Craft Brewing’s Growing Pains

In the last couple of months,’s Jason Notte has seen disquieting trends in the craft beer industry:

  • Craft Brew Alliance’s Redhook brand announced layoffs at its Woodinville, Washington, brewery. The Woodinville plant is contract-brewing for Pabst Brewing Company, but the Pabst business accounts for only 30 percent of its capacity.
  • Stone Brewing Company, headed by fiercely independent CEO Greg Koch, admitted that it had received $90 million in private equity financing and would lend the Stone name to a hotel. It, too, is cutting jobs.
  • And homebrew supply retailer Northern Brewer has agreed to be acquired by than Anheuser-Busch InBev.
  • Notte doesn’t think these developments mean the craft beer bubble has burst. He writes:

    “If anything, it all begrudgingly recognizes that the players in all tiers of the beer industry have found themselves in the same predicament: Running a business in an environment where constant growth isn’t a given and where big decisions are often followed by unintended fallout.”

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    The Friday Mash (Strait and Narrow Edition)

    On this day in 1520, Ferdinand Magellan discovered a navigable sea route separating South America and Tierra del Fuego. The treacherous body of water is now known as the Strait of Magellan.

    And now…The Mash!

    We begin in Columbus, Ohio, where Scotland-based BrewDog will have a brewery up and running late this winter. BrewDog is also raising capital by crowdfunding: you can buy shares for $47.50 each.

    It took him 16 tries, but reddit user “boomboomsaloon” finally succeeded in buying beer using a Blockbuster Video membership card as proof of age.

    “It’s like a death in the family”, said Revolution Brewing Founder Josh Deth after he recalled more than 10,000 barrels of beer that didn’t meet his brewery’s quality standards.

    Kirin Brewing Company, Japan’s second-largest brewery, will buy a 25-percent stake in Brooklyn Brewing Company. Kirin will introduce Brooklyn’s beers in Japan and distribute them in Brazil.

    Food blogger Kyle Marcoux aka The Vulgar Chef found a new way to pair beer and pizza. He made a koozie by rolling a square pizza base with pepperoni and mozzarella around a beer can.

    Engineers at University of Colorado have developed a process to make lithium-ion battery electrodes from the sugar-rich wastewater created in the beer-making process.

    Finally, beer writer Josh Bernstein says these six trends will be the talk of 2017: Marzen beers in the fall, the revival of Kolsch beers, juice-like IPAs, milk stouts, coffee beers, and fruited sour beers.

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    The Rise of Dick Yuengling

    In 1974, Dick Yuengling was fed up with his father’s refusal to modernize the floundering D.G. Yuengling & Son brewery. He walked away, spending 11 years in exile as a beer distributor. Finally, his ailing father agreed to sell him the business for $500,000.

    Once in charge, he made the needed changes. Over the next three decades, production grew from 137,000 barrels to 2.8 million, putting his brewery in the nation’s top five. Yuengling himself is in the Forbes 400 of richest Americans, with a net worth of $1.9 billion.

    To put it mildly, Yuengling is a hands-on CEO. A self-styled “production nut”, he sometimes runs machinery himself. It’s a running joke at the brewery that everyone on the organization chart reports directly to him.

    Yuengling’s lone-wolf approach to business comes with a possible downside: he’s 73 years old, and the brewery is becoming too big for him to manage himself. There’s another problem. Like King Lear, he has daughters and will eventually have to hand over control to one of them. Succession has proved the ruin of many family businesses.

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    Why Some Breweries Skipped the GABF

    Even though they’re well regarded and have a following, some breweries passed on this year’s Great American Beer Festival. Their reasons include the high cost of travel, the limited impact of GABF on sales, and the difficulty of getting the word out at such a heavily-attended event.

    Some breweries that skipped the GABF poured instead at fringe events during festival weekend. Those events attracted aficionados of certain styles, such as sour beers and beers made with wild yeasts or locally-found ingredients. The more intimate, laid-back atmosphere enabled brewery representatives to talk to attendees and further build their brand.

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    The Friday Mash (Cubs Win! Edition)

    On this date in 1908, the Chicago Cubs last won the World Series. Managed by Frank Chance of “Tinker to Evers to Chance” fame, they beat the Detroit Tigers, 4 games to 1. Cubs fans are hoping their team can end their 108-year drought in this year’s playoffs.

    And now…The Mash!

    We begin in Detroit, where Ludwig’s beloved Lions will sell $3.50 beers during Sunday’s game against the L.A. Rams. The way the Lions are playing, fans need a few to get them through the game.

    D.G. Yuengling & Son is waging a last-ditch fight against the pending merger of Anheuser-Busch InBev and SABMiller. Yuengling argues that A-B is trying to keep it out of new markets.

    German scientists have found that beer causes less liver damage than hard liquor. The reason? Hops may inhibit the formation of reactive oxygen species, which can damage cells in the liver.

    Ken Pagan, the Toronto-area man accused of throwing a beer can at a player during a baseball game, better have his lawyer warming up. A Canadian attorney discusses Pagan’s legal problems.

    Two Copenhagen men have taken the idea of freeze-dried coffee and applied it to four of their craft beers. They’ve created instant versions of a coffee beer, a fruity IPA, a wild-yeast IPA, and a pilsner.

    After a church in Canyon, Texas, ran an anti-alcohol ad in the local paper, an establishment called the Imperial Taproom offered a discount to customers who brought in a copy of the ad.

    Finally, Fat Head’s Brewery had a very short reign as “Mid-Sized Brewing Company of the Year” at the Great American Beer Festival. Officials revoked the award after concluding that Fat Head’s, which has three locations, had been misclassified.

