03 Aug 2017 @ 5:19 PM 

A little earlier this week, a good friend said to me: Hey. I’ve missed you writing on TopFermented. I figured with all of these acquisitions that you’d have something to say.

Sure, said I, I have a lot of thoughts, but not only am I busy as hell with the brewery these days, I also feel like I need to be a little more delicate with my words as President of the NC Craft Brewers Guild.

And then, lo, the muse gods answered all of our prayers and Anchor Brewing was acquired by Sapporo.

Since the last time I wrote a post here, disparaging ABI, a lot has happened in the M&A world of the craft brewing industry, most notably ABI’s acquisition of local NC darlings Wicked Weed, which seemed to hit home with a lot of people.

To me?  This one.

Why?  Well, because it looks a lot more like a signal than all of the others.  This brewery was first.  Fritz Maytag rescued Anchor from closing its doors in 1965 and effectively became the first craft brewery.  It’s been doing what we’re all doing for longer than anybody.  It was the model for so many breweries over the past 50 years.

On the other hand, it’s easy to forget that Fritz Maytag sold Anchor to Griffin Group, owners of BrewDog (hah, punks, sure thing fellas) and Skyy Vodka, way back in 2010, so no big shock that it was on the sale block as mergers and acquisitions are heating up in the beer industry.  You’ll see in the article that Keith Greggor, of the Griffin Group (and CEO of Anchor) said that “the move was a year in the making and the result of speaking with ‘many, many’ larger breweries all over the world to find the right fit.”

In fact, none of it is really a shock.  Many people in the industry are in the same space that Fritz came to in 2010:  In need of an exit strategy.  They’ve put their time in, they’ve grown their companies, they’ve done well by their employees, they’ve brought the brand they built into the world of success.  What else are you supposed to do?  Just close shop and lay everybody off?  Sell and go enjoy your grandkids, for gods sake.  Fritz was a pioneer in exit strategies just as he was in many other aspects of the craft industry.  He beat most everybody there by years.

Still – it feels like a larger symbol – this beacon of independence, innovation, and entrepreneurship is now just another brand swept up in the great brand homogenization of the past few years.  Like it or not, it’s part of an international corporation that will benefit by dragging sales away from small, local, independent producers.  From now on, when you buy an Anchor beer, that buck will ultimately stop at Sapporo Breweries, Toiso, Eniwa, Hokkaido Prefecture, Japan.

So, you know, support your local international brewery.  Or just buy what tastes good, I guess.

Ultimately, that’s the most disappointing part of it to me.  Every time one of these happens, a big wave goes through the craft industry in which a bunch of people who say: “Who gives a shit? If it tastes good, who cares who makes it?”

Well, I do.

And, sure.  I am biased.  The vast majority of breweries who will have M&A as a viable exit strategy look very similar to the ones that have already been acquired:  Established, 15+ years old, growing, with a good on-site presence and wide distribution.  The vast majority of breweries who will suffer for it look a lot like mine:  Tiny, hyper local, battling with congested distribution markets and a variable tourism trade after 3 – 7 years of being open with 3000 new breweries behind us eagerly waiting to take our place.  It sure as shit matters to me.

It’s difficult to see our forefathers and our pioneers – our independent giants and captains of industry – slip away from us.  It feels like a betrayal to the innovative attitude that seduced all of us 2nd, 3rd, and 4th rounders into the industry in the first place – the dreams of working hard with your own hands to make a cool product has gotten lost in the fast paced factory.  It hurts to see someone you idolized as a successful entrepreneur and businessman just become another suit and tie.

But it’s what the future holds for our industry.

On the wall of my production floor here at Mystery, there’s a quote from Fritz Maytag that reads, “Beer doesn’t make itself by itself. It takes an element of mystery and things unknown.”  Most people think it’s how I named my brewery.  It isn’t.  But it speaks to me enormously about the product and the reason that many of us are in the industry itself.  It’s more than just a business to a lot of us, it’s our way of life, it’s our passion.

So, this week, I’ll go buy my last Anchor Steam.  I’ll hoist it in memory to the innovative business that Fritz Maytag once built, and I won’t look back, just like I’ve done with so many breweries lately.  Then, I’ll get back up on my brew deck and pour my heart and soul in.

