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Beer Insights Extras

Extra beer business news, thoughts and insights from the publishers of Beer Marketer’s Insights, Insights Express, Craft Brew News, Beverage Business Insights and Alcohol Issues Insights.
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Grassroots Efforts, Political Savvy and the State of the Union

Caught up in pulling together today’s government affairs-focused issue of Craft Brew News, a series of comments late in President Obama’s State of the Union resonated. Speaking of “partisanship and gridlock” in Washington, and those who “benefit” from it, the President invoked an American public fed up with the politicians who serve them. “This isn’t what you signed up for,” he paraphrased the sentiment of some legislators in the audience. So, “imagine if we broke out of these tired old patterns. Imagine if we did something different.”


Breaking the patterns. Approaching politics differently. My mind immediately went to Florida, where small brewers have used grassroots efforts to garner the support of vocal beer drinkers (and constituents) to achieve their political goals. “Grassroots” is in no way “new,” though it does run counter to status quo. For the past two legislative sessions, even grassroots hasn’t succeeded and questions remain about how impactful the public will be on beer policy in Florida. But some seem to believe things will go differently this year. Small brewers in Florida have started expressing some of the same idealism that President Obama offered Tuesday night.


While not spoken, the president of the Florida Brewers Guild and Due South Brewing owner Mike Halker gave his own sort of SOTU: an in-depth explanation of where small brewers in Florida stand, what they want and what they’re up against. Mike posted the missive to Due South’s blog, specifically noting that he wrote it “not as the president of the FBG, but just as a guy in the middle of it all.” In it, Mike lays out the “complicated” picture of beer politics in his state, giving voice to observers that  ask “‘When will this be over?’ The short answer is, probably never,” he answers before launching into his view of the business of politics in Florida and how it’s affected small brewers there.


He notes that the FBG’s “prior weakness has little to do with the reason we don’t have 64 oz growlers.” Instead, “it’s the strength of our opponent.” Mixing a perhaps idealistic hope for the success of brewers’ rabble rousing with a little rabble rousing itself, he adds that “the reason it’s going to pass this year is not because we’re so much stronger, it’s that we’ve successfully painted them as the bastards they are. Not by ourselves mind you, but by engaging the craft beer supporters in Florida.” He concludes the thought by asking readers to “believe me, after last session, there are legislators walking around the capital right now thinking, ‘Just don’t piss off the craft brewers.’” At same time big brewers and wholesalers alike still have plenty of clout in Tallahassee (and elsewhere), clout that will not be easily eroded. They probably won’t like being called “bastards” either. In any case, smashmouth seems to be becoming more common, even if the tactic’s success rate is unclear at best.


But don’t assume for a minute that small brewers in Florida depend solely on the support of the public. Just as they’ve used traditional press and new technology to bring public scrutiny to the kinds of conversations often reserved for back rooms at the capital, pulling the game out into the open, the brewers “have better relationships with legislators,” are “more organized and connected.” The same could be said of many other small brewer associations across the country, including the nationally focused Brewers Association. Even politically, the craft segment is growing both ways: digging out smaller niches and going more mainstream. As it spreads wider, putting feet on the ground to gain support in more areas, it attempts to bring politics back to a future where constituents have more pull than campaign donations. At the same time, it’s becoming more sophisticated and savvy at playing by the current rules.

2015 could be a year when these dual strategies will be tested: if not nationally, then perhaps in Florida.

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Some Segments Grow Both Ways

Part of my job as a business reporter covering the craft beer industry for the last 4 years has been to read almost everything I can get my hands on that has anything, even marginally to do with craft beer, small brewers and larger competitors.  I’ve read more “New Brewery On Tap for Downtown X-ville” articles than I could possibly count.  More “Craft Beer Bubbling Up in Blah-dee-town” and “Locals Hopping for Small Brewery’s Wares” pieces than probably most other folks out there obsessing over this industry.  I’ve often been stunned as seemingly every local paper or state business journal or alt weekly available online has at least dipped their toes in addressing how the growth of small brewers in the US has touched or will touch their readership.

