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Sunday, December 30, 2018

Craft Beer: The Year Behind and Ahead

We're creeping toward the end of the year, which means everyone is putting out a list of the best beer or beers of the year. I'm not really a fan of lists. But let me look back on the year that was and provide some thoughts on the craft beer year ahead.

When I wrote this column a year ago, I suggested the popularity of cans would continue to grow and we'd see even more canned beer hitting shelves. That was a bit obvious, thinking back. It wasn't very hard to see the tsunami of cans forming; it had been doing so for several years.

What's most interesting about the emergence of cans in craft beer is how it happened. It wasn't a top-down movement. Established craft brewers, for the most part, were slow to embrace cans. To a significant extent, they were forced to adopt cans to compete with the smaller breweries who launched and articulated the movement. Some established places have even attempted to make their cans look like they came from a small, local brewery.

Anyway, you see more canned craft beer on store shelves than you did a few years ago. A lot more. There are many Oregon breweries that had no beers in cans until this year. Now they're pushing out a growling number of brands in cans.

I've mentioned the benefits of aluminum cans before. They're less prone to breakage, less costly to ship, protect beer from light, are easier to carry on outings than glass and easy to recycle. But that's not why they're gaining traction. They're being adopted far and wide because cans possess a cool factor that bottles don't.

I'm sure we'll continue to see more canned craft beer in 2019. Smaller and mid-sized breweries will transition most of their beers to cans, whether 12 or 16 ounce. Larger breweries will continue to package in 12 oz bottles, while also transitioning their mainstream stuff to cans. Increasingly, bottles are yesterday's news.

Local Beer and the Big Squeeze
Around this time last year, we had 6,000 or so breweries, mostly smaller and independent, operating in the United States. That was a shocking number, given where we were only 10 years earlier. Within the last couple of months, we passed through 7,000, with a huge number in planning.

As I said a year ago, the explosion in smaller breweries has been a terrific boon for consumers, who now have easy access to local beer. But it has also been a disaster for larger craft breweries, caught between the retail and distribution power of the Anheuser-Busch High End and the artisan creativity of small local breweries and losing market share in dramatic fashion.

The brewery count will almost certainly continue to rise. Why? Because there are still plenty of fools determined to open a brewery regardless of market conditions. Closures ramped up in 2018 (see Ezra's article on local closures here) and that will certainly be a common theme in 2019. There's nowhere to hide in a saturated market.

The reality is simple: production of craft beer has grown faster than the size of the consumer market. That wasn't all that hard to predict a few years ago. Even when craft beer was growing double digits, many knew it wasn't sustainable, that we'd hit the wall at some point. That's essentially what's happened.

For several years, I've tried to imagine what kind of fallout we'd see in a saturated market. Part of the answer is that poorly operated or otherwise compromised places are forced out. We're seeing that now. What about prices? Craft beer prices have risen slowly in recent years. Could we see a price war in which brewers cut prices to capture sales in a flat market? Hmmm.

This is an area in which independent breweries are vulnerable. Anheuser-Busch, which has already created significant turmoil with its High End, could use steep discounting to destabilize things further. They can manufacture those brands cheaply and have a strong enough presence in the retail channel to deal independent brewers a serious blow. Could it happen? We shall see.

Best and Worst
I'm seeing a lot of Beer of the Year lists. To me, there's no such thing. I tasted or drank a number of great beers in 2018. It's hard to pick a favorite or favorites because my taste varies from week to week and month to month. I tend to like lighter beers during the warm days of summer and darker, bigger beers when the weather turns cooler. But I can't identify a favorite.

On that subject, generally, I had hoped the haze craze would moderate or die in 2018. It's not that I hate the style...I'm just tired of the frenzy surrounding it and the $8 cans with ridiculous names and artwork. Of course, the haze lives on. But I sense the frenzy around it has slowed down a bit. I suppose that question will come into clearer focus as we move through the new year.

Brut IPA, some thought, would be a replacement for the hazy. Beer geeks were ready for something new, that's for sure. But the Brut movement bogged down when a lot of the beers turned out to be nothing more than hop-flavored LaCroix. I actually tasted a couple of Brut IPAs I liked. Most, however, were middling or bad. Some fine tuning is needed, I guess.

The event madness that started many years ago showed no signs of slowing down in 2018. In fact, the event circuit seems to have captivated an increasing number of wannabes and nerds who chase special releases, collabos, etc. Their dedication is cult-like. Yeah, I understand why breweries, pubs and taprooms do events. But the cult-like fascination is mystifying.

Somehow related to the trendy and frenetic aspects of the industry is the new approach to craft beer promotion on social media. Selling with sex or the suggestion of sex has been around for centuries. Now it's part of craft beer thanks to (for example) Instagram feeds that feature beer-themed soft porn. I'm not sure where this is headed, but I'm pretty sure it's not a good thing.

There's more I could talk about, but that's enough. It's a decent bet that 2019 will be just as interesting and crazy as 2018. Craft beer and the beer industry in general are an ongoing adventure.

Happy New Year!

Sunday, December 16, 2018

Researching the Obvious by Vertical

When you're thinking about cellaring beer for a later vertical tasting, the best choice probably isn't or shouldn't be a hoppy winter ale that's designed to be consumed fresh. But the world isn't a perfect place. Plus, some people are nerds.

Regardless of all that, you don't turn down a chance to partake in a vertical tasting of Sierra Nevada Celebration going back 30 years. Nope. The oldest bottle was from 1989, the year I packed up and moved to the Portland area. Some of my millennial beer friends were babies or not yet born. Yup.

We started off the tasting with the 2018 vintage. Starting fresh and working your way back through the years allows you to get a snootful of what the beer should taste like and how it declines down through time. In theory.

The problem with that approach is there are differences in packaging (several years of twist-on caps) and unknown variations in how the different years were stored and handled. As well, I'm guessing there were slight differences in Celebration over the years, for any number of reasons.

For the unaware, Celebration was first brewed in 1981. It arrived on the scene long before Americans imagined the concept of India Pale Ale and offered an example of what the style could be, might be. Celebration has always been seriously hop forward and focused on citrus and pine notes and tropical flavors. Its hop-centric character was/is offset by a thicker and darker backbone, a feature that has been almost completely abandoned by modern IPAs.

I first tasted Celebration a generation ago, as far as I can recall. This would have been in the days when Full Sail Amber was considered fairly bitter. At the time, Widmer Hefeweizen was also considerably more bitter than it is today, a factoid revealed to me in a private tasting with Ben Dobler during Widmer's 30th anniversary year. I don't remember being particularly fond of Celebration on that first taste, though the concept did eventually grow on me.

In fact, Celebration became a sort of role model for what aggressive winter beers would become. Imitation is the greatest form of flattery, they say, and Celebration set the standard for the craft breweries that followed Sierra Nevada. As IPAs took hold, those wanting to come up with a hoppy winter ale effectively reversed engineered Celebration.

Full Sail's Wreck the Halls is a good example of the style here in Oregon. Beers like Deschutes Jubelale and Full Sail's Wassail, among others, were nice winter ales. But they were malt-driven. Wreck the Halls, designed by then-Full Sail brewer John Harris, was aggressively hopped, a bold winter IPA and a direct descendant of Celebration. Countless others have followed to the point that most contemporary winter ales are excessively hopped.

As we started to churn through the vintages, the dropoff in hop aroma and flavor was not terrible for beers packaged within the last 8-9 years. There were some obvious ups and downs in those beers, perhaps revealing damage related to how they were stored or handled. Still, this group held up fairly well. Many tasters picked the 2018 as their favorite, but opinions were mixed.

Going back another decade, to beers packaged between 2000 and 2010, there was a steep dropoff in hop presence. No surprise. These beers, for the most part, had not disintegrated entirely, but were on the downhill slide. In most cases, it was like drinking an aged amber ale with mild hop essence. There were a few exceptions, beers that held up better than the group as a whole.

The final decade, beers from 1989-1999, revealed with brutal honesty what happens to these beers with age. Although a couple of them held up better than expected, most were lifeless. They presented as thin malt tea or, worse, soy sauce. Hop presence had faded almost completely in this set.

