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Thursday, January 31, 2013

The Big Game: Ravens, 49ers, Budweiser

Bud Light is the official beer of the NFL. You won't be able to keep that out of your mind as you watch the game on Sunday. Why? Because Anheuser Busch/InBev will spend enough money to make sure you don't.

You may recall last year, when the good folks at AB/InBev launched the Bud Light Platinum brand. At 6% ABV, Bud Light Platinum certainly didn't belong in the light category. But when the rest of your portfolio is in free fall, you stick with what does move and what still moves is Bud Light. Thus, Bud Light Platinum.

I've tasted BLP. I don't think it's a terrible beer. But I always thought the marketing was a mess. People looking for light beer aren't generally looking for a beer with 6% alcohol. To prove that boatloads of money can overcome bad marketing, AB/InBev spent millions to launch the brand.

And it worked. BL Platinum was fairly successful with younger drinkers who had moved on from light beer to the hard stuff. Some were sucked in. Here in Portland, BL Platinum bombed nicely. You don't see much of it on store shelves. Craft beer is king here. Anything with an Anheuser-Busch label tends to meet stiff resistance. We're odd that way.

Nonetheless, the Bud Light Platinum campaign reveals where Anheuser-Busch is headed as it attempts to hold onto market share. They're going after younger beer drinkers who, even if they may be disenchanted with light beer, have yet to fully discover craft beer. The thinking is that these are people who can be swayed with slick advertising and a slick product.

Super Bowl ads
According to Ad Age Media News, CBS (with easily the worst coverage of the NFL-affiliated networks, in my view) has sold out its Super Bowl ad inventory. Go figure. At $3.7 to $3.8 million per 30 second spot! As usual, AB/InBev is the biggest spender, having purchased three 30-second ads and three 60-second ads. They don't mess around.

The first ad you see after the game starts will be for Bud Black Crown. You may recall Budweiser's "Zip Code" series, where their breweries in different parts of the country brewed specialty beers. The beer brewed in Los Angeles, known as 91406, is being rebranded as Black Crown and is headed for national release in a few weeks. A second ad for Black Crown will run in the third quarter.

Perfect for the Kardashians
Another new product gets a 30-second spot in the third quarter. The beer is Beck's Sapphire, brewed in the United States...with German Saphir hops they claim. Don't be confused by the name...this is a pilsner. Like Bud Light Platinum, which came in trendy blue bottle, Sapphire relies on its own special bottle...a black one. The bottle evidently took two years to develop. No word on how long it took to refine the recipe for this stuff. If you have to ask, you probably don't want to know.

These beers have lots in common. Both are higher in alcohol than existing precursors: Sapphire (6%) vs. standard Becks (5%) and Black Crown (6%) vs. regular Bud (about 5%). They also cost more. As with Bud Light Platinum, AB/InBev is going after younger drinkers with a hipper and higher in alcohol message.

All about the bottle
We'll also get a couple of new Bud Light ads, set to run in 60-second spots during the second and third quarters. These ads have been fairly entertaining at times over the years and I suspect the news ones will fit that bill. Finally, they're pulling out the warm and fuzzy card with an ad devoted to Budweiser's Clydesdale horses...there's a new foal and they want your help naming it.

Setting aside all that, the overarching theme here is money. Lots of it. If you can't win people over with products that stand on their own merit, advertising is the answer. AB/InBev has money to burn and they're going to burn a chunk of it (about $17 million) in an effort to convince Super Bowl viewers that they are a vibrant, relevant brand. Read into that whatever you want.

Name that baby horse
The fact is, the macro brands are all about image and style. That's been their theme for decades and they aren't moving away from it. They produce a middling product and leverage the hell out of it with advertising. That was a viable strategy until recent times, when they started losing market share to craft brands and other segments (wine, spirits, ciders).

AB/InBev's response to this challenge has actually put a new twist on the old strategy. First, they produce fake craft beer and spend lavishly to win over (primarily) young drinkers. Second, they gobble up respectable brands and hollow them out by shifting production to giant factories and using cheaper ingredients. I've talked about this before and it is well-known in beer circles.

