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Sunday, November 29, 2015

Holiday Ale Festival's Lump of Coal

Given the rapidly changing aspects of the media landscape, I've wondered for a while which of the various beer festivals would be the first to pull the rug on broad media support. Almost on cue, I learned the Holiday Ale Festival will not issue media credentials this year. Viola!

For the unaware, a "media credential" is just a fancy way of saying the event provides writers and reporters with a small subsidy in the form of a glass, tokens and (in this case) comped entry as an incentive to attend. The package is best viewed as a sort of starter kit. Most buy additional tokens once inside.

In exchange for the freebies, media outlets provide coverage in the form of previews and reviews. What the Festival is saying by not issuing credentials is that it no longer needs the support of smaller outlets, particularly blogs.

You may fairly wonder why I say blogs are the primary target. It's pretty simple. Most blogs, even those that have a lot of followers, don't make money. So if you want bloggers to attend your event and write about it, you ought to provide a small subsidy. Reporters for larger media outlets don't rely on that kind of support because they typically have expense accounts.

In case you're wondering, subsidies were once considered unethical. Yep. One of the things you learn in journalism school is that reporting should not be tainted or perceived to be tainted by gifts or benefits. In essence, restaurants, bars, beer festivals, etc., shouldn't be able to pay for good reviews or to avoid bad ones. Makes sense, eh?

The practice of providing subsidies to blogs became fairly common over the last 10 or so years mostly due to the collapse of traditional media. The decline of mainstream print and electronic media and the rise of digital and, eventually, social media, ushered in the need to recognize the promotional value of all outlets, including blogs like this one.

Some regard event subsidies as a form of payola. The Federal Communications Commission, which supposedly governs these things, has regulations that require the disclosure of these kinds of benefits. But media outlets, including blogs, rarely disclose such benefits. Why? Because the monetary value of the benefits received is typically small.

If there's a problem with that arrangement, it occurs when event organizers demand positive coverage in exchange for freebies. That's certainly the case with many beer festivals. Organizers can be thin-skinned and intolerant of negative reporting. That can and does lead to some fairly mealy-mouthed, worthless reviews. You've read them, I assure you.

In the case of the Holiday Ale Festival, they provided no explanation for the policy change. But it isn't that hard to figure out. The festival has grown to the point that organizers see no need for broad media support. As far as they're concerned, folks who normally rely on blog coverage of the event can look elsewhere...to TV or radio, perhaps.

The change won't prevent anyone from covering the event, though most local blogs seem to be ignoring it. Some may pay their way in for the privilege of mingling with brewers and tasting from a list of one-off beers. Theoretically, the credential situation could lead to more honest, critical reportage. But don't hold your breath. This is a major league brofest.

For my part, I've been increasingly uncomfortable with the recent direction of the Holiday Festival. The price of admission has spiraled upward ($35 this year, for a skimpy package) and the multi-token beers and VIP scenarios suggest the event has jumped the tracks. And don't get me started on the juvenile pin-up girl marketing graphic. What the hell are they thinking?

Organizers have generously offered media folks who pay their way in the opportunity to mingle with the festival's Great Oz, Preston Weesner, for special tastes and stimulating conversation. I suppose some will take them up on that offer. But I'll pass. And I urge others to do the same. Festival organizers handed blogs and their followers a lump of coal. We need to return the favor.

Wednesday, November 25, 2015

Annual Holiday Toy Drive in Motion at Laurelwood

As we enter the season of giving and charity, it's always great to hear about businesses that are stepping up to help the community. Craft beer is part of that. As has been the case for many years, Laurelwood Brewing is again sponsoring its annual Doernbecher Holiday Toy Drive.

Between now and Dec. 20, patrons can drop off a new and unwrapped toy at Laurelwood's Sellwood or Sandy Blvd. location. In exchange, donors may purchase a pint of Laurelwood brew for $1 or enjoy a non-alcoholic beverage for free.

"We have always been dedicated to helping area youth,” said Desi Riscol, Laurelwood Public House and Brewery Area Manager. "This year, it feels especially important to extend the power of kindness. We’re excited to help give the gift of a magical holiday season to the children and families spending it at Doernbecher."

