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Wednesday, July 29, 2015

Pushing and Pulling with the Clydesdales

Our old friends Anheuser-Busch have been in the news lately. Many have been wondering when the next big buyouts will happen. A lot of industry experts expect the big fellas to buy another craft brewery before the year is out. Perish the thought.

Most assume the next acquisition will happen outside the Northwest, where the buyouts of 10 Barrel and Elysian jolted craft beer fans in the area like a subduction zone quake. Those acquisitions happened for a very good reason, which is that AB brands struggle in the Northwest. Bringing (previously) popular craft brands into the AB fold was/is an effort to stop the bleeding.

California appears to be the next logical target. The Clydesdales once owned a 50 share of the lucrative Cali market. That number slipped to just over 36 percent last year, according to a recent CNBC story, and AB is desperate to reverse the negative momentum. They're probably flashing bundles of cash to prospective sellouts as we speak.

Arguably the more interesting part of the AB saga is initiatives underway with its distributors. What they want to do, as I've mentioned in past posts, is force distributors to align more fully with AB brands. They do not want these folks selling brands that aren't in the family.

Indeed, part of the reason they've brought craft brands into the mix is they want to be able to go into accounts with a book that has something for everyone. "Yellow beer not your thing? Well, we've got some decent craft brands you might like."

By the way, the suits in St. Louis are particularly aggravated by the situation in California. Why? Because more than a few AB distributors in the Golden State sell Constellation brands. That infuriates the brass, which regards Constellation as a mortal enemy. They want changes.

The way this situation translates in day-to-day life is that AB is making it clear to distributors, even anchor distributors in big markets, that their ongoing relationship will require them to divest brands that aren't part of the AB family. The suits want distributors focused on AB products. Period.

Here in Portland, AB-independent, Maletis, owns one of the best craft books in the country. If AB's alignment strategy were firmly applied, Maletis would have to sell profitable brands and replace them with brands that are, quite frankly, flat-liners here. That isn't happening. But never mind.

What's wrong with the Clydesdales? Well, the horses are fine. Trust me. But the suits in St. Louis have become paranoid. They look at eroding market share and see distributors who are failing to push their products because they're distracted and mesmerized by non-AB craft brands. The brass wants these turncoats brought into line. It's an 18th century thing.

The problem, confirmed by industry experts in various places, is that AB does not have a push problem. What they have is a pull problem. In plain terms, AB's brands have little pull with consumers, which makes them a lot harder to sell regardless of how hard you push them.

How will they work through this confusion? Stay tuned.

Thursday, July 23, 2015

Better Weather, Flying Machines Greet OBF

Opening day at this year's Oregon Brewers Festival was a whole lot less dramatic than 2014, when beer fans were treated to cold, wet weather. In July. This year was cloudy, but dry. And there were drones zipping around overhead recording the festivities. You can't make this shit up.

Wednesday has been my preferred day to attend since they added it several years ago. Lots of pretend media types show up and the crowd is probably a bit more beer-centric than will be the case on the weekend.

I was surprised to see drones flying around during Art Larrance's opening talk. But I get it. These things were carrying cameras and getting much better views of the stage than the peasants trying to see over hammerheads and cats in (large) hats. Good thinking...until one of these things loses power and slams into the crowd. 

Stalking the grounds, I noticed a significant change under the tents. In past years dating as far back as I can remember, there were long tables and chairs in that area. No more. High tables occupy that space this year. The result is more open space, which ought to help with congestion later in the week and on the weekend. Smart move. 

Something else you may notice is they've gone away from advertising glass and token packages. In fact, you've always been able to walk up and buy a glass and/or however many tokens you wanted. But organizers, by virtual of signage, encouraged patrons to buy packages. That's not the case this year, although token sellers do have pre-filled baggies in various denominations. 

The other thing I noticed is how dry and dusty it is this year. Looking north from the south end at one point, I could see a dust plume. There appears to be less grass than usual this year, likely the result of a dry winter and event overload in the park. Keep that in mind if you're sensitive to dust.

I had relatively short list of beers to track down. And tracking down beers is easier than ever, I think. First, there's a large board near the main gates that lists every beer and where it's pouring. Second, the event website lists beers and where they're located. The event program is printed in advance and doesn't have that info. Still, it's easy enough to find. 

Kudos to OBF organizers on pricing. In contrast to the bulk of local festivals that have no problem charging two or three tokens for good and bad beers, I saw only single token beers yesterday. You might think that means the beers aren't that special. In fact, I think most of these beers are as special as the beers you will find at any area event. 