I should mention that there were a few gaps in the collection. Beers from 24 vintages were tasted, along with a shorter vertical of Bigfoot, which held up considerably better than Celebration. A fine time was had by everyone who attended, and it was instructive. Thanks to Nicole Kasten and Mike Perkins for generously hosting, and to everyone who provided beer.

What empirical lesson was learned? Only that cellaring hoppy beers for an eventual vertical tasting has some serious pitfalls and that these beers are best when fresh. So nothing we didn't already know. But proving the point once again was great fun.

Friday, December 7, 2018

The Uncertain Fate of the Craft Brew Alliance

I last discussed the Craft Brew Alliance roughly a year ago, just after they shut down the Gasthaus pub and turned it into a taproom for their small batch beers. That move was designed, at least partially, to make the CBA a juicier buyout target for Anheuser-Busch. But nothing has happened. What gives?

To understand why many assumed a buyout was imminent, you have to go back to the contract AB and the CBA signed in August 2016. That was a different time in craft beer, predating the market saturation and instability we see now. The document, which was a renewal and expansion of a prior contract, heavily favored the CBA and effectively established a framework for a slow moving buyout.

Giveaways in the contract involved domestic distribution costs, contract brewing opportunities, international distribution rights and more. They are covered thoroughly in the piece I wrote back in 2016. Rather than repeat those details, you can find them here if you're so inclined.

The reason many assumed a buyout was coming is the contract set escalating "qualifying offer" prices. By August 2017, a qualifying offer to buy the CBA had to be at least $22 per share. By August 2018, the number rose to $23.25 per share. By August 2019, a qualifying offer is set at $24.50 per share. There was incentive for AB to act sooner than later.

The allure of easy money attracted speculators. Soon after the new contract was announced in 2016, the CBA's stock price, which had been hovering around $14 per share, jumped to above $20. It hasn't yet worked out for the speculators that jumped aboard. The stock price has bounced around a bit, but shown life in July and August in each of the last two years, as speculators positioned themselves to cash in. It closed at $15.80 on Friday.

Given the structure of the contract, it's fair to wonder why the expected buyout hasn't happened. We all understand it's a different craft beer climate these days. Some of the big shots at AB have said they're comfortable with the High End portfolio as it is. They say they're focused on paying down debt acquired in the SABMiller merger/acquisition. Right.

The reality, though, is that Anheuser-Busch could not have gone through with a buyout in the wake of the SABMiller deal. It had to wait for the Department of Justice to complete its review. The "consent decree" was only recently issued, which means it's open season again, subject to certain limitations. One condition is that AB must give 30 days notice of any acquisition.

Opinions on whether a deal will happen on the 2019 timeline are mixed. Some believe the market is too unstable and that AB will stay focused on the craft assets it has and delay future acquisitions until the dust settles. That's not necessarily a bad argument.

However, there are sound reasons to believe a buyout may happen. Foremost is Kona, which continues strong growth despite the funk descending on the industry as a whole. Kona drove 64 percent of the CBA's total shipments during the first nine months of 2018 and its international potential is virtually untapped.

On the flip side, the CBA's legacy brands, Widmer and Redhook, are in decline and have no value to AB. They wouldn't be a stumbling block given the appeal of Kona, but they would likely be spun off in a buyout. It's ironic, for sure, given the history, but that's the way it is.

Should Anheuser-Busch fail to make a qualifying offer by August 2019, the contract stipulates that it pay the CBA a $20 million "international volume development incentive" fee. Those fees were $3 million in 2016 and $5 million in 2017. The $20 million balloon payment was put in the contract to leverage the imperative of a buyout.

It's entirely possible that AB moves forward in coming months. Since it already owns 31.4 percent of the CBA, it would spend only about $330 million (at $24.50 per share) to gain full ownership. That isn't a huge financial hit in a company so focused on reducing debt that it recently cut dividends to the tune of $4 billion a year. The spin for shareholders would be that the acquisition saves and makes the company money.

The fly in the ointment is the state of the industry. There are a lot of nervous folks out there. Some fear we are looking at a repeat of what happened in the late 1990s, which in our present context would mean dozens, if not hundreds, of brewery closures, and a depressed market for several years, at least. It's a serious and realistic concern.

On the other hand, there's Kona, seemingly impervious to market conditions. Even in a shrinking beer market and with overall craft sales flat or barely growing, Kona continues to surge. It's been dragging the CBA forward for several years and has the kind of brand appeal that a lot of companies covet. Kona may be one of the few gems left and AB already owns a piece. Why not own it all?

With all that in mind, I rate the chances of a buyout before the end of August 2019 at less than 50 percent. The incentives for AB to own Kona outright are significant. One thing that would certainly scuttle a deal is a sudden slowdown in Kona's growth trajectory, a scenario that would also cripple the CBA.

Anheuser-Busch may very well let the buyout timeline expire in 2019. When the contract was renewed in 2016, the parties didn't anticipate the slowdown we're seeing. They foresaw continued rapid growth in the craft segment. The qualifying offer minimums were set to protect both parties, but it turns out the numbers were set too high and are now an obstacle.

Should the August 2019 deadline pass without a deal, the CBA will receive the $20 million international development payment. It will also continue to benefit from all other aspects of the contract, including distribution, contract brewing, etc. The CBA would, of course, be open to offers from other suitors, though it's difficult to imagine who might be in the market.

The CBA's stock price will likely level off at around $14-$16 in that scenario, only slightly higher than it was before the contract renewal and buyout provisions artificially boosted it. If Kona falters, the stock price could take a significant hit, possibly into single digits.

It seems entirely plausible that AB plays a waiting game that extends beyond the 2019 deadline. Unless they want to be really generous with their CBA friends, they'll watch what happens with Kona and the overall market. If Kona continues to look strong, they'll likely proceed with a buyout for something less than the current $24.50/share price.

Crapshoot on.

Wednesday, November 28, 2018

In Shark Infested Waters, the Holiday Ale Fest Thrives

The 23rd Annual Holiday Ale Festival opened for business today in Pioneer Courthouse Square and runs through Sunday. Hardcore fans. as well as clueless newbies, will flock to the festival in droves. At a time when many large beer events are floundering, the HAF is thriving.

There are reasons for everything, of course. In one sense, you could argue that the Holiday Fest got lucky, that it has benefitted by way of timing, location and the evolving and fenetic interest in rare, experimental beers. You could argue that.

But it's a lot tougher to get lucky than it once was. Craft beer events used to draw crowds no matter how poorly they were run, how lousy their location or how mediocre their tap lists. Those days over. The competition for festival patrons is fierce and you have to offer value to reel them in.

What would become the Holiday Ale Festival began as the Winter Ale Festival, an offshoot of the Oregon Brewers Festival. Organizers, including OBF director, Art Larrance, discontinued the event after two years. After a year off, it returned as the Holiday Ale Festival. The historical arc of the event is nicely outlined in a recent post on the New School blog. Highly worthwhile read.

I first attended the event when it was known as the Winter Ale Festival. As noted in Ezra's article, the set up was quaint compared to today. The tents were small and, although it isn't mentioned in the article, made of fabric. As such, you couldn't view the surrounding sights while sipping beer, as is the case today. The beer list was small.

The most significant changes, it seems to me, have occurred since Preston Weesner took over in 2002. I know Weesner from my time working as a volunteer at OBF dating to the 90s. He became a common fixture in the beer fest culture here, involved in a number of area festivals. Those experiences, I suspect, helped shape his vision of the Holiday Fest, which he owns and directs.

Of the decision's Weesner has made (or not made), probably the most important one was staying the course in Pioneer Courthouse Square. He could have moved the event to a larger and less costly venue at any time. He refused to take the bait. Whether by luck, good sense or osmosis, he realized a large part of the event's appeal is its location.

I don't know when the clear plastic tents were introduced, but that was a game-changer. In the early days, it was a little claustrophobic and musty under the tents. The clear tents opened up the world outside the festival, including stunning views of the holiday tree and the surrounding city skyline. The change in ambiance was significant.

