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Friday, January 31, 2014

Fred Meyer Enters Portland Growler Sweepstakes

Fred Meyer this week launched growler filling stations in three of its busiest Portland stores: Burlingame, Hawthorne and Hollywood. I visited the Hollywood store Thursday evening and Friday, just as they opened the taps. This was a very soft opening. In fact, I'm Hollywood's first growler customer...a quart of Lucky Lab Super Dog IPA. Almost famous.

First growler filled at Hollywood store
Freddy's is entering the growler game on a virtual tsunami. Let me explain. Places that fill growlers are popping up everywhere around town. And not just in town. A couple I met at Belmont Station told me about a store in Damascus that fills growlers. Damascus!

The reality is, we are awash in these things. Not so long ago, it was considered chic and forward-thinking to offer growler fills. Now the idea is almost passe. You wonder where this is headed, how many of these places the community will support. But never mind.

Hollywood Freddy's is an excellent target for the growler concept. The store is located on the fringe of the affluent Irvington neighborhood. They sell a boatload of wine here. Until the recent (2012) reset, this store was down in the dumps on the beer side. Not any more. They now have a great beer selection. And it sells.

What they have now is 16 taps of craft beer and cider. When I arrived Friday morning, they were offering 14 beers and two ciders. The gent manning the taps (who preferred that his name not be used) said they will eventually add kombucha and maybe a couple of wines. That mix would be similar to what I've observed at Whole Foods locations, though most of those stores have fewer taps.

Freddy's will fill clean 32 and 64 oz containers. Bring in a bottle that smells like a dead raccoon and they won't fill it. If you don't have your own container, they sell standard 64 oz growlers for $4.99, not a bad deal. They will likely be selling 32 oz grenades and stainless steel growlers at some point. Of course, this is Fred Meyer. They sell all kinds of containers, many of which would be perfect for beer.

Pricing is on the high side in my estimation. My 32 oz grenade of Super Dog was $5.99, cheapest in the house. The highest priced full growler (two beers at this price) was $15.99 and the lowest (again, two beers) was $9.99. Not exactly cheap. Prices will obviously fluctuate with the beers, which will rotate quickly since they have mostly 1/6 barrel kegs in the coolers. I get that. But the list will have to be more spectacular to capture my interest at those prices.

When you get your growler filled, the barkeep will attach sealant tape and a tag with a PLU#. Yes, this is similar to what you do when you put a number on a bag of bulk nuts or whatever. The tag also specifies whether the growler belongs to the customer or store. Now you take your growler (growlers, for the greedy) to checkout and it is handled just like bulk food. Pretty smooth.

If I were installing a growler fill station in a store like this, I would want to ensure that it didn't cannibalize existing sales. Fred Meyers gets it. The gent I spoke to said they will address that concern by featuring mostly one-off beers that aren't for sale in packaged form. One of my industry sources had already told me that's what they were doing, but I'm stubborn...and nosy.

As I mentioned near the top, and have mentioned in past posts on the proliferation of taprooms and growler fill stations, we simply do not know how many of these places the market will bear. Grocery stores entering the fray is a significant development. Competition is the reason.

Because grocery stores do so much more volume than your average taproom, bar or convenience store, distributors are going to want to keep them happy. Now we have a situation in which behemoth stores are competing with taprooms and smaller growler fill locations for special beers. This is going to get interesting.

Wednesday, January 29, 2014

Larrance and Foyston: Champions of Portland Beer

Last night's festivities at the Cascade Barrel House honored Art Larrance for his contributions to Portland's beer scene. There was a good crowd on hand. An oil painting of Art by John Foyston was unveiled. Larrance and Foyston have both contributed plenty to the beer culture here. Champions they are. More on why shortly.

Foyston with his painting...and Larrance
A bunch of Art's Oregon Brewers Festival partners came up with the painting idea as a way of honoring him. These folks are mostly unknown outside the beer community. People like Teddy Peetz, Preston Weesner and Chris Crabb, all integral parts of the OBF virtually forever. They're mostly in the background and they like it that way.

These good folks commissioned Foyston to produce the painting that was unveiled last night much to Art's surprise. See, he was kept totally in the dark...very hush-hush. When I casually mentioned the upcoming event to Weesner at Belmont Station the other night, he gave me the universal "sheesh" symbol. I suspect the NSA knew, but almost no one else.

