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Thursday, November 20, 2014

Breakside Highlights Special Releases, Library Flights

The last time I mentioned Breakside Brewing here was last December, when I said there were my brewery of the year for 2013. That comment was based mostly on the fact that they had created some truly amazing specialty beers to go with some terrific standards, like their IPA and Pilsner.

Head brewer Ben Edmunds and his team have continued to build on that theme in 2014. The production brewery in Milwaukie has enabled them to do large batches of the popular standards, which you can find almost anywhere at reasonable prices. Meanwhile, smaller batches of seasonals and funky, barrel-aged specialty beers are showing up, too. I'll get to those shortly.

Looking at OLCC numbers, and keep in mind that these are Oregon-only numbers (limited to beer made and sold here), Breakside's overall production is rising. For all of 2013, they produced 3,178 barrels. Through August of this year, they produced 3,521 barrels. If monthly trends hold, they will easily pass through 5K barrels by the end of the year. As noted, these numbers do not include out-of-state sales, which are increasing.

Of course, rising production numbers suggest a strong following. Breakside bumped up the buzz in that area by winning two medals at the 2014 GABF. Breakside IPA took gold in the American Style IPA category and Wanderlust IPA won bronze for American Strong Pale Ale. Lots of good news at Breakside.

And there's more. Edmunds and his brewing elves have made great progress, but they continue to forge ahead with the release of new specialty beers and a new rare beer tasting program at their Milwaukie Brewery and Taproom. Below the details:

La Tormenta (dry-hopped soul ale): 7% ABV, 22 IBU
An experimental ale that combines a mildly tart base with a tasty and aromatic blend of tropical, fruity hops. Notes of grapefruit and lemongrass are present. This is a fantastic beer. No wonder it's one of Breakside's most popular small batch beers of the year. It will be available on draft and in bombers. The Portland release party happens tonight (11/20) at Beermongers, where they will have a flock of Breakside beers on tap.

Imperial Red: 8% ABV, 93 IBU
This is essentially an Imperial Red IPA and has enough backbone to offer a nice alternative to standard winter beers. But it's the aroma and flavor provided by Simcoe and Amarillo hops that make this beer special, with notes of pine resin and grapefruit. Imperial Red is so smooth you won't even notice the added alcohol, so watch it. This is a draft only release and you'll find it at Breakside and select locations. It's disappearing quickly, so get it now.

Country Blonde: 7.2% ABV, 27 IBU
A wheaten saison conditioned on Gewurztraminer grapes and a blend of wild yeast and bacteria that includes three strains of Brettanomyces and Lactobacillus. I tasted this beer, along with Imperial Red and La Tormenta, at a Tuesday night media event. It is excellent. Country Blonde will be available only in bottles probably limited to Breakside locations.

Rare & Vintage Beer Library Flights
Getting a chance to taste older vintages of specialty beers, particularly flights, is great fun. You get to appreciate how beers have aged and evaluate sometimes quirky flavor profiles. This type of tasting has become increasingly popular in recent times.

To address that demand, Breakside is launching Rare and Vintage Beer Library Flights at their Milwaukie location starting Dec. 5. Flights will be 5 oz pours (three for $9 or $3 each). Choices will vary and only include beers not available on draft. The Library Flights program will be run Friday through Sunday. Check Breakside's social media feeds for weekly updates on beers.

Once again, Breakside is setting a high standard for great beer and business smarts. They obviously aren't the only ones doing good work here, but it seems to me things are looking especially bright at Breakside. 

Monday, November 17, 2014

Risk and Reward in the 10 Barrel Buyout

When 10 Barrel Brewing agreed to be purchased by Anheuser-Busch, the founders surely evaluated the risk. In the end, they decided the benefits of selling outweighed the risks associated with potential negative consequences. That's how business decisions work.