The downside of keeping the event downtown was and is the cost. It's an extremely expensive place to host a beer festival due to the setup required for the unwieldy shape of the venue, challenges connected with unloading kegs and other essentials, as well as costs involved in arranging security and adhering to city and OLCC regulations.

With event costs high, ticket prices have escalated almost yearly. The base price this year is $40. Weesner has attempted to deflect gripes about rising prices by curating a list of extremely rare, typically experimental beers. For the most part, you won't find these beers outside this event, which seems to provide value for geeks and novices alike.

One of Weesner's revelations was that the HAF had become so popular that it did not need significant promotion. With that in mind, he stopped offering event passes to bloggers and other beer-centric media several years ago. That community was stunned and has mostly maintained radio silence since. But it hasn't mattered. The event hasn't missed a beat, just as Weesner suspected.

The result of the various moves (and non-moves) is a festival that keeps churning along smoothly, while others struggle in an increasingly competitive market. My guess is the HAF appeals to a wide swath of patrons interested in a boutique beer event in a picturesque setting during what is arguably our most festive time of year. This event pummels each of those targets.

Still, I'm not suggesting you shell out $40 for what I consider to be a stingy drinking package. I haven't attended for several years and have no plans to attend this year. Despite its attributes, I think the HAF stopped being a good value a while ago. The ambiance is terrific, but the beers tend to be more miss than hit for the price, which continues to spike upward.

Don't let my opinion stop you from attending if you are so inclined. I'm admittedly out of step with many of my peers, most of whom look forward to the Holiday Festival every year. That's fine. It wouldn't be any fun if we all had the same views on these things.

Friday, November 16, 2018

Lloyd Center Eyes Future with Migration Burger Shack

Lloyd Center Mall has been in gradual decline for most of the last 15 years. That's not really a secret and there are a variety of reasons. But there are efforts underway to transform the place for the 21st century. Migration Brewing's Burger Shack pop-up is part of that strategy.

The Burger Shack opened this week in the third floor food court area in the space formerly occupied by Billy Heartbeats Diner, a 50's-style eatery. It features cheap eats alongside craft beer from one of the area's aggressively expanding brands. This is billed as a temporary arrangement, lasting through the holidays. We'll see.

Migration, if you aren't aware, has been kicking around the local scene for a number of years. The original location on Northeast Glisan features a popular outdoor patio and practical pub. The second location, opened earlier this year, is a pub and production facility in Gresham. These guys are bigly on growth.

The pop-up menu is pretty dumbed down, perfect for frantic holiday shoppers who need a bite to eat and a break from shopping. The Classic Burger with fries and a soda costs $10. The same items with a beer go for $11. Not bad, eh? They also offer a Double Classic, a Veggie burger and a Fried Chicken sandwich, as well as some sides.

For beer, they're leaning on canned product made in Gresham. They had several choices when I stopped by on opening day. There are also wine and cider options on the board. Ideally, you'd like to see draft beer in a place like this. But that apparently isn't part of the plan for now. It's understandable if the situation here truly is temporary.

Whether the Burger Shack is permanent or temporary, it's a smart move. Migration, which isn't the  household name it might like to be, exposes its brand to a general audience that's more likely to buy beer in stores than hardcore beer fans. With the brewery expanding production and finding spots on more store shelves, the timing is ideal. Marketing 101, you might say.

This a win-win for the mall, as well. They're adding another food option for mall patrons to visit during the high traffic holiday season. Plus, this is the kind of place that will appeal to millennials who like craft beer, but aren't necessarily fans of mall culture. That's probably especially true of Lloyd Center, which has lost some luster and gotten some bad press in recent years.

When it opened in 1960, the mall was widely regarded as one of the best in the country. It has undergone several significant facelifts over the years, the most significant of which was (arguably) covering and enclosing it in the early 1990s. I've belonged to an athletic club across the street from Lloyd Center for 30 years and I've watched some of the changes happen. I've also seen the decline in holiday shopping traffic.

Developments over the last decade or so haven't been especially positive. The growing popularity of Amazon and online shopping in general has crushed traditional retail. Lloyd Center lost anchor tenants (Nordstrom and Sears, for example) and many smaller, non-chain stores. Its movie theater closed years ago. A number of vacated storefronts were in evidence on my visit.

But all is not lost. Mall owners launched a $50 million renovation project several years ago. They've made progress, though much remains to be done. The reimagined mall will place less emphasis on anchor tenants and more on lifestyle concepts and artisan shops. Drawings show a modern movieplex, a fitness center and other modern amenities. On the flipside, a vintage spiral staircase with terrazzo columns recalls the mall's early, open air days.

The Lloyd district itself has undergone a dramatic transformation in recent years, with residential high rises and street-level shops. There's more of that on the way. The updated mall, although it will certainly look to attract visitors from outside the area, will strive to serve the burgeoning residential clientele that lives or will live within walking distance. There are still questions about what the final form will be, but it's sure to be interesting.

As I think about what Lloyd Center might be, I can easily see it housing a couple of pubs and maybe even a brewpub. That scenario would fit with the goal of serving the local residential community, as well as patrons drawn from outlying areas. Whether the Migration Burger Shack is an experiment or the leading edge of what's coming, it makes a lot of sense. The future is now.

Wednesday, November 7, 2018

Runaway Growth and the Craft Beer Bubble

At some point, you start wondering when the next shoe will drop. The hypercompetitive craft beer industry, which had experienced dynamic, runaway growth for nearly a decade, is clearly entering a contraction phase. The bubble may not be bursting, but it is under intense pressure.

Signs of a slowdown began to appear a year ago, with the closures of Lompoc's Hedge House and Widmer's Gasthaus pub. Months later, General Distributing sold to Columbia, a move precipitated largely by perceived instability and a lack of confidence in where the market was headed.

More recently, we've seen additional evidence of turmoil. Lompoc Tavern closed. Seven Brides closed its pub in Silverton. Two Kilts closed in Sherwood. Then Alameda Brewing closed. Yesterday, Portland Brewing announced the abrupt closure of its underperforming pub in northwest Portland.

Alongside all this, we learned this past Friday that Brian Butenschoen is out as executive director of the Oregon Brewers Guild. Butenschoen had served as the leader of that organization since 2005. As of this moment, neither Butenschoen nor anyone at the Guild has explained what happened, beyond the typical canned statement saying they agreed to go their separate ways.

Forget Butenschoen for a minute. That situation may or may not be related to the big picture. When I was interviewed for what became PDX Brew City in 2014, I was asked if I thought there was a bubble forming in craft beer. Of course there was a bubble forming, I said. Whenever I've watched that film as part of an audience, I've heard smug laughter behind that comment.

But it was clear to me at the time that the brewery count was growing faster than demand at virtually every level. There were about 2000 craft-centric breweries in the United States in 2011. By the end of 2013, 2,420. By the end of 2015, 4,544. By the end of 2017, 6,266. By the end of this year, we'll have about 7,000, with 9,000 more in planning. These are crazy numbers.

Portland and Oregon brewery numbers essentially mirrored what was happening nationally. Oregon had 124 breweries in 2011, according the Brewers Association. By 2013, we had 181. By 2015, 228. By the end of 2017, 266. Portland stayed in step. It had about 40 breweries in 2011. Today, the city is home to 77, with 117 in the metro area, according to Oregon Brewers Guild stats.

My assumption back in 2014 was that the insane growth would compromise the entire industry. There's only so much shelf space and so many tap handles to chase. I always figured intense competition would create chaos and price wars that would affect everyone.

Some of that has happened or is happening. But the larger emerging theme is that older breweries and those that have quality issues or poor management or a lack of innovation are struggling or failing. Making good beer is definitely a requirement in the current marketplace, but not the only one.

When I said a bubble was forming, a friend suggested the result would be different than I imagined. He said places that make bad or mediocre beer would be driven out and replaced by those that make good beer. He was right, of course, though I still contend good beer isn't the only thing you need.

Getting back to Butenschoen's situation, he had been director of the Guild for 13 years. That's an eternity. He rode the wave of craft beer's golden age, a time when the industry could seemingly do no wrong. But things have flipped and the industry now faces a new set of challenges.