The painting is a great likeness of Art. Foyston has had some practice. He has several pictures hanging in pubs around town. Have you seen Don Younger above the fireplace at Lompoc's Sidebar? How about Younger at the Horse Brass? Or the rustic landscape at The Commons? Those are all John's paintings. And there are reportedly more on the way.

What about this Larrance character, anyway? Why should he be honored? Silly rabbit. Art belongs in the same breath as Henry Weinhard, Arnold Blitz and the Wessingers on the list of Portland beer royalty. Read my history of Portland beer if you want to know more. Art's contributions via Portland Brewing, the Oregon Brewers Festival, Raccoon Lodge and Cascade Barrel House are impossible to overlook. He's had a hand in exposing millions to great beer.

Art with longtime buddy, Teddy Peetz
"We were lucky," Larrance said, grouping himself with Fred Bowman and Jim Goodwin, co-founders of Portland Brewing in 1986. "We came around at just the right time and took advantage of a terrific opportunity. I've been fortunate to ride that wave with Cascade Brewing and the OBF. If it hadn't been me, I honestly think it would have been someone else."

Where does Foyston fit in? Again, silly question, silly rabbit. John is a talented writer, far better than most of us who attempt to cover the beer scene. He has been writing about beer for the Oregonian for nearly 20 years. His columns provide a base of knowledge and perspective, not to mention an event calendar. The painting gig is a recent venture and merely demonstrates John's renaissance man talents.

"I'm really happy to be involved in recognizing the people who were instrumental in getting craft beer off the ground in Portland," Foyston said. "Art's contributions are hard to fathom because they have benefitted the entire community."

As far as I'm concerned, we need more of these paintings. Need a list? For starters, Kurt and Rob Widmer, Mike and Brian McMenamin, Dick and Nancy Ponzi and Fred Eckhardt. Add Charles Coury, founder of the ill-fated Cartwright Brewing, to the list. Getting these folks in oil would be a nice start...and there will be others. It would be really great if this work got us talking about the beer museum we desperately need in Portland. But never mind. I digress.

Anyway, congratulations to Art Larrance on being recognized for his contributions to Portland beer. Certainly well-deserved. Similar congrats and thanks to John Foyston for his efforts. Word is the portrait will find a home at the Raccoon Lodge. Sounds about right.

Thursday, January 23, 2014

Morgan Dumps Craft Chumps in Wake of Buyout

Sometimes the beer business is creative comedy. Sometimes tragedy. Sometimes it's a mix of both. You just never know what crazy and insane chain of events is coming down the pike. I suppose that's one of the things that keeps it interesting.
Sure thing

When I reported on Anheuser-Busch's buyout of Morgan Distributing a couple of weeks back, I did not know what the fallout would be. It's probably fair to say no one knew. We suspected the buyout would lead to Morgan being more active as a pusher of AB products. We didn't know the rest.

Thanks to reliable industry sources, we now know. There's no sugarcoating it. Within days of AB taking over, Morgan terminated its craft brands. Yep. Fired them. They later rescinded the termination letter and told craft brands they were up for "assignment"...a nice way of saying for sale to other distributors.

There are a couple of things to keep in mind.

First, Morgan was not exactly a bastion of craft beer. Its short list of craft brands included Three Creeks, Silver Moon, Gilgamesh and Uinta. The Commons was a recent, hot addition, which I'll get to. I'm leaving out the CBA (Widmer, Kona, Redhook, etc.) brands, which Morgan already pushes heavily, because the CBA is distributed by AB and wasn't going anywhere.

Second, Morgan likely would have lost its craft brands in the wake of the buyout due to the way Oregon law works. When distributor ownership changes, contracted brands have the option of renegotiating new deals with anyone they want. Firing them just made that point official with an exclamation point..

All of Morgan's former craft brands are looking for and will soon have new homes. The Commons will go back to self-distribution, which is what they've done from the outset. It's almost comical to consider that Morgan worked diligently to sign these guys then dumped them days into the relationship. That's pretty funny in a sick sort of way.

The more significant point to consider is this: The new bosses at Morgan had ZERO intention of retaining their craft brands. They wanted them gone, the sooner the better. I'm told Morgan has so much going on with its AB portfolio that it has no room for craft brands. They have given other distributors the green light to go after their former brands and expect no compensation at all.

