Thursday, February 28, 2013

I'll Bet You Can Guess That Consolidation Is Kind Of A Big Issue These Days

In what seems like piling on, Marketplace* is now reporting that 2012's 4th Quarter profits are down and Anheuser-Busch is being sued by multiple plaintiffs over misstatements of alcohol content.

While it's great news that profits are down at A-B [ed note: it's not actually great news, we have many jobs here in WI that are dependent on A-B] [author's note: OK, fine, Mr. Editor, it's not great news for those folks, but for those of us that believe in craft beer and the craft beer industry it is further evidence that the good guys are winning], the more interesting news is the three lawsuits over alcohol content.

If true, this means that the worst fears of the craft industry are coming true. It means that the naysayers about the InBev deal were right. For a company like A-B that, whether you like their product or not, has always had product integrity, the merger with InBev has indeed muddied those waters (so to speak).

The suits allege that A-B is watering down its beer and that A-B is not using independent testing facilities to verify alcohol content claims. A-B is stating that the content claims are accurate enough and that they use standard industry practice (basically, complex math) to derive the alcohol content based on known data and process inputs.

We (MBR) actually discussed this a couple of years ago on a piece about High Gravity brewing. High gravity brewing is relatively common, particularly amongst larger brewers. Because of process efficiencies it is cheaper and easier to brew a moderately high-alcohol-content version of a beer and then water it down to suit the appropriate alcohol content and taste profile. I know. It seemed sketchy to me at first, too. But I've been assured by people way smarter than me that if it's done correctly you (the consumer) would never know the difference.

But, if, as the suits claim, A-B is adding a little more water to the process or using the same calculations but with different (read: cheaper/less efficient) ingredients, no craft brewery will ever again stake their brand and reputation on selling out to a macro. This will make purchases of regional or small national breweries, like Goose Island, far more difficult and will make entry into craft that much harder for SAB-Miller/AB-InBev in the future. While you might cheer this result, I would argue that these business sales provide viable exit strategies for breweries and their investors and help to promote a healthy craft brewing industry. Losing these sales could stifle investment in breweries and slow the growth of the industry.

Wednesday, February 20, 2013

I'm Not Dead Yet


Bring out your dead! Bring out your dead!
I'm not dead yet.
Be quiet! Here you go.
There, he says he's not dead yet.
Yes he is.
I think I'll go for a walk.

As if the programming folks over at NPR are reading MBR, they ran a piece on Tuesday about the number of brands owned by AB-InBev and SABMiller (answer: 210). It includes the graphic shown below.

Wednesday, February 13, 2013

Wisconsin's Best Beer Guide - Kevin Revolinkski

Disclaimer: The author sent me a review copy.

Even without the review copy though, really, my opinion wouldn't change. Wisconsin's Best Beer Guide is the most essential beer-and-travel guide for the State of Wisconsin. Period. If you don't own it, you should. It's been updated recently and contains all of the latest breweries in the state as of 1/1/2013.

Show the book at any brewery in the book and get a free beer. It'll pay for itself after about 3 breweries. Heck, you probably don't even have to leave your town/city to get your money's worth.

But, it's best use, for me at least, is as a handy companion for when you find yourself traveling and have some time to kill. Go up to Ashland to meet your family for the weekend? Pull out the guide and find out all of the breweries in the region. Find yourself in La Crosse for business conference and want to grab a beer with some new-found acquaintances? Pull out the guide and be the hero. Trying to go to every brewery in the greater Dane County area? This is the definitive list.

It's about the best $12 you'll spend on beer in Wisconsin.

Hint: If you're looking for a last-minute Valentine's Gift what better way to say "I Love You", than "Here's a whole book of free beer"?

Monday, February 11, 2013

Speaking of Big Beer Oligopoly

Another article on the attempts by SAB/InBev to consolidate market share. This time it's US News & World Report reporting on the attempted merger of AB and Grupo Modelo (Corona).

