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.

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

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This past week, I was invited to take part in an event called Free the Brews hosted by Generation Opportunity.
Free the Brews
Generation Opportunity is a nationwide non-profit funded by the Koch Brothers. They claim to be non-partisan, but they share funding mechanisms with a number of conservative groups and their messages are certainly libertarian/tea party heavy. As it appears to me, they are a group aimed at getting Millennials to vote conservative in the name of pro-business, or anti-fun, or something. Millennials are already known to skew more liberal than previous generations, so I guess this is a run at convincing a certain amount of them that they’re conservative, really. GenOpp is co-opting the craft beer industry largely under the banner of “down with the three-tier system”, or to put it succinctly, “Free the Brews.”

If you know me, you know I am not what you would call “conservative” unless we’re talking conservation of mass.

So, then, you might ask, what the hell was I doing at this event?

Well, a little history:

Back in May, Generation Opportunity wrote an op-ed in the Charlotte Observer titled “Free North Carolina’s brews from archaic regulations”, written by the head of the group in North Carolina, Alex Johnson. It highlights some issues that are, indeed, issues in North Carolina, but also puts focus on things that really have no bearing, and some that are plain wrong. The primary message is “regulation is bad.”

The NCBWWA responded with a piece titled “There’s a reason N.C. is such a great beer state” in which they make the claim that beer here is great because regulation is AWESOME and also the distributors made it great.

The real truth, of course, is that what makes North Carolina a great beer state is the beer and that without the beer from the breweries we’d all be getting shitfaced on Muscadine wine right now.

Anyway, as President of the North Carolina Craft Brewers Guild, I wrote an op-ed response… which never got published. Here’s a PDF if you’re curious what I had to say; it’s not really the point today.

When GenOpp announced the Free the Brews events, they invited the Guild to take part and the Guild was – understandably, I think – nervous. While GenOpp is championing some of the causes that the Guild believes in, they have reckless rhetoric. It’s the kind of rhetoric that creates political opponents. The Executive Director and I talked about it, and we felt that we didn’t want a narrative about beer to exist in North Carolina without our direct participation. We also knew that this event was happening whether we were there or not. So we agreed to take part. It was a calculated risk.

In the week leading up to the event, I was contacted by a lot of friends asking me something along the lines of “What the hell are you doing?” I had a lot of press contact me and ask me if I was a member of GenOpp (I’m not), or how did the Guild come to co-sponsor this event (we didn’t).

On the day of the event, a previous set of Free the Brews events were brought to my attention up in Detroit. They were followed up by an Op-Ed piece by GenOpp: Detroit, Michigan’s Newest Craft Beer City.

Here’s a snippet:

The most burdensome law is the three-tier system which requires that brewers, distributors, and retailers exist as separate entities. Brewers who produce over a certain number of barrels of beer cannot sell their products directly to consumers. Instead, they must sell to a distributor who then sells to the retailer. Not only does this steer profit toward the middle-man, it also makes expansion and experimentation difficult.

The culture of craft beer in Michigan and across the country is one of camaraderie, and brewers are always trying to push the envelope with new and exciting brews. Unfortunately, regulations make it hard for brewers to drive change. When Reith decided it was time to open Atwater and bring his passion for beer to the young people of Detroit – all of whom are over 21, of course – he faced a few setbacks.

“I had to go through every level of government just to get a permit,” he lamented at the event. Just waiting for the permit to go through federal, state, and local officials took almost twelve months. If regulations were streamlined to make the permit process simpler and speedier, more craft breweries would be able to open, spurring an increase in local competition and more creative products for consumers to choose from.

Less government means more opportunity, more craft beer, and more freedom.

And here’s the response, written by Mark Reith (who was quoted out of context above) and his distributor, Imperial Beverage: Michigan, craft beers, and growth

A snippet from that article:

Gardner took a remark about permits out of context and craftily implied that it was an attack on Michigan’s entire alcohol system. In fact, during the event Gardner attended, Atwater never addressed Michigan’s alcohol regulations. Just cumbersome permits.

What must be stated unequivocally: Michigan’s system works for the small brewery, not against it.

So, I was nervous going into the event on Thursday. I did my best to tell this story: We have it good in North Carolina. Our laws are pretty damn friendly. There’s a reason that breweries are moving here from across the country and opening up at the fastest rate in the country. It’s not because we’re all suffering here. Are there laws that need to be updated? Sure. The bulk of the law was written in 1938 and updated in 1983. The craft industry barely existed the last time the laws were revised. We’re in a different place now, and the laws will change to reflect that, but de-regulation is not the answer.

We’ll see if I am misquoted in my very own op-ed this week. If so, my distributor and I will probably have a blast crafting a rebuttal. The literature (seen to the right here) is definitely along the same lines as the Michigan event.