What are they up to? AB-owned Morgan will clearly become a bastion of AB brands. As I said in the earlier post and as Ezra outlines in his post on how the three-tier system works, self-distribution laws in Oregon allowed this takeover to happen. Anheuser-Busch will essentially be distributing its own beer via Morgan. Perfectly legal. They are also reportedly looking to purchase Maletis, which has a far more significant craft presence than Morgan ever had. This is how AB intends to address declining market share in Oregon.

The danger of this arrangement is clear. Buying up distributors is part of an effort to push craft brands into a corner while stuffing AB products down the throats of consumers. These guys are anti-craft beer. Period. Distributors have extensive control over what appears on store shelves, in taverns and other retail settings. You can bet AB intends to use that leverage to the fullest extent possible. If you haven't heard of Shock Top or Bud Light Platinum, you will.

In my mind, what's going on should be illegal. Oregon's self-distribution law was intended to help small brands. Many small breweries need the dollars that would otherwise go to a distributor when they're getting started. No one apparently considered the possibility that gigantic companies would use the self distribution law to buy up distributors and bully the market. Ye gods!

This is not good news if you're a fan of good beer. Trust me.

Tuesday, January 21, 2014

Rise of Taprooms, Growler Fill Locations Continues

Possibly the most significant emerging truism with respect to Portland's beer scene is you don't have to make good beer to serve or sell good beer. This is a result of the fact that we have a growing number of taprooms, growler fill locations and pubs that offer lots of great beer to stay or go.

This likely would not be happening if breweries and brewpubs hadn't paved the way. The folks who pioneered great beer in this city built the foundation upon which the current craft beer craze rests. The obvious suspects in this regard are Widmer, Bridgeport, Portland Brewing and McMenamins. But an inclusive list would also recognize breweries that opened more recently.

I just received word that a new growler fill station will open on Southeast Hawthorne in a couple of weeks. It's to be called Growlers Hawthorne and will be located at 3343 SE Hawthorne. Official opening is set for noon, Feb. 4. Their "under construction" website is here.

Growlers Hawthorne will have 40 rotating taps (beer, cider, mead), plus eight more taps pouring non-alcoholic drinks like kombucha. They have a weeklong grand opening planned, with exclusive beers and Meet the Brewer events featuring folks from 10 Barrel, Oakshire and Firestone Walker. It's going to be fun, no doubt.

Something to keep in mind about Growlers Hawthorne is there will be no on-premise consumption, outside sampling. This is essentially a growler fill station similar to what you find in some grocery stores, mini-marts, etc. You get your container filled and you vamoose. That's in contrast to what we see with taprooms, where you can buy beer to consume there or take with you.

Today's press release doesn't say it, but there's another place going in on Southeast Hawthorne and it will be a taproom similar to places like Tin Bucket (North Williams) and the Imperial Bottleshop and Taproom (Southeast Division). I don't yet know what it will be called or when it will open, But I know it's coming. Somewhere around 20th and SE Hawthorne, if you're wondering.

It's not so hard to see what's driving people to open these places: Demand for great beer continues to grow. If you want to tap (haha) into that growth curve, opening a taproom/bottleshop or growler fill station is a relatively easy way to do it. Certainly far cheaper than a pub, brewpub or brewery. And easier to borrow money because startup costs and risks are lower.

The elephant in the living room is this: How many of these places can the market bear? As usual, no one has an answer. While fizzy beer fizzles, we continue to see growth in craft beer numbers nationally, regionally and locally. The indicators are up. More shelf space in grocery and convenience stores appears to be occupied by craft brands.

My opinion, for what it's worth, is this: There are plenty of areas in this city that remain woefully underserved in terms of taprooms or growler fill stations offering a range of quality beers beyond what you might find in a nearby brewpub. I count my own neighborhood (Rose City Park) as being on that list. I suspect we will soon have a growler fill station or taproom of some sort nearby.

The Hawthorne corridor already features a number of places where you can get good beer. Beermongers and Apex aren't far. Blitz Ladd fills growlers and isn't far. But there's a hefty amount of pedestrian, bike and commuter traffic through there. And there's a large and growing residential community. My bet is these new places will be supported. Time will tell.