Laurelwood is no stranger to fundraisers, having sponsored benefits for schools and a variety of related community causes dating back to 2001, when it launched Dine Out to Wipe Out Cancer.

"We've never viewed fundraisers as an obligation," said Mike De Kalb, Laurelwood founder and co-owner. "We do them to give back to the community, to support the people who support us. Schools are desperate for funds. Some kids and families need help at Christmas. [My wife] Cathy and I have lived in this community for almost 25 years and this is our way of giving back."

Of course, Laurelwood is far from the only craft beer-centric business that supports the community. Belmont Station routinely has benefits, such as the Black Friday Sneak Preview. The list goes on. Ninkasi, Widmer, Breakside and a host of others give back to the community regularly.

You'll find details related to the Doernbecher Holiday Toy Drive on the Laurelwood website here. It's sure to be another big success this year thanks to support from the community. The chance to enjoy good karma and a tasty beverage at a bargain price are just added benefits for those who donate.

Friday, November 20, 2015

Black Friday Preview at Belmont Station

One of the things you don't see much of here is promotional content. There's a reason for that, which is there are so many competing events happening all the time that I mostly choose to stay neutral. That doesn't make me very popular in some circles. Oh well.

But there are events that deserve mention. Next week's Bourbon County Stout Sneak Preview at Belmont Station is just such an event. It's happening Wednesday, the day before Thanksgiving from noon to 9 p.m. in the bier cafe at the Station.

Attendees will be tasting four rare versions of Goose Island's most renowned beer: 2015 Bourbon County Stout; Bourbon County Stout Barley Wine; Bourbon County Stout Regal Rye and Bourbon County Stout Coffee. These beers will be available in flights only for ticket holders.

Tickets are limited and must be purchased in advance at Belmont Station. The cost is $30 per ticket, which might seem like a lot until you consider how rare these beers are, You can purchase up to four tickets in advance, but you can only redeem one per person on the day of the event.

The cool thing is that $15 of every ticket sold will benefit the Oregon Food Bank. This is another case of Lisa Morrison and the crew at Belmont Station giving back to the community. They do something similar with the annual Pliny the Younger release. It's damn good stuff.

Just so I don't get called out for hypocrisy, I'm well aware of the fact that Goose Island is wholly owned by Anheuser-Busch. You won't typically find me supporting events or breweries connected to the evil empire. But this event is different. It transcends the beer wars.

Tickets to the Sneak Preview will almost certainly sell out. Keep in mind that you will only be able to taste the beers in question if you purchase a ticket in advance. Tickets will not be sold on the day of the event.

This is a great opportunity to enjoy some great beers while helping out the Oregon Food Bank, which needs all the help it can get this time of year. Kudos and thanks to my friends at Belmont Station for hosting this great event.

Tuesday, November 17, 2015

Ballast Point and the Homogenization of Craft Beer

Yesterday's news that Ballast Point Brewing is being bought by Constellation Brands sent shock waves through the industry. These were different waves than the ones we've seen with other buyouts. It's a sign of the times than few are shocked when craft breweries are bought by big beer.

What shocked people about the Ballast Point buyout is the price. Constellation will reportedly pay a cool $1 billion for the privilege of owning the San Diego brewery. That number surely has more than a few craft brewers wondering what they might sell for. Everyone has a price.

On its face, the valuation seems a little crazy. Ballast Point will sell about 280,000 barrels this year and expects revenue of $115 million. The 20-year-old company has shown solid growth in recent years. Still, Constellation paid a premium, roughly $3,500 per finished barrel. Earlier buyouts were in the $1,000 per barrel range.

Keep in mind that all of these buyouts are a two-way street. Constellation, the keeper of Corona and Modelo, was shopping for a strong craft partner. Ballast Point. which launched an IPO in October at least partially to finance further expansion, was ripe for a big money partner. Both are getting exactly what they wanted.

For its part, Constellation is looking very much to the future with this deal. Craft beer owns 11 percent of the US beer market, but Constellation expects that number to grow as mass market lagers decline. Don't downplay the importance of the Anheuser-Busch/SABMiller merger as motivation. Constellation wanted to secure its place at the craft table and saw Ballast Point as a plum.