Says Jim Koch (Boston Beer), "I don't see them as trying to deliberately set out to destroy us. But we are very potentially the collateral damage." Sam Calagione (Dogfish Head) agreed: ""The success or failure of a beer should depend on how great that beer is… instead of artificial restraints to distribution ..." Koch gives some insight into how this works: "[AB and Miller] are [hiring category space analysts], they [say to a store]: 'We can do that for you,' ... And then they can take my beer from eye level to the top shelf, which drops my sales rate in half. ... We work very hard to get our beer into a sports venue, and then when the big brewer realizes we got in there... they buy out the bowl, and then we're gone."

Everyone's favorite craft-ish beer, Leinenkugel's even makes an appearance: "But brewers like New Belgium may have a reason to be upset with big beer. One of the most bitter complaints of craft brewers is that big beer wins consumers by introducing beers whose names resemble the names of actual independent beers. After New Belgium came out with a popular beer called Sunshine Wheat, MillerCoors, through its Leinenkugel brand, came out with a beer called Sunset Wheat. The beer even had a similar yellow label, which says that the beer is 'carefully brewed by the Leinenkugel family for five generations.'"

For what it's worth, I'm not entirely convinced that Koch isn't just a little Chicken Little. Is "Budweiser Black Crown" condescending and ridiculous? Sure. Is Sunset Wheat an attempt to cut into Sunrise Wheat? Maybe. Is playing shell games with shell companies petty and misleading? Yeah.

But at the end of the day, Black Crown will never be confused for 1554 or Dark Horse Schwarzbier. These "craft-ish" beers are gateways to a greater world. Someone who tries Black Crown and realizes that "dark" beer doesn't have to be heavy and can have great flavor might be less intimidated stepping into the local brewpub or checking out something that isn't at eye-level in the supermarket. Craft beer didn't die when Bud introduced Budweiser American Ale (or whatever the heck it was called). Craft beer won't die with Black Crown either.

Friday, February 8, 2013

Not Entirely Sure If We're Back Or Not

You may have noticed that this site has been conspicuously silent lately. Thanks to Joe, you've gotten some great homebrewing advice, but apparently my last post was sometime in October. The end of last year and the beginning of this year has been a bit busy and writing for MBR had to be put on the backburner. It's hard to say right now whether and with what regularity I will be able to continue to post, but will just say that I am going to try.

So, a few things that have happened since October?

Well, let's see ...

New Breweries:  One Barrel Brewing Co. is taking hold here in Madison. And, the opening of Karben4 in the old Ale Asylum space. Speaking of which, the new Ale Asylum space is now open. Over in Oconomowoc, ex-Grumpy Troll brewer Mark Duchow is getting comfortable at Sweet Mullets Brewing Co. Of course, Capital Brewery has a new brewer, Brian Destree who has spent many years working on MillerCoors' Leinenkugel brands. Of course, their new brewer is courtesy of Kirby Nelson leaving Capital to join Carl Nolen at Wisconsin Brewing Co. And, speaking of ex-Capital brewers, Tanner Brethorst has opened Port Huron Brewing Co in Wisconsin Dells. There's probably a few that I'm missing and I'm sure you'll let me know in the comments.

There's also rumblings of several other new breweries opening in the Madison area. Including a potential new nano-brewery in the Schenk-Atwood area of Madison and crowd-brewing innovators MobCraft, not to mention numerous others trying to get open around the state.

News: Finally, I'll leave you with this piece by Denis Wilson for CNN Money. It is perhaps one of the best pieces in mainstream media about the rise of craft beer and how the macros are trying to co-opt it for themselves. Give it a read.
What's noteworthy about these forays into the craft segment is the way these brands are purposely distanced from their Big Beer parents. You won't find the Coors name on a bottle of Blue Moon. Rather, you see the name Blue Moon Brewing Company. The same goes for a bottle of Anheuser-Busch's Shock Top. To distance their craft products from their billion-dollar household brands, the big brewers have gone so far as to create separate divisions to house their specialty brands: MillerCoors has created Tenth & Blake Beer Company while Anheuser Busch (BUD) has the Green Valley Brewery. 