Nonetheless, we will eventually reach the saturation point. That will happen when we have multiple retail locations (stores, taprooms, pubs) in an area offering growlers fills and specialty bottles. At that point, they will cannabalize each other's customers. We aren't there yet and it may be a while for most parts of the city.

Thursday, January 16, 2014

Big Beer Launches Subpremium Defense for '14

There's an old adage in big beer, which goes something like this: Whenever things aren't going the way you want, simply shift direction and start spending on something different. If it goes against what you were doing last year or for the past few years, never mind. It's all good.

For anyone interested in stupefying beer industry stories, I recommend Silver Bullets: A Soldiers Story of How Coors Bombed in the Beer Wars (Robert Burgess, 1993) and Beer Blast: The Inside Story of the Brewing Industry's Bizarre Battles for Your Money (Philip Van Munching, 1997). Gut busters. 

In case you haven't heard, big beer is shifting its attention back in the direction of low end products this year. Yep. After several years of working diligently to compete with craft brands for the hearts and livers of beer drinkers, Anheuser-Busch and MillerCoors both plan to push subpremium brands heavily in 2014. 

Don't worry if you're a fan of Bud Light Platinum, Redd's Apple Ale, Blue Moon or another one of big beer's superpremium brews. They'll still be out there and they'll still be supported. But industry big shots just realized they haven't been paying enough attention to blue collar consumers, described by MillerCoors CEO Tom Long as "the most loyal drinkers of beer." 

Tom has a point. Media spending to keep Americans guzzling shitty beer took a dive in 2012, to about $7 million. It exceeded $22 million in 2011. All the while, AB and MillerCoors were busy spending large money chasing higher end customers...and increasing prices on subpremium brands. Great marketing plan in a down economy, huh?

Now they realize the error. The subpremium segment is in decline and will probably continue on that path. But it still accounts for roughly 18 percent of beer dollar sales, according to SymphonyIRI. That's a substantial chunk of the beer market to ignore. Big beer doesn't make as much profit on subpremium brands, but they make up for that in volume. 

By largely ignoring the subpremium segment while raising prices, MillerCoors and AB alienated many longtime economy drinkers. Some of these folks drifted into the arms of Pabst, Old Milwaukee and other regionally and locally targeted brands. Ye gods!

In response to the risk, AB and MillerCoors are rolling out new packaging, updated ad campaigns and promotions for 2014. It's the usual suspects...Natural Light, Keystone Light, Busch and Miller High Life. That last one seems a little out of place, but it makes good sense if you consider the target market, which I'll get to.

Let's face it. Young drinkers, particularly college students, are a big target. Why? Because big beer believes young tastes are not yet formed and they are willing to try different kinds of beer. Natty Light is popular on many college campuses and AB intends to keep it that way with new stubby, "Fatty Natty" bottles. MillerCoors will target colleges with Keystone Light and hipsters with Hamm's. 
Miller High Life, once widely known as The Champaign of Bottled Beers, definitely fits an older, blue collar audience. MillerCoors is teaming up with Harley Davidson on a promotional campaign for High Life. That makes some sense. Baby boomers love their Harleys. How the campaign will be received by MADD and the anti-drunk driving crowd is an open question. Inquiring minds wonder.

To bolster its longtime, low end standard, Busch, AB is launching the "Here's to Earning It"campaign. It's a variation on the work-reward theme embodied in Busch's now obsolete "Head for the Mountains"campaign. The updated version will feature eight working class men and women from around the country. The Marlboro man has nothing on working class heroes who love Busch beer.

Big beer won't say what they will to spend to protect their share of the subpremium market this year. Certainly less than the $22 million spent in 2011. Expect to see more store displays, web video, ads in newspapers and select magazines, probably some billboards. TV is on the table, but big beer is reluctant to spend lavishly on low tier products. We'll see.

This effort to bolster the subpremium segment is apt to have no impact at all on the growth of craft beer.   In fact, defending the subpremiums is a sort of rear action. Big beer realizes its premium brands are being cannabalized by the growth of craft. Protecting the subpremium category is a way for them to stay in the game...until they can buy up or partner with more craft breweries.

Monday, January 13, 2014

Brewmasterpiece Theater On Tap Friday

There is a somewhat under-appreciated link between rock and roll and craft beer. Once upon a time, folks of many ages flocked to record stores to get their fix of what was newest and coolest. Today, folks of drinking age flock to breweries and pubs on a similar mission.