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Categories: brewery, distribution, industry, Mystery Brewing Company, news, op-ed
Posted By: erik
Last Edit: 03 Aug 2017 @ 05 21 PM

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 22 Jun 2016 @ 10:46 AM 

You might remember a story from a few weeks ago: Budweiser renames beer ‘America’ this summer.

I’ll admit – I don’t get it.  I feel like they’re pandering to an audience that they’re not likely to lose.  I’m not sure if someone thinks that this will draw in consumers from some heretofore unknown market segment or if someone just thought it was cool (and if it’s the latter, then, fair enough).  The most thought that I’ve put to it beyond that was, “How did they get TTB approval for that?”

I guess there’s nothing necessarily BAD about it.  But you’re not supposed to have anything on the label that suggests a government endorsement nor put anything on the label that’s designed to confuse or misrepresent the product to the consumer and, well, here’s the label:

america_label_1462891903025_2198395_ver1.0_1462914847434_2200648_ver1.0

I don’t know about you, but this seems to represent that Budweiser is American which I would consider to be confusing to the consumer.  And, look, it started here, but it’s clearly moved on and doesn’t really need us anymore.  And E Pluribus Unum?  One, out of many.  I guess it does make a lot of sense for the King of Mergers and Acquisitions.

Anyway, that’s about the last I thought about it until a couple of weeks ago when I was preparing a lunch-and-learn about label approval in NC.  I always use Anheuser Busch as one of my examples because they just have SO many brands, and they tend to represent them legally differently than most small breweries.

And that’s when I noticed this:

Screenshot-2016-06-22-10.19.56

Let me tell you a story about this picture.  When you register a brand in North Carolina, you need to turn into a label approval form.  On that label approval form, you designate the Supplier (Anheuser Busch), the Brand – which designates distribution rights, the Product Description (Pale Ale, etc.), and a Fanciful Name (where most small breweries put the name of their beer).

Anheuser Busch generally lists their individual Brands in the Brand field instead of a Fanciful Name, which is a legitimate practice.   If you search for Budweiser, you get 75 different results.

Screenshot-2016-06-22-10.25.07

It means that they have the ability to control distribution rights on each individual brand (which is really useful if you’d like the ability to punish or reward an individual distributor).  So, okay, no problem, so I searched for America.

Screenshot-2016-06-22-10.28.30

Fun, right?  Now, I’m no alcohol lawyer, but this suggests to me that America is being distributed illegally in North Carolina.  So, I took my time and filed a little bit of paperwork, so now if you search in public records, you can find this:

Screenshot-2016-06-22-10.32.08

That’s why it’s my pleasure to announce that just in time for America’s birthday, you can find America, a Ridiculously Patriotic Extra Pale Ale available in cans from Mystery Brewing Company.  They’ll be available July 1 at our Public House in Hillsborough (and it’s really delicious).

(high res if you click)

AMERICA

And hopefully I don’t get sued off of the planet. In the meantime, I’ll be drinking this baby on July 4. Happy birthday, America.

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Tags Categories: brewery, industry, marketing, Mystery Brewing Company, new beer Posted By: erik
Last Edit: 22 Jun 2016 @ 10 46 AM

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 23 Jul 2015 @ 11:37 AM 

It’s amazing just how complex my feelings are about the dumbest things. Not Your Father’s Root Beer is inexplicable to me.  Partially because I just really dislike root beer and I just can’t imagine drinking a whole bottle of this, and partially because of the witchcraft through which it hath been wrought.NYFRB-Bottle

Drinkers apparently love itThe press loves it.

Except for the handful who are decent journalists and smell something fishy.

Here, I’ll save you the trouble of clicking on those links (but please do if you have the time).

1. Incredibly high ratings on RateBeer, alone, but especially within style.

2. Fortune, Time, Bloomberg, and Consumerist posts about how alcoholic root beer is “The Beer of the Year” and the best thing EVAR.

