AB isn't even denying the charges, It says it did provide the equipment to retailers and believes it did so legally. Say what? Yep. The company is challenging the state's definition of illegal gifts.

It turns out Massachusetts bans brewers and wholesalers from providing retailers with anything of “substantial value” as a means of gaining influence. The problem is, “substantial value” isn’t defined, leaving open a door through which AB is driving a semi. Imagine the hubris.

Anheuser-Busch contends it had no idea that the coolers and other merchandise exceeded the "substantial value" threshold. Keep in mind we're talking about items valued at from hundreds to several thousand dollars each. Who knew these things were of "substantial value?"

These are the people we're dealing with. They want to dominate the industry and aren't especially concerned with how they do it. If there's a law blocking their objective, they're apt to work around it and worry about the consequences later. It's who they are.

And if you're buying any of their products, you're helping finance this kind of behavior. There's a simple solution: Don't buy any of their shit. End of story.

Tuesday, August 22, 2017

Reinventing the CBA's Redheaded Stepchild

For a number of  years, many beer-centric folks wondered what the Craft Brew Alliance would to with Redhook, it's redheaded stepchild. Redhook was thrashed like a rented mule and abandoned in a dusty ditch long ago. What now? Well, they actually have a plan to resurrect it.

Founded in 1981, Redhook is the oldest existing craft brewery in the Northwest. I use the term "craft" loosely because Redhook is part of the CBA, roughly a third owned by Anheuser-Busch. Along with Widmer and Kona, Redhook doesn't meet the Brewers Association craft standard.

In fact, Redhook was the first Northwest brand to fashion a partnership with big beer. That happened in 1994, when it sold a 25 percent interest to AB. Under the terms of the deal, Redhook maintained control of its marketing and advertising, but gained access to the AB distribution network.

The results were stellar. Redhook built a large brewery in Woodinville and another in Portsmouth, N.H. in the wake of the deal. Boosted production and access to the AB network helped Redhook increase sales from 93.7 million to 226 million cases between 1994 and 2002. Serious stuff.

Redhook's experience was not lost on Kurt and Rob Widmer, who had solid beers, but no access to wide distribution or cash that could be used to enhance their brand. Around the time they figured out how to package their iconic Hefeweizen in bottles, the Widmers sold a 31 percent interest to Anheuser-Busch. That was 1997. Within five years, Widmer sales increased 20 percent.

The rest of the story is well-known. Widmer and Redhook, already paramours of Anheuser-Busch, merged in 2008, forming the Craft Brewers Alliance. Two years later, the CBA, which had been brewing Kona beer on contract for at least several years, acquired Kona. A few years later, the name was shortened to Craft Brew Alliance (BREW on the NYSE).

There are differences of opinion over what happened to Redhook. Mine is that, once it became part of the CBA, Redhook was overshadowed by Widmer and, soon enough, Kona. With sloppy, inattentive brand management, Redhook drifted into sub-craft status, relegated to sharing shelf space with the likes of Pyramid, Portland Brewing and other derelict brands.

While there may be different explanations for the decline, the numbers cannot be disputed. Redhook sales have been tanking for years, a drag on the entire CBA portfolio. In recent times, Widmer has also gone flat. Kona is the only darling in the group, still chugging along nicely, a big fat target for AB acquisition.

After the CBA's Portland facility was updated and upgraded, most of Woodinville's production gradually moved here. To its credit, the CBA hoped to sell the Woodinville brewery to Pabst. That deal fell through when Pabst saw its revenues take a dump. Today, the old brewery is shuttered, awaiting a suitor, (apparently) overvalued on the CBA balance sheet.

But all may not be lost. The CBA is hoping to refurbish the Redhook brand. Talk about big projects. The plan revolves around a fancy new brewpub in Seattle's swanky Capitol Hill neighborhood. It serves up specialty beers brewed on a small system, alongside what appears to be an upscale pub menu.

This isn't a terrible idea. Going small has possibilities. Brewlab, the name of the new pub, will feature two banks of 16 taps. Beers will be produced on an in-house 8 bbl system, with a focus on small batch, experimental brews. That sounds pretty good.

There will be several special edition packaged beers in six-packs and draft form. Distribution will be limited to the Northwest. They also plan to release variety packs of selected special edition beers to a broader audience. Care to guess where these beers will be brewed? Not in Seattle. But never mind.

This plan lines up with what's happening in craft beer, as long as Redhook doesn't attempt to conquer distant markets. Between taprooms and new breweries, the winning focus at the moment is hyper local. It's gotten extremely difficult to build strong regional and national brands because small local breweries are gulping up market share from larger brands.

Whether the CBA can succeed with the Redhook plan is an open question. With the exception of Kona, which rides a strong connection to place, the CBA has not proven itself to be particularly adept at brand building, similar to its inept part owner, Anheuser-Busch.