One of the angles they certainly considered is that, by selling out to big beer, 10 Barrel would no longer be considered a craft brewery by the Brewers Association. The Brewers Association, although it is home to some odd rules, has some pretty simple guidelines when it comes to craft brewers.
  1. Small: Annual production must not exceed 6 million barrels
  2. Independent: Less than 25 percent of the brewery is owned by a large, non-craft brewer.
  3. Traditional: The majority of a brewer's volume is beer made by fermenting traditional or innovative brewing ingredients.
These guidelines have been questioned. What are "innovative brewing ingredients?" for instance. How does 6 million barrels make sense when most craft brewers produce in the thousands of barrels annually? Deschutes Brewing, one of the largest craft brewers, brewed 478,00 barrels last year. Sam Adams brewed 2.5 million barrels. What? Some say the Brewers Association has adjusted the production limit upward over the years to keep Sam Adams, the behemoth of the craft world, in. But never mind.

In 10 Barrel's case, the production limit won't be an issue anytime soon, if ever. Same goes for the traditional aspect. Where the problem occurs is ownership. Being a wholly owned subsidiary of Anheuser-Busch means they lose the craft label. Regardless of whether you think that's an issue, it is the reality.

So I was amused to see an article in the Bend Bulletin under the headline: "Could 10 Barrel Lose Craft Brewer Label?" Seriously? Folks, there isn't a question. The craft label is gone. Kaput. I enjoyed reading some of the comments, particularly those attributed to Van Havig, co-owner of Portland's Gigantic Brewing and a member of the Oregon Brewers Guild board of directors.

"Those people [at 10 Barrel] are craft brewers, period," Havig told the Bulletin. "It has nothing to do with who owns them." 

Actually, who owns them does matter to beer fans and the Brewers Association. But that's a nice way to spin it and a smart position for any brewer to take...just in case his or her brewery should be bought out by a beer behemoth at some point. Thinking ahead always makes sense. 

Whether the craft label matters is open to serious question. Goose Island lost its craft status when it sold out to AB in 2011. Widmer Brewing lost its craft status when it sold a roughly 30 percent stake to AB in 1997. Same goes for Blue Point Brewing, which came under AB control earlier this year.

The funny thing is, these breweries are doing fine. Widmer is a relevant national brand, distributed across the country. Goose Island is in the same boat. It's kind of early to say what will happen with Blue Point, but you suspect it will experience similar results.

10 Barrel is going to be the butt of jokes among beer geeks in Oregon for a while. A short-term drop in sales volume here seems likely. A lot of people have told me they will never support 10 Barrel by buying their beer or going to the brewpub that will open in Portland next spring. Fair enough.

As a kid, I was told, "You take your chances and you take your lumps." 10 Barrel took its chances selling out to AB and is taking its lumps. I don't like this buyout or those like it one bit, but I think 10 Barrel will probably be just fine in the end.

Thursday, November 13, 2014

Watered Down Beer in Seattle?

It's been a sketchy season so far for the defending Super Bowl champion Seahawks. They haven't exactly been blowing the competition away. Now comes news that fans are paying for watered down beer at CenturyLink Field. Very bad.

This story was first reported by KOMO TV (it's now spread to other outlets), which had operatives collect beer samples on two separate trips to CenturyLink during Sounders and Seahawks games. Samples were smuggled out of the stadium (it's illegal to do that) in small vials and subsequently evaluated by a Seattle lab.

The lab results showed that all of the six beers tested fell short of the advertised ABV. In some cases, the shortfall was minimal and within federal guidelines, which allow a discrepancy of up to .3% below the stated number. In other cases, not so much. Below, the results.

Stella Artois
5.0% stated
4.8% measured

Bud Light
4.2% stated
3.9% measured

Redhook No Equal
5.2% stated
4.8% measured

5.2 stated
4.7% measured

Bass Pale Ale
5.1% stated
4.5% measured

5% stated
4.4% measured

There's a lively discussion about this on the KOMO site. Some folks are pointing out that it's illegal to remove beer from the stadium. Very helpful. Others point out how implausible watered down beer is, given the challenges.

One of my industry friends (not with Anheuser-Busch, which owns five of the six brands tested) says the risks of watering beer, whether in the stadium or in production, far outweigh the financial benefits. There are actual laws that include some fairly stiff penalties, I guess. 