Record stores, of course, have mostly vanished. There was a time when they dotted the map in this city and others. It isn't just digital music that did them in. The importance of music in our culture has declined as the number of entertainment choices has risen.

It occurs to me that breweries and pubs are what record stores were 30-40 years ago, which is to say they are everywhere. Just as people once had to physically shop for their music, modern beer fans frequent pubs and breweries to keep up with what's happening on the beer front.

And don't forget the link between brewers and rock music. At it's most basic level, brewing is a blue collar occupation. Walk into a lot of breweries during production hours and you're going to get an earful of classic rock music. Many pubs spin vinyl or play from rock-oriented playlists. Though they occupy different slots in time and form, craft beer and classic rock seem to have a symbiotic connection.

Given all that, it makes perfect sense that the Hollywood Theater and Lompoc Brewing have put together an event that pairs maybe the best rock concert film of all time with suitably named beers. They're calling it Brewmasterpiece Theater. Clever.

The movie is The Last Waltz. The beers include several IPAs inspired by the film, which I'll get to. It's happening this Friday, January 17, beginning at 7 p.m. The Hollywood Theater is located at 4122 NE Sandy Blvd. Advance tickets cost $8 and can be had here. Beer is obviously separate.

If you are unaware, the The Last Waltz documents the farewell live performance of The Band at San Francisco's Winterland Ballroom on Thanksgiving 1976.  An audience of some 5,000 was reportedly served turkey dinners prior to the show. Stick that in your trivia folder for future reference.

The Band had been playing together since the 1950s, notably as Bob Dylan's backup band in the sixties. They had grudgingly decided to quit touring and this was to be their final show. Director Martin Scorsese was hired to film the evening's proceedings. The initial idea of just having The Band perform morphed after original leader Ronnie Hawkins and Dylan agreed to play. Soon the guest list expanded to include some of the greatest rock names of the day.

Lompoc's brewery on North Williams is one of those places where the classics always seem to be playing. You'll hear CCR, Zeppelin, Grateful Dead, Tom Petty, Queen, Nirvana, Beatles, Cars, Pearl Jam, ZZ Top, U2, etc. The music evidently affects the brewing, as Lompoc has prior experience creating beers with connections to bands and music.

Beers for Friday evening's event will include:

Satisfaction IPA, a collaboration with Jack Harris of Fort George Brewing, is brewed with Centennial, Simcoe, Meridian and Newport hops. It reportedly has a piney, resinous profile.

Saaz, Nuggs & Rock 'n Roll IPA, a collaboration with local beer writer John Foyston. This bright orange-amber brew leans on 40 pounds of Saaz, Nuggets, Simcoe and Centennial hops in a 15-barrel batch. The flavor is said to offer hints of pine and apricot.

White Album IPA, a collaboration with Portland Brewing co-founder Fred Bowman, features half wheat and half pale malt. Meridian and Chinook hops in the boil and fermenter provide a hefty citrus aroma.

Every Rose Has its Thorn IPA is a collaboration with Hilda Stevens of Bazi Bierbrasserie. Ten pounds of rose hips were added at the end of the boil and another 10 pounds were added to the brite tank. Sounds interesting.

Ramble On IPA completes the list, but there are no stats available at the moment.

The folks who thought up the idea of presenting this movie alongside themed beers deserve a lot of credit. It sounds like a great evening of fun.

Wednesday, January 8, 2014

Wheels Keep Turning: Morgan Distributing Sells to AB

In what may be seen as an effort to bolster its failing brands in Oregon, Anheuser-Busch has purchased Morgan Distributing, one of the state's largest independent distributors. The news was first reported in St. Louis and became known in industry circles on Wednesday.

If you're wondering what prompted the move, consider what's been happening to AB in Oregon. Their brands have been trending downward since 2008, losing 14 percent share along the way. The purchase of Morgan means they will effectively sell some 70 percent of their in-state volume via distributors they own. 

Morgan had evidently been for sale for a while. It seems Maletis, AB's other Portland distributor, was also vying to acquire Morgan. In the end, AB decided it would rather own Morgan than have it owned by Maletis. Terms of the sale have not been made public. The deal leaves Oregon with only four independent AB distributors, including Maletis. 