I was lucky enough to meet up with friends and share tastes, which means I tasted many more beers than I would have on my own. Still, I sampled less than a third of the 105 beers they have on tap in the park. It was a mixed bag, for sure. Nothing new.

The Good
Among the beers that I will drink again on Friday or Saturday or whenever:
  • Breakside: Rainbows and Unicorns. Light and nicely tropical. A mildly fruity session IPA.
  • Boneyard: Bone Light. Nicely dry-hopped, full of flavor and only 4%.
  • Cascade: Frite Gaulois. Blended Weizen, Saison and Blond aged in oak barrels. Lovely.
  • Anderson Valley: The Kimmie, The Yink and the Holy Gose. Mildy tart and salty.
  • Gigamesh: Radler. Bavarian-style lager blended with pink grapefruit juice. Tart, refreshing.
  • Central City: Red Betty Imperial IPA. Hoppy, malty, huge. Watch it. 
The Rest
As always, there were beers that didn't meet my expectations or hopes or whatever. A shining example was Prodigal Son's Huckleberry Wheat. The beer had a great aroma, but collapsed into a pungent mess on tasting. I suspect some will be pleased with this beer. And good for them. I was disappointed.

Some of the beers here are simply irrelevant and out of place. Why would they offer Kona Big Wave here? What about Full Sail Session IPA and Bridgeport Conviction? These are mainstream beers widely available in packaged form. You aren't going to find them in any beer bars. So why here? That's a rhetorical question. I have no answer.

International Tent
I stopped by the International Tent several times, There are some interesting beers in there. Brewers from The Netherlands and New Zealand were hanging out jabbering with anyone who cared to talk. Outside, Jeff Alworth and Patrick Emerson interviewed a Dutch brewer for an upcoming podcast. Later on, they were talking to Ninkasi's Jamie Floyd. And others.

Final Thoughts
Go to the festival site here if you need more information or have questions about what you can and can't pack into the park. It's going to be another fun few days of tasting well-made beers in a great setting.

Sunday, July 19, 2015

Hook, Line and Sinker with OLCC Stats

It's Oregon Craft Beer Month. You may have heard. As much as it's a time to celebrate the terrific beer culture we have, it's also a good time to look back at how we got here. If you've been around long enough, you remember when the craft beer scene here wasn't all that big.

One of the things I have long-assumed is that, even with the growth in the number of breweries and in the volume of beer produced, the largest breweries dominate the industry in Oregon. In fact, OLCC stats show something else.

The Play
For comparison, I looked at the OLCC reports for December of 2005 and 2014. Roughly 10 years. I used the December reports because they provide the best look at what Oregon breweries are doing on an annual basis.

The first thing to note is the increase in production, from 263,637 barrels in 2005 to 581,151 barrels in 2014. That represents more than a doubling in production, which is significant, but not the whole story by any means. Another interesting factoid, not shown in graphic form, is the increase in reporting breweries...from 64 to 203. We've more than tripled our brewery count.

Widmer (aka the CBA) and Deschutes have occupied the top spots on the OLCC reports for many years. If you go back to the early days, that was Full Sail's spot. I do not know when that changed; probably in the 1990s when craft beer in packaged form gained popularity.
Anyway, my assumption regarding the dominance of the top breweries was stomped on out of the gate. In actual fact, Widmer and Deschutes have seen their combined share of total Oregon production decline over the past decade, from 52 to 32 percent.

Don't be fooled. Deschutes and Widmer still produce far more beer than anyone else. It's just that there are many small and medium-sized breweries doing well. At the end of 2005, only 24 breweries produced 1,000 or more barrels. By the end of last year, 64 had reached that level. Sea change.

It's a similar story when you look at the top five. That group has changed slightly since 2005, when it included Deschutes, Widmer/CBA, Portland Brewing (aka Mac's), Bridgeport and Full Sail. By the end of last year, Ninkasi and 10 Barrel had nudged Bridgeport and Full Sail out of the group.
Regardless, the top five's percent of total production declined significantly, from 76 percent in 2005 to 49 percent in 2014. It's fairly easy to see why. It isn't just because we have a lot of breweries producing more than 1,000 barrels annually; it's because nearly half of the breweries hitting that number are producing more than 2,000 barrels annually.

One more comparison is the top 10 vs. total production. This is a dominant group, accounting for 85 percent of Oregon production in 2005. Yet by the end of last year, the top 10 percentage of a much larger pie had declined to 65 percent.