It’s been gratifying to watch since I joined this industry in 2010 on a whim, on a chance.  My father’s worked for Beer Marketer’s Insights since before I was born.  I knew the people at BMI but nothing of what they did or the industry they covered.  Not while stuffing orange newsletters in envelopes as a teenager.  Not while teaching and tutoring standardized tests in NYC after graduating college, trying to make it as a director/choreographer in the big city.  I’ve often heard people refer to having “ah hah” moments upon tasting some beer for the first time, a “beer that changed everything,” and wondered what that’s like.  Revelation didn’t come in the form of flavor for me.  Instead, researching this industry, reading about the companies that built it and writing a “dummy issue” of Craft Brew News (and trust me, it was pretty dummy, save parts of the Facebook article that Benj decided to print in the second official issue) changed the course of my life.

Regular readers of Craft Brew News may recognize a few common themes that have popped up again and again in our text.  One of our favorites has been the “mainstreaming” of craft: TV shows, celebrity endorsements, fast-casual restaurant and convenience store sales, session brands and an endless list of other phenomena wherein “craft beer” has acted a bit more or felt a bit more like just plain “beer.”  Regular readers may have also noticed that simultaneous to this movement towards the center, craft has continued expanding out along the edges, pushing further the boundaries of what “beer” could possibly be understood to be.  Just as craft beer has become more accessible, more affordable, more drinkable, it’s also become harder to find, buy and guzzle with abandon.  

I’ve long posited that this movement in
both directions contributes to craft’s continued health and growth.

Put another way:
without this movement in both directions, craft probably isn’t as healthy, doesn’t grow as quickly.

Right along with those locally-focused overviews of craft -- printed by ever-smaller papers as ever-smaller brewers started affecting ever-smaller communities -- I’ve also had to read the growing number of “think pieces” offered to the universe that dissect “the big picture.”  Doing that without mis-stepping or mis-stating is no easy task.

In a brief email interaction with a rep from a small brewery recently, “grinding” was the response to “how are things?” -- “you too?” I replied.  Par for the course, as far as I can tell: everyone’s running to keep up.  That’s been the basic story from the largest small brewer, that giant among pygmies (scratch that, reverse it), Boston Beer, so far this year on its quarterly earnings calls: “chasing the growth” to the point that it’s affecting efficiency, operations and yes, earnings.  I imagine newsrooms across the country are no different: running to keep up with an ever-faster news cycle, publishing content without deep research, confirmations or counter-arguments ever heard.  Just get it out the door!  So no surprise, really, news story or think piece, we end up with a broad range: total gem to lump of coal.

It doesn’t take a genius to extend the metaphor: we end up with a broad range of beers these days too.  Everyone running to keep up and all, follow their passions, grab a piece of the pie.  I could spin off any number of the thoughts above into separate posts (and in an ideal world, I will, but let’s not make any promises; running to keep up and all).  To try to bring it all together, let’s take a moment to re-imagine the “pieces of the pie” that brewers of all sizes are working to grab.

Market share is most easily represented graphically as a pie chart, right?  And just like those pies you eat, companies or segments or brands or groups of those things are typically represented by differently-sized slices for comparison’s sake.  It works because anyone who’s taken a bit of geometry (and likely many who haven’t) can look at a pair of slices and tell you which one is larger than the other. 

But what if we think about the craft segment not as a slice of the beer-pie, but as the crust, say: a ring around the outside of this circle (which is probably more like a sphere, but let’s not get too complex too quickly). 

If we assume the outer-edges of beer are bordered by non-beer beverages -- wine, spirits, soda -- and probably food too, you can start to imagine how the overlap between beer and wine, for example, is already being explored (not hard to name a few brands that belong in the center piece of that Venn Diagram).  As more and more circles of related products are added into the mix (again, spheres may be more accurate) it’s also pretty clear that craft doesn’t occupy the
entire outer ring of the “beer” circle.  Flavored malt beverages take a chunk there -- not exactly what everyone thinks of when they hear the word “beer,” but part of the segment regardless.  Cider, depending on who you ask, has a small chunk of a couple different circles (spheres?). 