The handouts at Free the Brews

The handouts at Free the Brews

But that’s also not the point (he said, 1000 words in):

The point is this: Craft beer is currently in this really strange space in politics in which we are neither the darlings of the right or the darlings of the left. We enjoy support from both sides of the aisle, and it enables us to make a lot of progress when it comes to updating old laws to fit a new industry. The last thing we need is to be co-opted by A Cause. As soon as we are seen as a Republican issue or a Democratic issue things are going to get really sticky.

Look, changing laws takes a long damn time. It’s a complicated system, and not just because of the network of relationships and partisanship, or that some laws are only considered during certain sessions in non-election years, but also because changing a law in one place has far-reaching effects. Simple word changes in a law can have effects that go far beyond the intent of the author. Tax changes can change the entire course of state budgets. It’s natural that the pace of industry will outstrip that of policy. That’s okay. Policy changes to fit us, eventually, so long as we work reasonably and responsibly toward an established goal.

I’m happy that there are other groups out there talking policy. I’m glad that there’s apparently a nationwide discussion about alcoholic beverages that isn’t about restricting them further. On the other hand, I’m terrified that it’s happening outside of the brewing industry. Even brewers don’t necessarily agree about what is best for breweries. The possibility of solutions being proposed by people who don’t even understand the problems – just because they want to further a broad political agenda of “more young voters” – could hamper our industry in a real way. Grassroots support is great. Grassroots policy is tricky.

So, my message for Millennials and GenOpp and everyone is this. If you really want to help craft beer and breweries? Go to your local brewery and buy a pint. I promise that they will pursue their own interests just fine. In fact, one of the reasons that there’s a North Carolina Craft Brewers Guild is precisely that: to help brewers pursue their own interests. The Guild has a robust legislative agenda. We’re working toward getting a lot of laws updated. It’s the ones that brewers are concerned about, and I promise all of them are working toward getting beer into your hands because that’s how we continue to pay our mortgages. We know the people involved, we know how these laws will effect brewers. We’re doing a lot less guess work than an outside group would.

If YOU want to get involved and follow a call to action, join the NC Craft Brewer’s Guild and volunteer, Support Your Local Brewery through the Brewer’s Association, but please, let’s leave partisan politics and reckless rhetoric out of it.

Tags Categories: op-ed Posted By: erik
Last Edit: 18 Aug 2014 @ 04 48 PM

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Today, I ran across an article in a local mag. The lede reads, Snubbed: Why Raleigh isn’t a top 10 emerging beer town.

The article is a response, of sorts, to a listicle in the Seattle Post-Intelligence: America’s Top Ten Emerging Beer Towns.

The list in the SPI doesn’t bother me much. I don’t see anything in it that’s necessarily out of place, and besides which lists are lazy journalism. Lists are what happens when somebody has to get an article out but doesn’t want to take the time to actually write an article. It’s why BuzzFeed exists. It’s not based off of research or any sort of really quantifiable criteria, it’s based off of personal experience, and it’s largely opinion regardless of the fact that this dude thinks he’s got some sort of repeatable experiment. It’s fine. You could also title this article, “10 Emerging Beer Cultures That I Have Recently Visited and/or Read About”. “Top Ten” is click bait. You’ll also note that it leaves off Washington DC and Richmond, VA, both of which have fantastic emerging beer cultures.

No, what bothers me is the thesis of the TBJ article which is bold and clear in the last paragraph:

Perhaps Raleigh isn’t making recent beer lists – not because there isn’t a plethora of breweries to choose from – because these breweries aren’t doing anything to stand out.

Let me posit another hypothesis: Maybe Raleigh isn’t making recent beer lists because of lack of media support in our local markets. I mean, how else is some guy from Seattle supposed to know that we have a great beer culture? Right now, he reads your article and his response is, “Nailed it.” Nothing to see here, move along.

Now, look, I realize that negative and controversial headlines move papers, but what happened here is that an article got published in a market across country. That didn’t mention North Carolina at all and the TBJ wrote a followup that specifically calls out our local market in a negative way. Thanks for the support guys! Can’t wait to invite you to our next party!

Raleigh – no, I’m going to talk about the entire Triangle, because it takes up the same geographical space as some of the other emerging beer towns in the U.S., and actually includes all 32 of the breweries that are referenced in the TBJ – is one of the fastest growing beer areas in the country. Alongside those 32 breweries we also have another 10 breweries in planning (30% increase!) that I know about and probably more that I don’t know about.

In those 32 breweries, in the last year alone, we have a World Beer Cup Gold Medal (White Street, for their Kolsch), a World Beer Cup Silver Medal (Lynwood Brewing Concern, for their Black IPA), and a GABF Bronze Medal (Carolina Brewery for their Oatmeal Porter). We have 10 medals from the U.S. Open Beer Championship (LoneRider, Silver, Porter; Lynwood Brewing Concern, Bronze, Dry Irish Stout; White Street, Bronze, Foreign Extra Stout; LoneRider, Bronze, Barleywine; White Street, Bronze, Black IPA; LoneRider, Bronze, Black IPA; Fullsteam, Gold, Cream Ale; Fullsteam, Silver, Vegetable Beer; LoneRider, Bronze, Chocolate Beer; Mystery, Bronze, Wood and Barrel Aged Beer).