I'm not a lab technician or scientist, but I wonder if these results could have somehow been tainted by sample sizes, storage methods or time between collecting samples and evaluating them. There ought be a more formal investigation of this mess, I think.

The timing of this news isn't good. A couple of years back fans learned that large and small cups at CenturyLink held the same amount of beer. Thus, people paying $1.25 more for a large cup were getting the same amount of beer as the cheapskates who ordered the small. Stadium suits took the Fifth..."We didn't know." Of course they didn't. Needless to say, trust in stadium management has been running a little thin of late. Now the ABV controversy.

Think about this situation for a few seconds and connect the dots. Seahawks fans are going to need more, not less, alcohol to get through this year's nail-biters. If fans think stadium management is screwing them on ticket prices and beer, they'll drink more before games and smuggle in extra booze to hold them over during the games. Getting "blitzed" may take on a whole new meaning. 

This may not work out well.

Sunday, November 9, 2014

10 Barrel and the New Reality in Craft Beer

Wednesday's announcement that Anheuser-Busch is acquiring 10 Barrel Brewing of Bend drew a firestorm of commentary in social media and blog land, most of it negative. The reasons are related to how craft brands are perceived and what people think they should and shouldn't be. And who should and shouldn't own them.

When I was researching my book on Portland Beer, I asked a number of people why craft beer had taken off here. The theme that popped up routinely in responses was provincialism. In Portland and Oregon we have a history of preferring products that are produced locally by local businesses.

These attitudes originated during pioneer times and grew into a strong do-it-yourself culture through the 20th century. I think a good argument can be made that provincialism is on the wane here. You look around and see all these nationally-owned big box stores infesting the area and you realize there's nothing provincial about them.

However, provincial attitudes are entrenched when it comes to craft beer. That's probably because craft beer came along at a time, starting in the mid-1980s, when our provincial facade was beginning to crack. We've experienced massive growth since that time and a lot of things have changed. Yet we stubbornly hang on to craft beer as something small, local and artisan.

There truly is a sort of mythology driving that. Some of our breweries (Deschutes, Widmer, etc.) are huge by craft standards. And there's serious money being invested in hoards of beer-centric operations like taprooms, restaurants, growler fill stations and more. Craft beer is big business. Yet many beer fans continue to think of it differently.

There have been prior deals with big beer here. Bridgeport was sold to Gambrinus in 1995. Portland Brewing has been bought and sold several times. Widmer partnered with Anheuser-Busch in 1997, a deal in which AB gained a non-controlling interest in the company. None of these arrangements was greeted with enthusiasm when announced.

The Empire
It's hard to say what will happen with 10 Barrel. The founders got a chunk of cash, for sure, and you can't fault them for that. In the short run, I suspect they will continue to function much as they have. The beers brewed in 10 Barrel breweries will remain solid. Their specialty beer program may actually expand, as it has at Goose Island since the AB buyout a couple of years back.

Of course, AB did not enter into this deal out of the kindness of its heart...or strictly to help 10 Barrel build its brand in Oregon.They need to fill a deepening revenue hole caused by the collapse of Bud, Bud Light and other standards. Distributing craft brands around the country is part of that plan, and it means 10 Barrel beers will eventually be brewed in factory breweries, as happened with Goose Island. The quality of those beers will likely suffer.
Acquisitions are just one part of AB's effort to maintain its position in the industry. There will be more buyouts. Even so, AB cannot buy craft breweries fast enough to make up for the volume they're losing with their mainstream brands. Another piece of the action plan involves buying up distributors in some states, including Oregon, so they can use discounting and other tactics to leverage their position. There's also an effort to slow the growth of craft beer by lobbying for restrictive laws, new and existing, in some states. A rather shameful resume.

Given Anheuser-Busch's body of work, they and 10 Barrel should have expected the uproar that materialized this week. Social media, which didn't exist when the prior deals happened, magnified the beatdown that descended on them. I understand comments were deleted and people were banned from social media pages. The banter reached such a crescendo that AB and 10 Barrel reached out to "sympathetic" media outlets (sorry, no names) in hopes of creating some positive spin. Ingenious.