There is no mystery as to why. The top 10 is producing a lot more beer than it was in 2005. But there are simply a lot of smaller breweries doing well. In 2005, Laurelwood finished tenth with just over 2,000 barrels production. The tenth place brewery for 2014 was Boneyard, which produced over 14,000 barrels. You can take it from there.
The Rub
There are some things to keep in mind. Most importantly, OLCC stats only track beer made and sold in Oregon. Beer shipped out-of-state doesn't show up in OLCC stats. Beer shipped into Oregon doesn't show up, either. In effect, OLCC stats are fairly limited. I've talked about this before.

Deschutes and Widmer illustrate the true reality nicely. They have a combined capacity of around a million barrels a year. Yet only a fraction of that beer shows up in OLCC stats. Why? Because a lot of the beer these guys make is exported and doesn't register in OLCC stats because it isn't sold here.

Widmer's case is otherwise unique because it has breweries outside Oregon. Some of the beer they sell here is produced, for instance, at their brewery in Woodinville, Wash. That beer doesn't show up in OLCC stats because it isn't produced in Oregon.

In other words, about the best thing you can say about OLCC numbers is they provide a glimpse into what's happening in Oregon. That glimpse suggests non-behemoth breweries are doing pretty well, making progress, in fact.

Just remember those conclusions are based on stats that are incomplete and limited in scope. In reality, the big guys still rule Oregon beer production by a large margin. They just don't sell it all here.

Happy Craft Beer Month!

Sunday, July 12, 2015

Gracefully Aging OBF Returns for 28th Year

Once upon a time, young Americans grew up dreaming they might be president someday. Later, those same kiddos dreamed of being rock stars. More recently, they dream of becoming a craft brewer. Or of organizing a beer festival. That's where we are, for better or worse.

As we prepare for the 28th rendition of the Oregon Brewers Festival next week, I can assure you that none of the event's founders had any deep, long-held fantasies about organizing such an event. The reality is, they needed a vehicle to promote their beers in 1988. The OBF provided it.

It's hard to fathom in our present circumstance, but Portland hasn't always been a craft beer-crazed town. There haven't always been daily beer events to distract us from the traditional duties of citizenship. Craft beer would come to rule the hearts of minds of Portlanders. But that didn't happen overnight.

For many years, the OBF was the only significant promotional event on the craft beer calendar. When it finished its annual run, I can remember commiserating with others over the wait to the following year. Today, we just pull out our phones and check social media for the next worthwhile thing.

The truth is, the OBF has aged gracefully. Organizers have faced a barrage of challenges over the years. Ever-increasing attendance is surely the biggest issue. They've addressed it by adding days and spreading things out in the park. Entry has been streamlined and finding the beers you want to try is easier due to improved signage and a better event program, which is free to everyone.

Thank the city for a major improvement this year, which involves closing the northbound lane of traffic on SW Naito Parkway next to Waterfront Park. The vacated lane will provide added space for the public to walk and bike safely for the duration of the event. The gate on that side is typically the busiest and providing additional space there is a positive thing.

There's also the festival's effort to develop a cultural exchange between Oregon and international brewers. This year, the OBF welcomes brewers from New Zealand and the return of some who came last year from The Netherlands. These folks will be hanging out in the International Tent talking beer and other things. They are guests of Art Larrance and the OBF, which paid to get them here so they can see what we have and share what they're up to. Good vibes.

Of course, there's the beer...lots of it. Volunteers will be pouring 90 beers in the main tents and another 15 in the International Tent. The press release says there are 47 styles represented. I'll have to take their word for it because I haven't yet gone over the beer list in detail. Here's a link to the list if you want to take a look.

Prices at the OBF have remained stable in recent years. Oh sure, they went to a 3 oz taste two years ago. Others quickly followed suit. You won't pay a cent to enter Waterfront Park. If you want to drink beer, a festival glass will run you $7 and tokens are $1. Most beers in the main tents will cost a token for a taste, four tokens for a full glass.

It may not be worth reporting here, but the glass glass used the past two years is history. There were some problems with people doing dumb things with the glasses in the downtown area after exiting the park. Portland Police asked organizers to switch to something less breakable. The new glass looks similar to the ones used the last two years, but it's made of polycarbonate plastic.

Expect excellent weather. Last year was the first year the OBF experienced dreadful weather. It was cold and wet the first day before gradually warming for the weekend. I had never seen anything like that in 25 years of attendance. It probably won't happen again for a long time, certainly not in the hot and dry conditions of this year.

Like a lot of people, I'll be posting some thoughts on beers after attending on opening day. Stop back by if you're looking for that information. Otherwise, there's a ton of info on the festival site here. Event dates are July 22-26.

