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Thursday, July 28, 2016

Odds and Ends: Report from the 29th OBF

The 29th Oregon Brewers Festival blasted off yesterday with the brunch, parade and ceremonial tapping of the first barrel, this one provided by host brewery, Laurelwood. There was a large, but mostly quiet crowd on hand to kick things off.

Wednesday might just as well be called "industry day" at OBF. Because there are countless industry-connected deadbeats hanging out drinking beer, networking and seeing the sights. That includes the so-called beer media, which is always well-represented. Trust me.

This is my 25th OBF, 24th in a row. I missed 1988 (not yet here), 1989-1990 (here but not yet paying attention) and 1992 (mysteriously out of town). A lot of things have changed over the years, The event has grown and evolved.

One of the things casual bystanders probably aren't aware of is the extent to which OBF is much more than just a beer festival. Countless private parties and sideshows litter OBF week. In effect, the festival is the central event in a sea of unconnected spin offs. Craft beer is big business and Portland is a central player in that business. Which means the money flows.

But never mind the details. You aren't interested in the politics of the Oregon Brewers Festival or the economics of the beer industry. You don't know how lucky you are. Below are some of the things you may want to know about the festival.

Tasting Packages
Unlike most modern festivals, the OBF does not require you to purchase a tasting package. So you won't have to shell out $25 for a shoddy package that includes a mug and 10 tokens. Instead, you can buy a mug for $7 and tokens for $1. Yes, you can buy a package. But you don't have to. I talked to several people who didn't know that.

It's always a good idea to stay as hydrated as possible while tasting/drinking beer. Watering stations are scattered around the park and you can buy outrageously priced bottled water from the various food vendors. A better idea is to bring your own. They have not always allowed it, but you can, in fact, bring in water. Do it.

Bike Parking
Unbeknown to me, the bike parking area moved. In recent years, it was located at the Northeast corner of the park. I expected to find it there yesterday. No luck. And no signage telling me where to find it. The gate staff could give me only a rough idea of where to find parking. Well, it's at the Southeast corner of the festival space, on the other side of the Morrison Bridge. FYI.

The Beers
I think they've upped their game this year. Between the 88 or so beers pouring in the main tents and the 25 or so pouring in the International Tent, organizers have done a nice job in terms of variety and quality. Also value. I didn't see a single multiple token beer. That doesn't mean none exist; it simply means the majority are one token beers. Nice.

It's a bit of a slippery slope recommending beers to folks who certainly have different likes and dislikes. Plus, I tasted only 30 or so beers, out of more than 100. It's fairly condescending for anyone who hasn't tasted all or most of the beers to recommend anything. Still, I can tell you what I did like.

A good place to start your tasting is with 54°40' Brewing's Ultra Pilsner, an easy-drinking, refreshing interpretation of the age-old German style. This beer's light enough (5.1% ABV) that you could easily drink a full mug. Best move on and return later.

For hopheads, I recommend High Desert Diesel by Sunriver Brewing. This is an Imperial IPA that clocks in at 8% ABV, so be careful. It leans on nine hop additions for aroma and flavor. I'd guess this is a bigger version of the popular Vicious Mosquito, a favorite of mine. Another IIPA, this one from Melvin Brewing, 2X4 DIPA (a whopping 10% ABV), is also a winner.

Some will say a summer beer festival is no place for stouts and similar dark beers. Not so. There are two stellar stouts pouring on the south side, Dragon's Milk Reserve (10% ABV) by New Holland Brewing and Serpent's Stout (11% ABV) by Lost Abbey Brewing. Both are excellent. I also ran into a nice Baltic Porter from Japan's Baird Beer in the International Tent.

With respect to sours, I tasted or shared tastes of maybe 10. Most lacked fruit character and were simply sour. If that's what you're looking for, great. I enjoyed Breakside's Pomegranate Gose (4.6% ABV), which is moderately tart and refreshing. I also liked Green Flash's Passion Fruit Kicker (5.5% ABV), an unfiltered wheat beer highlighted by notes of passion fruit and subtle white tea.

I don't like to dwell on beers that sucked or weren't quite right, but there are always a few. One of the more notable ones was Sagefight from Deschutes. It's supposed to combine citrusy hops with sage and juniper berries for flavor. But it somehow collapses into a murky, bitter mess. Surprisingly bad. I had to dump it. Best avoid.

