According to Tom Philpott of Mother Jones magazine, big breweries such as Anheuser-Busch InBev are following a two-pronged strategy in response to declining market share for their brands. The first is “relentless cost cutting.” After InBev acquired Anheuser-Busch in 2008, it very quickly cut 1,400 jobs, or about six percent of its American workforce. Its focus on slashing costs has continued.
The second approach is rolling out “crafty” beers–the include Shock Top, Blue Moon, Leinenkugel, Killian’s, Batch 19, and Third Shift–or, alternatively, buy up craft breweries like Chicago’s Goose Island. Philpott says this “has been successful, to a point.” The good new is that InBev’s Shock Top and Goose Island sales have surged. But here’s the bad news. According to Bloomberg, craft beers “are taking sales from already-troubled mass-market brands owned by the industry giants peddling these crafty brews.”
On this day in 1981, MTV began broadcasting in America. Pay attention to this factoid, because it comes up often in pub trivia: MTV’s first video was “Video Killed the Radio Star” by The Buggles.
And now….The Mash!
We begin in Chicago, where Ian Hughes, a brewmaster at Goose Island Brewing Company, is trying to educate people about the importance of clean water, the main ingredient in Goose Island beers.
Canadian actor Seth Rogan got to fulfill his dream of drinking beer from the Stanley Cup. P.K. Subban, who plays for the Montreal Canadiens, earned an assist for pouring beer into the trophy.
The list of exotic ingredients in beer now includes seaweed. Marshall Wharf Brewing Company adds 66 pounds of Maine sugar kelp to 200 gallons of its Scotch ale to brew a batch of Sea Belt Ale.
In Indiana, a newly-passed law lifts the 67-year-old ban on beer at the State Fair, which opens today. Last call is at 8 pm, and fair-goers will be limited to three 12-ounce beers.
Tech companies in Boston are using craft beer to attract and retain talented employees. Journalist Dennis Keohane decided to investigate the tap selection at some of the area’s leading companies.
In San Francisco, a woman in the outfield seats got a rude surprise: a home run ball landed in her beer. Not only was she soaked with beer and out $8, but someone else wound up with the baseball.
Finally, the Michigan Brewers Guild has responded to heavy demand for tickets to the annual Winter Beer Festival by adding an evening session to next year’s event in Grand Rapids.
On this day in 1908, the Japanese food company Ajinomoto—“The Essence of Taste”–was founded. Ajinmoto’s founder, chemist Kikunae Ikeda, discovered that a key ingredient in kombu soup stock was monosodium glutamate, for which he was given the patent.
And now….The Mash!
We begin in Marshall, Michigan, where microbrewery owner Aaron Morse and his family have landed a reality-show gig. They’ll appear on The History Channel’s “Dark Horse Nation.”
Tin Man Brewing of Terre Haute has released Klingon Warnog. This officially-licensed beer follows the Prime Directive: “to unite both Star Trek and Craft Beer fans.”
Dogfish Head Artisan Ales is the most famous brewery in the Delmarva Peninsula, but it now has plenty of company, and that’s good news for local beer drinkers.
A new California law will allow students younger than 21 to sample alcohol as part of their beer and wine studies. Oregon and Washington have passed similar laws.
The Jurassic Park of beer? Probably not, but Jason Osborne of Paleo Quest and microbiologist Jasper Akerboom of the Lost Rhino Brewing Company are working with a 45-million-year-old yeast strain found in a fly entrapped in fossilized amber.
Philadelphians are upset at state legislators who want to close a loophole which allows pop-up beer gardens to operate without having to shell out six figures for a liquor license.
Finally, Bart Watson, the Brewers Association’s chief economist, says we’re not in a craft beer bubble. The nation’s 3,000 breweries is well below the saturation level; and besides, factors such as the variety and quality of local beer determine whether a market is saturated.
Jeff Alworth, who blogs at Beervana, passed along what he called “an alarming report” from 47 Hops about the supply and cost of hops in the near future.
Given 10-20 percent annual growth in craft-beer production, 47 Hops estimates that the hops industry needs to invest between $500 million and $1 billion in new capacity over the next five years. However, the price of hops would have to double to give hop growers an incentive to add the needed capacity.
Alworth points out that 47 Hops is a hop dealer, and “they seem inevitably to come to a conclusion that supports their business model–get a contract now!” Nevertheless, he thinks its warning should be taken seriously.
On this day in 1885, Clark W. Bryan founded Good Housekeeping magazine. Famous writers who have contributed to it include Somerset Maugham, Edna St. Vincent Millay, Frances Parkinson Keyes, A.J. Cronin, Virginia Woolf, and Evelyn Waugh.
And now…The Mash!
We begin in New Brunswick, Canada, where a Budweiser blimp went rogue. The blimp, which broke loose at a hockey promotion in St. John, wound up in a wooded area northeast of the city.
Authorities in Siberia are investigating a brewery that put images of Soviet World War II heroes on beer cans. Some veterans think the brewery is exploiting the heroes for profit.
Illegal 20 years ago, microbreweries are flourishing in Japan. Ingrid Williams of the New York Times visits several in Osaka, the nation’s unofficial culinary capital.
Meet the Roger Bannister of beer running. James Neilsen ran the Beer Mile in 4:57. A Beer mile contestant must consume a 12-ounce portion of beer every 400-meter lap.
Ty Burrell, who plays the bumbling dad on the TV sitcom “Modern Family,” has opened The Beer Bar, a restaurant and beer garden in Salt Lake City. Its signature dish will be the Reuben brat.