There are more than 250 breweries in Oregon today, most of them small. The Guild is tasked with serving the needs of the many, as opposed to the needs of the huge and the few. That means collaborating and cooperating with all kinds of operatives across a wide spectrum.

"It's a new world we're experiencing right now in beer," says a reliable industry source. "Everybody knows it. Oregon needs effective leadership if we're going to stay strong in craft. Maybe the Guild felt Brian wasn't the right guy to lead it through the emerging challenges."

Regardless of what's going at the Guild, the industry definitely needs strong leadership to help it navigate the turbulent waters ahead. The era of runaway growth is closing, to be replaced by a period of consolidation and contraction. At least for now.

Sunday, October 28, 2018

Rogue Changes Horses as National Stature FIzzles

The news that Brett Joyce will step down as president of Rogue Ales & Spirits after nearly 11 years at the helm was greeted with surprise in beer circles. Maybe it shouldn't have been. Rogue has been spiraling downward for several years. Is new leadership the answer?

Exploring alternative narratives, Beer Business Daily asked Joyce if there was a lurking scandal or #metoo situation behind his decision. He assured them that is not the case. Inquiring minds may fairly wonder why the question was asked in the first place. You wonder.

Current general manager Dharma Tamm, will assume the top leadership role in January. The 31-year-old joined Rogue in January 2017. He's a Stanford grad (engineering and German) and worked in the ABI High End for seven years before joining Rogue.

Joyce, who will stay involved as owner and board member, says the transition has been in the works for some time, that it's just time for him to step aside. Given Rogue's apparent trajectory, no one's arguing. But handing over the controls to someone who's been with the organization for less than two years has raised eyebrows.

Looking back, you will recall that Rogue was launched by the late Jack Joyce (Brett's dad) and some fellow Nike execs in 1988. Rogue formulated a uncommon game plan from the start, initiating a national sales strategy. It has sold the bulk of its beer outside Oregon for years.

The national strategy was successful for several reasons. First, being in 50 states was genius when consumers didn't have a lot of beer choices. Second, Rogue beer was nicely packaged and sold at a premium price. Those factors helped Rogue carve out a wildly successful niche.

Of course, the national strategy is now unraveling. The flood of new breweries over the course of the last decade has brought local beer to communities that once only had access to national and regional brands. Rogue is one of the victims, but not the only one. The pain is being felt widely.

According to Brewbound, Rogue's overall production peaked at 117,000 barrels in 2014. Numbers have declined each year since, as a tsunami of new craft breweries opened. Rogue's overall sales volume declined to 98,000 barrels in 2017, and 2018 is likely to show additional losses.

The situation in Oregon is much better. Rogue has a small collection of pubs that help counterbalance declining retail sales. If you believe OLCC stats, Rogue's numbers have been relatively stable in recent years. Volume peaked in 2016, but has stayed pretty constant. It looks like they are on track to produce and sell more than 15,000 barrels this year.

So the challenge Tamm inherits is definitely a national one. Rogue isn't just competing with the thousands of small breweries that have opened. Big beer, mainly the AB High End, has dramatically increased its retail footprint over the past 5-10 years, putting the squeeze on Rogue and other regional and national brands in the grocery and convenience channels.

The spin pushed by Tamm and Joyce is that Rogue is a diversified brand. As noted, they do have a small number of pubs. Perhaps more importantly, they have an evolving spirits business, which is a good place to be given the growing popularity of hard liquor among younger drinkers.

Nonetheless, the odds of Rogue regaining its national stature appear to be long. That has nothing to do with Tamm, who may turn out to be perfectly fine in an industry where millennial drinkers (his age) are the primary target. The marketplace has simply moved on from Rogue's approach.

As Rogue's national numbers continue to slide, the prediction here, suggested by a well-placed and reliable industry informant, is that Joyce will either return or bring in another wild card to pick up the pieces in a couple of years. We shall see.

Tuesday, October 23, 2018

Bill Coors and Oregon's Brewpub Bill

When Bill Coors passed away last week, there was an outpouring of sympathy around the beer industry. The dude was 102 and lived a long life, which included an incredible four decades as the head of Coors Brewing. We are unlikely to see Bill's equal anytime soon.

Maybe that's good news. As Jeff Alworth outlined yesterday, this guy was much more than a bold entrepreneur who introduced the aluminum can and transformed Coors into a national brand. Bill Coors was a racist who held unpopular views on organized labor, women's rights and more.

It's largely forgotten, but Coors' politics nearly derailed Oregon's Brewpub legislation in 1985. The story is briefly documented in Portland Beer and has been retold in various places since the book was published in 2013.

Briefly, Portland's founding brewers were attempting to change the law so they could sell beer directly to patrons in a pub setting. At the time, breweries (only Widmer and Bridgeport were open) could only sell their beer in taverns, bars and restaurants.

That situation was a carryover from the end of Prohibition in 1933. Breweries were prime targets for punitive laws because they had owned saloons, distributors and retailers in the bad old days. Corruption was rampant. When Prohibition ended, states were charged with establishing laws to ensure that scenario didn’t repeat itself.

Oregon’s three-tier system, similar to many states, required breweries to sell their wares to taverns, bars and retailers through independent distributors. Or they could sell directly to those outlets, a time-consuming and logistically awkward proposition.

The founding brewers, including the Widmers, Dick and Nancy Ponzi and Karl Ockert (Bridgeport), Mike and Brian McMenamin, and the gents who would launch Portland Brewing, figured brewpubs would be the key to their success. They were working to get the appropriate legislation passed.

At the same time, Coors was trying to tap the Oregon market. For decades, its beer had been available in a limited number of states, creating a sort of cult-like status, as depicted in the movie, Smokey and the Bandit. By 1985, Coors was distributed in 43 states, but it wanted to be in all 50.

Coors ran into a snag: Oregon had a 50-year-old statute forbidding the sale of unpasteurized beer, which was officially considered unhealthy. Coors beer was cold filtered, not pasteurized. Ironically, Oregon’s goofy pasteurization law applied only to packaged beer sold in stores. Taverns, bars and restaurants were free to sell unpasteurized beer in any form.

Given that virtually all draft (and craft) beer is unpasteurized, Oregon's crazy law seems pretty comical in retrospect. Nonetheless, it was the law. In fact, Coors was selling its beer in some Oregon bars and restaurants by 1984, hoping to demonstrate the hypocrisy of the law.

The pasteurization law became a dynamic issue in 1985 largely due to Coors' politics. Under the leadership of Bill Coors, the company abused workers and was belligerently anti-union. Some of his racist, homophobic remarks were quoted in the New York Times and other newspapers. Coors was not very popular in Oregon.

That was bad timing for the folks pursuing brewpub legislation because their effort got entangled with Coors' effort to fully enter the Oregon market. Senate Bill 45 combined language allowing brewpubs and Coors in Oregon. That bill passed the House 45-14 in early June and was expected to be passed by the Senate.

It didn't happen. Several key members of the Senate still objected to Coors in Oregon. They were willing to use the pasteurization law to keep Coors out of Oregon because they didn't like its politics. The measure was defeated 16-14. Brewpubs were the unfortunate victim.

When I was interviewing the founding brewers for Portland Beer, they all thought the brewpub legislation had passed in the same bill that allowed Coors into Oregon. Not quite.

As it turned out, an ally of the brewpub legislation, Rep. Verner Anderson of Roseburg, had inserted the brewpub language into SB 813, which addressed the granting of liquor licenses to bed and breakfast establishments. In effect, there were two separate bills with the brewpub language in the legislative pipeline by early June. SB 45 failed.

Since the brewpub language was amended to SB 813 after it had already cleared both the House and Senate, it need only go through Conference Committee for review. In a five-minute meeting on the afternoon of June 17, the bill was unanimously approved. It headed to Governor Vic Atiyeh’s desk, where he signed it into law on July 13.

No thanks to the politics of Bill Coors, brewpubs became legal in Oregon. McMenamins launched the state's first brewpub a few months later. They would eventually help fuel a revolution in how Oregonians think about and consume beer, a revolution that continues to this day.