With all that said, there are plenty of great beers to try. As always, the best times to attend will be Thursday, early Friday afternoon and Sunday. Things tend to be a bit crazy under the tents Friday evening and most of Saturday. There's a lot more info on the event site here. You knew that.

Monday, July 25, 2016

The Irony of Boston Beer's Sagging Fortunes

These are interesting times for the Boston Beer Company, producers of Sam Adams beer, Angry Orchard Cider, Twisted Tea and several other fizzy drink brands. Once upon a time, Boston Beer was one of the hottest commodities around. These days, not so much.

If you watch stocks, you may think Boston Beer is fine. Its stock price rose 15 percent, to $190, last week, thanks mainly to a better-than-expected earnings report. As with all things, it sometimes pays to look a little deeper for a better understanding of what's happening.

Boston Beer financials aren't in great shape. Revenue and profits declined 3 percent and 11 percent, respectively, in the second quarter of 2016. But Wall Street was expecting even deeper declines. Instead of the expected $239 million in revenue and $1.95 per share profit, BB had nearly $245 million in revenue and $2.06 per share profit.

How they managed to generate revenue and profit is an interesting matter, which we shall soon get to. Because Boston Beer sales-to-retailers declined 5 percent in Q2. Shipments were down 100,000 bbls and operating income fell $16 million (23 percent) during the first half of the year.

The only growth in the BB portfolio is coming from outside Sam Adams and Angry Orchard, its best-known brand families. Sam Adams was down 6 percent by volume in IRI through July 10 and the on-premise picture is apparently worse. The Angry Orchard family, a significant growth driver in recent years, took a 20 percent hit. Meanwhile, the Twisted Tea family was up 13 percent.

How do you beat earnings expectations when your flagship brands are tanking? Simple. You cut advertising, promotional and selling expenses. Several reports say $8 million in cuts were spread between media/advertising/promotion and lower freight costs due to lower shipping volumes. Hey, fewer sales can be helpful!

These kinds of things obviously aren't sustainable. Sooner or later, they have to get the big brands moving again. And they know it. The plan, if you want to call it that, is to give Sam Adams a facelift with new packaging and advertising in the second half of the year. They'll also invest in Angry Orchard in hopes of returning that family to growth. At the same time, they expect to further reduce costs. You read that right. They plan to do more with less.

Their prospects are not good. You might say Boston Beer is the victim of its own success. Founded in 1984, it eventually became a national leader in the movement toward better beer. Sam Adams gained a following because consumers realized they were getting a product that was better than the swill sold by big beer. In effect, Sam Adams helped launch the craft beer revolution.

Ironically, the growing popularity of better beer helped spawn an explosion in breweries. Today, Sam Adams has to compete with more than 4,200 craft breweries around the country. Given the opportunity to purchase local beer, a growing number of consumers are doing just that. The result is that many large craft brewers are seeing significant declines. Sam Adams is one of them. I've mentioned this trend several times, most recently here.

The popularity of Angry Orchard Cider undoubtedly helped ease the pain associated with the escalating decline of the Sam Adams family. But the entire cider segment has lost momentum in recent times, thanks largely to the very fickle and promiscuous nature of younger drinkers who have moved on to hard sodas and other flavored fizzy drinks.

It's hard to see a way out for Boston Beer. Chasing the fickle and fast-changing tastes of Millennial drinkers is a sketchy proposition. Even if they reinvent the Sam Adams brands with a robust line of hoppier and seasonal brews, it's tough to see a viable way for them to successfully compete with the increasing number of well-made, local craft beers.

There is, of course, the possibility that Boston Beer could acquire smaller brands. They've bought breweries and brands before. Again, I'm not sure how that would work for them in the current context. They aren't in the same league as Anheuser-Busch, which has a vast distribution network. Boston Beer is a different kind of animal, entirely. Still, they could give that strategy a whirl.

Some of my industry friends have suggested that Boston Beer might be sold. That's a thought. But to whom? We're talking about a company whose most prolific brand families are in virtual free fall. And the challenges are not going away as more breweries open and other competition stiffens. Again, you wonder who would want to buy a collection of brands that are declining in value.

Please don't feel sorry for Boston Beer. The company has made oodles of money for its executives and investors. Founder and chairman Jim Koch has a number of quirky, nuanced views that make him a sort of lightning rod in the industry. But give Koch credit for helping start the revolution that is now squeezing his company out of the market.

You have to appreciate the irony, if nothing else.