So, you know, whatever. Nothing special. Except for the worldwide recognition of excellent beer across a vast range of styles. Yawn.

Fact is this: The Triangle is a great place to have a beer. Is there a lot of “boring” beer out there? Sure. There’s a lot of Pale Ale, IPA, Hefeweissen, Porter, Stout, Kolsch, and whatnot out there, and the slice of the market that is Double Sour Imperial Cucumber and Chive Stouts is fairly small. You know why? Because that’s true everywhere. This country’s beer culture is built on those every day beers. The reason they’re everywhere is not that they’re boring, it’s that they’re good. You think they’re the same everywhere you go? Line up 30 IPAs from Raleigh/Durham’s breweries and get ready for a rollercoaster. They’re all vastly different and all amazing in their own way. We wouldn’t have a beer culture in this country if it weren’t for those every day beers being the inspiration for beers that would become every day beers: Sierra Nevada Pale Ale, Sam Adams Boston Lager, Anchor Steam, etc.

I can make a long list of classic American beers that sound like they don’t “stand out” but that the backbone of this country’s beer industry are built on.

But here’s the other thing about this article. The original criteria of the listicle as reported by the TBJ is this (emphasis mine):

To get on this list, “you need one or more great, veteran brewers in that culture; people others can learn from and emulate. And, most of all, you need a population that’s avid, open-minded, culturally aware, adaptable, adventurous and ready to embrace the Journey along with that new brewery,” the blogger writes.

So, I ultimately read this TBJ article as a slight against our beer drinking population. Raleigh/Durham drinkers, are you really going to take this? I read here that you’re not open-minded, culturally aware, adaptable, adventurous, or ready to embrace a new brewery. To me, the way the TBJ article reads, regardless of the quality of the beer – which is clearly there – we’re not an emerging beer culture because of the quality of the drinker. The crowd at my pub suggests that this isn’t true, but I’m not out drinking with you.

Here’s my call to action: Prove that shit wrong. I know you’re better than that. I see people coming out to our “Sour Sundays”, I see complex and interesting beer styles being gobbled up, I see local support for local breweries every day. And while maybe the author of this article didn’t do the best job doing local research before publishing a nastygram, maybe she shouldn’t have had to do research to know how much local drinkers dig the local beer scene.

So, go forth, drink local, support local, and let’s make sure that articles like this never darken our local media again.

Dear Ms. Kurry, I would like to personally invite you on a tour of the Triangle’s breweries to show you that they are anything but unspectacular. We’ll start here at Mystery and I will personally drive you around all day to make sure we hit as many phenomenal spots as possible. I’m afraid that all 32 breweries may not be possible in one day, since that amounts to 4 per hour in an 8-hour period (to say nothing of drunkenness), but I’ll get you to at least 10 that will blow your socks off. Drop me an e-mail, we’ll make it happen.

Tags Categories: op-ed Posted By: erik
Last Edit: 24 Jul 2014 @ 12 50 PM

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 17 Jun 2013 @ 11:35 PM 

Since Mystery Brewing Company‘s appearance on Crowd Rules in May and the introduction of our brand idea on a national scale, I’ve seen a fair amount of discussion online (and in my inbox) about our “no flagship brand” model with varying degrees of agreement or disagreement. I thought it might be a fine time to talk about what seasonal-only brewing means to us, how we do it, why we do it, and why I think that it’s the future of craft beer.

Why seasonal-only?

It’s easy: people love seasonal beers.

This idea didn’t just come fully formed into my head. Back when I attended my first Craft Brewer’s Conference, one slide during Paul Gatza’s State of the Industry presentation kept sticking in my head. I might get into a bit of trouble by pulling this slide out of an industry-only presentation, but here it is from 2013. It’s looked pretty much the same way for the past 4 or 5 years:

Taken from CBC 2013 State of the Industry presentation

Taken from CBC 2013 State of the Industry presentation

Seasonal: #1.

And, yes, IPA is coming up strong because IPA, but you’ll notice that the other big climber is “Variety.” These trends look the same year after year and they read to me like this:

People are no longer brand drinkers. They’re portfolio drinkers.

It’s always amusing to me that an industry that spends so much time trying to define itself as “not industrial lager” bases its primary business model on the industrial lager model, which is the flagship model: Make one beer, make it well, make it as cheaply as possible, use other brands to keep competitors off the shelf.

There’s two obvious reasons why this model has worked so well and why it’s been adopted by the craft industry.