What happened to Coors? Although it looked like Coors would once again be banned from Oregon stores, events intervened. In Portland, Circuit Court Judge Bill Snouffer ruled the state’s goofy pasteurization law unconstitutional on June 12. He found that “neither the safety nor the health of the people of the state is jeopardized by the consumption of unpasteurized beer.”

This ruling came down hours after the Senate voted down SB 45. No one was quite sure what would happen next. Some wondered if the OLCC would appeal Snouffer’s ruling. Didn’t happen. In the end, the legislature passed SB 50, a rewritten bill allowing Coors into Oregon, on June 19.

Coors soon became available in stores around the state, for better or for worse.

Sunday, October 14, 2018

Cicerone and the Search for Off-Flavors in Beer

Having judged in competitions several times in recent years, I've always been interested to hear what brewers and experienced homebrewers say about beers. In a lot of cases, they would talk about things I was tasting, but didn't necessarily know how to describe.

That led me to think it might be useful to get some formal training on how to detect and describe flaws and off-flavors. A few weeks ago, I found out about a Cicerone Off-Flavor class that was being held in Portland. Viola.

For the record, I'm not seeking any kind of Cicerone certification. I think the value of those certifications depends on where you are in your career and your intentions. I'm not in the beer industry, likely won't ever be part of the industry. I'm also not a decorated homebrewer (when I was brewing, my beers were often infected). The Off-Flavor class was strictly an educational junket for me.

The class, which was held at Ex Novo Brewing in Portland, was small...12 people. The gent who facilitated the class, Bobby Wood, travels around the Northwest teaching classes and doing other things related to the Cicerone program. It's a tough job, but someone has to do it. He told me via email that classes vary in size:
Depending on the market, off flavor courses can sometimes have up to 40 or so attendees, especially if the course is being held in conjunction with a major industry event, though attendance can sometimes be difficult to predict.
I expected to see industry-connected folks at the class. Sure enough, I was the only one from outside the industry. The rest were bartenders, servers, brewers and brewery reps. Wood verified that attendees run the gamut from beer aficionados to homebrewers to service staff and sales reps.

There were no quickie intros, which was too bad because I was curious to know why people were there. Some were evidently there simply to improve their ability to detect and identify flaws. Others were getting ready to take a Cicerone test and the Off-Flavor class was part of the prep.

The format is pretty simple. When you sit down, there are seven small glasses in front of you. One is a control beer. The other six are the control beer spiked with chemicals that induce common off-flavors DMS, Diacetyl, Acetaldehyde, Trans-2-Nonenal, Lightstruck (Skunky) and Infection.

There's a certain technique to tasting that I wasn't fully familiar with. The spiked samples, Wood noted, presented more robust flaws than we are likely to find in the wild. Still, some of these flaws are more difficult to detect than others and proper tasting approach is helpful.

By far the easiest flaw to detect, at least for me, is Lightstruck, which can happen to a beer in a matter of minutes when it is exposed to the right (or wrong) kind of light. Trans-2 is another easy one, featuring a dry mouthfeel and papery flavor. The others are more nuanced. Palates vary.

We also talked about how flaws occur. The most instructive point here is that flaws don't always emanate in the brewery. Beer can be damaged by inappropriate handling, dirty tap lines, poor packaging, etc. This isn't exactly breaking news, but it's important to recognize that flaws in beer are sometimes caused by things that happen after it leaves the brewery.

The basic Off-Flavor class runs just over an hour and costs $49. I thought that was a decent value because I think it's useful to hear what others who taste and evaluate beer have to say. However, you can purchase a kit to do this tasting as an independent group in a private setting.

Several people have asked when the Off-Flavor class will be offered again in Portland. I have no idea. Wood told me they typically offer the course here quarterly, but that depends on demand and attendance history. Navigate to the Cicerone Off-Flavor page for upcoming sites and dates.

The value of the class will depend largely on what you're looking for. There are several layers of Off-Flavor courses, this one being the most basic. I thought it was time and money well-spent. But opinions will certainly vary.

Monday, October 1, 2018

Cashing in on Oregon's Bottle Bill

As a lifelong supporter of recycling, I've always returned my empties. I was a big proponent of the BottleDrop redemption centers when they started showing up a few years ago. Instead of returning empties to my bottleshop or grocery store, I could drop bags off every few weeks.

The notion that the BottleDrop concept might be part of a money grab didn't occur to me. Recent experiences there led me to take a deeper look at what's going on. Sure enough, BottleDrop centers are part of a giant money making scheme.

Oregon's Bottle Bill, you may recall, came to fruition in in 1971. It was the first of its kind in the country. The idea was that putting a nickel deposit on beer and soda containers would reduce what was then considered to be a growing litter problem.

The law has been updated several times, most recently in 2011, when it was expanded to include all drink containers except wine, liquor and milk as of 2018. More importantly, returns would mostly move away from large grocery stores to BottleDrop redemption centers.

If your Fred Meyer, for example, is located within 2 miles of a redemption center, they don't have to take empties. If your Freddy's is within the 2-mile limit, the store can still decline to take empties if it's willing to pay a $200 fine per day. My Fred Meyer is apparently doing just that.

Of course, it's been common knowledge for decades that grocers and distributors hate the headaches attached to redeeming empties. The smell and the mess come to mind. Grocers also don't like the extra staffing required to count empties or keep machines functioning.

By 2011, grocers and distributors realized recycling proponents would succeed in expanding the list of containers requiring a deposit. The 2011 Bottle Bill update was a compromise supported by grocers, distributors and recycling advocates. It included establishment of the BottleDrop redemption centers, as well as language requiring the container deposit to increase to 10 cents if the rate of return dropped below 80 percent and stayed there for two years.

At this point, it pays to know how Oregon's redemption system works. You might think it's managed by the state. Not so. When a retailer buys product to put on store shelves, the distributor is paid for the drinks, including deposits on the containers. When a customer returns the container to the store or a BottleDrop redemption center, the deposit is returned.

The rub is that something like 35 percent of the containers (600 million in 2015) eligible for return aren't returned. Some wind up in the garbage. Some wind up in curbside recycling. When that happens, distributors, not the retailer or the state, keep the cash. A lot cash...about $30 million in 2015 according to a 2017 Willamette Week story.

Some were concerned about the potential increase to 10 cents when the 2011 update was being configured. They saw it as a windfall for distributors. Return rates at 5 cents had been dropping, prompting the fear that 10 cents would happen. Distributors pushed the idea that return rates would improve thanks to the BottleDrop centers and that the 10 cent deposit would never happen.

Of course, we now know that was bad advice. In July of 2016, the OLCC announced that the redemption rate had dropped below 80 percent for two consecutive years. The 10 cent deposit on containers went into effect in April 2017.

That led to charges that distributors knew all along the deposit would increase. Slow execution was probably part of the problem. Distributors agreed to build 45 BottleDrop centers as part of the 2011 compromise. By my count, there are fewer than 25 of them today. Distributors say they're behind because locating and implementing redemption centers got too expensive. Food for thought.

For a while, I wondered why BottleDrop centers are always such a gross mess. I wondered why I regularly find machines not working and see long lines of folks waiting to return containers. I wondered why these places routinely appear to be drastically understaffed. I wondered about some of the quirky rules they have in play. But now I get it.

The fact is, distributors have a financial disincentive to keep BottleDrop locations clean, well-staffed and running smoothly. With the 10 cent deposit and the expanded list of eligible returnables, the $30 million windfall they got in 2015 has likely doubled..or increased significantly, at least.

Distributors big and small are no enemies of mine. They have an important job to do. But if we want Oregon's redemption system to be run efficiently, maybe the best approach would be to have it run by an entity that doesn't directly benefit by it not being operated efficiently.

Monday, September 24, 2018

Oregon's GABF Connection, 2018

I didn't make the trip to Denver and the Great American Beer Festival this year. Last year was my first. I'll go again. Maybe next year. Regardless, it's always interesting to watch what transpires in the medal ceremony, some of which I watched via streaming. Surprises and trends.

If you're looking for summaries, look elsewhere. The complete results are posted on the GABF site and are sortable by state, beer, medal, etc. You can also find local and state coverage on The New School and Beervana blogs.