You really have to wonder what would happen if these guys ever got truly serious about making good beer. It isn't likely because they are far more about marketing than they are about good product. Nonetheless, you have to wonder.

The game
The Super Bowl game is largely a sideshow for mega marketing campaigns. That's not the way the game started out, but that's what it has become. Modern American culture is driven by money and excess, so you see game tickets going for $850 (seats still available!) and TV ads selling for exorbitant prices.

Of course, some people do care about the actual game. I've been a 49ers fan since I was a small kid and lived in the Bay Area, so I'll be rooting for them and against the Ravens. I like the whole Harbaugh vs. Harbaugh thing, but I really do not care for Ray Lewis and the Ravens.

This will likely be a close game. San Francisco is favored by 3.5 right now. The Ravens are getting a lot of respect coming off road playoff wins against Denver and New England. I don't think they've seen the likes of the 49ers, who have a solid defense, a solid running game, solid receivers and a quarterback who can throw and run. Pumpernickel is the wild card in this game. I don't see how Baltimore can account for him. Of course, I may be wrong. We'll see.

San Francisco 31, Baltimore 27.

Thursday, January 24, 2013

Tales of Woe in Colorado

Every once in a while I run across something that is so hard to believe I have to blink and read it again. That's what happened when I read this article on craft beer retail sales laws in Colorado. It can only be sold in liquor stores. Ye gods.

We're talking about Colorado here. A state that has been one of the beacons in the craft beer revolution. A state that is home to the Brewers Association and the Great American Beer Festival. A state whose per capita brewery count is higher than Oregon. A yet state where you can't find craft beer in your local grocery store.

Not sold in Colorado grocery stores
As you will discover if you read the linked article, the only beer you can buy in Colorado grocery and convenience stores is low alcohol sludge (4% ABV or less). Many bills have evidently tried to change the law in the past, and all of them have been slapped down...blocked by the craft industry in Colorado, which fears it would hurt business. Seriously?

Enter Kevin Priola, a Republican state representative from Henderson. Priola is preparing to introduce a bill that would bring most craft beer into grocery and convenience stores. There are some limitations on the size of the brewery (less than six million barrels/year) and ABV (under 10%). These limitations seem designed to keep fake craft beers (from Coors and AB) out of stores while putting a lid on the how much alcohol beers in stores can have.

Priola says his bill is a "Goldilocks model....something for everyone and not too hot or too cold." He figures the grocery stores will support the bill, even though they'd like to be able to sell a full line of beers. He's a little sketchy on whether liquor stores and the Colorado Brewers Guild will support it, but he hopes the Goldilocks approach will win them over. Film at 11.

From my outpost in Oregon, it's a little hard to understand why anyone would think selling good beer in grocery and convenience stores might hurt business. Do the brewers own these supposedly independent liquor stores? Reasoning like this suggests we were better off when craft beer occupied only a few feet of shelf space and macros had all the rest. Dark days.

Go into any decent Oregon grocery or convenience store today and you're apt to find a generous selection of craft beer. This didn't happen overnight...it took years. And there's no doubt that what we've done here has been rather good for business. You might say it's helped launch a wave of breweries and pubs that distribute in bottles or cans. Making good beer easy to buy in grocery stores has been a good thing. It hasn't hurt business.

Take the plunge, Colorado.

Thursday, January 17, 2013

Widmer Rolls into 2013 with Renewed Look, New Beers

The folks down at Widmer Brothers Brewing celebrated the new year with a beer release party the other night. It was fun event, with beers all around, gourmet cheese appetizers and a mildly spicy stew for the main course. Three ice creams and stouts made up the desert mix. Great stuff.

Ice cream and stout...yummy!
Kurt and Rob Widmer, as well as members of their brewing, marketing and other teams were present. Thirsty operatives from virtually every beer-centric media outlet in the area also stopped by. No one in their right mind wants to miss a party like this.

Just to be clear, this was strictly a Widmer affair. There was no mention of the other Craft Brew Alliance brands...Omission, Redhook and Kona. This was all about what Widmer is doing and where they're headed for 2013.

