Bryan Roth, who blogs at This Is Why I’m Drunk, delved into the economics of craft beer prices. The analysis starts with the assumption that inelastic pricing exists in the beer market. In other words, when the price of beer goes up, drinkers are still willing to pay for it.
Inelastic pricing is more prominent with respect to craft for several reasons. Some craft drinkers are willing to pay more to impress others with their taste in beer. A related, and more common, reason is that many craft drinkers are willing to pay for the experience of trying a new beer—especially if it’s hard to find. In addition, those switching from macro to craft do so with the understanding that the latter will cost them more. Finally, craft drinkers are influenced by the decision of their peers, who have come to accept the high cost of the product.
Roth also points out that geography significantly affects beer prices. Portland, Oregon, is awash in craft beer. And because the supply is so great, breweries that charge too much for their beer—especially if the beer itself is of lower quality than the competition—could find themselves out of business.
It’s Thanksgiving weekend, which means that Ludwig, our beer-drinking lion, is spending quality time with his pride. His first stop is, of course, the Detroit Lions game at Ford Field. Then, after he and the other lions feast (on zebra and all the trimmings, of course), he’s going to take a long nap. He’ll be back next Friday with the regular edition of…
We begin in Chelsea, Massachusetts, where The Field hosted its annual Pub Debate over whether marijuana should be legalized. The debate was conducted under British parliamentary rules, and both drinking and heckling were encouraged.
Chris Bosh of the NBA’s Miami Heat hosted a block party for his neighborhood. Bosh, an avid homebrewer, included a growler of his beer with each invitation.
Sierra Nevada Brewing Company has launched the Alpha Hops Society. For a $250 annual fee, members will receive a quarterly release of small-batch experimental brews.
Last month’s mega-merger between Anheuser-Busch InBev and SABMiller has put midsize brands such as Carlsberg and Heineken in a squeeze between a goliath with one-third of the industry’s market share and a growing craft sector.
The “Flux Capacitor” is back from the future. Treadwell Park, a beer hall in Manhattan has installed the device, which lets bartenders control the carbonation and temperature of each beer.
Here’s evidence that beer pong can be educational. Alex, from QuickSolar.com, hosts a two-minute video in which he uses the game to explain the solar photovoltaic effect.
Finally, beer, then whiskey. Rhonda Kallman, co-founder of the Boston Beer Company and a craft beer legend, has started a new venture, the Boston Harbor Distillery. It makes whiskey out of—you guessed it—Sam Adams beer.
Can a craft brewery get the funds needed to expand without its independence? Dale Katechis, the CEO of Oskar Blues Brewery, found an answer. Instead of selling out to a larger brewery, he brought in Fireman Capital, a private-equity firm in Boston. Katechis met Dan Fireman while developing a succession plan for his brewery, and concluded that Fireman would make a good business partner. He said, “It was refreshing to meet someone who understood the heart and the soul of this business was and knew how important the heart and the soul is to it. Sometimes, it isn’t the best business decisions that are the heart and the soul.”
Oskar Blues used some of Fireman’s cash to acquire Perrin Brewing Company of Grand Rapids, Michigan. Katechis was introduced to the brewery by Keith Klopcic, a co-owner of Oskar Blues’s Michigan distributor. Perrin had gone from zero to 14,000 barrels in two years, and had a distribution network in place; however, it “wasn’t into packaging.” After taking over the brewery, Katechis introduced a canning line. Cash flow doubled within three months, and Perrin is expected to grow substantially. Klopcic is in charge of Perrin, which will remain independent of Oskar Blues.
Seventy-five years ago today marked the premiere of Walt Disney’s Fantasia. The animated film opened to mixed reviews, but it is now considered one of the classic animated films of all time.
And now….The Mash!
We begin in Great Britain, where a 2002 law granting excise tax breaks caused a proliferation of breweries. The country has more than 1,300, and ranks first world-wide in breweries per capita.
Football fans will soon see something new in Bud Light commercials. The National Football League has changed its rules to allow the use of game footage involving active players.
In Oregon, the craft brewing and newly-legalized marijuana industries have something in common: a proliferation of start-up businesses.
Guinness will soon become an all-vegan beer. The brewery will stop using isinglass, a by-product of the fishing industry that’s used to clarify the beer and make yeast settle faster.
Boston-area entrepreneur Adam Oliveri has started a boutique beer distribution business. His Craft Collective has already signed distribution contracts with 16 craft breweries from the Northeast.
How dangerous is a “beer belly”? Depends on one’s fat distribution. Otherwise slim people with a beer belly run a much greater risk of serious health problems than obese people with one.