The first surprise for me was Omission Pale Ale winning a gold medal in Classic English Style Pale Ale category. What's odd about it? Omission is a gluten-reduced beer winning in a standard category. The lager version of Omission won gold in a standard category two years ago, so maybe the Pale winning shouldn't be considered a giant surprise. Still.

Another surprise was MacTarnahan's Amber Ale winning silver the same category. This beer is ancient. I used to drink a lot of it back in the dark ages. I don't consider it a pale ale, but nevermind. MacTarnahan's has won before in this category, but not lately. I sampled a bottle of it earlier this year and it seemed pretty solid. Anyway, good news for Portland Brewing.

It wasn't a surprise, but it was good to see pFriem do well. The brewery won medals for its Pilsner and Druif, a mixed culture specialty beer. More importantly, perhaps, pFriem was named Mid Size Brewery of the Year. Anyone who's been to the pub in Hood River or had their beer in any form knows this award is well-deserved.

Finally, one of Oregon's prime medal suspects faltered this year. Breakside won four medals in 2017, three in 2016. It's IPA won a gold in 2014. But no medals this year. This despite the fact that the brewing program there appears to be as solid as ever. Go figure.

Medal Explosion
With the number of breweries across the country rising almost exponentially, GABF competition has has added new medal categories regularly. There were 160 total medals awarded in 2000. The number ballooned to 239 in 2010. This year, 306 medals were awarded.

It isn't that hard to figure out why. The brewery count is approaching 7,000. We have a growing number of styles and substyles represented in the marketplace. A good way to to keep everyone interested and focused is to increase the number of available medals. Viola!

Just over 2,400 breweries entered the beer competition this year. The only state not represented was Mississippi. We don't know the number of breweries per state. That's info the Brewers Association doesn't release in my experience. We do know that about 8,500 entries were evaluated by 239 judges from around the world. That's a crazy amount of beer to taste.

Oregon's Count
With the brewery count expanding everywhere, I wondered what might be happening to Oregon's share of the awarded medals at GABF. The website provides a handy way to look back at past years and determine how many total medals were awarded and how many Oregon won.

I took a look at the medal count every third year over the last 12 years Why 12? I don't know. It made sense for the task. I wanted to see if there was any kind of obvious trend without plotting every year. Anyway, I looked at 2018, 2015, 2012, 2009 and 2006.

You can see by way of the graphic what's happened. In 2018, Oregon won roughly 7 percent of  the awarded medals. That was about the same as 2015 and 2006, but down from the better than 9 percent won in 2009 and 2012.

Looking at every year 2006-2018, the lowest medal count was 11 in 2007. The highest was 25 in 2013. So Oregon breweries are winning an average of about 20 medals a year, while the number of awarded medals is increasing.

Is there any kind of notable trend? Not really. The medal count has bounced around a bit. I'm going to guess a rate of around 7 percent will begin to look like the new norm due to the growing number of breweries, better techniques and improved beer quality. But that's strictly a guess.

Just for fun, I looked at a few states that have seen significant increases in brewery count from where they were in 2006. Texas and Florida are in that boat. Between them, they won just four medals in 2006. This year, Texas and Florida combined to win 25 medals. Big change.

There's also California, which has more breweries (more than 900 by the end of 2017) than any other state and has always done well at GABF. California won 16 percent of the awarded GABF medals in 2009, 24 percent in 2015 and 23 percent in 2018...a case of the rich getting richer.

Portland's Count
Taking this exercise a step further, I looked at what's happened to Portland's share of Oregon medals over the same period. Portland has been a leader in the craft beer renaissance, but Oregon has a growing number of breweries (281 at the end of 2017) and a lot of them are winning GABF medals. What do the stats say?

The answer is that Portland's share of GABF medals appears to be in gradual decline. Portland brewers won 42 percent of the state's medals in 2006. This year, the share dropped to 31 percent. Similar numbers pop up for 2012 and 2015. The decline looks worse if you include 2003 (which I did in the graph), when Portland won 57 percent of the state's GABF medals.

What does it all mean? It mostly means the craft revolution is expanding. The cities and states where the movement began and flourished have helped spread the word through the sharing of appropriate techniques and best practices. Craft beer is being assimilated.

The end result is that GABF medals are being won all over the country. Also known as good news for the industry.

Monday, September 17, 2018

Lompoc Tavern Closure a Sign of the Times

The news that Lompoc Tavern will soon close arrived Friday afternoon. I wasn't surprised. It has become increasingly difficult in recent years for established pubs and breweries to compete with a sea of newcomers that tend to have greater appeal among young drinkers.

In the press release announcing the closure, owner Jerry Fechter talked about the challenge of operating pubs in various parts of the city and said it's time to sharpen the organization's focus on the pubs they have left...Fifth Quadrant, Oaks Bottom and Side Bar.

"We're embracing this as an opportunity to invest more time and attention on the remaining pubs and brewery, and making them the best they can be.”

This is the second Lompoc pub to close within the last year. The Hedge House on Southeast Division closed late last year and is now home to Little Beast. Lompoc had been a major player in the Portland market for many years, but its status is apparently waning.

Recall that Lompoc Tavern is the descendent of the original Old Lompoc Tavern, founded in 1993. Fechter, who moved to Oregon from Ohio in 1989, got hooked on craft beer and homebrewing in the early 1990s. He wanted a brewing job, but couldn't find one.

"McMenamins wouldn’t hire me," he told me in 2013. "I never got hired."

He wound up working at Old Lompoc Tavern and they got interested in brewing in-house. He started brewing there in late 1996, marked as the beginning of Lompoc. The initial results were sketchy.

"The first batch of beer was called Erstfest," Fechter remembered. "It wasn't good, but that's how I got started."

Several years later, Fechter negotiated with the owners to buy the place. They worked out a deal that included all the appropriate numbers. At the point where everyone was supposed to sign, the owners backed out, saying they wanted more money. Fechter would need a partner.

"That’s how I got partnered with Don Younger," he said. "Don and I met and chatted over several months on barstools in various places and eventually combined to buy the place. We renamed it New Old Lompoc."

I never met Don Younger, who was a partner is several of the Lompoc ventures. He passed away in 2011, as I was starting to cover Portland's beer scene. But conversations with Fechter suggest to me that the partnership worked fairly well. Don was the wacky elder statesmen who knew the business; Jerry was the eager apprentice who took it all in, though they weren't always in sync.

"I didn’t know how influential Don was until I started talking to him," Fechter told me. "He knew everyone and had been involved in craft beer from the start. Don was a character, always coming up with creative and crazy ideas." Fechter has an archive of stories.

After Younger passed away, New Old Lompoc came under Fechter's control. But things were changing dramatically in the area. The building owner soon decided to demolish it and build something that's a better fit for the trendy Northwest neighborhood.

When it reopened in 2013, the Lompoc Tavern had been reconfigured to fit a smaller space. The antiquated little brewery was gone, which helps explain the name change. Changes in the industry were also putting pressure on Lompoc.

Portland's brewery count started spiraling dramatically upward around 2009. By the time Lompoc Tavern opened, the city had more than twice as many breweries as it featured only a few years earlier. Competition in the beer and pub business was stiffening.

The press release says the crowd that supported New Old Lompoc found other places to go during construction and never returned when Lompoc Tavern opened. It also suggests business declined because a number of jobs moved out of the neighborhood.

My own version is that a lot of options started popping up in the area. Breakside Slabtown, just a short walk from Lompoc Tavern, undoubtedly sucked business away after it opened in 2017. Other new places harmonize better with what the millennial crowd is looking for.

Lompoc Tavern's final day will be Wednesday, Sept. 26. The lease is being taken over by Tap & Table, which currently has a location on Southeast Ankeny St. There will almost certainly be a gathering of regulars and friends on that last day. Note to self.

There are those who will shrug at the demise of Lompoc Tavern. For them, it's a relic of a bygone era. That's one way to look at it. Another view is that a slice of Portland's craft brewing history is being displaced. There's an instructive tale here for established pubs and breweries.