Big Picture
I'll get to the star of the evening momentarily, but first the big picture. Widmer is in the process of revamping its packaging for 2013. You'll notice it right away when you see the seasonals and Rotator IPAs on store shelves. It's a bolder look than before and will eventually be applied more broadly.

They're calling this "revised" as opposed to "rebranded" packaging. There's a big difference. If this were a full rebranding, there would certainly be a new logo...and there isn't. What they've done is brighten up the presentation. The big idea seems to be clearer differentiation between the various brands and that's what you'll likely see as the new packaging rolls out in coming months.

Sixer side view
It seems to me the new packaging is part of a reevaluation of their overall marketing plan that began in 2011. Why did it start then? Because that's when they started to seriously address the dipping performance of Hefeweizen, the main meal ticket for many years. This reality is surely driving many initiatives as Widmer moves to solidify a broader portfolio.

One interesting quirk with the packaging is that the beer specs are on the bottom. Yep. Don't bother looking for info on ABV, IBU or other ingredients on the side panels. Nothing there. You'll have to lift that six-pack above your head to see what's in the beer. I'm not sure how 12-packs and cases will be handled, but I suspect they're be the same.

Stars Out
The star of the show in my mind was the newly released Columbia Common Spring Ale. I was talking about the rise of lower ABV, session beers the other day; lo and behold, I ran into this beer that very evening. What a great find!

Bottoms up details!
Backing up, brewer Ben Dobler told me this beer was in the pipeline when I met with him a couple of months back. He gave me a bunch of details, which I wrote it down in my notes and mostly forgot because, well, because I knew it wasn't going to be released for a few months. Then I forgot about it.

Columbia Common features a nice combination of flavor and drinkability. At 4.7% ABV, it has less kick than Budweiser. Make no mistake, though, this light amber beer has great character. The zesty hop notes are derived form Columbia hops, which were nearly extinct before Widmer brewers rediscovered them. Another part of the equation is the combination of Hefeweizen and lager yeast, which seems to create an almost creamy body.

Fine cheese!
Although it has the makings of a year-round beer, Columbia Common is billed as a Spring Seasonal, with January-April availability. That's seems odd. I'm guessing the timetable is related to the wide distribution of Widmer beers. Some of this beer has to be shipped to distant markets and that takes time. So they've built that into production and marketing.

The other new seasonal is Chocolate Russian Imperial Stout '13. This is a nice beer. They used the KGB Russian Imperial Stout recipe and added Ecuadorian cocoa nibs. The result is a complex beer that is mildly sweet with hints of cocoa and coffee. Hops are in the background. This thing clocks in at 9.3%, so you have to be careful.

Another of the evening's beers was O'Ryely IPA, one of the Rotator IPAs from last year. Widmer is re-releasing O'Ryely in the revised packaging. They say this is "a big punchy IPA with notable hoppiness and just a touch of caramel malty sweetness." But it's 6.4% and only 50 IBU, so it isn't too punchy.
O'Ryely sixer side panel
It's good to see O'Ryely back out there. The revised packaging will certainly make it easier to spot than the (too busy) old packaging. The beer itself seems to have a bit more zip in hop character than what I remember, but Dobler said the recipe is the same. Perhaps minor ingredient variations are responsible for any change...or maybe I'm just crazy. Sure, that's it.

Of all the recent Rotator IPAs, I like O'Ryely the best. The others (Spiced, Falconers and Shaddock) never came close to my IPA sweet spot. For my money, the best of the Rotator IPAs was the original X-114, which came on the heels of Broken Halo...both retired. Maybe Widmer will bring these beers back as part of the new approach. Hope springs eternal.

All and all, it seems the folks at Widmer are heading into 2013 with a solid game plan that mixes innovation with tradition. I look forward to seeing what else they've got up their sleeves.

Disclosure: Like everyone who attended this event, I was treated to snacks, free beer, dinner and a take home beer of my choice.

Monday, January 14, 2013

Is Session Beer the Future of Craft?

There's always discussion and speculation about the future of craft beer. Where's this all headed? What are the most probable craft beer styles of tomorrow? Will we ever overcome the current IPA fetish?

