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Thursday, September 29, 2016

The Unique Odyssey of Mt.Tabor Brewing

Every brewery has a story. Just like any business. Of course, some of the stories are more interesting than others. For Mt. Tabor Brewing, which just opened a production brewery and tasting room in Southeast Portland, it's been quite a ride.

The first edition of the brewery, launched by friends Eric Surface and Brian Maher, was located in Maher's garage. Subsequently, they moved to an industrial space in Montavilla in 2010. A year later, they lost that spot. That led to Version 3 in downtown Vancouver, opened in October 2011. Now there's Version 4 in Portland.

"When we moved to Vancouver, the brewery was really nothing more than a hobby that supported itself," Surface says "But we quickly outgrew the limited space there. My vision had always been that our production facility should be in Portland and we actually made that happen more quickly than I imagined when we moved to Vancouver."

In fact, plans for Portland were moving forward well before their lease in downtown Vancouver ended last May. Two years ago, Surface and several partners leased 6,000 sq ft of space in the Buckman neighborhood. Since then, they've been navigating the construction and permit process involved in getting the doors open, which happened a week ago.

Another twist in the road involves their head brewer. When the previous brewer left to pursue another opportunity, Surface needed a replacement. A lot of industry heads spun Exorcist-style when they learned Ben Dobler, a 20-year Widmer veteran, had opted to leave a good job in an established company to roll the dice with Mt. Tabor as head brewer.

"I saw things changing at the CBA," says Dobler, who worked in new product development for most of his last 10 years there. "They wanted me to create inexpensive beers that could be sold at a premium price. The stress was mental, not physical. But the uncertainty of what's happening with the CBA and whether I'd still have a job in a couple of years made me uncomfortable."

Dobler and Surface knew each other from their days at Mountain View High School in Vancouver, classes of '92 and '93, respectively. They had stayed in touch over the years through mutual friends and had occasionally spoken. Would Dobler leave a cush job at Widmer to join a startup working 60 grueling hours a week?

"I had no idea if he'd be interested," Surface says. But we have similar tastes in beer and similar interests outside brewing. He seemed like a natural fit for our program and the expansion I envisioned with the move back to Portland. I figured there was no harm in asking so I sent him a text message."

Dobler, somewhat bored at Widmer, saw potential at Mt. Tabor and thought it represented a stimulating opportunity. "I'm going to brew quality beer my way," he said. "The beer list will reflect my preference for balanced, drinkable, low ABV beers. I'm not a fan of alcohol bombs where patrons have to be carted out after more than a pint."

The Portland location features a 15 bbl brewhouse with three 20 bbl fermenters. They could brew up to 120 barrels a month with the current setup, and expect to produce around 500 barrels this year. The taproom, managed by veteran Nicole Kasten, will be open Friday and Saturday for the time being. Soon enough, Surface expects to add Sunday and Thursday.

Kasten, Surface, Dobler
Growth will happen primarily via draft distribution for now, Surface said. Mt. Tabor beers are distributed by Running Man in Portland and by Stein in Vancouver. They will consider packaging options once draft volume edges closer to capacity. Their space has considerable room for expansion, when the time is right.

The beers on the core list are solid and all are under 7% ABV. But there isn't a single niche or zinger on the list, which seems odd. Normally, you walk into a Portland brewery and see at least one standout, flagship beer. Not here. In the heart of the craziest craft beer market in the country, these guys expect to attract a following with quality and drinkability. We shall see.

Despite the heavy recent focus on Portland, Vancouver has not been entirely abandoned. Surface and partners have leased space in the Felida area and will open a brewpub and pizza joint there by the end of the year, if all goes well. That location, in an underserved residential area not far from Surface's house, should do especially well.

Mt. Tabor's strange, twisting journey continues.

Editor's Note: On October 15, two weeks after this story was published, Ben Dobler and Nicole Kasten announced they are leaving Mt. Tabor Brewing. No reasons were given to the public. Mt. Tabor's strange odyssey continues.

Thursday, September 22, 2016

Image is Everything for Michelob Ultra

Those who follow or attempt to follow craft beer tend to see it as a monolithic movement that will eventually envelop the country and the world. That mindset more or less assumes that light beer is irrelevant and dead. An arrogant mistake.

Because light beer is far from dead. It remains a dominant force in the industry and, it turns out, is home to one of the fastest growing brands in the business: Michelob Ultra.