  • In the early craft market, when there wasn’t a lot of brand recognition for craft beer, much less craft brands, it was a lot easier – and better for business – to emulate the big brewery model. In the 1980s and even the early 90s, it was necessary to have big iconic craft branding to stand apart from and against the industrial lagers.
  • It’s the way distributors operate. Distributors are built around selling core brands and selling them well. Since distribution was key in the growth of craft across the country, craft breweries adopted the flagship model in order to move their beer.

But this isn’t your daddy’s beer industry any more and drinkers have moved on from the core brand model. A quick look at Rate Beer, or Beer Advocate, or Untappd – or even the fact that those sites exist – will show you. Very few craft fans buy one brand and drink that one brand. Drinking variety is a badge of honor, sometimes even literally.

A few years back, when I was just getting into the beer industry, I saw the results of a survey that showed that when people had a beer that they identified as their favorite – a brand that they were loyal to – they bought that beer, on average, once per month. The same survey showed that they consumed beer several times per week, and often 2 – 3 beers at a time. Some loyalty, huh?

(I really wish I could find that survey and link to it and/or see the results of those questions today.)

The young members of the drinking market – the kids just turning 21 years old – have something that their predecessors never had: vast variety. Any young drinker that walks into a beer store today is faced with not 10, not even 100, but thousands of varieties of beer. I can get 55 different pale ales at the store near my house. And that brings me to two different questions:

1) How could anybody choose just one of those without trying a ton of them?
2) With that much competition already in the market, why on earth should I make a pale ale?

If you’re a craft drinker, ask yourself these questions: When was the last time you weren’t interested in trying something new from a brewery you like? When was the last time you didn’t want to try something from a new brewery? When was the last time you bought the same beer more than a couple of times in a row?

See? It’s happening to you, too. Variety is king.

What we mean by seasonal-only brewing

Based on that information, I decided to pursue the idea of seasonal-only brewing. There were a couple of different facets to the decision. One of them was to capitalize on the fact that people enjoy variety and enjoy seasonal beers. It’s what people buy the most, and so it seemed natural that they would also buy our seasonal beers. The other was to differentiate our brands, and not just make another golden, pale, amber, porter, stout, IPA lineup, but to actually fit into the niches that were open in an already-crowded beer market.

One of the main misconceptions about our model is that we’re just flying by the seat of our pants and have no idea what’s coming next. In reality, we have a set schedule that we brew by that is based on both style and season. It works like this:

Click for a larger version of our seasonality chart.

Click for a larger version of our seasonality chart.

We have four style categories that we brew in: Session, Hop Forward, Saison, and Stout.

Each season we make something seasonally appropriate within that category, and we repeat that beer each year. So, just like every other seasonal brand in the country, each beer comes out once/year, is consistent with how it tasted last year, and will be back again next year when it is again seasonally appropriate.

You can click into the graphic, but I’ll break down the styles for you here in text.

Session Line

  • Gentlemen’s Preference, Belgian Blonde Ale (Spring)
  • Langhorne, Rye Wit (Summer)
  • Pickwick, English Mild (Fall)
  • Ballantrae, Scottish 60/- (Winter)

Hop Forward Line

  • Queen Anne’s Revenge, Carolinian Dark (think English-style Black IPA) (Spring)
  • Lockwood’s Retreat, American IPA (Summer)
  • Fantine, Red Belgian IPA (Fall)
  • Hornigold, English IPA (Winter)

Saison Line

  • Beatrix, Hoppy Saison (Spring)
  • Evangeline, Rye Saison (Summer)
  • Rosalind, Autumnal Saison (Fall)
  • Annabel, Black Saison (Winter)

Stout Line

  • St. Stephen’s Green, Dry Irish Stout (Spring)
  • Papa Bois, Citrus Foreign Extra Stout (Summer)
  • Thornfield’s End, Smoked Rye Stout (Fall)
  • Six Impossible Things, Chocolate Breakfast Stout (Winter)

On top of that, we also do more limited seasonals, one-offs, experimental, and barrel-aged brews. Since it seems weird to call a beer a seasonal at a seasonal-only brewery, we release them in a line we call our Novella Series. Some of them are truly one-and-done. Some of them we’ll make again. Some of them are candidates for future categories as we expand. Basically, these are where we’re trying our new recipes and styles. Now that we have an operating taproom, many of these go on tap there and there only, but we still like to be able to get special one-offs into the market in keg format.

Challenges to the model

There are, no doubt, many challenges to this model. I anticipated some of those challenges, and some of them caught me by surprise.

I, like most crazy founders of things that don’t really exist, thought that the brilliance of my idea would be self-evident and that people would immediately understand what the hell I was talking about. In reality, we opened the brewery to confusion about our model and it’s still one of the most significant challenges we face (which is at least one of the reasons I’m writing this article).