Forget about using Bitcoins to buy beer in Ohio. The Department of Public Safety has concluded they’re too volatile. That, and they aren’t recognized as legal currency.
Boston Beer Company CEO Jim Koch reveals his secret for not getting drunk. Before drinking, he downs one teaspoonful of Fleischmann’s yeast for every beer he intends to consume.
Most companies cut back their lobbying budgets but according to Aimee Duffy of The Motley Fool, Anheuser-Busch InBev is spending heavily in favor of two tax measures currently before Congress.
Readers of this blog are probably aware of the Brewers Excise and Economic Relief (BEER) Act of 2013, which would cut the federal beer tax in half, and give small brewers an even more generous tax break; and the Small Brewer Reinvestment and Expanding Workforce (Small BREW) Act of 2013, which would reduce the beer tax by 50 percent on the first 60,000 barrels and by 11 percent on each barrel beyond that.
According to the website govtrack.us, the BEER Act has zero chance of getting through Congress, and the Small BREW Act has only a 2-percent chance. In spite of those odds, A-B spent $4.3 million on lobbying, most of it to make sure these bills pass.
Duffy finds method in A-B’s madness. If the BEER Act passes, the company’s tax bill would drop by around $500 million a year–more than a 10,000 percent return on a $4.3 million lobbying investment.
One hundred and fifty-five years ago today, Oregon was admitted to the Union as the 33rd state. An impressive 47 percent of the beer poured in the Beaver State is craft beer, most of it locally brewed; and Portland, the state’s largest city, has become a top destination for beer travelers.
And now….The Mash!
We begin in Pennsylvania where, after a 29-year hiatus, D. Yuengling & Son is again making ice cream. It’s so popular that the first 100,000-quart run rolled off the line ahead of schedule.
The Stochasticity Project has released its first beer, Grapefruit Slam IPA. The beer, which checks in at 8.2% ABV and 95 IBUs, will be available nationwide.
Bear Republic is the first brewery to buy the Eco-Volt system, which uses microbes to convert dissolved carbon in wastewater into biogas, which can be burned to make electricity or heat.
The Beer Store, Ontario’s provincial retail monopoly, warns that if grocery and convenience stores are allowed to sell beer, consumers will have to pay an extra C$10 (U.S. $9) a case.
Francis Rossi and Rick Parfitt, who performed as Status Quo, are the latest celebrity beer makers. Piledriver ale, named for their 1972 album, is brewed by Wychwood Brewery of Oxfordshire.
Fans at the Winter Olympics can escape bland food by journeying to the nearby town of Adler, where “Draft Beer & Fish” has 16 beers on tap, most of them locally brewed.
Finally, clear your desk and take out a number-two pencil. John Metcalf of The Atlantic has a ten-point craft beer quiz that emphasizes the strange ingredients brewers are using.
For decades, big brewers have been big advertisers at the Super Bowl, and this year’s game is no exception. However, their products are steadily losing market share, especially among drinkers younger than 30.
Quentin Fottrell, a correspondent for MarketWatch.com, identifies several reasons for Big Beer’s declining popularity. One, of course, is growing popularity of craft beer. If this segment didn’t exist, beer sales would be on a downward course. (And if craft beer didn’t exist, neither would this site, but I digress.) Another factor is competition from the hard liquor industry, which ended its self-imposed ban on television advertising in 1996; and from wine, which has acquired a “halo effect” as a beverage associated with healthier living. Calorie-conscious drinkers have also hurt sales. Non-alcoholic drinks, bottled water in particular, have taken market share away from beer.
Why is craft beer served in shaker pints or other glassware and not a pitcher? BrewProf has the answer. Actually, he has more than one answer.
To begin with, a pitcher doesn’t make sense from a quality-control perspective. Beer’s two worst enemies, light and oxygen, thrive in pitchers. Economics also play a role. Many bars sell a pitcher of national-brand beer for well under $10, but with craft beer priced at $4-5 a pint these days, a pitcher might carry a price tag of $20–and give customers a case of sticker shock. Liquor laws are another factor. Even if there aren’t restrictions on pitcher sales, some establishments are reluctant to serve four-pint portions of high-gravity ale. Then there’s an element of beer snobbery: some craft beer drinkers associate pitchers with macrobrews and shy away from them.
Despite all those drawbacks, BrewProf gives pitchers a qualified thumbs-up. If it’s not too warm out and you’re drinking with friends, pitchers save drinkers trips to the bar and make life a little less hectic for bar staff.
America has never had more breweries than it has today, and the quality of beer at your local bar has never been better. But will the good times last? Some observers think the craft-brewing industry is in the midst of a classic bubble that might be about to burst.
Noah Davis of Business Insider points that for every Alchemist, brewers of the wildly successful Heady Topper double IPA, “there are numerous small breweries turning out solid product that will never see a profit.” Davis wonders how the hundreds of breweries that opened this year, not to mention another 1,500 in the planning stages, are going to find distributors, get shelf space, and sign up tap accounts. The newcomers, he adds, are entering a craft beer market that is dominated by a few big players.
Industry figures believe the days of double-, and even triple-digit growth won’t last much longer. John Laffler, who opened a craft brewery in Chicago last year, said, “I see the industry becoming more local, more regional, more city-specific. At that point, you’re locked in making $35,000 a year and hopefully your business can last 10 years.”
Some startups might not survive. According to Greg Koch, the founder of Stone Brewing Company, “You can expect that consumer fatigue will show up again, just like it did in 1996. It’s like a school of fish. It will turn, but you don’t know when.” The industry shakeout of the late 1990s resulted in some 300 brewery closures.