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Monday, July 9, 2018

For Better or Worse: Craft Beer's McDonald's

Ray Kroc made his first visit to McDonald's in 1954. He was a milkshake mixer salesman at the time and brothers Richard and Maurice McDonald had purchased eight mixers for their San Bernardino restaurant.

Kroc was impressed with what he saw. Having visited a lot of restaurant kitchens in the years following World War II, he came to believe the McDonald brothers had the most efficient operation he had seen. The place was professional, clean, somewhat automated. To Kroc, it looked like a concept that could be expanded nationally.

There was no such thing as fast food at the time. Kroc surmised that most roadside hamburger joints were grubby havens that mostly featured inconsistent food, pay phones, jukeboxes and smoking rooms. His vision was of a chain that would appeal to the emerging suburban culture with a consistent menu, uniformed attendants and squeaky clean spaces.

Most of the rest of the story is well-known. Kroc opened the first franchised McDonald's in Illinois in 1955. He would go on to establish a fast-food empire that today spans the globe. In fact, it isn't a stretch to suggest that Kroc and McDonald's launched a worldwide fast food revolution...for better or for worse, depending on your point of view.

Watching craft beer gain a foothold national and internationally, I've occasionally wondered if there could be a craft beer version of McDonald's. Such a chain would feature consistent branding, similar building designs, common beers and food, etc. There are some pretty good reasons why this will probably never happen. Still, I wonder.

One thing we have seen and are continuing to see is craft beer chains (multiple locations) that function well locally and regionally. McMenamins is a good example here. The brothers started out in the Portland area and have expanded in Oregon and Washington. I'm not sure how far the quirky McMenamins brand can go. My guess is the regional I-5 corridor is its sweet spot.

Some brief, forgotten history. The founders of Portland Brewing (in 1986) envisioned a string of brewpubs up and down the I-5 corridor from Washington to California. It never happened, Art Larrance told me, because the company's board of directors wouldn't agree to it. Given the trajectory of Portland Brewing, that was fortuitous.

Of course, there are successful local craft beer chains beyond McMenamins. Hopworks, Laurelwood, Lompoc and Lucky Labrador have operated multiple locations for years. More recent entrants include Breakside, Migration, Von Ebert (soon) and Sasquatch. There are will be others.

It's difficult to see any of those entities being gobbled up by an investor capable of taking it national. The notable exception to that rule is 10 Barrel, which is owned by Anheuser-Busch and already has brewpubs outside Oregon (San Diego, Boise, Denver). The 10 Barrel concept was designed such that it could take up residence almost anywhere.

In fact, if there's anyone out there with the will and the means to establish a national brewpub chain, it's probably Anheuser-Busch. Of the acquired AB craft brands, 10 Barrel likely makes the most sense. Golden Road, also a generic brand without a plausible connection to place, is another possible candidate.

There's an interesting dichotomy at work here. While 10 Barrel and Golden Road have potential as national brands due to their lack of connection to place, Goose Island is thought to be a poor choice because of its strong connection to place (Chicago). And Kona, which will very likely end up the AB family of brands in the near future, is considered an excellent choice for a national pub brand because of its strong connection to place. Ironic, eh?

Anyway, the case against a national brewpub brand is strong and rests mainly on the fact that craft beer is hyper-local. Consumers around the county are seeking out unique beers made by local breweries, and there are plenty of local breweries out there. The idea of a national brewpub chain succeeding in that scenario seems sketchy, though you never know.

Maybe the closest thing we have to a national pub is exemplified by Buffalo Wild Wings, a craft beer taproom chain with pub-ish food. Buffalo Wild, established in 1982, currently has more than 1,200 locations in the U.S. They don't brew, but they do offer local beers alongside an expansive selection of national macro and craft brands.

For anyone wondering why the Brewers Association would make Buffalo Wild one of two major sponsors for this year's GABF, the answer is clear enough: Buffalo Wild is arguably the closest thing we have to a national craft beer pub chain. For better or for worse.

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