Honestly, I completely get the emotionally charged response to this deal due to Anheuser-Busch's unlikable corporate persona. At the same time, I think a lot of people are holding onto some fairly outdated notions about craft beer. It is no longer particularly small or particularly local or necessarily driven by idealistic values. Craft beer is big business, and getting bigger by the minute.

The buyout of 10 Barrel isn't the end or even the beginning of the end for craft beer. Not even close. However, this deal and the one for Goose Island suggest an end to roughly three decades in which craft brewers flew mostly under big beer's radar. Those days are gone forever. And the line that previously divided craft beer and big beer is blurring.

Wednesday, November 5, 2014

Millennials and Craft Beer in the Digital Age

It's hardly a secret that Millennials are a force to be reckoned with in modern American business. They make up an increasingly significant portion of the 25-45 age group business covets and targets. This is as true of the beer industry as any other.

The problem for business is the Millennial demographic is not receptive to traditional marketing strategies and tactics. You cannot effectively reach them via print, radio or television advertising. One might argue that's because they are fixated on computer, tablet and phone screens. But never mind.

There are a lot of things businesses have to keep in mind with Millennials and plenty of places to find that intel if that's your thing. Generally speaking, these kids identify more personally and emotionally with brands than prior generations. They demand to interact and be part of the brands they respect.

The platform that makes this stuff happen is provided by the combined emergence of the smart phone and social media, which allow good and bad experiences to be widely spread electronically in the blink of an eye. This kind of instant publicity was unheard of 10 years ago. Today it drives the success of many businesses...and Millennials are heavily immersed in it.

When it comes to beer, Millennial tastes are vague and transient. They want to experience a wide range of flavors, which means they are receptive to inventive approaches and bizarre blends, and somewhat bored by traditional styles. In short, they are regularly looking for something new and different.

That reality is forcing suppliers and retailers to radically increase the number of available choices. A reliable industry source expects the number of SKUs on the market to double within 10 years. That's a significant increase given there are already something like 10,000 SKUs out there.

These changes mean chaos for big beer, whose leadership is dominated mostly by folks who have been around for 20 or more years. Age alone isn't the issue. The more serious problem is they are stuck in an antiquated mindset. Expensive ad campaigns and traditional media are yesterday's news...they fall flat with Millennials.

Craft beer is another story. Small breweries and pubs never had the luxury of using expensive, traditional media. Building a brand identity took years. Then came social media and the smart phone. Today, craft-centric businesses are leveraging the digital space and effectively engaging with the all-important Millennial demographic. Craft brands are being built quickly, almost overnight in some cases.

In other words, the brand building shoe is now on the other foot. Being small and unable to afford expensive advertising tactics has put the little guys ahead of the big guys in the digital, Millennial age. If nothing else, you have to appreciate the irony.

Friday, October 31, 2014

Rainier Honors Past with Jubilee Can

You never know what crazy marketing concept you're going to run into in the macro world. These gigantic companies will lean on just about any angle that will help them sell beer that is, shall we say, not quite up to snuff.

So I shouldn't have been surprised when I ran into a Rainier Jubilee display the other day at Fred Meyer. It looked vaguely similar to a display you might see for a seasonal craft beer. 

These are some fancy cans, for sure. They catch your eye as you shuffle by. You might expect to find a unique seasonal beverage inside them, but that's where you would be dead wrong. Because the only thing special about Rainier Jubilee is the can.

As with many things, you need to step back in time to track the origins of the Jubilee can. The Rainier Brewing Company, which exists today only as a brand owned by an international cartel, has deep roots in the Northwest dating back to 1884.

Rainier had a solid following through much of the 20th century, propelled during the latter half of the century by some seriously creative ad campaigns. Things gradually unraveled for Rainier with the full-fledged arrival of the national brands beginning in the 1960s, as was the case with most regional brands. The brewery in Seattle closed in 1999 and production moved out of state.

The original Jubilee cans appeared between 1952 and 1963, good years for Rainier. The holiday-themed cans became popular with collectors. It seems there were different themes each year and they appeal to collectors because they were produced in limited quantities. They were discontinued after 1963 and did not reappear until last year.