In this month's Beer Advocate, Andy Crouch says the era of extreme, innovative beer is over. He believes the focus of the industry in the coming era will be sound business practices. Instead of brewing beer with eclectic ingredients, successful brewers will rely on HR pros and accountants to drive their business. Sounds exciting, I must say.

I don't know about Andy's prediction, but I do think there's an opening for a new era of brewing...or a return to earlier values. We may well be entering the era of the tasty session beer. There are others who have similar thoughts here and here.

If you go back a decade or two and look at what craft brewers were producing, there are some fairly illuminating facts with respect to ABV values. A few Oregon-centric examples (disclaimer: these are current, as opposed to historical numbers):

  • Portland Ale: 5%
  • Widmer Altbier: 5%
  • Widmer Hefeweizen: 4.9%
  • Widmer X Wheat (original Hef recipe): 4.5%,
  • Bridgeport Blue Heron: 4.9%,
  • Bridgeport IPA: 5.5%,
  • MacTarnahan's Amber Ale: 5.1%
  • McMenamin's Ruby Ale: 4.1%

Of course, you have to put these beers into the proper perspective. They were designed as alternatives to tasteless macro brews, which were typically 4 to 5% ABV...beers like Budweiser, Coors, Miller, etc. The primary differentiating factor with craft beers was flavor, body and character...and they gained a following based on those attributes.

Fast forward to modern day. Over the last few years, we've seen an escalation in ABV levels (IBU levels, too, although that's another post). There were few mainstream beers with ABV levels higher than 6% 10-15 years ago. Today they're all over the place and represent some of the most well-known beers around. A few (again, Oregon-centric) examples:

  • Boneyard RPM: 7% (I know it's draft only at this point, but it's wildly popular)
  • Laurelwood Workhorse IPA: 7.5%
  • Bridgeport Kingpin: 7.5%
  • Deschutes Red Chair NWPA: 6.4%
  • Widmer Rotator IPA (Falconers): 7%
  • Hopworks IPA: 6.6%
  • Double Mountain IRA: 6.5%

We somehow arrived at the point where higher alcohol beers became the accepted standard. Some might say the higher ABV is the collateral damage of the ongoing hops arms race. Another argument is that brewers, attempting to differentiate their beers from the competition, simply got immersed in a battle of bigger and bigger beers.

Regardless, escalating ABV values eventually have to moderate. I realize people like to feel like they're getting their money's worth in a beer, but please. You cannot drink a lot of this stuff on any kind of regular basis and remain healthy. The health risks may be less apparent when you're 25 or 30, but they will catch up with you eventually. And drunk driving is an ongoing risk.

I certainly don't think exotic, high octane beers are going away. That's not happening because hardcore fans will always seek these beers out. But sooner or later mainstream beer fans are going to figure out they can't make a steady diet of these kinds of beers. It just won't work for a bunch or reasons.

The challenge for brewers is to create beers that have character and depth with lower ABV levels. Is it possible? Of course it is. It's been done before...some of those beers are still out there largely in the background. A new crop of session-type beers brewed with modern ingredients and techniques might well foster changing drinking habits.

If you need verification of the session beer concept, consider Portland's original craft beer publican, the late Don Younger. Jerry Fechter, Don's partner for many years, says Don would hate the high ABV beer craze. He wanted good tasting, low ABV beers that patrons could drink a lot of. His reasons may have been selfish, but he had the right idea.

So we'll have to see what happens. There's already evidence that some respected brewers are increasing their production of lighter beers. I'll return to that theme in upcoming posts.

Tuesday, January 8, 2013

Kauai Island Brewing: Supplemental

Spending the week of Christmas on the island of Kauai was a treat and a nice break from Oregon weather. But I didn't mind the 37 degree blast of air that greeted me as I walked up the jet-way into PDX on my return. I was back in the land of plentiful great beer.

Lanai gear
As I documented in a post from Kauai, the beer choices there are slim. The most popular flavors in the bars and eateries around Poipu are Kona styles...Longboard, Fire Rock, Big Wave and some others you aren't likely to see outside the Islands.

There's nothing particularly wrong with the Kona beers. They're well-made and reasonably tasty. I actually couldn't help wondering if maybe the Kona beers and other domestic macros that dominate the scene there aren't perfect for the mix of tourists and locals. Maybe lighter beers is all folks want in the tropics. Hmmm.