Let me back up. Michelob Ultra is part of the super premium segment, which is dominated by Anheuser-Busch brands and includes garbage like Bud Light Lime, Bud Light Platinum, Landshark and others. Super Premiums did well in the late summer according to IRI scans, showing the second best dollar growth trends behind imports.

And Michelob Ultra is king of the super premiums, owning the greatest share, five times larger than second place Bud Light Lime. Through early September, Michelob Ultra was up nearly 25 percent in dollars for the year. Not bad for a brand that was written off by craft fans long ago.

You may recall that Michelob Ultra isn't new. Launched during the low-carb diet craze back in 2000, it appealed to folks trying to lose weight by cutting loose calories, of which beer is a fantastic source. Ultra didn't do badly in those bygone days. But it was seen mainly as a diet beer, a motif that has never worked well in beer. That's why "light beer" was invented.

Since 2011, Michelob Ultra has been growing steadily. This has nothing at all to do with the beer, which is, contrary to ads suggesting otherwise, a pretty tasteless drink. What's changed is how the beer is marketed, who is targeted and how much money is being spent. As we know, image counts for a lot if you have money spread the word.

It is undoubtedly true that the availability of reduced calorie foods and beverages has been increasing. That category reportedly accounted for 99 percent of the sales growth for the major food companies between 2007 and 2012. Michelob Ultra is a near perfect fit for the category, a fact not lost on the marketing kids at Anheuser-Busch.

What they noticed is that fans of lower calorie, healthier foods and drinks are spread throughout the various demographic groups. In that scenario, you don't want to limit your ad imagery to older or younger drinkers. The active, healthy lifestyle used to promote Michelob Ultra targets a wide swath of people who don't want to be slowed down by "heavy" food and drink.

They have backed up that thinking by spending more to promote the Ultra brand, though what they're spending pales next to what they spend on Budweiser and Bud Light, brands that are tanking badly. They've managed to create an image that appeals to active, educated, and perhaps more affluent and mature folks. In short, things many of us would like to be.

The Michelob Ultra growth train shows no sign of slowing, which proves you don't have to have a great product if you can devise and execute a smart and effective advertising campaign. More than anything else, that's what Anheuser-Busch has done with Ultra. Kudos to them. They aren't stupid, by any means.

In fact, Michelob Ultra is likely to gain traction as millennials get fat and begin to seek low calorie alternatives to their 7% IPA. Could craft brewers enter the fray? Certainly, they could produce light beers to compete with crap like Ultra. What they don't have is the money to support a national ad campaign, upon which the success of Ultra is largely based.

Sometimes image really is everything.

Thursday, September 15, 2016

Winesong Contrasts Beer and Wine Crowds

Last week was a blur. It included a drive to Mendocino and weekend adventures at a wine festival. There's plenty of beer to be had in California, and I did manage to visit North Coast Brewing in Fort Bragg. But the trip was all about wine. And eating too much.

The festival is Winesong, which has been in existence since 1984. It's a benefit for the Mendocino Coast Hospital Foundation, engaged in fundraising and community activities that help support vital equipment acquisition and services at Mendocino Coast District Hospital.

What was I doing at Winesong? Good question. I'm not normally a wine snob. But my wife prefers wine and her late father attended Winesong regularly for many years. She had been to the event once, 25 years ago, and wanted to try it on again. I was mostly along for the ride, although I do enjoy wine when not being a beer snot.

Winesong is essentially three separate events: a Pinot Noir tasting; a Grand Tasting and a Charity Auction. We attended the Pinot Noir tasting Friday afternoon and the Grand Tasting on Saturday. The Charity Auction, which happens right after the Grand Tasting, wasn't on our radar screen.

These wine people know their stuff. The Pinot event, attended by a few hundred fans of the style, featured some fantastic wines, as well as food. The Grand Tasting, attended by (in my estimation) several thousand fans of wine and food, featured a variety of wines and expansive food options. as well as music in an incredible botanical garden setting.

I didn't expect these wine events to mimic the style and form of the beer festivals I've come to know. And they didn't. Winesong tickets are far more expensive than what most of us pay for a typical beer event. Of course, they include all the wine you can drink (they will cut off the sloshed) and, in the case of the Grand Tasting, all the food you can stomach.

Beyond the differences in cost and offerings, there was more. I assumed the crowds would be different than a beer crowd, and they were. But there were differences I hadn't expected.

The folks attending the Pinot tasting arrived mostly in expensive European automobiles. It was a decidedly older crowd, way older than what you find at your average beer festival. A lot of these folks have been coming to this slice of Winesong for a while. They knew the ropes.