Ancient and collectible
The modern version of the Jubilee can emerged last October as Rainier celebrated restoration of the historic "R" atop the old brewery. There's no longer a brewery of any kind there, but never mind. This was a symbolic celebration of what Rainier once meant to Seattle. A good crowd turned out to party it up for R Day.

Fast forward to October 2014 and another R Day celebration. And a newly revised can. The artwork continues to borrow slogans, typography and themes from the past. The primary color tone switches from last year's powder blue to a hunter green motif this year. Fans of the standard Rainier can need not fear. The white cans will return after the holidays.

2013 version
Statements from Rainier officials suggest the cans are part of maintaining the integrity of the brand. And you know that's what they're doing because they aren't messing with the time-proven Rainier recipe that so many know and love.

So grab a six-pack if you must. Just know the only thing special is the can.

Thursday, October 23, 2014

Thunder Island Brewing a Perfect Fit in Cascade Locks

Thunder Island Brewing in Cascade Locks is an idea whose time is exactly right. They celebrated their first anniversary the other day and it was evidently a great first year. The time is right because the sleepy little town of Cascade Locks is growing up. A brewery is a nice thing to have.

I stopped in the other day on a drive out to Hood River. It wasn't a great day, but it's pretty clear to me that Thunder Island chose an ideal location. The brewery/pub sits on the edge of the Columbia River and the views from their patio are terrific.

This place opened a year ago on a two-barrel system in a renovated industrial space. Founders Dave Lipps and Dan Hynes figured the brewery and space would meet their needs for a while. As so often happens in this industry, they were wrong and soon found themselves unable to keep up with demand.

"Things were bonkers for us during the summer," the gal behind the bar told me. "We had a constant flow of people. It was beyond our expectations."

Thanks largely to the craziness, they launched a plan to transition to a seven-barrel system with several larger fermenters. They had some technical issues and a small fire tossed a monkey wrench into that plan. Beer production is limited at the moment.

I spent an hour talking to Hynes, Thunder Island's brewer. He said they would normally have three or four of their beers on. Production issues had reduced the count to one, a nice Scotch Porter once it warmed up. Guest handles were occupied by beers from Backwoods Brewing, including a terrific IRA, and some ciders.

"This definitely isn't what you're usually going to find here," Hynes said. They typically offer a Kolsch, a pale ale and an IPA to go with the Scotch Porter. Seasonal and specialty beers are also part of the mix and I'll have more to say about that in a moment.

Hynes is a young guy, and passionate about beer. He has no formal brewing training, but has bounced around the Portland beer and homebrewing scene for years and knows the ropes. He and his partner decided to open in Cascade Locks because the business community was receptive and inviting. Brilliant.

The Gorge is a destination. Multnomah Falls is just down the road. There are hiking and biking trails and all kinds of recreation  A brewery is a perfect fit here. Being located a short distance from the freeway in a protected, scenic spot makes the place easily accessible and friendly.

If you're wondering, Thunder Island Brewing is not located on Thunder Island. That would have been a nice touch, but also logistically difficult. Take a look at the map. The brewery and patio actually overlook Thunder Island, which isn't half bad.

When the place opened, they were open limited hours and had no food, outside of a food cart. Not an unusual arrangement. The food issue meant minors were not allowed in what was then a tasting room. That's been fixed. Today, they have a kitchen and decent pub menu. Hours have been expanded. Kiddos are welcome. Bingo.

They aren't strictly interested in standard beer styles. Hynes has a small barrel program in place and they had four "dinoSOUR" beers on. I sampled the beers as we talked. None of them has aged long enough be considered truly finished. But they are pretty good and worth trying if you like sour/wild beers. Obviously, the supply of these beers is limited and they won't be on long.

Travel through the Gorge is will be a little less relaxed as we move into the darker, wetter, cooler months. At Thunder Island Brewing, they will probably see fewer patrons over the winter. But add this little brewery to your bucket list of places to visit in the Gorge. You won't regret it.