Last week, a little press release flitted across the wire. You may not have noticed it, so I’ll post it here for your inspection. It was in regards to Blue Moon’s latest release, their Blue Moon Grand Cru. It’s timed to come out in the same month as the only actual blue moon (the second full moon of a month) that has fallen on New Year’s Even in decades. We won’t see another one for 20 years.
Blue Moon: Craft Brewer
At this point, you may be looking up at the title of this post saying, “What’s this supposed to be about again?” Fear not, gentle reader.

Here’s a quote from the press release that caught my eye:

“The craft brewer is celebrating this rare lunar occurrence with an equally rare brew: the limited-edition Blue Moon Grand Cru.”

Yeah. You read that right. Craft brewer.

You may also notice that their tagline – which I hadn’t noticed before – is, “Artfully Crafted.” I’m not sure if that’s new, but after seeing them reference themselves as a craft brewery, it certainly caught my eye and this mention of “craft brewer” in their press release really set off warning bells for me.

Now, just in case you don’t know, let me put this out on the line: Blue Moon is brewed by Coors. In fact, if you look down at the bottom of the press release, you’ll notice that the contact person that’s listed is from MillerCoors. They also list Keith Villa as the Blue Moon Brewmaster – which is not inaccurate – he did come up with the beer. Keith is a brewmaster at Coors.

Coors is not a craft brewer.

The Brewers Association has a definition of craft beer that’s centered around taxation. They list a craft brewer as being Small (under 2 million barrels per year – which is a taxation benchmark), Independent (tricky definition basically saying you’re not owned by somebody else), and Traditional (50+% of the brewery’s volume must be all-malt beers).

On their site, they have a list of “concepts related to craft beer and craft brewers” which I have a LOT of issues with (example: “The hallmark of craft beer and craft brewers is innovation. Craft brewers interpret historic styles with unique twists and develop new styles that have no precedent.” That is in no way traditional.), but this is not the post for that.

This is also not the post where we talk about how this definition actually cuts a lot of good, popular, small American brewers (Ommegang, Goose Island, etc.) out of the craft beer category, even though their products fit the bill in an exemplary manner.

This post will address this:

If you’re a consumer and you’re in the grocery store or a bar, and you want to buy a “craft beer”, how do you know what to get? You can’t just look for the CAMRA seal. If you haven’t taken the time to educate yourself, how do you know that Blue Moon is not a craft beer?
CAMRA
You can say all you want that, “Well, maybe they SHOULD educate themselves.” but it’s not reasonable, it’s a real issue. If you’re a craft brewer, your ubiquitous competition is Blue Moon (and Sam Adams) because: 1) It’s a decent beer and 2) It’s everywhere.

The fact is, if breweries – or the Brewers Association, really – does not come up with a simple and consistent way of showing the average consumer what products on the shelf count as craft beer, they risk losing the term and the definition to the multi-billion dollar marketing machine employed by MillerCoors and InBev.

“Artfully crafted” is a first step, and if it’s successful at reinforcing Blue Moon as a craft beer, then don’t be surprised if you end up hearing about Bud Light Golden Wheat being “craft brewed in small batches” or some such nonsense. I’m not a big fan of slippery slope arguments, but it seems to me like it isn’t long before you have BMC rolling out brands that are successfully marketed as craft beers taking significant portions of sales away from small craft brewers.

If the brewing industry doesn’t take the time, in the next year or so, to aggressively define “craft beer” in a way that is easily recognizable to the consumer, I think they risk losing the term and BMC will have won another battle against it’s minuscule brethren.

I look forward to a point at which I can walk into a store and look for the label, “Real American Craft Beer” so that I know exactly what I’m getting. I hope that day is coming soon and that we don’t have to invent and defend another definition, first.

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Categories: industry, marketing, op-ed
Posted By: erik
Last Edit: 08 Dec 2009 @ 05 25 PM

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 27 May 2009 @ 11:34 AM 

I’ve been thinking about this a lot lately. There’s a problem in the definition. That’s clear. After all, it’s been discussed in other venues prior to this ad infinitum (and those three are just a small example), and now I feel the new to add to the noise. The thing is, I think we’re all running up against the same problem.
Beer!
The problem is the Brewers Association is right and wrong all at the same time. Lemme explain.

The Brewers Association has it right

See this Examiner post by Larry Johnson for a succinct re-hash of the definition without having to scroll through the BA‘s entire statistics and definitions page.

This definition of a craft brewery and craft beer here is based entirely on regulations set by the U.S. Government for taxation purposes. If breweries produce under 2 million barrels per year, they qualify for a small brewer tax break on their first 60,000 barrels. If you’re above that, you’re not a craft brewer. That’s it. The smaller breaks in between are built in for statistical purposes. Plain and simple, when you’re talking about market segments, you need to be able to compare apples to apples. New Belgium and their amazing expanding distribution network just doesn’t compare well vs. a startup brewpub (much less how Sam Adams compares with anybody else). They’re two entirely different segments in the same industry.