Monday, July 6, 2015

Portland Craft Beer Hall of Fame: My Inaugural List

We are a week into Oregon Craft Beer Month. As usual, there's an ongoing barrage of beer festivals, release parties and related events. It hasn't always been this way. There was a time not so many years ago when we didn't have daily beer events, even in July. The thought takes me back.

This past weekend marked the first Portland Craft Beer Festival, held at Fields Neighborhood Park in Northwest Portland. I didn't attend. But I see they chose and announced five inaugural members of the Portland Craft Beer Hall of Fame on Saturday.

Just so we're clear, there is no physical Hall of Fame or wax busts at this point. The Hall of Fame is a paper list. I suppose we'll have a physical HOF when someone (or some group) agrees to pay to have it built. Also, I have no clue how the selection process worked. There's no information on the festival site or anywhere else that I can find.

The first five names probably aren't going to raise too many eyebrows: Henry Weinhard, Fred Eckhardt, Kurt Widmer, Rob Widmer and Don Younger. Naturally, I have my own ideas about what that list should look like. And why.

Henry Weinhard
One of the reasons Portlanders were receptive to the early craft beers is the beers were local and they had the experience of drinking local beer thanks to Blitz-Weinhard Brewing, established in 1856. Early craft brewers also benefited from the expertise of the brewers at Weinhard.

Weinhard Brewing, under the direction of Henry's great grandsons Fred and Bill Wessinger, produced what was arguably Oregon's first craft beer,..Henry's Weinhard's Private Reserve in 1976. The Wessingers came up with the idea because they saw a niche in super premium beer that had been largely abandoned by big beer. They figured Private Reserve could be successful in that niche...and they were right. Craft brewers would later build on that theme.

Fred Eckhardt
If you look through the pages of the Oregonian from the 1980s, you'll find beer-related articles by several writers. The first craft brewers were getting started and there was interest in the new industry. Fred Eckhardt became the face of the paper's beer coverage at a time when few media outlets had any interest. That coverage became a sort of guide to what what going on.

Eckhardt's reports were often packed with information that would challenge the attention spans of modern beer fans. He discussed the origins of different styles and how they were made. In fact, Eckhardt had written several books on beer and beer styles and his influence extended to brewers. Whenever he wasn't satisfied with what was going on, he would head down to a brewery and badger brewers to make something new. He became an icon and remains one to this day.

Charles Coury
How do you evaluate the impact of a failure? Tough question. Charles Coury, a winemaker, founded Cartwright Brewing in 1980. His brewery was plagued with problems. He didn't have the right equipment to succeed. Sanitation was huge a problem. Then he took on the ill-advised challenge of bottling. There aren't many who remember his beer and speak of it fondly.
Cartwright lasted less than two years, closing at the end of 1981. But there were a lot of people rooting for its success. When the brewery closed, the idea of producing a quality beer lived on in the minds of the early brewers. They realized Coury's failure was in execution, not concept. Some will argue Coury doesn't belong in the Hall of Fame because he was a flash in the pan. The problem with that view is this: Cartwright is where the craft revolution started here.

Dick and Nancy Ponzi
The Ponzis are the most important of Portland's original craft brewers.They founded Bridgeport Brewing (initially known as Columbia River Brewing) in 1984. In fact, Bridgeport is the only Oregon craft brewery that sold any beer in '84. Don't downplay their legacy because they sold Bridgeport to Gambrinus in 1995. Their influence was significant and long-lasting.

The Ponzis were friends of Coury and saw what he was doing, even helped him with equipment and money. After Cartwright went under, Dick Ponzi took on the challenge of making good craft beer to prove it could be done. He applied his engineering expertise to building a brewery that wasn't prone to the kinds of problems Coury experienced.

There's also the brewpub factor. Brewpubs got craft beer out of the shadows and exposed it to the masses. Of the founding brewers, the Ponzis were the most crucial to the brewpub legislation. Why? Because they had the wine tasting room experience. If you could sell wine to patrons in a tasting room setting, they reasoned, why shouldn't craft brewers be able to do the same thing? It was a strong argument and one that eventually helped get the legislation through.

Of course, the Ponzis weren't the first to open a brewpub after the Brewpub Bill passed in June 1985. But their pub on Northwest Marshall, where they served their ales alongside some pretty good pizza, set the standard by which brewpubs here were measured. Even today, I can see Bridgeport's influence in almost all of the city's better brewpubs.

So those are my inaugural members of the Portland Craft Beer Hall of Fame, based mainly on the influence they had on the movement as a whole. My nominees for next year: Mike and Brian McMenamin, Don Younger, Kurt Widmer, Karl Ockert and Art Larrance.