3.  Boston Globe and Philly Inquirer pieces revealing that Small Town Brewery isn’t a Small Town Brewery, but a subsidiary of Phusion brands, the fine folks who brought you Four Loko and that it’s probably going to be acquired by Pabst.

Before I go into my problems on this, let me just get this off of my chest:  Not Your Father’s Root Beer is no more beer than actual root beer is.  It’s a Flavored Malt Beverage, an Alcopop.  It’s made in a factory that makes Mike’s Hard Lemonade and Smirnoff Ice among other things.  And I’m not telling you not to like it.  I’m telling you to stop calling it a craft beer.  It’s no more a craft beer than Twisted Tea or Bacardi Breezer, or Hooch, or, you know, root beer.

Y’all know that root beer isn’t actually beer, right?  The guy who first commercialized root beer was active in the temperance movement and wanted to make Hires “Root Tea”.  He called it “beer” to appeal to the working classes and to stop them from drinking alcohol.  It’s just marketing.  It’s always been a sham.

I don’t even doubt that Small Town Brewery is what it purports to be or that it doesn’t make an array small of craft beers.  For all I know, the original location in Wauconda still does on its 3 bbl system.  But that product that you see in stacks on the floor at WalMart?  That is being released en masse in 30+ states?  Not on your freakin’ life.  I hope that Tim Kovac is getting enough in royalties and residuals on this to at least finally quit his day job, because it’s a masterful turn that I am, frankly, quite jealous of.

But why not admit it?  Why not take pride in it?

The chicanery that Phusion and phriends have used to convince drinkers that NYFRB is a craft beer is, frankly, incredible and awe inspiring, and for a little while I was puzzled by it.  Why be ashamed of what you are?  Mike’s Hard Lemonade doesn’t try to be something it isn’t.  Why is NYFRB doing this?  But I think I get it:  Earn the trust of the craft beer nerds and a lot of people who aren’t sure about what to think fall into place.  Look at the comments on this page.  It’s described as “liquid gold”, “a small taste of heaven”, “nectar of the gods”.  It boggles the mind.  It’s fucking root beer.  But when you’ve got the snobs in a tizzy everybody else leans over and takes a look.

What this is really teaching us is 1) The majority of craft beer nerds could give two shits about who makes their beer, or even, apparently, if it’s beer.  2) Most people think that “craft beer” means “not light lager” (thank you Stone).  3) People love soda.

And now let me tell you a story about grocery stores and what products like NYFRB mean to small breweries.

Grocery stores are funny places for beer.

The next time you’re in a grocery store, count the number of facings there are for just Bud Light.  Notice that there are full cold boxes dedicated to Bud Light.  They’ve got a 12 pack showing long-side and short-side in packaging so that it can fit a whole shelf.  They’ve got 12 oz cans, 16 oz cans, 12 oz bottles, 12 oz long-neck bottles, single cans, single bottles, beer balls, party packs, drink your way out of a swimming pool kits, etc., etc.  Then there’s a stack in the shape of a recliner and a television to celebrate the fact that football season starts in 2 months.

Just Bud Light.  Now start looking at Budweiser, and Bud sub-brands.  Lime-a-ritas, etc.

Now, who do you suppose puts all of those facings up?  If your answer is “the grocery store” you’re wrong.

Grocery store beer coolers and shelves are decided roughly twice per year at a corporate level.  Fortunately, both AB-InBev and MillerCoors pay the salaries of people who actually work for the grocery store corporate offices and specialize in building grocery store sets.  There’s software for it.  The contents of the shelves are decided down to the inch.  Occasionally there’s a bit of manager’s discretion for local brands.  A few chains have some local initiatives, but don’t think that the big guys are losing much space for that.

On an individual grocery store level? Those guys don’t stock the shelves, either.  That’s done by distributors.  When you see somebody walking through the grocery store aisles restocking beer, or fixing the way something is sitting on a shelf, take note of what they’re wearing.  It’s probably a polo shirt from a local distributor.  They are trying as hard as they can to get as many brands from their distributor on the shelf as possible because that’s how they get paid.