As it turns out, the most common question you’re asked as a new brewery is, “What’s your flagship?” When you have an answer that’s a paragraph and not a sentence, people aren’t excited to listen and that’s because – as I was surprised to find out – most of the people who are buying beer at bars and restaurants don’t really care about beer.

I will almost definitely catch some sort of flak for that, but it’s true and, what’s more, it will always be true. You can almost definitely say the same thing about wine, liquor, chocolate, hot dogs, or any other specialty product. Because the people who are most likely making these decisions are making a myriad of different decisions and purchases, and they’re just not excited by the nuances of the brewing industry, nor should they be. They want to make an easy decision about one small facet of their operation and then get along to the next crisis in their day. Plain and simple, it’s not their job to care about the difference between your business model and the next guy’s. In many cases, beer is a set-and-forget kind of purchase. They will buy one brand until sales start to dip and then they will buy a different brand. If you go into a bar or restaurant with a brand that will go away on its own (or will appear to), then it looks to them like you’re just giving them more work.

We’ve honed our elevator speech, we’ve made charts and graphics and flyers, and we’re continually working on more ways of getting information out to bars and restaurants on a regular basis. Still, our largest challenge is defining our business to the customer in a way that they easily understand. We have a hard time convincing bars that they could just, say, always keep our stout on tap and that it creates variety in their lineup for them without any further work on their part.

The same goes for our relationship with our distributor. We’ve had a great time with our distributor, but we’ve found out the hard way that we were not providing enough information to their reps in order to best sell our beer. Sales reps fall in the same place as bar managers and beer buyers. We are just one brand in their book. If they don’t have a good understanding of what that beer is, what it tastes like, or why it changes, it’s a lot easier to sell something else. We’ve had to come back into the brewery and make changes in how we are handling information and what we’re expecting from sales. It was our assumption that beer reps working for our distributor would naturally be interested in learning more about the product and representing it correctly, but it’s a naive view of a crowded market. We don’t just make another pale ale, and if our beer is difficult for a rep to sell, they won’t sell it. After all, it’s just one small facet of their job.

Seasonal-only also contradicts how distributors are built to sell product. There is an onus in distribution to push the flagship brand of a brewery in order to qualify a retail establishment for inclusion on seasonal releases. To put it more plainly: If you, as a retailer, order a bunch of Crappy Golden Ale from Brewery X then you are virtually (but not legally) guaranteed that when Super Popular Imperial Stout comes out from Brewer X in the fall, you’ll get some. But if you don’t buy Crappy, you can kiss Super Popular goodbye. When all of your brands are seasonal, it’s hard to play that game.

Consistency is the challenge that I correctly anticipated. My feeling was that in order to get people to trust an ever-changing beer lineup, you have to make sure that the beer that’s going out is consistent within the brand and that it’s always great. Simply put: You cannot have your entire lineup change four times per year if half the beer you put out is sub-par. What’s more, the beer has to be consistent year-to-year, so that the flavor that customers loved last year is back again for their enjoyment.

We’ve put a lot of effort into making sure that we have an excellent lab and good science. We manage 95% of our own yeast propagation, we test every batch through the system for any sort of contamination, and we’re in the midst of starting a tasting panel program to make sure that flavor consistency isn’t just a decision between me and my brewer.

Why I think seasonal is the future of craft (specifically small craft)  beer

All this said, I do believe that seasonality is the future of craft, and that these challenges – particularly the ones in which people don’t understand our business model – will fade away, precisely because more breweries will eventually buy into the idea.

If I were to polish up my crystal ball and tell you what I think the future of beer looks like, I think it goes a little like this:

Small craft brewers face a number of future challenges from both inside and outside craft.

The big guys are losing market share, and they know where it’s going.

MillerCoors just expanded their “craft” division. Tenth and Blake just got a fancy new building and I’m sure we’ll be seeing plenty of new MillerCoors-funded “craft” brands coming into the market. Anybody who isn’t concerned by that from a small business perspective should take a look at Blue Moon sales numbers and then taste the sours that are coming out of ACGolden’s barrels and think again.

This past year AB-InBev took what should look less like a warning shot and more like first volley in the purchase and proliferation of Goose Island. They can shore up loss of market share by purchasing and assimilating craft breweries and this act shows it. Aggressive corporate behavior and ruthless market dominance is what took them from prohibition to the best selling brand in the world and nobody should believe that they can’t, or won’t, make beer good enough to give any craft brewery a run for its money. Everybody should also remember that Budweiser was, at some point in history, a delicious, crisp, and well-made American pilsner.

These giants and their pocketbooks have considerable influence and sway with the distribution system, which most small brewers still depend on enormously without having robust protection from franchise law. Small brewers, in most cases, still play by the same rules as the large brewers when it comes to distribution because there are no exceptions for business size written into the law in most states. Unfortunately, 99.9% of small brewers don’t have the same financial sway that the makers of industrial lagers do. They are at an incredible disadvantage there.