Some have poo-pooed the value of Ballast Point. That's crazy. Located in one of the nation's best beer cities, BP has a broad portfolio of beers, many of which are well-regarded outside California...they distribute to more than 30 states. They also have a small collection of pubs. The stature of the brand and their expertise at running pubs means Ballast Point could conceivably open these things all over the country. And those are serious cash machines.

What we may be starting to see with these buyouts is the coming homogenization of craft beer in this country. In the same way that fast food and a multitude of other things have been homogenized over the last 40 or so years, we may well be seeing something similar with craft beer.

When I was a kid, the national chains didn't own the fast food market. There were still a lot of independently owned and operated, mom and pop places. The big chains were around, but independents were easier to find. Since that time, the big shots have almost completely taken over the fast food landscape.

Most of today's craft breweries and pubs are independent. Imagine for a moment what happens when you have well-financed chains operated by the likes of Ballast Point and 10 Barrel opening pubs everywhere. The pubs would be backed by packaged beer in stores. Remember, these operations will enjoy huge purchasing and logistical advantages over independent pubs. Well?

Even if the homogenization doesn't happen quite as I envision, these buyouts are changing the nature of craft beer. The lines are blurring. Regardless of what you or I or the Brewers Association thinks, Ballast Point and the other purchased brands will continue to operate as craft breweries.

What everyone needs to recognize is that these breweries, by way of their connection to big beer, enjoy substantial advantages over independent brewers. The craft beer playing field is in the process of becoming a lot less level than it has been. In a nutshell, that is the risk to independent craft brewers.

Friday, November 6, 2015

Laurelwood Moving 'Contract Brewing' to Full Sail

I'm not the type to troll the OLCC website looking for information on new breweries and pubs. It isn't worth my time because I don't care if I'm first to cover a story. I prefer to provide some perspective that often isn't part of breaking coverage.

Friday afternoon, one of my industry contacts gave me a heads up that Laurelwood has applied for a brewpub license in Hood River. "What could that mean?" he wondered. I immediately thought it might be related to the contract brewing situation. Sure enough.

"We're in the process of switching our contract brewing partner closer to home," Laurelwood owner Mike De Kalb told me via email. "The Craft Brew Alliance wants to get out of the contract brewing business and Full Sail has extra capacity, so it seemed like a natural fit."

Recall that the CBA has been brewing Laurelwood Workhorse and Free Range Red at its Woodinville, Wash. facility since 2013. That arrangement has been a big winner, getting those beers into six-packs of 12 ounce bottles, beer's most popular packaging. As well, the deal freed up production capacity in Portland, allowing brewers to focus on developing more specialty beers. The Full Sail partnership may be a further step in that direction.

"We expect the arrangement with Full Sail to give us added flexibility," De Kalb said. "We'll have more control of the processes and outcomes. The details are still being worked out, but I expect us to to be able to release seasonal beers in six-packs, something we couldn't do with the CBA."

Some are wondering why, if it's a contract brewing situation, Laurelwood applied for a brewpub license. There are reasons for everything.

"This is common in Oregon. Most breweries have a brewpub license," De Kalb said. "With Full Sail, we've worked out an alternating proprietorship agreement. It's a little technical and slightly different than contract brewing. As I said, the details are still being hammered out."

Moving their production brewing closer to home offers benefits. For starters, 75 percent of the Laurelwood beer produced in Woodinville (estimated at 18,000 barrels for 2015 earlier this year) returns to Oregon. Brewing that beer here means reduced shipping costs and fresher beer. It also means easier access to the day-to-day brewing operation.

In case you're wondering, production of Red Elephant cans will continue at the Portland brewery. I assume Full Sail does not have a canning line. At present, Laurelwood uses a mobile canning system for Red Elephant, which has been well-received since its release in cans last summer.

As for the CBA, you have to wonder why they would want to abandon contract brewing. Maybe they need the capacity for the popular Kona beers. No way do they need additional capacity for Redhook, a craft flat-liner. Perhaps they've contracted with Anheuser-Busch to brew wholly owned brands like Goose Island or 10 Barrel for the Northwest. Any such arrangement would be top secret, of course. 

In the case of Laurelwood, they expect to issue a formal press release when the details are fully worked out. The switch to Full Sail won't happen overnight. They anticipate Spring 2016.