Even if I was somehow out of step with local tastes, I was looking for something more stimulating. And there is something more stimulating for those with a similar mindset. It can be found up the road from Poipu in Port Allen. 

I was well aware of Kauai Island Brewing before this most recent trip. Last summer, I interviewed brewmaster and vice president Dave Curry and there is an earlier post here. My treat on this trip was a visit to the brewery and a chance to meet Dave face-to-face and taste his beers. Not especially lucrative, but great fun.

Not to repeat too much of the earlier post, but Kauai Island Brewing is essentially the old Waimea Brewing Company, which was located for many years within the Plantation Cottages in Waimea. Curry, whose background I'll get to momentarily, ran Waimea Brewing for many years. They lost their lease in Waimea a couple of years back, thus forcing a change of scenery.

Curry is not a Hawaiian. He's a mainland guy...worked at a now defunct Redding, Calif. brewery prior to coming out to Kauai in the late nineties. Upon arriving, he held positions at Whaler's Brewing (in Lihue) and Waimea Brewing. He went full-time at Waimea after 6-8 months on the island. Whaler's evidently didn't make it. 

Curry fronts several of his fermenters
As I noted previously, Kauai Island Brewing has an unique ownership arrangement. Curry is a partner in the business, which is owned by Seattle couple, Bret and Janice Larson. The Larsons (Bret is an engineer at Boeing) do not own a Kauai residence and simply make occasional trips to see how things are going. Curry runs the operation and brews the beer.

As the lease in Waimea was ending, Curry set about finding a new location. This can be a bit of a challenge because property values and lease rates on Kauai have been badly bloated by the tourism trade. More than a million visitors pour into Kauai every year. The building Curry found on the industrial side of Port Allen was previously occupied by Rainbow Paint and Fishing Supply. He suspects the building had been empty since 1992, when Iniki, a Category 4 hurricane, slammed into Kauai. 

The copper clappers...I mean kettles
Not to get too far afield, but Iniki is an interesting story in its own right. Most large Pacific storms originate there and are known as typhoons. Iniki was different. It originated as a tropical wave off the coast of Africa, crossed the Atlantic Ocean and jumped to the Pacific over Central America. It moved westward and strengthened before zig-zagging and making landfall on south-central Kauai with sustained winds of 145 mph. Damage was extensive. More than 1,500 homes were destroyed and many more damaged. It was years before the area recovered and some places were never rebuilt. A vibrant wild chicken population owes its existence to Iniki, but never mind.

Back to Kauai Island Brewing. It took Curry more than a year to get his new-found space ready to house a brewery. There was the usual barrage of permit challenges and regulatory issues. He finally opened last summer. The place is fairly charming, with large seating area and bar on the main floor and additional seating upstairs. 

The overview
Curry operates a 5 bbl brewing system attached to three 5 bbl fermenters and a 10 bbl fermenter. The place is also outfitted with 10 serving tanks (four 10 bbl; six 5 bbl). Lines run under the main seating area and come up behind the bar on the other side. It's a nice setup and the capacity there is more than sufficient for the pub. They were pouring 10 Kauai Island Beers when I visited. Not bad.

There are challenges. One of the biggest is energy costs. Kauai has for decades relied almost exclusively on expensive, oil-fired electricity. Curry said he pays $4,000 a month just for utilities. He had hoped to equip his new space with solar collectors, but plans fell through. So he does his best to conserve power when possible and hopes to someday go solar. A footnote here: Kauai is making progress in the area of renewable power. More here.

Shipping costs for malts and hops is another issue. Curry receives regular shipments from Great Western Malting (Vancouver) and Hop Union (Yakima), among others. All parties are constantly on the lookout for creative ways to minimize shipping costs.

Beach gear
Finally, there's the state's beer excise tax, fourth highest in the country at 93 cents a gallon. Pints and pitchers are more expensive here at least partially due to the tax. By way of comparison, Oregon's beer excise tax is 8 cents/gallon. The differential helps explain why craft breweries have flourished in Oregon and often flopped in Hawaii. 