The resulting image is more akin to an amorphous blob with blurring borders than our once easy-reading pie.  But it’s this view that helps me explain what I see happening in craft beer as it relates to the total beer category.  Craft expands in all directions, getting closer and closer to the heart of “beer” in the popular imagination while simultaneously crossing boundaries into other categories and yes, even into the white space where nothing yet exists.  It seems to me that this is part of the reason why craft's been so difficult to define (nail down) and why that may only get harder.  

It also seems to me that the passion ignited in beer drinkers by the boundary-pushing experimental beers (visible in long-lines, ticket-sell-outs, avid trading and more) allows brewers to exert that force against whatever historical standard or circumstance drew the borders.  Said another way: the money beer lovers are willing to pay, the effort they’re willing to take to taste these beers on the bleeding edge allows brewers to invest in the expense of making them in the first place.

I recently confronted a think piece -- one of those "big picture" dissections -- that seemed to suggest that as craft moves closer to the center (as I put it above), asking beer drinkers to pay for more-expensive limited offerings with hard-earned money or time seems somehow like a foolish endeavor, especially now that drinkers have so many high-quality, cheaper, easier to find options.  

I get it, but this doesn't jibe with my view.  Instead, I see room for
both/and.  For beer marketers to put beer in every corner store the world over and to hide it in a haystack that can only be found by buying a treasure map and breaking its code.  To satisfy a drinker’s flavor expectations of “beer” and to explode those expectations.  To make a beer that somehow does both and then hide it behind the milk in every corner store the world over.  To dig deeper to the core and to expand out around the edges.  This is how craft has grown and, I suspect, how it will continue to grow.  Both ways.

There was a time, soon after I first started writing for Craft Brew News, when I pored over those articles about new breweries in local papers and when shorter versions of them or round-ups of multiple stories found their way into CBN.  Put another way: when we believed our readers would find great value in those stories.  I read more of them now on a weekly basis than I have in 4 years.  Paradoxically, I write about them less, perhaps incorrectly assessing the diminished value we now believe our readers would attach to them.  The fairly consistent acceleration of their printing tracks pretty closely to the acceleration of craft’s overall growth, it seems to me.  These local stories help broaden the meaning of “beer” in new pockets and corners of the country, pushing the boundaries of craft’s sphere of influence you could say.  Other publications that initiated craft-coverage years ago simultaneously identify ways that craft moves closer to the center, develops a closer relationship with their readership.  Those that find value in the former story might see less value in the latter and vice versa, but both can serve to change minds and further widen the borders of the segment.  Borders stretch and become more porous.  And craft grows.

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12 Days After Boulevard/Duvel Deal, KC Star Comes Around

Many Kansas Citians seemed pretty distressed in the days immediately following Boulevard Brewing’s announcement that it will soon be owned by Duvel Moortgat.  Much of that reaction was based on Duvel Moortgat’s Belgian-ness, foreign-ness or at least its non-Kansas-City-ness.  In the Craft Brew News we sent out on Oct 22, we noted the initial Kansas City Star editorial that called the deal “disappointing” and “unfortunate,” as well as a second editorial originally titled the “Boulevard Brewing blues," but now going by another name.

But this week, folks over at the Star seem to have turned a corner, printing today’s “If experience holds, Boulevard’s fans and hometown will do just fine.” It comes just days after CNBC shared the glowing response to the deal from Sam Calagione, founder of Dogfish Head and current Brewers Association chairman.  We printed Sam’s opinion that Boulevard founder John McDonald has “made one of the most graceful transitions in ownership of a craft brewery that’s been made yet,” in Insights Express yesterday.  The Star’s current article looks closely at Duvel’s experience with Brewery Ommegang, founded in 1997 and purchased by Duvel Moortgat in 2003.  Citing Cooperstown-area locals and bar-owners, the article attempts to assuage worried Kansas Citians, noting that not only does Ommegang still make “award-winning Belgian-style beer, just like it has since 1997,” but it also still regularly gives back to its upstate NY community and does its fair share attracting visitors to that community.  Boulevard is a company with deep connections to KC, and now one Missouri resident told the paper that, even under this new ownership structure, “I don’t see that changing.”