Obfuscating the parent company behind a beer denies a drinker the right to exercise that choice [of whether to consume beer from a particular manufacturer or parent company]. However, Tom Cardella, the CEO of Tenth and Blake, doesn't see the issue this way. In addition to the Blue Moon brand, Tenth and Blake houses Jacob Leinenkugel Brewing Company, Crispin Cider, as well as imports such as Peroni and Pilsner Urquell. "There's a lot of chatter about it within the industry but, at the end of the day, I really don't think it's a big issue. These businesses are marketed differently, they're targeted differently against consumer segments within the marketplace."

"Anheuser Busch can snap their fingers and the distribution network will get it on shelves and get it on tap handles and knock off other brewers who have been on those tap handles," says the Brewer's Association's Gatza. "In an ideal world, those decisions would be made by the beer drinker…."

Monday, February 4, 2013

Five Gallons At A Time: Draught System Balance

The Brewers Association Draught Quality Manual is a great resource, but using its resistance values to size my home tap lines resulted in slightly higher flowrates (and therefore more foam) than the manual's target. It's possible that my CO2 pressure gauge is inaccurate, but that would fall short of the scope of this post. My next idea was that most draught systems are designed to serve beer at 38 degf, and my elevated serving temperatures could lower the resistance of my tap lines by reducing the viscosity of the beer. Having a degree in aerospace engineering, there were periods in my life when I understood fluid dynamics - usually about two weeks before and after each exam - so I decided to derive the resistance values myself.

My quest for information led me to this weblog post. Essentially, the author used the same approach as me to improve his draught balance calculations. Unfortunately, he assumed that vinyl tubing was perfectly smooth and that beer at serving temperature had the same viscosity as water at room temperature. No wonder his calculated resistance for 3/16" ID vinyl tubing was only a third of the Draught Quality Manual value. The author of this post equated the viscosity of beer with the viscosity of water at 38-39 degf and assigned a non-zero roughness value to vinyl tubing, which are both steps in the right direction, but he didn't explain the rationale behind his chosen roughness value. In addition, he marginalized the impact of a keg spear (for a corny keg, it's like adding two feet of 1/4" OD stainless tubing to your tap line) and faucet shank (not a big deal for most home draught systems, but it's often a major source of restriction for commercial setups). Although I question their assumptions, both authors explain the math well and I'll spare you the drudgery of repeating it.

In my calculations, I assume the dynamic viscosity of beer at a given temperature equals the dynamic viscosity of water at the same temperature x 1.7 / 1.002 lb-s/ft2 (the value for beer is between the lager and stout values in Malting and Brewing Science, Volume 2 by Hough, Briggs, Stevens and Young, and the value for water is from the same paragraph). To correlate viscosity and temperature, I used the values from this website. At typical serving temperatures, the dependence of viscosity on temperature had a smaller impact than I expected. It wasn't zero, though, so it was worth investigating. On the other hand, researching the surface roughnesses of vinyl tubing, barrier tubing and stainless tubing was a total dead end. Defeated, I fudged the values by (1) driving the calculations for serving beer on my home setup at 14 psig and 44 degf to require 6" more 3/16" ID vinyl tubing than the Draught Quality Manual and (2) making my calculations match the performance of Ale Asylum's downstairs draught system, which uses all three tubing materials. If you're wondering why I don't just use the same resistance values as draught technicians, the taps at Ale Asylum were designed to pour beer at 2 fluid oz/sec but actually operate around 2.4 fluid oz/sec. Like my home tap lines, the resistance assumptions were too high and I suspect the same is true of many commercial draught systems.

My assumptions will probably change as I acquire more data points, but here's how my current resistance values (in psi/foot) compare with the Draught Quality Manual for a flowrate of 2 fluid oz/sec and a temperature of 38 degf:

By design, my value for 3/16" ID vinyl tubing is slightly lower than the manual's. From there, the two sets of values diverge as diameter increases. For barrier tubing, my values are higher than the Draught Quality Manual. In fact, if my viscosity assumptions are reasonable, the manual's numbers for barrier tubing aren't physically possible. Stainless was hard to compare because OD is a terrible way to describe draught tubing. A given OD can have a wide range of IDs that depend on wall thickness, and the differences can profoundly influence fluid flow. For what it's worth, I assumed a wall thickness of 0.020". If you'd like to examine the math behind these numbers, you can download it in spreadsheet form at the usual place. The file name is Draught_Balance.xlsx.