Inside the craft industry, we’re building our own industry giants. Boston Beer, Sierra Nevada, New Belgium, and others are so far and away larger than most of the small breweries in States that it’s almost unfair to lump them in the same industry. When we talk about “the Big 3″ we could just as well be talking about those three, since the three of them together make more beer than 98% of the breweries in the U.S. combined.

Regional and super-regional breweries continue to dominate the craft market through many of the same tactics used by the makers of industrial lagers: aggressive expansion and financial influence on local markets through event sponsorship. They get a pass from craft drinkers, though, because of two key reasons: 1) They’re still largely seen as small breweries (because in comparison to AB-InBev, they really are). 2) They make great beer.

However, as those companies continue to grow with a bevy of regional breweries behind them looking to follow in their footsteps, I find myself asking:

Can this country support 50+ super-regional breweries AND 3000+ small breweries? How long can we go before small breweries start going under because they can’t keep up with the big craft brands? How do I differentiate my company to allow it to survive?

I can’t play in the same space as these other breweries. I have neither the financial resources nor the desire to create a nationwide brand. What can I do to stop my company from being swallowed up? What advantage do I possibly have over any of these guys?

The answer is the same for any new small business: agility, creativity, innovation.

I’ll never be able to get my ingredients cheaper, I’ll never be able to make more beer than they can, have lower prices, have flashier advertising, or fancier new packaging. Our advantage – and the advantage of many other new breweries out there – is our small size. We can do things on a 7 bbl scale, that nobody would ever want to do on a 100 bbl system. Maybe because it’s a pain in the butt to manually quarter that many lemons, or maybe because finding a source for 500,000 jasmine flowers is unreasonable. It doesn’t matter why – it is.

The advantage to seasonality in a small brewery is that it takes advantage of what we do best: We make small amounts of really fresh beer, we make a variety of styles, we make them quickly, we make them well, and then they go away. We offer variety and exciting innovation in a marketplace that’s filled with overwhelming sameness. We offer exactly what drinkers are looking for, exactly when they’re looking for it.

Now, if only we can get everybody to understand that. Drinkers love the idea. Bars, restaurants, and distributors are following along, and soon, I hope, breweries will, too.

Tags Categories: brewery, distribution, history, industry, ingredients, marketing, Mystery Brewing Company, op-ed, seasonality Posted By: erik
Last Edit: 17 Jun 2013 @ 11 35 PM

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 06 Jan 2013 @ 11:27 PM 

This is a very late entry into this debate, and there’s a good reason why: I’ve been having a hard time articulating to myself just why I think the debate has been so… well.. wrong. I tried recording a podcast about it, but I was just a rambling mess (more so than usual) and so I felt like the best way to approach this was through writing.

To cover the backstory: Back on December 13th, a few high ranking members of the BA wrote an article in the St. Louis Dispatch titled Craft or crafty? Consumers deserve to know the truth in which the authors attempt to call attention to the problem of “faux craft” beer being made by the large international conglomerate breweries, namely Anheuser Busch-InBev (ABI) and MillerCoors, henceforth to be referred to this in this article as The Duopoly (because that’s what they are). It was timed to coincide with a press release by the Brewers Association titled The Beer Drinker’s Right to Know, which seemed to be a response to this insane interview on Forbes/CNN titled Big beer’s response to craft: If you can’t beat ‘em, join ‘em which contains some crazypants quotes from the Executive Chairman of SABMiller like

“There’s a huge debate in the craft world about us, all big brewers, because we’re like the enemy. We’re the other guys. They think we’re stealing their authenticity. What we say is, “Let the consumer decide.” If we’re authentic enough for the consumer, that’s authentic enough for anyone.”

and

“I don’t think the craft movement in its current guise will continue to grow indefinitely. I don’t think it can. It’s not economic. Too many people won’t make any money. Too many of them will go out of business. And I think it will become less fashionable. These things are fashion to some extent.”

Though if I had to guess, what the BA was really responding to is this:

“We have our own craft brands. We also look selectively to acquire, or form partnerships with, or cozy up to people who have incubated good businesses. It’s difficult for big companies to incubate small brands. That, at its heart, is the dilemma. To start a small brand in a credible, consistent, sticking-to-it kind of way is hard for big companies. That’s what small entrepreneurs do best.”

because that is, in reality, the heart of the matter. By the by, that article was actually a followup article to one that came out back in November titled Big Beer dresses up in craft brewers’ clothing, which nobody seemed to take issue with.

Unfortunately, the BA press release and article was taken as an attack and was received with vitriol by some of the country’s smaller brewers that happened to land on this list of Domestic Non-Craft Brewers. They pissed some people off and, frankly, I don’t blame them for being pissed. At least one of those brewers – D.G. Yuengling & Sons – was welcomed warmly during the keynote address at the Craft Brewers Conference a couple of years ago in a we’ve-expanded-our-definition-so-you-can-be-craft-now moment. Throwing them under the bus on this chart is.. well.. kinda crazy. Until this chart, I didn’t realize that the BA didn’t consider them craft anymore.