Why am I talking about grocery stores?  Because the only real way to make money in beer is by selling a LOT of it.  Margins are paper thin.  Volume sales are where it’s at.  And grocery store chains equal volume.  There are 37,716 grocery stores in the US (or were at the end of 2014).  If, by some miracle, you could sell only case of 12 oz bottles in each one of those once per month through a whole year, ignoring any other sales outlet, you’d be making 33,000 bbls of beer.  That is roughly the size of the large regional craft brewery in your area.  There are 90 breweries that size or larger in the U.S., out of 3500.  Fewer than 2 per state.

Next, go find out how many actual craft brands your grocery store carries.  I bet it’s fewer than 90 in most stores.  Make sure you don’t count any of these brands or any of these brands or any of these brands or any of these brands.  It’s a fun exercise.

Grocery stores, like beer reviewers on the internet, don’t really care who makes beer.  They care about sales.  They want to know that sku A sold faster than sku B.  The next time shelves are edited, sku A gets more space, sku B gets less.  That’s it.  It is, yes, why Bud Light has so much space and won’t lose it.  It’s also why small breweries have a hard time with shelf space: because they’re not instantly recognizable; people who aren’t sure about what they’re buying avoid them.

Finally, you’ll notice that there’s a limited amount of space for beer in grocery stores.  It doesn’t really change.  There are, however, a LOT more breweries, to the tune of 100% growth in the past five-ish years.  Space is a premium.  The largest challenges to a craft brewer today are shelf space and tap space.  They are difficult and expensive to get and even more difficult to keep, because every day there is someone at your heels saying, “Hey, want to try this? It’s NEW. You should sell it.”

When something like NYFRB comes along, an alcopop disguised as a craft beer, a mass-market beverage disguised as a small time brewery, what I see is danger.  Why?  Because not only is it being bought by the people who don’t know and don’t care, it’s being bought by the people who DO care.  Because the elaborate ruse that Phusion and Small Town Brewery have engaged in through their incredible (and expensive) PR firm is masterful and has fooled an enormous amount of people from drinkers to journalists.  Craft beer stores that would normally never carry alcopops are buying it by the pallet – and why wouldn’t they?  It’s like instant money.

But, make no mistake.  Every time NYFRB or something like it comes into a store as a craft beer, something else goes out.  And since people have no problem buying the ever living shit out of it, they’re guaranteeing that there’s one less spot for a small, local brewery to inhabit in the future.

So, sure.  If it’s good, drink it.  Who gives a shit, right?  Get TRASHED.  You’re an AMERICAN.

But don’t be fooled.

Know the choice that you’re making and what it means.  And don’t call yourself a craft beer fan if you don’t care.  Let the small breweries know who their fans and allies really are.

 

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Tags Categories: distribution, industry, marketing, media, news, op-ed Posted By: erik
Last Edit: 23 Jul 2015 @ 11 37 AM

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 21 Oct 2014 @ 11:01 PM 

Today, I poured samples of beer at the North Carolina State Fair. This year is the first time that samples were being poured there, so it was a novel experience for everybody involved. The staff, the brewers, the patrons, etc.

Because I didn’t have much to eat today I found myself getting irritated by little things, like the fact that I had no idea how to get into where I was pouring beer. Like the fact that I was ridiculous and didn’t ask my distributor to bring beer over for me. Like the fact that the greeters in the complex we were in kept saying, “Yeah! The wine is this way!” but neglected to say anything about beer. It was fine. The whole thing turned out to be a great success, grumpiness notwithstanding.

It was actually an incredibly refreshing day. There’s nothing like having a 50-year old, grey-haired, Southern boy walk up to you wearing a John Deere t-shirt, dirty jeans, and a yellowing farm equipment hat, staring at the bottles you’re serving for a bit and then saying, “Whaddya got that’s dark?” to remind you why you’re in this business. Sometimes you get so mired in sales figures and brewery efficiency and you get so involved in the business around you that you forget that a lot of what this is about is giving people good beer that makes them happy.

But tonight I had a bit of an epiphany – at the very least an idea. I think I still need to think about it (and write about it), and I probably won’t even define it perfectly here today, but it’s a start. Here’s what happened:

A lady came up to my table. She was probably mid-50s to mid-60s, short cut, curly, dyed red hair with grey roots. She was wearing a zipper sweatshirt over a blouse and some mom jeans. She was staring down at the bottles that I had but not touching them, clearly not making eye contact with me.