Tuesday, July 19, 2016

Oregon Brewers Festival Rolls on at 29

It's a bit hard to fathom. The Oregon Brewers Festival is celebrating 29 years. Some 80,000 craft beer lovers will descend on Waterfront Park to enjoy five days of fancy suds and sun. For the unknowing, the festival runs Wednesday through Sunday, July 27-31.

The beer landscape has warped since that first OBF in 1988. Back then, there were seven craft breweries in Oregon. Today, Portland has 65 breweries and there are 30 more in the metro area. The state is home to nearly 250 breweries. The country will soon have 4,300. Shazam!

As the brewery count has climbed, so too has the festival count. Hundreds of "festivals" now dot the Portland calendar. I don't even want to consider how many events populate the state and national calendar. A calculator might be helpful, if you want to do that.

But the Oregon Brewers Festival is one of the oldest and largest in the country. It is, quite simply, the event that provided much of the form modern events have copied. Sure, there are differences in size and shape, but the basic form mostly starts and ends with the OBF.

For many years, the OBF was the only serious show in town. We didn't have umpteen beer festivals a week. We didn't have specialty beers coming out of our ears. We also didn't have social media, which has helped magnify the event crush. Craft beer was mostly a novelty in that bygone era. That's obviously changed.

The OBF has rolled with the punches to some extent. They've rearranged the grounds to allow for easier movement under the tents and (they hope) near the taps. The International Beer Garden is a recent addition, designed to showcase what's happening around the world. This year's IBG will feature 25 beers from Japan, Germany and The Netherlands.

Of course, significantly altering the culture of an event of this size is tough...like turning an aircraft carrier around. Some geek types see the OBF as less relevant these days. These are the folks who chase rare specialty beers and gum up social media with their commentaries. I prefer to see OBF as a constant, a place where you can enjoy good beer in a great venue. Also a salute to the past.

They'll pour 88 beers from independent craft breweries this year. Independent has become an increasingly important OBF theme in light of buyouts by Anheuser-Busch and others. When you look at the event program, you won't see beers from 10 Barrel or Elysian or Goose Island, all fully owned by AB. You also won't see beers from Ballast Point, fully owned by Constellation Brands, or Lagunitas, half owned by Heineken. Good philosophy, I think.

The glass/mug is changing again this year. For the first 25 years, the fest used murky, white plastic mugs. In 2013, they switched to a glass glass to avoid odors from off-gassing and to allow better views of the beer. The glass lasted just two years (although I do have a nice collection at home for tasting parties, thanks to Art Larrance).

Due to some "problems" downtown, Portland Police and Portland Parks banned glass from all parks. So the OBF switched to a clear plastic glass last year. Not bad. This year they're bringing back a mug, now in clear styrene plastic. If this mug is more substantial than last year's flimsy plastic glass, it will be a nice win for everyone.

I'm not going to comment on the beers. The list is plain enough to see on the website and what you drink will depend largely on what you like in a beer. There are plenty of styles to go around this year on a list that isn't dominated by IPAs. I expect to seek out darker, sour and barrel-aged beers, but that's subject to change.

You know the rest of the story. The festival features live music, food booths, craft vendors, a craft soda garden and homebrew demonstrations. It doesn't cost a penny to enter and roam the grounds, but you'll have to buy a mug ($7) and tokens ($1 each) if you want to sample beers. It remains one of the better festival values, I think.

In case I haven't provided enough info here. there's always the event website here, as well as the various social media feeds on Twitter, Facebook and Instagram. I have not received word regarding the presence of Pokemon species in Waterfront Park, but I'm sure they're around.

Happy hunting!

Thursday, July 14, 2016

Don't be Alarmed: The Beer Wars are Heating Up

Perhaps you've seen Anat Baron's terrific documentary, Beer Wars, which does a nice job exploring big beer's efforts to undermine craft beer. Perhaps you get it. Or maybe you to live in an alternative fantasy world, where big beer isn't a threat to craft brewers.

I first thought today's post would explore the Beer Institute's recent announcement that members will implement a voluntary statement of serving facts on their products. Then came today's news that the Colorado Brewers Guild has changed its bylaws, stripping big beer breweries of voting privileges. Daily double.

Both developments are shots across the bows of opposing sides in the evolving struggle for the hearts, minds and wallets of American beer consumers. That battle didn't start with Anheuser-Busch's acquisition of craft breweries and it won't end with this week's skirmishes. Not by a longshot.

Beer Institute
On its face, the Beer Institute's decision on voluntary product labeling might seem like a good-hearted, well-meaning move. I mean, a lot of beer drinkers probably do want to know how many calories and carbs are in what they're guzzling or sipping. And making ABV readily available on labels can't be a bad thing.