I won’t summarize the response that the BA received from August Schell. I think it sums up the sentiment that was expressed out and around the internet quite well. You can read it here: August Schell’s response to Craft vs. Crafty on Facebook

Now, here’s my thought on the whole thing:

Faux-craft can be a threat, but not – I think – in the way that this concerted press release and chart make it out to be. It’s not because consumers might be confused into thinking that some shit Shocktop Wheat IPA is craft. It’s because consumers might not have the chance to have a choice in the matter.

One of the biggest warning shots that craft has had fired across its bow in the past 30 years was the AB-InBev purchase of Goose Island. There are a million and one reactions to that purchase and most of them are ridiculous because they’re either about whether or not the beer is going to suck now or whether or not it should still be counted as craft.

I’ll tell you: No, the beer will not suck. No, it is not craft. Done. Happy now?

The problem, I think, is a far more complicated one than it appears on the surface. Here’s why the Goose Island purchase is a threat:

Because Goose Island is good beer with a good reputation that people like and have heard of.

Why is that a problem? Because AB-InBev has a program that it runs with its distributors whereupon you can become an “aligned distributor”. That means that you purposefully exclude products not from the AB-InBev catalog from your sales. In return, you receive excellent lines of credit, better pricing on your products, and all kinds of interesting incentives that give you a competitive advantage in the market. Here’s a quote from the Wholesaler Family 2011 Consolidation Guide (lifted from The Washington Monthly: Last Call):

We ask all wholesalers to use the guide’s self assessment tool to objectively consider their capabilities and goals. Wholesalers who aspire to be an Anchor Wholesaler can identify any gaps they have in these qualities and build a plan to address them. Some wholesalers might remain committed to their current market, but realize further acquisitions are not right for their business. Others might decide now is the best time to consider whether a sale is in their best interest.

There are many aspects of an aligned wholesaler, and an explicit focus on our portfolio of brands is paramount. Those who are aligned with us only acquire brands that compete in segments underserved by our current portfolio and that bring incremental sales, not brands that have a negative impact on the A-B portfolio.

In a nutshell: our brands are your priority.

Okay, fine, you say. So craft doesn’t sign on with a Bud distributor. Big deal. Except that the country doesn’t have very many distributors with the same kind of reach and network that the two big houses do. To not sign on with those distributors – in most markets – is to put yourself at a significant competitive disadvantage. Unfortunately, to sign on with those distributors – in most markets – seems to now put yourself at a significant competitive disadvantage. Because now, when a bar says, “Hey – my customers keep asking me for a Pale Ale – can I get one of those?” The Bud guys can say, “Sure – Goose Island Honkers Pale Ale coming right up.”

Not that they wouldn’t say that anyway, but now they have incentive to push it harder. It doesn’t seem like much. Alone, it’s not.

Education is key

Part 2 of the problem is that there is awful – and by awful, I mean fucking TERRIBLE – education about beer in the bar and restaurant market. Here’s the thing I find the most embarrassing in restaurants: when they’ve put time into crafting the most beautiful wine list in the world, and the beer they offer is Heineken or Amstel Light or something because that’s imported fancy beer. There is a really large emphasis on wine education in culinary institutes, but unless a chef has a personal preference for beer it is basically ignored. This goes doubly when it comes to management and server training. So, unless you’ve gone out of your way to hire a huge beer geek at your restaurant to run your beer list, an IPA is an IPA and Honkers or Shocktop Wheat IPA or Leinenkugel Big Gig is just as good as Pliny the Younger. I mean.. hey – is it cheap? Then, cool, get it.

That’s why faux-craft is a threat: not because craft drinkers might be somehow duped into thinking that some other beer is a craft beer, but because new craft drinkers might never get the chance to have anything else. It’s not an awareness problem, it’s a market share problem. Nobody doing purchasing at Wal-Mart is going to be a big enough beer nerd to call out a distributor on pushing a faux craft instead of a craft, so nobody who shops at Wal-Mart gets to see anything else. Not a big deal, right? Except that that’s the single largest retail outlet in the country.

(Alternate argument says, “But those people are learning about craft and might eventually move onto other brands,” which is legitimate. My argument to that says, “People are lazy and if they can buy a six pack with the rest of their groceries, they will. It takes education and affluence to go to a beer-only store.)

The BA has posted articles about the need for more education in bars and restaurants before, but it didn’t receive the same kind of attention that last press release did. I guess it’s easy to write off Garret Oliver as an elitist jerk, which might be one of the single wrongest sentences I’ve ever written. He’s right.