But we shall see. You never know. It might work out for them if their goal is limited. If there's any kind of overreach, it'll likely be a disaster.

Tuesday, August 15, 2017

What's Beer Got to Do With it?

I met Laura 25 years ago. She was a not quite halfway through her career in healthcare at the time. She reached thousands of people by way of her work in various hospitals, as an educator at OHSU and, more recently, as a Nurse Practitioner in the Legacy System. Today she retired, after 42 years of service.

At OBF 2017
Our paths crossed and eventually merged thanks largely to a common obsession with racquetball. This is not a made up story. We were addicted to the sport. During most of our first 10 years together, regular weekly play and tournaments dominated our annual schedules. It was quite insane.

What we came to regard as our "need for speed" also coaxed us into other risky activities. A shared interest in snow skiing led to annual outings on Mt. Bachelor and Mt. Hood. During a trip to Kauai in 1996, we developed a boogie boarding fetish that lasted many years.

Outings were not without peril and occasional anguish. Both of us were "spin-cycled"into the sand on the beaches of Poipu numerous times while boogie boarding. But the worst occurred on Mt Bachelor in March 2008. While skiing in chopped up powder after a stressful night searching for a marauding black dog, Laura caught an edge on a snowboard rut and mangled her knee. She was unable to stand. The Ski Patrol was summoned.

She had suffered a torn ACL and meniscus damage. The trip back to Portland was painful. Soon enough, the damage was surgically repaired. She eventually returned to the slopes wearing a rigid brace. It was tough to have such limited mobility and she was tentative. I don't think she ever recovered emotionally. Getting injured like that was something she'd never experienced, didn't expect. It knocked her for a loop.

With puppy Biscuit in 2009
That 2008 incident foreshadowed the end of our "calm years." In early 2009, Laura's father passed away, more or less unexpectedly. Returning from his memorial, I was laid off, an event that had lasting consequences. Shortly thereafter, the second of our first pair of Labs passed away. Soon enough, I learned my own father had cancer. He passed away in November. It's fair to say 2009 was not a very good year.

From that point on, Laura carried the load in our household. With my career in disarray, she kept us afloat by paying the bulk of the bills while at the same time planning for her impending retirement and contributing to the college funds of her two grandchildren. Somehow, some way, she succeeded. The house was paid off a year ago. The college funds grew. We survived.

Unlike my uneven career in marketing communications and writing, Laura's career in healthcare featured a gradual, upward trajectory. During the Clinton years, she opted to get her NP certification because she believed primary care would be the wave of the future. If memory serves, we both thought primary care would become somewhat universal and well-funded.

At Waimea Brewing, 2009
Things clearly didn't work out the way we figured. Laura rolled with the punches for 22 years in several scenarios. She's seen a lot of change. Technology now plays a far greater role than it once did. But the end result is that providing care has gotten more difficult, not easier. That's largely due to the way the insurance industry works, but never mind.

These last few months of work have been bittersweet. As she gradually approached her final day in the office, Laura exchanged hugs and tears with patients, some of whom she had been seeing for a number of years. She'll undoubtedly be missed by those patients, and also by the colleagues she worked with so closely during this final chapter at Legacy. She'll miss those interactions more than she knows, but it may take some time for that to sink in.

Even though she's retiring, Laura's efforts in the healthcare area won't end. She'll maintain her license for a while, maybe do volunteer work somewhere. She doesn't plan to consider work as a healthcare provider similar to what she's done for more than two decades. "That's a mission impossible scenario," she says. "Too messy."

Retirement dinner at Oxpdx
As with all things, there is irony. One of Laura's specialties over the years has been diabetes care. That experience will come in handy because we recently learned our youngest Lab, Biscuit, born on Valentine's Day 2009, is diabetic. So even though Laura is retiring from the office, she'll still be providing care. The irony is not lost on either of us.

What's beer got to do with it? Very little. Laura prefers wine and does not share my geeky interest in beer. But she encouraged it by giving me homebrewing equipment for my birthday in 1995. I brewed for years and we shared a lot of that beer. We also frequented the Oregon Brewers Festival as drinkers and volunteers for more than a decade. Today, only I chase beer.

Honestly, I don't know what her retirement holds. She has far too much energy to sit around and do nothing. Gardening, reading and sudoku won't be enough. This I know. I worry that she'll drive me nuts as I attempt to work in my basement office. She worries that I'll run off with one of my millennial beer friends. The reality is, we'll work things out just as we always have.

So congratulations on your retirement, my dear. It's certainly well-deserved. Time to start enjoying everything you worked so hard to attain for all these years.

Now, how about let's grab a beer? 🍻

Postscript: A quick shoutout to the folks at Ox Restaurant, Laura's chosen dinner venue. After a great dinner that included a bottle of wine and several entrees, as well as the ice cream shown above, we were told our dinner check had been taken care of. Our server had learned of Laura's retirement during the course of our meal. Needless to say, we left a large tip.