Before you jump to the conclusion that members of the Beer Institute are good guys wearing white hats, you may want to look a little deeper. You may want to ask, for instance, "Who belongs to the Beer Institute?' Alternatively, "What are these folks up to?" Hey, nice start.

It turns out the Beer Institute is dominated by big beer. While there are certainly craft brewers on the member list, the organization is run mainly for the benefit of its largest and most affluent members. Those would be Anheuser-Busch, MillerCoors, Constellation Brands, etc.

What are they up to? It's simple. They want to put craft brewers in a bind. Keep in mind that we're talking about product labeling. Don't confuse that with the FDA mandate that restaurants and bars post nutrition, ABV and related info on the beers they serve. Those rules will come into play in 2017. Labeling is different.

Big beer knows craft brewers typically offer a barrage of seasonals and specialty beers. It would like to put a crimp on that. It knows the cost of collecting the requisite data and putting it on product labels would be substantial and prohibitive. It also knows craft brands are typically higher in calories and alcohol than the low level swill sold by most BI members.

Clearly, the thrust of this move is to make craft brewers look bad or limit what they sell. I leave it to you to decide who wears the white hats and black hats in this skirmish.

Colorado Guild
The train wreck in Colorado has been in motion since Anheuser-Busch acquired Breckenridge Brewery in late 2015. A lot of independent brewers took exception to Breckenridge continuing to play a role in Guild. In fact, 14 brewers (including the four largest) defected and eventually started Craft Beer Colorado, an alternative trade group.

This week's vote is an effort to hold the original Colorado Brewers Guild together. In effect, the membership voted to change the bylaws such that large breweries have no voting rights or power on committers or the board of directors. The big guys can continue to be members, but they will have no input in decisions.

The Guild hopes this will lead to a reconciliation with the breweries that left, and maybe it will. But it seems the breweries that bolted did so because they wanted a stronger legislative presence and more responsive leadership, in general. So we shall see how it works out.

In fact, I've wondered if the situation in Colorado might have fallout in Oregon. I'm aware of one effort to form an alternative guild here, primarily because some feel the Oregon Brewers Guild doesn't serve their interests. Messages sent to the Oregon Brewers Guild asking for comment went unanswered, which wasn't really surprising. Oh well.

Anyway, the beer wars are ramping up and will likely continue to do so. There will be no truce in this war. Big beer is tired of losing market share and will resort to any available means to slow down craft brewers. That includes legislation, buyouts and whatever else they think of.

These are wild times.

Tuesday, July 12, 2016

Friends and Enemies: Beervana Buzz at 5

This blog launched five years ago with a piece about the upcoming Oregon Brewers Festival. At the time, I certainly didn't know where it would lead or how long it would last. I only knew I had more to say about beer and the beer scene than I could ever get published via traditional media.

I chose to write about beer after several beer-centric articles published in digital form drew a fair amount of attention. I could have chosen another topic. But I had a history with beer dating back 20-plus years and it was something I knew I wouldn't mind spending some time with.

To be honest, I thought the blog would help me maintain and maybe expand my writing, research and project management skills. I used those skills extensively in the marketing communications work I did 1993-2009. I thought keeping those skills up might help me return to that work. If not that, maybe it would help me get a gig where I could use those skills.

I never seriously considered the possibility that the blog could make money. That's a tough nut to crack unless you get a ton of traffic. If making money had been my goal, the site would be much more of a promotional vehicle. That was never a possibility. We have enough promoters and industry shills writing blogs and print articles as if they're objective journalists. They aren't.

The price of writing mostly objective content is you make enemies. The articles that have generated the most traffic here have invariably dealt with the shadier side of the industry. Anheuser-Busch and its owned craft breweries have been a popular target. Several of those pieces have drawn more than 20,000 page views. And counting. The enemy count has risen, as well.

Some of the articles I enjoyed writing the most include personal reflections of what it was like in the pre-craft era. This week's piece on Lucky Lager was a fun one to write. Last summer's piece on my experience as a bartender at Coeur d'Alene's Rathskeller Inn during the summer of 1975 was another one I had fun with. There are others.

Writing about beer is mostly a fancy hobby. If you're good, you might actually get paid for that work. Jeff Alworth does. Brian Yaeger does. I've written articles for BeerAdvocate and for various print and digital media outlets. The blog certainly helped me get that work. It also helped me get the contract to write Portland Beer, published in 2013.