Thursday, September 13, 2018

Thwarted in Portland, Ferment Opens in Hood River

Two years after plans to open in Portland fell by the wayside, Dan and Jennifer Peterson opened Ferment Brewing on Hood River's busy waterfront. The brewery and pub, which is just a hop and a skip from pFriem Brewing, opened in early August.

The Petersons originally planned to open their brewery in Portland’s Yard (Death Star) Building, near the east end of the Burnside Bridge. But those plans failed to materialize and they moved onward (and upward) to Hood River.

You suspect they're fine with the location. Dan Peterson was formerly head brewer at pFriem (2013-2015) and Full Sail (2010-2013). A microbiologist by education, he started his career at Brooklyn Brewing in New York, where he worked from 2003 to 2010.

“The concept here is a little different than pFriem,” he said. “I like traditional beers brewed with ingredients from the places where they originated. Whether it’s English, German, Czech or whatever, we strive to use ingredients native to those areas.”

Ferment's 20-bbl brewhouse was fabricated by Specific Mechanical Systems of British Columbia. They initially had two 20-bbl fermenters, and have added two more of the same size within the last week. The brewery is simple, old school.

“There isn’t a lot of automation here,” Peterson said. “I like simple controls and a hands-on feel in the brewery. To me, a big part of craft brewing is someone mindfully taking part in the brewing process. That was the concept with this setup.”

Peterson also believes in low ABV beers. All of Ferment’s Signature Series beers clock in at 6% ABV or less. The Premium series of bottle-conditioned and barrel-aged beers will include an expanding selection of higher ABV product as the brewery gets up to production speed.

During the time when they were hoping to open in Portland, Ferment was brewing at Zoiglhaus and Pints. That arrangement continued as they located the space in Hood River and began the construction process. That allowed them to work on recipe development and have a full set of beers available when they opened.

The Signature Series beers include: Czech Lager (5%), ESB (5.4%), India Pale Ale (5.8%), Dry Stout (4.5%), Biere De Garde Ale (5.8%) and White River Saison (5%). My favorites from the list were the Czech Lager and the ESB. But tastes will differ.

The building itself provides a unique presentation. The restaurant and taproom area is bathed in natural light and features a community-centric atmosphere with picnic-style tables and benches. Patrons can look down on the brewery below while sipping on a beer or enjoying a meal. Or they can see what's going on out on the Columbia or in Waterfront Park.

“It was a fun challenge to make a brewery work in this space,” Jennifer Peterson said. “We have a lot of windows all around and garage doors on the main floor. We made it all work by situating the brewery in the middle. Views of the brewery and surroundings were a definite consideration.”

An outdoor patio just west of the taproom is shared community space between the tenants in the building. It also features splendid views and Ferment is hoping the space will be available to beer sipping patrons. However, they had not acquired the necessary permit in early September.

The Peterson’s have modest goals when it comes to growth and distribution of their product, believing they’re better off selling their beer to patrons in Hood River than exporting a lot of volume in packaged form to a hyper-competitive marketplace. It doesn't make business sense.

“Once we're fully up and running, we’ll push a limited supply of beer out into distribution,” Dan said. “We’ll use 500 ml bottles for our packaged product. I’m not interested in chasing trends. I like the feel of glass. No liner to worry about. Beer poured from bottle to glass is elegant.”

Ferment’s food menu, like the tap list, features eclectic options and isn’t limited to a particular style or ethnicity. Locally-sourced produce and meats are the backbone. Jennifer Peterson, former part-owner of the now defunct Pine Street Kitchen in Hood River, was instrumental in developing the approach to food.

"We wanted to create a menu that would pair with a wide variety of beers,” she said. “The approach to food needed to mirror the approach to beer and I think we’ve done that. It is, of course, a work in progress that will evolve and roll with the seasons moving forward.”

One of Ferment’s pet projects is kombucha. While they were refining beer recipes and waiting for a space to materialize, they played around with kombucha. The result was several tea-based recipes that lean on simple, natural ingredients. Three brands are available on draft and in packaged form.

“We kind of fell in love with it,” Jennifer said. “We eventually decided to incorporate it since it falls into the ‘fermented’ category. It has great health benefits and tastes pretty good, too.”

For more information, visit Ferment’s website.

Monday, September 10, 2018

Promoting the Making of Flawed Craft Beer

It is certainly a truism that not all craft beer is good. There may be no better way to evaluate that statement than to have a bottleshare where people show up with random bottles, cans and even growlers. That was my Saturday. So much suspect beer.

That point was nicely made in a recent article by John Holl in the LA Times. In the article, Holl describes some of the negative experiences he's had with craft beer. Like the can of hazy IPA that exploded in his living room. Also skunky aromas, popcorn smell, etc.

Holl notes that he is often labeled a whiner when he brings up shortcomings in craft beer. That's part of the cultural worship surrounding the rising popularity of craft beer. Hardcore fans and geeks sometimes have a hard time admitting bad things happen in their pet industry.

Of course, a lot of us tend to look past the quality issue. Craft brewers make beer in hundreds of styles and (theoretically) thousands of flavor profiles. That fact has conned craft fans into thinking flavor equals quality. That isn't necessarily the case.

The big brewers are partly responsible for those attitudes. Budweiser, Miller and others reduced beer down to almost nothing in terms of flavor. Along the way, they became sticklers about quality, developing sophisticated systems to ensure that their beer is consistently tasteless wherever it is made. They had to...off flavors are easily detectable in the swill they make.

I'm not a fan of big beer or it's tasteless product. But I'm also not a fan of some of the garbage I tasted at my party on Saturday. We sampled beers that were corked, oxidized, under and over carbonated. We tried beers with floaters, beers that were too thin for their style or way too sweet. Ye gods.

You start asking yourself how there can be so much shitty beer. I'm quite sure some of the beers in question were old or, at least, not as fresh as you might like. You don't how it was stored or transported. Fine. But that still leaves a more than ample of amount of bad beer.

My question is simple: Now that craft beer has attained celebrity status, where can average fans find out what's good and what sucks? The collapse of print media has left a coverage void. Blogs might have filled it for a time, but blogs are losing steam. Where's the objective coverage?

There are obviously sources like Untappd and others that provide ratings based on aggregate input from many reviewers. The problem is, most average consumers don't use those apps or sites. Where's the informative mainstream coverage?

The answer is there isn't much of it. Instead, an escalating amount of craft beer promotion is happening on social media. Attractive, often scantily clad young female promoters are an emerging theme, particularly on Instagram. There's rarely any objective context involved, but this is one of the big new ways consumers learn out about beers and beer events.

I admit complicity. I sometimes post photos of beers that turn out to be flawed. Fortunately, my social media following and influence is small. Those with thousands of followers have a lot of impact with similar posts. Keep in mind that many of these folks are either paid industry shills or want to be.

When I think of all the flawed and borderline craft beer out there, I can't help but wonder if social media promotion, which tends to give brewers a pass, isn't partially responsible. Its promotional power is a boon for breweries, but it does nothing to push consistency and quality.

How does this get fixed? I have no idea.

Thursday, August 30, 2018

Craft Beer's Revolving Door

For quite some time, I've been perplexed about a theme I've seen playing out in my local pub. When I first started showing up 10 or so years ago, I saw the same faces for years at a time. There was very little turnover in the bar or the attached bottleshop.

That scenario has flipped in recent times. Faces come and go with increased frequency. Why have things changed so dramatically? Why have we gone from a situation where people stuck around for years to one in which they often come and go in a year or less?

The answer, of course, is opportunity. Craft beer was a modest growth industry until about 10 years ago. Nationwide, we had 1,521 craft breweries and brewpubs in 2008. By late 2017, that number had ballooned to 6,266. And that's not counting the many craft beer-focused taprooms and bars.

The consequence of the exponential growth is a corresponding increase in opportunity. These businesses don't run themselves. Many of the best opportunities are skilled positions in breweries, equipment manufacturing, etc. But the list extends to all corners of the industry.

That essentially means there's a lot of horizontal and upward mobility in craft beer. We regularly see brewers jumping from place to place...or starting their own gig. We see keg washers moving on to become assistant brewers and, sometimes, head brewers. Wild times.