There’s only one part of their definition of a craft brewery that isn’t based on an economic restriction:

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 it’s volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

And it kinda reads like an economic restriction, doesn’t it?

I take this as their way of saying, in every way they possibly can, “NOT megabreweries.”

So, here’s the thing. The Brewers Association is, first and foremost, a trade organization. As a brewery owner, I want them focused on helping to keep the most rigorously regulated industry in the country (aside from probably tobacco) a sane enough environment for my small business to exist in. A startup brewpub can’t afford to hire a full time (team of) lobbyist(s) to look out for their interests in the same way that MillerCoors can, but they can get help from the BA when they’re looking at challenging a law that’s coming through the pipeline. What is beneficial to MillerCoors may not be beneficial to the startup brewpub, so you also need somebody to push back against the corporate behemoths who, let’s be frank, would probably rather not have any competitors, even minuscule ones.

The BA needs tools to be able to do this job, and accurate statistics is one of those tools, consistent standards is another. These definitions are what the BA needs in order to do what breweries need them to do, and the BA can be an invaluable ally to a small craft brewer.

They are really crappy definitions for the average consumer. The consumer cares about good beer.

The Brewers Association has it wrong

Here are a couple of breweries that I would guess that consumers think are considered craft breweries that are not, according to BA definitions:

  • Widmer
  • Goose Island
  • Mendocino Brewing Co.
  • Brewery Ommegang

Soon, Sam Adams will join that list. I would challenge anybody to tell me that any of those breweries don’t make great beer, regardless of percentages of ownership and/or how many barrels they manufacture per year.

The problem is that the BA also makes attempts at functioning as a consumer advocacy organization, most notably via the GABF. And why not? People who make great beer are fans of great beer. It makes sense to function as an organization that gets consumers in touch with great beer. But the definitions of what craft beer is for industrial purposes don’t necessarily work for consumers.

Consumers want to drink great beer, and while I’ve heard a lot of people say they don’t really care where something comes from, I think they do. Behind craft beer there are personalities, there is passion for the product that is being made. That translates down to the customer very easily in small businesses. It’s something that the megabreweries will never be able to harness because they’re too far removed from the consumer.

Here, the problem is: How do you define passion?

In this case it’s almost definitely via selection of ingredients and processes. But you can’t define it as “beer without corn” or “beer without rice.” There was a little bit of a kickback from a few brewers after the IAACB video who do use corn and rice in their beers, but do it in really interesting ways. A brewer in Kansas or Nebraska using a local good (corn – what else?), malted and roasted to make a corn stout? How is that not a craft beer?

It’s sticky when it gets to passion definition. More on this later.

Where the Disconnect Happens

Quick story: At the end of CBC09, I was blitzing through the Farewell Reception grabbing a quick bite to eat and a quick drink before I had to rush to board my plane and I ran into Charlie Papazian. He was strolling through the middle of the ballroom, tie off, collar undone. In his right hand he had a goblet full of beer. In his left hand, hanging casually at his side, he had an open bomber. He wasn’t talking to anybody, he was just walking around with this enormous grin on his face. I wish I could have gotten a picture of him. The only thing I could think was: “This must be what it’s like to have your dreams come true.”

Think about it – this guy, who happens to just love beer, put this all together. He’s not a stupendously successful brewery owner, he’s not a Wall Street investment guru, he’s not a real estate tycoon. He’s a writer, and a homebrewer, and he loves beer so much that he has spent his entire life facilitating this entire budding industry. He is the perfect beer evangelist. Every brewery owner and beer drinker should take the time to shake his hand and thank him for loving beer. (I did.)

But, this is the reason for the disconnect. What eventually became the BA was born out of a passion for beer, but it has become (and thank god) a business organization. When Charlie started everything in the 1970’s, the definition of craft beer was easy: “Not the megabreweries.” But you can’t use that as a definition to define your business organization. You need clear rules that define the segment(s), even if they backhandedly say, “Not the megabreweries.” The definition of a craft brewery as recognized by the BA is spot on. They need to be built around the tax restrictions.

However, governing the definition of product made with passion with a tax-based definition is sure to lead to resentment from the consumer when they’re favorite popular brewery makes a business decision and is no longer considered a craft beer. The consumer wants to support craft beer, but also wants to support their favorite brewery. How do they make that call? By ignoring the tax definitions.

Here’s what I’d like to see: Let the BA define a craft brewery, and let the drinker define a craft beer.