I asked her, “Would you like a sample?” She nodded, so I continued, “Do you want just one or do you want to try all three?”

“Just one,” she said.

“Well, then, what kind of beer do you like?”

Pause. She looks up at me and says, “I like ales and.. uhh.. lagers. Ales and lagers.”

Normally, this is the kind of thing that I internally roll my eyes at. It’s the kind of thing you laugh about with other brewers at beer festivals. You want to snarkily respond to them, “Oh, you like BEER? GOT IT.” You know what they mean. I drink that fizzy, yellow stuff – those are lagers – and sometimes I drink stuff that isn’t fizzy and yellow. Those are ales.” Probably. Maybe.

So, I talked to her a little bit about flavor. Caramel and toffee, chocolate and smoke, oranges and pineapples. I kinda wanted to tell her, hey – it’s okay. I know you’re intimidated by this stuff, but “I don’t know” is a fine answer. Let me help you. And while I was talking to her it occurred to me in such a moment of clarity that it actually stopped me mid-sentence, and I paused in the middle of a tasting before I went on.

Of course she doesn’t know what she likes. Up until now, the people who were making the beer that she was drinking didn’t care what she likes, they care what she buys.

Now, look, I care that she buys. After all, I need to make money. I have employees to pay and beer to make, but follow me for a little while:

This, to me, might be the new definition of “craft”: People who care about YOUR beer.

Today, I was pouring an English Mild Ale (caramel/toffee), a Saison (pineapple/oranges), and a Smoked Rye Stout (chocolate/campfire). If she would have said to me, “I really love IPAs” I would have said, “Hey, sorry. I have nothing for you, but the three other breweries here all have great IPAs. They’re about 4 booths away from me. If you want to try something else, I’ve got your lineup.” because I am so much more interested in that lady having a good experience than I am in getting her $7.

Mass market beer doesn’t give a shit about what you like in a beer. They’re not even trying to sell you that anymore. They’re trying to sell you sex appeal, cool friends, and chug-friendly packaging. Like it? Of course you like it. You’re getting drunk, aren’t you? Ugh.

Craft: We care what you drink.

It’s why beer festivals are so damn frustrating. They’re full of jackasses that come up to your booth and order, “Whatever.” No, man. Not whatever. I spend a lot of time and effort making these beers taste great. I want YOU to LIKE them. Bud Light is whatever. PBR is whatever. If you want to get whatever, just spend your $7 on a plastic bottle of Popov Vodka and tuck in for the night. These beers are ideas. They’re concepts. They’re little glasses of art. I want them to speak to you in the same way they speak to me. You might not even like it, and I’m okay with that, but I want you to just try because I care about what you like.

“Whatever” means fun is drunk. In craft beer, fun is drinking.

So, I care. And I think that’s what sets us – collectively – apart. At Mystery the other night, we had a conversation about what the mission of our company really is. Why are we here? It’s difficult trying to convey the sense of, “We’re here because we feel there’s an underserved market of people who want seasonal-only beer.” or some sort of line like that. It feels too corporate and stodgy, but it’s important to give the company the right direction as you grow. We’ll have something like that (but better) once we finish the process, but the following underpinning idea is still there.

We care about what you like. We want to make great beer and we want you to like it and enjoy it because it’s delicious and that makes everyone happy. That’s what makes us craft.

Because I feel like I need to finish my story, she tried all three. Stout was the hit. She liked the Mild, the Saison was okay (“Too much like Blue Moon.” – which I DID internally cringe at, because it’s not ANYTHING like Blue Moon and also Blue Moon. Eh.), but the Stout!

“I ain’t never had a beer like that. It tastes like chocolate!”

What I wanted to capture in a glass – I told her – were those cold fall evenings, when you’re walking outside and there’s smoke coming out of someone’s chimney, and the smell of damp leaves is in the air. That quintessential fall evening.

“Well, you sure got it.” she said. And she handed me her $7 and left with a bottle.