But that work is not as lucrative or accessible as many imagine. It was clear to me some time ago that the blog and the freelancing are not a viable career. Neither are they a way back to my former career path. There's no reason to delve into the details, except to say employers aren't remotely interested in people my age. Experience and skill set aren't really a factor.

Of course, there was always the possibility of beer industry work. That was never much of a motivating theme, though I have floated resumes or applied for a handful of industry jobs. Nothing came of those opportunities. In the cases where I was interviewed, I always learned I just wasn't quite the right fit. Nothing personal, you know.

Looking back on five  years, I'm mostly satisfied with the variety and quality of coverage I've provided here. There have been highlights and lowlights, for sure, and I've learned a lot about beer and the beer industry along the way. I've also made a lot of friends to go with more than a few enemies in the beer community. Many more friends than enemies makes it worthwhile.

Still, the reality is the reasons I originally created the blog have evaporated. There's simply no reason to continue on with it if the goal is some sort of professional upside. That's a fantasy. I've essentially passed the point where many blogs begin to fade from sight without notice. I've seen it happen countless times.

I don't have a crystal ball and I know the future is uncertain. I won't stop writing, but my efforts along those lines will likely take on a lower priority as I focus on something with a greater potential upside. I'll have more to say about that in due time.

For now, accept my thanks for stopping by from time to time over the course of the last five years. Without readers, this site is nowhere.

Wednesday, July 6, 2016

When Lucky Lager Was Fab

A chance conversation with one of my beer sluth friends got me thinking back to the good old days, when men were men and beer was tasteless and clear. As I've mentioned once or twice in these pages, my beer life is long. I consumed my first beer more than a half century ago.

That was possible because I had parents who thought a bit of drinking was fine and dandy, so long as it was controlled and done at home. Even after they divorced, they continued with that policy. I was always free to enjoy a beer or two, regardless of where I was staying.

By the time I reached high school, I knew a bit about beer. Many of my friends, who had been forbidden to drink a drop, were hungry to catch up as fast as they could. It was somewhat curious and amusing to see them chasing after beer and other forbidden alcoholic fruits with gusto.

Lucky Lager, for better or for worse, was the beer of choice. At the time, it was brewed in Vancouver, but no one in remote, rural eastern Washington had a clue about that, and wouldn't have cared in any case. Lucky was everywhere. And people liked it for some strange reason.

One of the more comical experiences in my beer file happened early in high school. A good friend somehow got himself hired to load beer delivery trucks at a small distributor in Clarkston. He was all of 16 and naturally needed help loading those trucks. Lucky for him, he had friends willing to lend a hand.

The brands available through this distributor included Lucky Lager, Budweiser, Schmidt, Buckhorn and a few others. There was no Bud Light in those days...that came later. But there was Michelob, widely regarded as a sort of gold standard, and the distributor had it.

About the only strict rule we had to follow involved breakage. Any time a case or six-pack or 12-pack was broken, the remaining beer was relegated to the breakage cooler. The beer in that cooler was fair game. It could be consumed on site or taken home with permission. I'm sure it was all perfectly legal. Needless to say, there was a fair amount of breakage that summer. Dammit.

I don't recall ever loading kegs into the distributor trucks. That seems a little odd in retrospect. I suppose maybe the guy's franchise didn't include draft beer, that he was strictly providing packaged beer to stores. That seems strange, but I have no idea what his operational guidelines were. When you have teenagers loading your trucks, you can't have a lot of guidelines.

If our guy didn't have Lucky Lager in draft form, he wished he did. The stuff was wildly popular in those days. All the taverns and bars had it. If you were having a kegger at your house or on a beach up the Snake River, you could acquire a keg of Lucky for around $30. It wasn't cheap. It was inexpensive. Everything else cost more, in some cases a lot more.

A nice insult to reasonable intelligence occurred at the end of my junior year, when we held a celebratory kegger up the river. This was during the school day and organizers had done a poor job forecasting attendance. Thus, the keg ran dry early. That prompted a 25-mile trip into Lewiston, where the drinking age was 19, to purchase a keg of Lucky at a bar. Brilliant.

How we made it through high school I'll never know. But Lucky Lager's fingerprints are all over that experience. Lucky  left Vancouver (General Brewing) in 1985 and the Northwest in 2003, It's currently brewed at a factory brewery in Southern California. I haven't consumed it forever and have no plans along those lines. Nonetheless, I remember when it was fab.