The Definition of Craft is Misguided and Outdated

Part 3 of the problem is the definition of craft. The basis of the definition is written around tax guidelines – or worse, proposed tax guidelines written in legislation that hasn’t passed yet. If you’re anywhere near the craft industry at all, you’ve seen this definition before:

Small: Annual production of 6 million barrels of beer or less. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition.

Independent: Less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer.

Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

This summary might better explain what a craft brewer is: Not The Duopoly.

In the grand scheme of things, the definition here isn’t that bad. Small and Independent I can get behind (except for the definition of 6 million barrels as small – that is complete bullshit), what makes the definition wonky here is “Traditional”. Everything about this definition is about taxes and business size and that Traditional part of the definition means that you’re making a quality call in the middle of the definition.

I’ve thought about this a lot, and it goes against what I’ve said for years, but here’s what I think should be the definition of a craft brewer: A brewery that isn’t publicly traded on the stock market.

Because when you put quality into the definition of what a craft brewery is, you run into another problem.

Craft beer does not mean “good beer”

Part 4 of the problem is that people are confused about what is craft beer and what is good beer.

Craft beer does not mean good beer. There’s a lot of shitty craft beer out there. Sorry to say. Just because you’re small doesn’t mean you know what the hell you’re doing. It doesn’t mean you know how to build a recipe or package without an infection. It just means you’re small. If you want to say small breweries are craft breweries, then cool – that’s a craft brewery. But if you start making quality calls in the definition then there are a lot of breweries that are going to need to turn in their “craft” badge.

So what does that mean? It means that Utica Club and Yuengling and August Schell and Genessee and all that light beer with corn in it is probably craft. You might not like it, but you don’t stay open for 150 years because your beer is shitty, so deal with it. It also means that Sam Adams (SAM) isn’t, nor is the Craft Brew Alliance (BREW) or Mendocino (MENB), Sackets Harber Brewing Company (HBWO), Big Rock (BRBMF) or, of course The Duopoly (BUD, TAP) or any of the other international conglomerate breweries.

So, if I can sum all of this up: Craft vs. crafty. Is it an issue?

Yes, but not in the way it’s made out to be. Faux-craft is a problem because the big breweries control an unreasonable share of the market (80+%!) and, thus, have a stranglehold on the distribution system, meaning that they can control the flow of product in many markets. If they can give the mid-level suppliers – who are often poorly educated about the product they’re buying – an easy alternative to a higher priced product, regardless of how “cool” local is, they’ll control the market share and, thus, put small breweries out of business.

The BA’s position statement was, by all means, appropriate (somebody has to be a watchdog for the craft industry and call out the big guys, because craft brewers are so stupidly apologetic about The Duopoly). But, it is clouded by the fact that their own self-made definition of what craft is has a (recent!) history of changing to suit their priorities and contains a basically unenforceable criteria – quality – that they insist on enforcing based, it would appear to most outsiders, on beer color.

Drinkers are confused about what to do with this position statement because they’re being told that beer that they consider “good” (Goose Island, Ommegang, Magic Hat, Pyramid, Red Hook, Leinenkugel, etc.) is apparently “bad” because they falsely associate “craft” with “good”. In reality, those breweries are NOT craft, based on taxation definitions alone and it is not – and should not be – a measure of how good their beer is, merely whether or not they can join the Brewers Association.

Final word. Support your local brewery. If the big guys get their way, your local brewery will go away and the BA or anybody will be powerless to stop it because so many craft drinkers can’t be bothered to draw a line in the sand. The number of conversations that I have with craft beer drinkers that have an element of, “Yeah, but a Miller High Life on a hot day is awesome!” is astounding. No it’s not. It’s gross, just like it is on any other day. It’s not a good beer. (Oh, the apologetic craft brewer in me says, “But it’s a well made beer!” Sure. Your McDonalds hamburger is a well-made hamburger but it’s still a shitty goddamned hamburger.) You know what’s good on a hot day? A wit. A hefeweissen. A craft pilsner. A foreign extra stout. A really crisp IPA. I can keep going FOR HOURS about what beer is good on a hot day instead of a Miller High Life, and I will no longer compromise.

And you shouldn’t either. Here’s why you shouldn’t support faux-craft – and that includes everything from Blue Moon and Shock Top to (yes, I’m deeply sorry to say this) Goose Island and all the others: Because you’re feeding the machine that is working to remove choice from your life. The Duopoly is a consolidation machine that will, if given the chance, wipe out all competition possible.

Don’t let it.

Additional reading/listening just for fun:

The Street: 10 Craft Beers That Aren’t

Beer Advocate Thread: Craft vs. Crafty

Another definition of, well, not ‘craft’ beer

WUNC: The State of Things – Brewing Beer Battle

Last Call: Industry giants are threatening to swallow up America’s carefully regulated alcohol industry, and remake America in the image of booze-soaked Britain.

The Plot to Destroy America’s Beer

Random Thoughts from Littleton (about the Wholesaler Family 2011 Consolidation Guide)

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