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Craft Growth in China Hearkens to US Trends

“Craft beer began bubbling up through the cracks in China about five years ago.  But it may still account for as little as 0.01 percent of the domestic beer market - the world’s largest with 50 billion liters consumers in 2011 alone.”

That’s well over 400 million barrels, about twice the size of the US beer market.  It also means that China’s craft production in 2011 was somewhere around 40K bbls, if this guesstimation from China Daily’s European Edition is to be trusted - the source pegs US craft share at 12%, a big overstatement though.  Regardless, it’s still early days for craft beer in China, but like the US and other markets, it’s changing rapidly.

This China Daily piece, like others, points to the importance of expats: Americans or Europeans that brought their excitement for beer with them in their move to China.  But Chinese natives are starting to get it too, an essential step in the spread of any idea or invention.  A quarterly Chinese beer magazine, Hops, got its start as an English-only publication in 2011.  Last year it began publishing in Chinese too and “now that’s bigger than the English one,” managing editor Kathryn Grant told the paper.  Recall that American craft had its roots in visits to European breweries, whether German, Belgian or English and subsequent desires to bring those flavors and the associated cultures stateside.

Grant also offered that craft beer is changing the drinking culture in China: “it’s not just ‘ganbei’ (drink to get drunk) culture anymore.”  Instead, drinkers are drawn to the flavors of the new beers, like in the US.  One expat, Michael Jordan, brewmaster at Boxing Cat Brewery in Shanghai said that “we’re definitely seeing a trend switch, where locals are getting into different styles of beers.”  Grant echoes that sentiment and builds on it, noting that Chinese-owned breweries “are actually more experimental,” because they’re using local ingredients that they’re already intimately familiar with but that foreigners may understand less - “like ginseng, asparagus, seaweed, aniseed and Sichuan pepper.”

The backdrop of these early days for Chinese craft beer is a growing overall beer market: “beer has been gaining popularity in China in recent years, while demand for wine and spirits has been losing steam.”  While beer down slightly in US in recent years, we printed in Insights Express this morning that spirits’ growth has slowed over the last year and a half, at least in 17 control states.  We'll continue to observe dynamics between alcohol segments here in the US, but every once in a while taking a gander at other markets, especially those as large as China, can be an interesting detour.

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Back in Denver for GABF

It's that time of year again!  I got into Denver yesterday afternoon to cover the Great American Beer Festival for Craft Brew News.  It'll be a whirlwind couple of days full of great times, great people and lots of great beers.

But it's a good thing I'm back here too.  Long-time readers (hah!) may remember that I left my brain in Colorado the last time I was here, coincidentally as the 100-year flood hit the Front Range.  For those of you also in Denver this week/weekend, be in touch as I'm always up for a beer and spin around the festival hall.  But also be sure to remember what happened very close by exactly one month ago - the GABF has created this helpful page for those attending the fest (or not) who are interested in helping with Flood Relief efforts.  Hope to see you here!

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Back to School for College Drinking

Every September, just as new college students are entering dorms for the first time and older students return to campus, we see an uptick in the number of media outlets looking to cover college drinking culture.  Our publication Alcohol Issues Insights has covered these stories as well as studies of that culture and its effects on student life, not to mention the various policies institutions have implemented in attempts to keep their students safe.  When I joined BMI in 2010 just 3 years out of college, my dad, Eric, long-time AII editor, gleefully started piling anything he gathered about college drinking on my desk, commenting that I was “closer” to the culture than he was.  Now I’m 6 years out of college and still eagerly flipping thru these pieces, analyzing the studies and listening out for policy changes.