    Beer, Hospitals and No “Double Jeopardy”

    Candida Moss, a professor at the University of Notre Dame, reminds us of Christianity’s role in bringing us beer. Catholic monks didn’t invent beer or create beer culture, but out of necessity they brewed superb ales—including Westvletern 12, which has been rated the world’s best. Centuries ago, St. Benedict instructed monks to be good hosts, and to support themselves from the fruit of their labor. Brewing beer was a way to comply with both. Originally the monks made beer as a way to avoid contracting dangerous water-borne illnesses. But in the 17th century, the Paulaner monks of Bavaria starting brewing beer especially for consumption during the Lenten fast, when eating was prohibited. The monks’ tradition lives on in the form of Starkbierzeit, Munich’s Lenten festival.

    Moss adds that Christianity deserves credit for the concept of the hospital as an independent institution. Here again, the monks get credit; they started caring for the sick at their monasteries; and in Egypt, they make the health care available to monks available to all. In addition, Moss traces the Anglo-American legal concept of “double jeopardy” to the Church. In the 12th century, King Henry II of England tried to pass a law allowing his courts to try members of the clergy who had already been tried in ecclesiastical courts. Thomas a Becket, who was later made a saint, argued that there could be only one judgment for the same act. Henry took exception, and his knights murdered Becket. Afterward, the pope not only condemned Henry but also his effort to inflict double punishment on the clergy.

    In Case You Missed It

    Here are the winners from this year’s Great American Beer Festival competition. We’re pleased to say that our home state of Michigan brought home ten medals.

    The Friday Mash (Blowout Edition)

    One hundred years ago today, Georgia Tech defeated Cumberland University, 222-0, in the most lopsided college football game of all time. Tech coach John Heisman had an incentive to run up the score: back then, football rankings were based on margin of victory, not strength of schedule.

    And now…The Mash!

    We begin in Asheville, North Carolina, where Catawba Brewing has honored a native son, author Thomas Wolfe, with a beer called Wolfeman Kolsch. Its ingredients include hops grown in western North Carolina.

    Even though the economy has improved since the Great Recession, beer sales at bars and restaurants have stayed flat. Factors include competition from brewery taprooms and growlers.

    Two more non-beer companies are rolling out their own beers: Vice Media and the clothing company Patagonia, Inc.

    In the UK, the brewery count has topped 1,700. An industry analyst says that some of the country’s craft breweries are attractive acquisition targets.

    Some in the brewing industry oppose legal marijuana for fear of losing market share. However, that hasn’t happened in Colorado and Washington State, where recreational pot is legal.

    Entrepreneur Josephine Uwineza plans to open a brewpub in Kigali, the capital of Rwanda. It will not only be Rwanda’s only women-owned brewery but also the country’s first-ever craft brewery.

    Finally, People for the Ethical Treatment of Animals raised eyebrows by claiming that beer is healthier than milk. PETA contends that beer can strengthen bones and extend life, while milk is linked to obesity, diabetes, and cancer.

    Beer…By the Numbers

  • U.S. Senate sponsors of the Craft Beverage Modernization and Tax Reform Act: 51.
  • U.S. House sponsors of that bill: 100.
  • Value of Ireland’s beer exports in 2015: €265 million ($300 million).
  • Increase over 2014: 16 percent.
  • Average cost of a pint of beer in the UK this year: £3.47 ($4.61).
  • Increase over last year: 1p.
  • Licensed premises’ share of UK beer sales in 2015: 49 percent. For the first time in history, it fell below 50 percent.
  • Decline in UK licensed premises’ beer sales from 1980 until 2015: 44 percent.
  • Projected U.S. hop harvest for this year: 92 million pounds.
  • Acres of U.S. farmland on which hops are currently grown: 51,000.
  • Increase over 2011 acreage: 20,000 acres (64.5 percent).
  • Tax revenue from legal marijuana sales in Washington State in 2015: $64.6 million.
  • Tax revenue from beer sales in Washington State in 2015: $30.8 million.
  • Market capitalization of merged corporations SABMiller and Anheuser-Busch InBev: $245 billion.
  • SAB Miller-Anheuser-Busch InBev merger’s rank on the all-time mergers list: 4th. The combined company is the world’s fifth-largest brand.
  • The Friday Mash (James Dean Edition)

    Sixty-one years ago today, James Dean was killed in a traffic crash in California. He was 24 years old. Dean became the first actor to earn posthumous Academy Award nominations for Best Actor, for playing Cal Trask in East of Eden and Jett Rink in Giant.

    And now…The Mash!

    We begin in Denver, where Brent Doeden aka “Captain Earthman” suffers from inoperable brain cancer. Doeden, who’s been vending beer at Colorado Rockies baseball games since the franchise’s inception, is a cult figure at Coors Field.

    Wil Fulton of makes the case for why flip cup is a better drinking game than beer pong. One advantage: it’s easier to cheat, which—like in Monopoly—is an integral part of the game.

    The Michelada is one of Mexico’s popular new drinks. It consists of beer, lime juice, spices, sauces, and other ingredients in a salt-lined glass. It has some similarity to a margarita.

    To combat “flagship fatigue”, Sierra Nevada Brewing Company will release three new ales next year: Sidecar Orange Pale Ale, Tropical Torpedo, and Golden IPA.

    Los Angeles has light rail transportation, and you can spend a day pub-crawling along the Red Line, which runs from Union Station to North Hollywood.

    Candidates aren’t the only ones running negative ads this fall. Miller Lite responded to a Bud Light spot with this slogan: “Bud Light says raise one to right now so why not raise the right one?”

    Finally, ultra-runner Karl Meltzer set a new record for running the length of the 2,190-mile Appalachian Trail: 44.9 days, 22 hours 38 minutes. His routine on the AT included ending the day with a couple of brews. Meltzer celebrated the end of his trek with a pepperoni pizza and—you guessed it—a beer.

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