Finally, San Diego Beer Week isn’t just an opportunity to taste great beer. It also gives new breweries a chance to introduce themselves. More than half of San Diego County’s 115 breweries are less than three years old.
The mega-merger between Anheuser-Busch InBev and SABMiller will give the combined business a 30-percent share of the world’s beer market and control of eight of America’s top ten brands. And, according to Time magazine correspondent Brad Tuttle, it will pose a serious threat to the growing craft beer sector. The big brewers’ campaign against craft is being waged on several fronts.
Big Beer’s first line of attack on craft brewers is “crafty” beers such as Blue Moon and Shock Top. Critics call these products “crafty” because many, if not most, consumers are unaware that they’re made by big breweries.
The big breweries are also buying craft breweries whose products have a following, such as Goose Island, Elysian, 10 Barrel, Golden Road, and Blue Point. Even though there are 4,000 breweries in the U.S., Tuttle points out that strategic acquisitions of key craft breweries make it much more difficult for other craft brewers to succeed.
Advertising is another weapon in the mega-brewers’ arsenal. The craft-bashing Budweiser commercial that ran during the last Super Bowl, poking fun at hipsters who fuss over pumpkin peach ale, is the most notorious.
The big brands still dominate distribution, and the three-tier system isn’t going away anytime soon. In some states, such as Colorado, A-B InBev has bought distributors outright—a practice that may lead to antitrust investigation by the Justice Department.
Finally, consolidation helps offset the big brands’ sagging sales growth by cutting costs. Advertising is one such cost. A-B InBev and SABMiller spend billions on sports sponsorships to promote their brands. Now that the two companies are no longer competing, they’ll have more negotiating power with the sports industry and will demand lower fees for their “official sponsorship” status.
Eighty years ago today, organized crime kingpin Dutch Schultz and three other men were fatally shot at a saloon in Newark, New Jersey, in what became known as “The Chophouse Massacre.”
And now….The Mash!
We begin in England, where Cheltenham Racecourse has teamed up with Arkell’s Brewery to brew a beer honoring a famous racehorse named Arkle, whose daily diet included two bottles of Guinness.
This fall, Pawtucket, Rhode Island-based Foolproof Brewing Company is bucking the trend by adding peanut butter to its Raincloud Robust Porter. It’s “as far as you can get” from pumpkin ale.
Niraj Dawar and Charan K. Bagga have put together a graph that illustrates the branding power of the combined Anheuser-Busch-InBev SAB Miller mega-brewing company.
Congressman Peter DeFazio offers yet another reason to drink American craft beer. The Oregon Democrat contends that buying local craft products helps reduce the nation’s balance-of-trade deficit.
“No forests, no beer”, says Matt Miller of the Nature Conservancy. Forests are the home of headwaters streams, where most of the nation’s water supply originates.
Beer, always been a part of Cincinnati’s culture, has enjoyed a renaissance in recent years. Garin Pirnia of Paste magazine offers a comprehensive beer traveler’s guide to the Queen City.
Finally, the Kansas City Chiefs will reward 800 season-ticket holders who are flying to London to see their team play Detroit on November 1. The Chiefs have rented a pub, and will serve free beer Friday afternoon.
On this day in 1837, the retailer now known as Tiffany’s was founded by Charles Lewis Tiffany and Teddy Young in New York City. The founders called their store a “stationery and fancy goods emporium.” However, Tiffany’s didn’t serve breakfast, let alone Founder’s Breakfast Stout.
And now….The Mash!
We begin in Sacramento, where the inaugural California Craft Beer Summit took place. This two-day festival attracted the biggest names in craft brewing, who talked about the state of the industry.
Listen up, class. Sylvester Schneider, the owner of Zum Schneider in New York City, has prepared a video to show you how to pour wheat, pilsner, and lager beer like a German.
A boarding school in Zimbabwe has slapped a ban on breakfast cereal. Students mixed it with brown sugar, water, and yeast, then left it in the sun to ferment into beer.
The recipes for New Belgium Brewing Company’s dubbel and trippel Belgian-style ales are getting a makeover. The changes, which include a different yeast strain, will make the beers more authentically Belgian tasting.
A video of six Scottish men, drinking beer at the bottom of a swimming pool while on vacation in Florida, was viewed more than 1.8 million times on YouTube in the week after it was posted.
Greg Koch, the founder of Stone Brewing Company, is stepping down as CEO. He’ll stay on as executive chairman, and he promises not to sell out to one of the big breweries.
Finally, even though China is a huge beer market, intense competition has made it tough for breweries to make much of a profit. That problem could get worse as the country’s economy slows.