The Grand Tasting crowd was much more diverse and not as gentrified. Many of the folks from the Pinot tasting were there, but the crowd had a youthful twist. It was good to see young faces similar to the ones I see in beer indulging in wine. Gave me comfort.

As I was thinking about the crowd, comparing it to a beer festival, I realized the biggest difference was the demographic mix. There was a good mix of men and women of all ages at Winesong. Specifically, there were middle-aged women, a demographic that's virtually nonexistent at beer events. These women like their wine and food. Beer is not their thing.

As for styles, the wines being poured were straightforward. There was Chardonnay, Cabernet Sauvignon, Pinot Noir, sparkling wines, etc. Wine simply hasn't been taken over by the wildly imaginative approaches seen in brewing, as brewers driven by the eclectic tastes of young drinkers do all kinds of crazy stuff to create unique beers that routinely pummel style guidelines.

When I was interviewing Dick and Nancy Ponzi for my book, one of the significant questions I asked them was, given the phenomenal success of Bridgeport Brewing, why they decided to sell to Gambrinus in 1995. Of course, they're smart folks and didn't want to give a blunt answer. So they developed an explanation with supple edges.

Essentially, the Ponzi's sold Bridgeport because they tired of the beer business, where people were always asking for hats, shirts and other schwag. They realized they would have to invest substantially in marketing and education if they wanted to build the brand further. The decided they preferred the wine business, where they didn't have to do so much handholding.

After attending Winesong, I may finally have a more complete understanding of where the Ponzi's were coming from.

Tuesday, September 6, 2016

IPA Keeps Craft Beer Afloat in a Sluggish Year

One of the more annoying experiences for many a beer geek is walking into a brewpub or beer bar, looking at the board, and discovering the majority of available beers are IPAs. It's not that we don't like IPAs. It's that we'd like to see more choices.

Of course, there are reasons for everything. And the reason beer watering holes and retail stores stock so many IPAs is that's what a growing number of consumers are looking for. That's not the way most beer snobs would draw it up

But it turns out we're lucky to have IPAs around. In a sluggish growth year for craft beer, IPA is a bright spot. If you haven't seen the numbers, craft beer is seeing its lowest sales growth in grocery stores since 2004. Growth dipped below 10 percent through the first half of the year and has lost further momentum since.

The slowdown will evidently impact fall grocery sets. Large retailers are reportedly scrutinizing craft SKUs carefully, looking for losers. That's how these folks roll. They want stuff that turns quickly and generates dollars per square foot. If craft isn't performing, something else might, though finding replacement products won't be easy since craft beer remains the fastest growing segment in the alcoholic beverage category.

When you think about the overall trends, keep in mind that these are strictly food store-related. On-premise (bars, restaurants) sales aren't tracked in these numbers. Neither are convenience and multi-outlet (Walmart and such) stores, where craft trends are evidently slightly higher. Nonetheless, the numbers are fairly shocking when you're used to double-digit growth.

Peeking through the fog of disappointing numbers is IPA, which is keeping the craft boat afloat. Through early July, IPA is up 23 percent for the year in grocery stores and creeping up on a 30 percent dollar share nationally. IPA is literally kicking the crap out of everything else. And the national numbers only hint at what IPA is doing in the nation's premier craft markets.

In San Diego, IPA is approaching 50 percent of craft sales in grocery and is up nearly 5 percent this year. The San Francisco Bay Area and Portland are close to 38 percent, both with solid growth this year. Other markets where IPA is seeing spectacular growth include Seattle, Sacramento, Los Angeles, Philly, Miami, Baltimore/DC and Raleigh/Greensboro.

Again, keep in mind that grocery sales in well-developed markets, like Portland, which consume a lot of draft beer, dramatically underreport the dollar volume of IPA sales. Industry friends tell me we don't have a great way to track draft-only sales. If we could track retail and draft sales of IPAs in places like Portland and San Diego, they might approach 60 percent of total dollars. Shazam!

Not that long ago, people were predicting the coming demise of IPA. Now that it's the shining star of the craft segment, those predictions are laughed off as highly exaggerated. Some in the industry wonder how far IPA can take them. Can it pull the craft segment out of the doldrums and a be a growth leader into the future? Or does the industry have too many eggs in the IPA basket?

No one knows the answers. Anticipating trends can be tricky. All we know for sure is that beer fans are hooked on hops. And IPA is how they get their fix.