Of the 10 house beers, most are pretty good. The bulk of these beers came over from Waimea Brewing. The lighter ones, including Leilani Light, Lilikoi Ale, Wai'ale'ale Ale and NaPali Pale Ale are all decent, if not hugely exciting. Captain Cook IPA is a full-bodied, dry-hopped brew that compares to Northwest IPAs. Cane Fire Red is a malty, mildly hoppy red that works fairly well.

Chickens everywhere
It's a pity you can't find Captain Cook or Cane Fire Red in any of the bars and restaurants on Kauai. They would definitely boost the beer aura. Self-distribution is legal in Hawaii, so Curry has that option. He would likely need to bump up his production capacity if outside distribution were to go well. This would be a keg-only situation, as bottling beer in Hawaii presents another problem: a per case tax on empties shipped in. I'm not kidding. Curry says keg distribution might happen someday.

If you happen to be headed out to Kauai and in need of a craft beer fix, Kauai Island Brewing is the only show in town (err, on the island) at the moment. There's evidently another place hoping to open in Lihue one of these days...Kauai Brewing Company. These things take time and things move rather slowly on these islands, so we shall see.

Friday, January 4, 2013

Elephants and Grasshoppers: Thoughts on 2012

I'm a little behind. I was away for a week while everyone was putting together lists highlighting the significant beer themes of 2012. It's an amusing concept, despite the fact that 2012 was not really amusing on a number of counts. But I digress.

In beer blogland, there's the best and worst of 2012. It's all about polls and geek opinions and perhaps it's a worthy exercise...as long as you don't think too much about the potential conflicts of interest with info coming from industry-connected folks with axes to grind and brands to boost.

The truth is, stats like best new brewery, best new brewer, best new beer in a bottle, best IPA, etc., are meaningless in the greater scheme of things. What they are is marginally entertaining factoids...perfect for the beer version of Trivial Pursuit if that's what turns your crank.

The big elephant in the living room for 2012 was the continued proliferation of new breweries, along with the expanded retail presence of craft brands. All the other stuff is just subterfuge. Trust me on that.

Let's look at brewery growth. There are now more breweries (certainly more than 2,200 at year's end) in this country than we've had at any time in our history. That's useful to consider when you think back to simpler times, when most American cities and towns had several small breweries.

You don't need fancy stats to see that craft beer has made huge inroads in retail and related settings. Just open your eyes. Bottle shops are popping up all over the place. Dive bars that once served nothing but sludge are now pouring craft beer. Big box grocery stores and convenience stores alike have figured out that craft beer is good business and good for business.

Somehow lost in the conversation is the fact that overall craft beer growth is horribly uneven. States like Oregon and Colorado are far ahead of the curve while others, particularly most of the old Confederacy, are so far behind the 8-ball they will likely never catch up.

Of course, state-to-state comparisons obscure the real story...which is that specific areas have experienced off-the-hook growth and are probably producing more beer than they can consume or sell elsewhere. Portland is a prime example, though we are not alone. We now have more than 50 breweries. And counting. How many can we support?

Most beer people would rather not talk about it, but I wonder if we don't already have too many brands competing for a pool of customers that is expanding slower than brewing capacity. The signs of an overcrowded marketplace are already out there for anyone who cares to look.

First there's wacky. In a overcrowded marketplace, brands must work hard to differentiate themselves. Around here, we see this represented by the escalating number of strange concoctions...brewers using fruit or spices in IPAs. It won't be long before someone invents Grasshopper IPA, dry-hopped (obviously) with organic grasshoppers. Sounds yummy! (If you see this on a future episode of Portlandia, remember you heard it here first.)

Then there's price. I've watched prices for craft beer in stores and pubs steadily increase over the past couple of years. In a shitty economy, no less. I realize craft dollar volume is growing slightly faster than production volume (15 to 13 percent for 2011, according to the Brewers Association). But rising prices in an ultra-competitive market during bad economic times? This can't be a supply and demand issue because we have more than enough supply. Are prices rising to make up for lagging sales volume? Hmmm...something to contemplate.

For now, though, I'm gonna kick back and enjoy a pint of (experimental) Grasshopper IPA.

Happy New Year!