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Tags Categories: industry, op-ed Posted By: erik
Last Edit: 22 Oct 2014 @ 08 37 AM

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 14 Feb 2014 @ 8:00 PM 

I’ve been kind of struggling over whether or not to write this. Partly because it comes off as something of a “woe is me” kind of post and partly because it looks like an excuse, but in reality it’s just me being frustrated and venting. So, hi, I have a blog.

Well, it IS something of a “woe is me” post, I guess. But, here goes.

Here at Mystery, we use a lot of specialty malts. You could probably argue that the only thing that we use is specialty malt because we don’t use any base 2-row malts. All of our base grain is either Pilsner Malt or Maris Otter depending on the style. For a handful of our brands throughout the year, we use very specific malts because of a very specific flavor we get from it.
DSC_0041
Let me explain that last sentence. One some very base level, malt is malt. The Cara malt from Crisp will get me the same basic flavor as the Cara malt from Simpsons, which will get me the same basic flavor as the Cara malt from Patagonia or a blend of Crystal 10 and Crystal 20 from Briess.

It’s not entirely true. They all have their own character, but when blended into an overall beer the only people who are really noticing those things are the people inside the brewery that have been around since last year’s run of the same beers and have tasted them a LOT. That’s just 3 of us, really.

We have some ingredients, however, that have very specific characters that we feel aren’t reproducible in other malts. The one that specifically jumps to mind for me – primarily because I’ve been having a problem with it – is Simpsons Golden Naked Oats. It is, without a doubt, one of the primary driving flavors in Six Impossible Things, our Chocolate Breakfast Stout (and pretty much our most popular beer). I haven’t been able to find anything that tastes the same. We have a handful of grains like that. They’re normally from small foreign producers. You’re probably already guessing what I’m going to write about.

This winter in particular, our supply chain has been a complete disaster. We’ve had orders come in wrong, we’ve had orders get lost, we’ve had deliveries show up a week late. It’s been one thing after another. In the case of our oats, we bought the last few bags in the entire Southeast in mid-January after being out for the better part of a month. I had to buy two more bags from a homebrew shop to do another batch of beer. As near as I can tell there are no Golden Naked Oats in the US. Anywhere.

The container that the oats are supposed to be in left England (which, of course, has been experiencing catastrophic flooding) late. It got caught in a storm on the Atlantic Ocean. Twice. It was finally supposed to arrive this week just in time for the winter storm that hit this weekend. Once it finally gets unloaded and goes through customs it has to take a truck to Minnesota where it’ll get portioned out to more trucks who will then get it to warehouses around the country around a week after that at which point I will finally be able to order it ASSUMING that order is handled correctly.

So what’s the result? The result is that I stop producing my most popular seasonal beer because I, quite literally, cannot do it. It’ll be weeks or longer before I get it back out in the market, at which point it’ll be mid-spring and totally out of season. It’s frustrating.

So, why the bitch session? Because nobody can see it. To my distributor, to bars and restaurants, to customers in my pub, I’m just not making enough beer, and I’m not making enough of something that will make all of them happy, too. It’s an excuse. What do you mean you can’t get oats? I can go get Quaker Oats at the grocery store and bring you some.

No, you can’t.

And I feel very responsible for the fact that every piece of the chain below me is disappointed, and I feel, too, that I have no recourse in the supply chain above me. Not just for this instance, but for anything.

What am I going to do? Not order again from my largest supplier? Hold them financially responsible for the fact that I’m losing business because they can’t get an order right? What leverage does a small brewery really have? We can’t order in all of the grain for the year up front. We don’t have that kind of cash, much less that kind of storage space. I would imagine that most small breweries are in the same boat that I am.

In a lot of ways, this seems like it would be so much worse if I had a flagship. At least now I can call it quits on a brand and move on to the next season, better luck next year. What happens if you have one of these things happen to your flagship? You change the recipe? Change the flavor? Screw consistency?

So, the next time you see a brewery with what looks like supply problems, maybe think a little bit about how supply chain makes a difference.

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Tags Categories: industry, ingredients, seasonality Posted By: erik
Last Edit: 14 Feb 2014 @ 08 00 PM

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