Morgan distribution areas

A little history. Morgan Distributing has been around since 1959. It was founded as a family business dedicated to providing professional beer and beverage distribution services in the area. They aligned themselves closely with Anheuser Busch in 2000. Prior to that time, Morgan was a multi-brand distributor. They purchased several AB distribution territories to expand their reach in ensuing years.

Morgan does not have an extensive craft portfolio. The Craft Brew Alliance (Widmer, Kona, Redhook, Omission) brands are part of of their AB portfolio. They also distribute Silver Moon (Bend), Three Creeks (Sisters), Gilgamesh (Salem), Uinta (Salt Lake City) and a few others. A hot new addition is The Commons (Portland).

In the wake of the buyout, Morgan's craft partners will all have the option of jumping ship. This will be a little less interesting than it would be if Morgan had a large craft portfolio. Nonetheless, it will be educational to see where the craft brands go, if they go. The Commons is just coming on board and may choose another path.

Why did AB buy Morgan? Speculation is cheap. AB clearly did not purchase Morgan for its craft brands. That would have been stupid and they aren't stupid. More likely, this as a sort of rear action designed to maintain the position of AB products by keeping craft brands out. The deal definitely enhances their ability to push their own products in Morgan's territories.

Wondering how this can be legal? So did I. How can a gigantic beer company own distributors when we have three-tier laws on the books? Well, beer laws vary from state-to-state. In Oregon, our laws allowing self-distribution, which have helped many craft brewers, also enable a behemoth like AB to own distributors. As noted, that's not the case in every state, but it is the law here. 

So the wheels of business keep on turning. We'll have to wait and see what it means for consumers...or victims, if you prefer.

Monday, January 6, 2014

Tastes Great, Less Filling 2014

Since I started writing this blog a few years ago, my beer consumption has spiked. It's part of the deal. So one of the things I do every January is embark on a Tastes Great, Less Filling excursion. I figure it's the least I can do for my liver, which spends most of the year chewing on a steady diet of beer-based alcohol. This month I'll look for tasty, less filling options.

Of course, Tastes Great, Less Filling was the slogan Miller used to launch Lite Beer in the 1970s. The concept of light beer wasn't new at the time. It had been tried for many years and always whiffed. Why? Because it was universally positioned as a diet drink, and very few self-respecting beer drinkers wanted anything to do with diet beer.

Miller turned the tables with an ingenius advertising campaign that positioned Lite Beer as something that tasted great and didn't fill you up. The idea was you could drink a lot more of it at home or at the bar. Sports stars and other celebrities hawked Lite Beer in popular TV ads. It was a gigantic success for Miller, so successful it launched the light beer category. Other brands soon followed with their own light beer. They had to.

MillerCoors, which has had a tough year, just announced that Miller Lite will be available in a limited edition, retro can from January through March of this year. The original can was white with hops and barley graphics, and the words "A Fine Pilsner Beer." I don't know if they use hops and barley in Miller Lite these days, but never mind. The can is iconic.

Miller Lite likely won't be part of my January program. I'll look for craft beers that fit the tasty, less filling montra. I've talked about low ABV beers before. It sometimes irks me that so many craft beers are 7% or higher. Such beers were not the domain of the early craft brewers. But there has been a sort of creep toward higher ABV beers in recent years.

It  is most definitely possible to make a great beer in the sessionable 5% range. I know because I've found many of them over the last couple of years. The first one on this year's list is Ching Ching from Bend Brewing. It clocks in at 4.5%, about what you'd find in a can of standard Budweiser. And that's where the similarity ends with a jolt.

Ching Ching is a mildly sour Berliner-Weisse made with pomegranate juice and hibiscus. It was Tonya Cornett's recipe when she was at Bend Brewing and won a gold medal at the 2012 World Beer Cup. This is a fantastic beer, brilliant pink in color, luscious in flavor, yet intensely light. It fits perfectly with my January program.

The biggest problem with Ching Ching is it's hard to find. They had a keg and some bottles at Tin Bucket last week. The bottles were gone in hours, two of them landing in my fridge. I can't say how long the keg lasted, but almost everyone at the bar was drinking Ching Ching when I was there. Jump on it if you see it!

I'll be posting other finds from my annual Tastes Great, Less Filling tour through January. Stay tuned.