Friday, November 21, 2008

Have Some Time To Kill?

Maybe we'll turn this into a semi-regular feature. We'll see. In the meantime, here's some good non-MBR beer-related reading from the relatively recent past.

From the New Yorker: A long (and I mean long) article about the state of American craft brewing. It uses Sam Calagione at Dogfish Head as its foil to talk about how the current crop of American craft brewers are changing the nature of the beer industry, and what we as consumers see as beer. It also looks at the impact that American beer-related creativity and ingenuity is having on the world-wide craft beer movement. An excellent article, if you happen to have the better part of a Sunday morning to kill.

From our brethren in Oregon: An article that I'm jealous that I didn't write. Jeff Alworth discusses what the future of American craft brewing will look like now that the InBev purchase of Anheuser-Busch is complete. He proposes, and I think I agree, that you are going to see a regionalization of the beer industry. There will likely be "national brands" like Bud or Miller or even Coors, but as Jeff notes, "Breweries are gone, replaced by 'plants,' just as faceless as the beer they make. I suspect there's still a little pride in Colorado of Coors and in Milwaukee of Miller, but it must be a vestigial, nostalgic pride. There's nothing about Miller that says Milwaukee anymore--the association is purely reflex memory." In their place will be regional giants like Boston Beer in the North-East, Yuengling in the South [ed note: In the comments, Emily reminded me that Yuengling isn't actually based in the South, and in fact their distribution is more mid-Atlantic and the Eastern South; but the point still holds to the extent that they very definitely dominate this region], Sierra Nevada in the West, New Belgium in the Mountain Region, etc. These regionals will, of course, have some national penetration, but will retain a, comparatively, overwhelming market share in their own geography. They can even gain market share within their region against the nationals by having advertising budgets big enough to take advantage of affinity marketing opportunities that arise from the regional association. Just below those will be sub-regionals, like Harpoon (NorthEast) or Great Lakes and Bells (Midwest) or Abita (South) or Avery (Mountain) or Flying Dog (Atlantic/MidWest) or Alaska (west), that maintain their purely intra-regional identities. Personally, I see consolidation happening within these regions with breweries threatening to move up tiers, but not vertically. In other words, Boston Beer has no reason to merge with Yuengling - there would be few distribution advantages in doing so. But, if Harpoon were to get big enough, there may be some advantage of Boston Beer purchasing Harpoon (a growing sub-regional brewery within its own region) to gain certain brands (e.g., a hefeweizen and IPA).d But absent brand acquisition and the elimination of competition, there would be no reason for it; for example, there would be reason for, say, Sierra Nevada to purchase Alaska. Similarly, the MidWest doesn't really have a regional giant like Boston Beer or Yuengling - a combination of sub-regionals, for example Bells and Great Lakes, could create one (maybe in some sort of joint-partnership that would allow group purchasing and greater market share in communities within the region but wouldn't destroy their individual identities) and might be a reason to merge.

An article by soon-to-be-ex-Madison Magazine beer-writer, Kent Palmer: Normally I like Kent's writing; it's fluffy, but still informative - perfectly suited for bringing quality beer to the type of folks who subscribe to Madison Magazine. But he, like all of us, has his biases - and his is a predilection towards The Great Dane and Capital - both places where his band has played. But he should know better. In his current Madison Magazine fluff-piece that "reviews" the year in beer awards given to Wisconsin breweries he says: "Give The Great Dane (Madison/ Fitchburg) an honorable mention; they helped amend Wisconsin's Prohibition-era tied house laws. Now our state's smaller brewers can compete and brew more, taking advantage of economies of scale through expanded production and distribution." This sentence is not only wrong, it borders on a flat-out propagandist lie. This law does the exact opposite of help our state's smaller brewers - it severely hampers their ability to scale their breweries to compete with out-of-state and regional breweries. Let's not kid ourselves. This law does not help anyone except The Great Dane. At this point, it is not really a hindrance to others, but it will be - and it certainly does not help them. Shame on Kent; he should know better.

Finally, the un-imitatable Lew Bryson takes on the wine industry: Lew writes about how pairing wine at Thanksgiving is a fools errand; just better to go with beer. And, well, I agree. Rather than shoe-horn some wine style that doesn't go with anything, to quote Lew: what wine goes with Lima Beans?, it's far better to just drink a beer that perfectly accompanies your scalloped oysters (dry stout).

4 comments:

  1. Yuengling in the South? They're based in Northern Pennsylvania. You can finally buy it outside the state again, but most of the export beer gets sent to NY and NJ.

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  2. hmmmm...sorry for the confusion. I know that the last few times I've been in the South, it's EVERYWHERE. Kind of forgot about the fact they are actually Mid-Atlantic. For some reason, I was thinking they were based in Florida. Darn. Well, the point still holds to the extent that there is a regional brewery for the South.

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  3. Some clarification from a former central PA boy - Yuengling is based out of Pottsville, PA. It purchased a brewery in Tampa, FL, from Stroh's around 1999. About the same time, they started building a new brewery near Pottsville, PA. Until the new PA plant got up to speed, the beer from the Tampa brewery was actually being shipped north to the mid-Atlantic markets mainly due to high demand in PA and growth in NY/DC. Now that all the breweries are running, distribution has spread to southern states like Florida, the Carolinas, and Alabama. While Yuengling is still clearly identified with PA (especially with the demise of Rolling Rock to AB), it is becoming much more prevalent all along the east coast, so I think your point is becoming more valid every day.

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  4. The New Yorker article about Sam and DFH is great. I have been lucky enough to have beers with Sam on a couple of occasions and have really enjoyed meeting him. His personality is pretty much exactlt the same as it comes off in the article. I tend to like Dogfish Head adventurous beers and think that Garrett Oliver comes off a little like an old fuddy duddy in this article. Oh well, he is welcome to his opinions. DFH wins by default with me because I can buy it here in Madison and Brooklyn Brewery I cannot.

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