There are a number of different ways this can be done. There are already what amounts to enormous consumer organizations who are devoted to good beer. Use the existing communities to refine a decent definition and go. Maybe the BA creates a spinoff non-profit that handles the GABF and works on creating similar standardized festivals across the US promoting good beer, and they leave the government work and business side of things to the Brewers Association. Let the consumers be consumers. They don’t need to be complicit in business practices, you just want them educated about good beer, because then they’ll be much more likely to buy from craft breweries.

Overall, I think these are growing pains. I think the reason that the craft beer community is hashing this out over and over again is because the segment has been so successful. After all, when the 2 million barrel cap used as the definition of a craft brewer, did anybody reasonably expect Sam Adams to get there so quickly? I doubt it. It’s fantastic that they’re pushing this boundary and allowing us to continue to go through this painful revision process.

In conclusion, I’d like to put out my definition of a craft beer, as a beer drinker: Any well-made beer that was obviously made with passion. You can see it in the labels, the names, in the bottles, cans, or glassware, and in the ingredient selection.

If the beer has a personality all its own, it’s a craft beer. I suspect that there are at least a few drinkers out there who would join me in that.

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 13 Apr 2009 @ 10:50 AM 

I had a flash of insight.

Beer Wars. You know Beer Wars. If you don’t, just watch a brewery twitter feed for a few hours. It’s coming: This Thursday, in fact. You should think about going to see it.

I haven’t seen any projections about how many people are going to see this thing, but let’s make some rough estimates: Beer Wars plays in 440 theaters nationwide. Let’s assume that each of these theaters seats 400 people – which is a pretty big theater, but this is a one-night-only event, right? Hopefully, it’s being treated well. So that’s a potential viewing audience of ~176,000. Now, you have to assume that the bulk of the viewing audience will be craft beer enthusiasts, let’s assume 75%.

Now, what my insight had to do with is Blue Moon and its place in the world of craft beer. (What “craft beer” means has been covered amply on other blogs.) To sum up: Does craft beer have to do with how beer is made or who distributes it? I’ll tackle this, myself, some other day when I’m feeling extra glib and like I have something to add that hasn’t been said over and over again.

Beer Wars will rightly point out that Blue Moon is made by Coors, which in and of itself isn’t that much of a problem. By some people’s definitions (and, after a lot of thought, the one that I’m personally inclined to go with), it is as much a craft beer as any local offering you might find. My personal opinion is that Blue Moon does more to introduce people to good beer than a lot of smaller, more specialized, brews – it’s a gateway beer, like Sam Adams Boston Lager. You can take the step there from drinking Miller Lite, learn that you like craft beer, and then you’ve got one more consumer drinking a local beer. However! Is Coors a craft brewery? Well, they make Blue Moon. They make a lot of other small offerings. One could argue that, yes, in fact, they are. I might not like their mass market offerings, but you know what? They make good beer … sometimes. One should respect good beer. I can be bitter about their marketing budget and still respect good beer.

So let’s head back to the numbers for a second. Out of the 75% of craft beer enthusiasts who are seeing Beer Wars, let’s assume that 1/3 of them don’t know that Blue Moon is made by Coors. That seems like a high number, but it makes the math easier. So, put all that together, and let’s pretend that half of the audience (25% who aren’t craft beer enthusiasts, plus 1/3 of the 75% that are = 50%) that’s watching Beer Wars on Thursday night find out, in the midst of this event, that Blue Moon is a beer made by a megabrewery. That’s 88,000 people. Now, let’s pretend that those 88,000 people all go home and go to a party on Friday night and then tell 5 people each that they shouldn’t drink Blue Moon because it’s made by Coors. That’s 440,000 people. If THEY all tell 5 people each, that’s over 2.2 million.

Small facts run like wild fire, especially on angry opinions. Just do a Twitter search for #amazonfail for a really mind-boggling (and still truly enraging) example.

So, with all this in mind, Beer Wars has a chance, and I think a fairly significant one, of seriously effecting the sales figures of Blue Moon.

Will that hurt Coors? Given that Blue Moon is probably only a small portion of their gross income, I’d say that it’s unlikely. Equally as unlikely is that all of those people will continue to not buy Blue Moon, simply because it actually is one of the only good beer options in some bars and, hey, when your choices are between Blue Moon and Coors Light? I’d order a Blue Moon, too. If anything, I bet it will seriously make them reconsider how they’re spending the big in-flux of cash that Blue Moon is apparently supposed to be seeing soon.

It’d still be REALLY interesting to look at the balance sheets over at Coors in a month to see how much of a gut punch they feel from this. The closer we get, the more interested I am to see the fall out from Beer Wars and I wish, more than ever, that I could make my local screening.

The Craft Brewers Conference next week should be a blast on this topic alone.

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Categories: industry, media
Posted By: erik
Last Edit: 13 Apr 2009 @ 10 50 AM

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