In the case of my local, most of the folks who come and go stay within the craft beer space. Some have gone on to work for distributors or become brand reps or even assistant brewers. They use their acquired knowledge and experience to leverage a better role.

There's great incentive to move on if you work in retail. It isn't like being a bartender, where tips can make up for a crappy hourly wage. That's not the case with the folks who work in bottleships or craft-centric retail stores. The hourly wage in those place is low.

How low? Starting pay at my bottleshop is $12/hour. Not close to a living wage. Keep in mind that doing the job well requires significant beer knowledge and expertise. Customers constantly ask for advice and bottleshop folks need to be able to make informed suggestions.

What these folks soon find out is that their knowledge is worth more somewhere else. Prior to the craft explosion, there wasn't much opportunity in craft beer. People were stuck. Today, folks who work in retail can and do make the jump to better situations. Thus, the revolving door.

On a related note, Jeff Alworth is currently researching a piece that will explore brewer pay. Brewers are some of the best-paid people in craft beer, but I won't be surprised to learn that, as a group, they are underpaid in relation to their value. That's why so many open their own breweries.

Look for Jeff's piece in the next week or so. Should be solid stuff.

Thursday, August 23, 2018

Craft Beer's Illinois Problem

In its infancy, craft beer was a virtual blip. A nothing. Without passage of the Brewpub Bill in 1985, Oregon's craft beer industry would have certainly remained small and insignificant. It simply could not have flourished in a scenario where breweries could not sell directly to customers.

One of the reasons the Brewpub Bill passed is that beer distributors and retailers, who weren't interested in craft beer at the time, decided to not oppose it. They figured it wouldn't hurt to let these cowboys chase their dreams and that craft beer might someday make them money. Little did they know.

The ability to sell directly to customers was crucial to the industry establishing a strong identity here. It led to the emergence of taprooms and pubs where a brewery's beer could be featured. That formula, more or less, has been used to boost the fortunes of craft beer across the country.

Fast forward to last week, when Illinois Gov. Bruce Rauner signed a bill allowing licensed breweries producing up to 120,000 barrels of beer annually to purchase beer or cider from wholesalers or other breweries to sell in their taprooms. Great news, right?

The signing drew quick criticism from several restaurant and bar owners in Chicago. They view the law as a blurring of the lines between taprooms and bars. The effect of the law, they say, is that the only difference between taprooms and bars will be a bar's ability to sell wine and liquor. They aren't pleased.

“Taprooms are going from a place to grab a pint after a tour to enticing a customer to spend the whole evening there,” one owner told Brewbound. “To me, that’s why we have brewpub licenses. If you want to be a full service, one-stop shop to the consumer, then you should be subject to the same laws and zoning rules as the rest of us.”

Owners essentially object to the different zoning rules that breweries, which are considered manufacturing outlets, are subject to. As well, beer brewed on site carries a much higher profit margin than anything bars and restaurants sell. Remember, bars and restaurants buy almost everything they sell through distributors at a much higher price point. It's the law.

“We don’t think it’s cool that breweries with taprooms act as bars,” an owner told Brewbound.

From the craft beer side, I've seen several condescending comments in various places. The consensus seems to be that adding guest beers and ciders to taproom lists is fine and something that needs to happen due to the overwhelming popularity and girth of craft beer.

Part of the argument is that brewpubs and taprooms typically want to sell their own beer first and guest beer or cider second. True enough. One brewery owner told Brewbound that the new law was necessary so he could bring in and sell collaboration beers brewed at other breweries.

That's all well and good. But it seems to me that the bar owners have a legitimate beef. We seem to have lost sight of why taprooms and brewpubs were set up in the first place, which was to allow brewers to display and sell their own products directly to consumers.

If the original taproom/brewpub concept had included the right to sell a variety of beers to consumers like a bar or tavern does, the restaurant and bar industry may well have opposed changes in the law and derailed legislation everywhere. That didn't happen.

Now that craft beer has attained star status, it has the power to push for changes that may put other businesses at a disadvantage. The situation in Illinois is one example of that. It's really not okay. No one likes a bully, especially one that ought to know better.

Friday, August 17, 2018

De Garde and Oregon's Coolship Fetish

It's not much of a secret that increased competition has brewers looking for ways to produce unique beers that distinguish and differentiate their portfolios. One result of that reality is a growing interest in spontaneous fermentation and coolships.

Trevor Rogers and his coolships
Breweries currently immersed in spontaneous fermentation include
Allegory, de Garde, Logsdon. Block 15, Ale Apothecary, Flat Tail, McMenamin’s Edgefield and Wolf Tree. The list of those planning to install coolships soon include pFriem, Von Ebert East and Little Beast.

“The concept of spontaneous fermentation is exciting for brewers because it brings ‘local’ into the brewery on a whole new level,” local writer and author Jeff Alworth told me. "There's something incredibly seductive about the local-ness of spontaneous fermentation."

That's because microflora can vary widely from place to place, even in a small area. Jeff related a story in which buckets of cooling wort were left out overnight in Forest Park., all within reasonably close proximity. The buckets were then pitched into larger batches and left to ferment.

“The amazing thing is they all tasted different,” he said. “Even a couple hundred feet is enough to get a different mix of microbes. It’s crazy. I think yeast is on the frontier of experimentation, and spontaneous fermentation is basically yeast-foraging. It has a lot of appeal.”

Part of that appeal may be the risky nature of the approach. Spontaneous fermentation can be done almost anywhere, but the results can be wildly unpredictable. Some places have characters floating around in the air that aren’t conducive to producing good beer. Success is a roll of the dice.

The entire concept caused my friend and occasional co-conspirator to pitch the idea of exploring what's happening with coolships. An article to be published in the September issue of the Oregon Beer Growler details our findings.

What we found, generally, is that approaches vary. You might think breweries using coolships have done meticulous research on what's floating around in the air where they live. You might think there's some standard in terms of what a coolship looks like or the material it's made of. Not exactly so. Read the OBG story for more on all that.

My own corner of the story involves de Garde. I wrote about them for BeerAdvocate in 2015. Their operation was small, but growing rapidly at the time. They moved from their original location (on Blimp Blvd.) to a space in downtown Tillamook in late 2017. Time to revisit.

How de Garde wound up in Tillamook is a story that's been documented many times in many places. Co-founder and brewer Trevor Rogers collected and evaluated wild yeast cultures from several areas on the Oregon coast before making a decision.                          .

“I liked the yeast and bacterial combinations in several areas,” Rogers says. “One place I liked had a lower concentration of bugs in the air, which produced sluggish fermentation and occasional bad batches. I eventually decided the microflora around Tillamook was ideal.”

Anyway, I drove down there last week to take a look at the new space. It's quite impressive, with a vast tasting room and a compact brewery behind and above it. There's significantly less brewing and barrel storage space here than at the old place, but improved efficiencies mean they produce just as much beer. They have two operational coolships of more or less standard shape and depth.

Rogers had wanted a larger coolship to take full advantage of the new brewing space. But it wound up being cheaper and easier to simply build a second coolship that's essentially identical to the original one. They sit side-by-side in the brewery.

Beer nerds will recall that the original de Garde brewery had a garage door that opened to expose cooling wort to outside air. It worked fine most of the time, but Rogers felt they needed to improve the consistency of microbe flow.

"We found outside wind patterns had a big effect on what was coming in," he said. "Sometimes we got a lot of bugs, sometimes not. The new space was designed to fix that. It has a high capacity fan with air ducting that allows a regular flow of outside air into the coolship area."

The result is they don’t have days where there’s a high or low flow of bugs. It's more even now. Rogers knows a lot inoculants come from inside the brewery, the reason a lot of old wood was kept when the building was renovated. But he believes it's important to replenish the inside area.

I don't know that de Garde's approach is the best one out there. They've built a solid niche in the spontaneous fermentation space and they sell a ton of beer directly to patrons from their tasting room. Others want a piece of that action and either are or soon will be navigating that space.

"I think it’s great that people are experimenting," Rogers said. "We don’t yet know the full potential of our area. We targeted the coast, but that’s not to say that great beer can’t be made in other areas. A lot of exploration remains to be done."

The coolship fetish is a real thing. And catching.