On this day in 1781, forty-four Spanish settlers founded El Pueblo de Nuestra Señora La Reina de los Ángeles de Porciúncula (The Village of Our Lady, the Queen of the Angels of Porziuncola) in southern California. The settlement eventually acquired the friendlier name, “Los Angeles.”
And now….The Mash!
We begin in Colorado, where two men got into the beer business without brewing. Last year they formed Inland Island Yeast Laboratories, whose customers include three dozen local micros.
Japanese beer taxes are steep, but the government is about to give brewers a break. It will also change the century-old definition of beer, which requires it to contain at least two-thirds malt.
Darrin Wingard, of West Caln, Pennsylvania, has drunk a new beer on each of the last 1,100 days. You can follow his beer adventures on his Instagram account, newbeeraday.
Synek, a packaging company, has unveiled a self-contained countertop tap system that dispenses 128-ounce cartridges of beer that will stay fresh for a month. A home version retails for $289.
Aficionados keep rare beers in their cellar, sometimes for years. However, cellaring might be the wrong thing to do with hoppy beers because hop flavor is the first thing to fade as time passes.
Last weekend, Brian Harman became the third golfer in PGA Tour history to shoot two holes-in-one in the same round. He celebrated by treating the media to $3,000 worth of beer and whiskey.
Finally, British writer Pete Brown laments his government’s failure to grasp that people drink to achieve a state somewhere between sobriety and drunkenness. The English language doesn’t even have a word for that state.
Today is the 80th anniversary of President Franklin D. Roosevelt’s signing of the Social Security Act. More than 50 million Americans, most of whom are retirees, receive Social Security benefits. That number will grow as members of the Baby Boom generation reach retirement age.
And now (can I see some ID, please?)….The Mash!
We begin in North Korea, whose government is looking for foreign investors for a brewery in Wosnan. The country’s leader, Kim Jong-un, wants to turn the port city into a tourist attraction.
Jim Koch, the CEO of Boston Beer Company, blames high U.S. corporate taxes for acquisitions that have left foreign firms in control of 90 percent of America’s brewing industry.
The oldest known receipt for beer is a more than 4,000-year-old Sumerian tablet in which a scribe acknowledges receiving approximately 4-1/2 liters of Alulu the brewer’s “best beer.”
At New Belgium Brewing Company, Kim Jordan is turning over her CEO duties to another woman, Christine Perich, the chief operating officer. Jordan will head the brewery’s board of directors.
The Los Angeles Times’s John Verive decodes seven words—clean, dry, phenolic, creamy, hot, soft, and light—that are often found in reviews of craft beers.
White Bull beer, a symbol of South Sudan’s independence, is on the endangered list. Armed conflict has left White Bull’s brewer short on foreign currency it needs to import fuel and materials.
Finally, “Biscuit,” who works at the Sun King Brewery in Indianapolis sneaked “Tom Brady Sux” next to the “born-on” date on 20,000 cans of Wee Mac Scottish Ale. His future work will have to be approved by his higher-ups.
Twenty-five years ago today, the Hubble Space Telescope was launched into low Earth orbit. The telescope, which has had five in-space service calls by NASA astronauts, is still functioning and is expected to last another five years.
And now….The Mash!
We begin in the friendly confines of Wrigley Field, where Krista Dotzenrod caught a foul ball in her beer cup and, at the urging fans, chugged the beer. The hashtag for this is #ChugBall.
“Raising the Bar”, which began last year in New York, is a program in which scholars give lectures in pubs and other venues. Recently, Hong Kong became the first Asian city to stage this event.
Australian prime minister Tony Abbott sent a mixed message about binge drinking when he downed a 12-ounce schooner of beer seven seconds at a Sydney bar.
A bar in Maple Grove, Minnesota, must deal with the dreaded Beer Police. Its offense? Buying kegs of New Glarus Spotted Cow from a Wisconsin liquor store and bringing them across the state line.
The government of Indonesia, a Muslim-majority country, has outlawed the sale of beer at convenience stores. Small retailers account for around 60 percent of the country’s beer sales.
Tomorrow is Dark Lord Day, and host Three Floyds Brewery has something new for festival-goers: Dark Lord-infused hot sauce, made with ancho and guajillo chili peppers.
Finally, Brook Bristow, executive director of the South Carolina Brewers Guild, was presented with the F.X. Matt Defense of the Industry Award at last week’s Craft Brewers Conference. Working pro bono, Bristow’s law firm successfully lobbied for craft-friendly laws in the Palmetto State.