This year, the Washington Post printed a long article on “The College Drinking Problem” in its magazine.  Anyone working in the beer industry (or not) who is at least as far out of college as I am might want to take a peek.  Or maybe a long stare.  As I say, it’s a deep dive, but it drops readers off at a commencement ceremony pre-game at U-Va, a registered party in Boston College and other bastions of collegiate shenanigans.  Keeping in touch with these students and how and why they’re choosing to drink the way they drink is an important early step in identifying policy possibilities.  And the college policy-makers that the Post talks to, while hopeful that they may be making progress, are clear that this “problem” likely won’t go away anytime soon.  I used the piece, and the administrator’s lack of certainty, to open an article we printed in Alcohol Issues Insights this week, before diving into various updates from schools around the country.  Of particular interest: lots of focus on education, including bringing parents into the mix.

I didn’t have room in that article for one particularly frank University of Nebraska-Lincoln junior though.  Early this month, he took the unpopular position in his school’s newspaper in support of UNL’s dry campus policy.  His reasoning?  While not perfect, he deems staying “dry” to be “the policy that best supports” what he calls the “two major overreaching [sic? overarching? maybe not...] goals” of colleges/college students:

“1. Get a degree.

2. Don’t die.”

Fair enough.  Of course, dangerous drinking “is still a problem” at UNL, he cops, and one “that no one really has a solution to.”

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"Water, water, every where"

I left Fort Collins, CO unexpectedly-early this morning: Tamarron Consulting’s Supply Chain and Operations Leadership Conference was cut short due to the flooding along Colorado’s Front Range.  I was looking forward to today’s forward-looking programming: what might the beer industry look like 2025.  Instead I’m left remembering yesterday’s presentations, including Tom Wyness’ look at the “Past, Present and Future” of Crown Imports, the company he’s been with for 25 years.  Tamarron’s Greg Hopkins asked Tom about the continuity of the management team at Crown, one of the most stable leadership teams among top beer suppliers over the past decade or two.  As a relative newbie to the beer industry (3 years and counting), I enjoy history lessons such as these every once in awhile.  As for its future, Crown has a big (and we saw the video, it’s BIG) new responsibility in the form of a 10 mil-hectoliter (8.5 mil-bbl) brewery, Piedras Negras.  And that’s for now - it’s scalable up to 3x that size.


Before Tom spoke, MillerCoors’ David Ryder gave quite the provocative presentation about quality and innovation in the beer industry, which I wrote up for Insights Express this morning.  I was particularly struck by watching a suited executive from a major brewing company talking about the importance of having “happy, happy yeast” - it was a reminder of the common denominators that unite brewers, regardless of size.


Just after I wrote that article, I learned of the cancelling of today’s program at the conference.  The flooding along the Front Range here is truly devastating.  As news outlets around the country have shared, homes have been destroyed, roads washed away and entire communities inundated by water.  And it's supposed to continue to rain through the weekend. Hundreds, perhaps thousands of beer industry professionals have been affected.


Doug Odell, co-founder of Odell Brewing in Fort Collins, reminded me just Wednesday when I visited the brewery that “local beer” goes far beyond just small craft brewers in Colorado’s Front Range.  With brewing plants of hugely varying sizes in the area, not to mention distribution centers, raw materials suppliers, and countless bars and liquor stores at risk, it could be days or weeks before the effects of this flooding on the brewing industry are fully assessed.  Of course, top of mind for me, as I sit looking Northwest out my window of my hotel near the Denver airport, are the people who have built their lives, their livelihoods on turning water into the beverage we all love, water that has now so thoroughly altered their lives again.  I’m safe here and expect to be able to return safely to NY tomorrow, but my thoughts will remain here for many days to come.

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 2020 The Year in Beer

By Beer Marketer’s Insights
Presented by Benj Steinman and
the Editors of Beer Marketer's Insights
January 27, 2021
1pm Eastern Time
90-minutes including Q&A

Click Here to Register