September 2015

Dogfish Head Does Deal With Private Equity Firm

On Monday, Sam Calagione, the CEO of Dogfish Head Craft Brewery, Inc., told his employees that LNK Partners, a New York-based private equity firm, has taken a 15-percent stake in the brewery. As part of the deal, LNK would be given one seat on the company’s board of directors.

Calagione made it clear that Dogfish Head will remain a family-led and -controlled business. He also said that LNK was in accord with his instance that the deal wouldn’t lead to an initial public offering, interfere with the brewery’s “off-centered” culture, or stress fast growth over “smart growth”.

Dogfish Head, the nation’s 13th largest craft brewery, produces 175,000 barrels a year.

How the GABF Came to Be

Last night, the 34th Great American Beer Festival came to an end. There wouldn’t have been a 34th GABF, or even a first one, had it not been for Charlie Papazian—and, perhaps, an event called “Beer and Steer”.

Beer and Steer, organized during the 1970s by Papazian, was annual beer party, held in the foothills above Boulder, Colorado. Homebrewers and beer enthusiasts gathered there each year to swap beers and recipes, and enjoy roasted meat and good company. Partiers brought down snow from higher elevations to keep the beer cold.

Each year the party grew more elaborate and more popular, forcing Papazian and his fellow organizers to limit it to 400 attendees.

The experience Papazian gained from Beer and Steer proved invaluable when he founded the American Homebrewers Association. He invited industry professionals to the National Homebrewers Conference, turning a low-key competition into an industry event. Papazian next launched the GABF, which gave aspiring craft brewers an opportunity to meet professional brewers and learn how to scale up their own operations while maintaining quality.

The Friday Mash (1,500th Blog Post Edition)

We aren’t beginning the Mash with a historical reference because we’re too busy celebrating a milestone. Today’s Mash is the 1,500th post on “Ludwig Roars.” Now excuse us while we refill our pint glasses.

And now….The Mash! 

We begin in the West Bank, where the Taybeh Brewery hosted its 11th annual Oktoberfest. The brewery poured a non-alcoholic beer for festival-goers from neighboring Muslim towns.

Anheuser-Busch InBev’s planned takeover of SAB Miller has advertising agencies worried. Less competition could mean less advertising. That, in turn, could affect the sports industry’s bottom lilne.

A 3,800-year-old poem honoring Ninkasi is also a recipe for Sumerian beer. Brewers have replicated the beer, which tastes like dry apple cider and has a modest 3.5 percent ABV.

Organizers of the Skanderborg Music Festival in Denmark have found an alternative to sleeping in hot tents: giant beer cans that offer a bed with pillows, shelving, a fan, and other amenities.

Jake Anderson, a goalie for the University of Virginia hockey team, was given five-minute major penalty and ejected from the game after chugging a can of Keystone Lite during the second intermission.

Québécois travel writer Caitlin Stall-Paquet takes us a beer-focused road trip through Gaspésie and the Bas-Saint-Laurent. The attractions also include museums, cathedrals, and rock formations.

Finally, Portland beer writer Jeff Alworth, who spent two years traveling and tasting beers, has written The Beer Bible. The 656-page book is accessible, but at the same time, an in-depth exploration of the heritage behind the beers we drink today.

Beer….By the Numbers

  • Number of Oktoberfests held in Munich (including this year’s): 182.
  • Times since 1810 that Oktoberfest was canceled: 24 (reasons include war, hyperinflation, and cholera epidemics).
  • Cost of a one-liter beer at this year’s Oktoberfest: €10 ($11.34).
  • Increase in the price of beer over 2014: 3 percent.
  • Cost of a pint of ale in the UK’s cheapest university town: £2.10 ($3.20), in Durham.
  • Cost of a pint in the UK’s most-expensive university town: £5.25 ($7.90), in Surrey.
  • Bushels of American barley used to brew beer in 2014: 177 million.
  • Brewing’s share of America’s barley crop in 2014: 75.
  • Stadium with the National Football League’s cheapest beer: Paul Brown Stadium, Cincinnati, 36 cents an ounce.
  • Stadium with the NFL’s most expensive beer: Lincoln Financial Field, Philadelphia, 71 cents an ounce.
  • Average per-ounce price of beer in NFL stadiums: 46 cents an ounce.
  • Number of Ontario supermarkets that will sell beer under new provincial legislation: 450 (out of 1,500).
  • Daily sales quota for Ontario supermarkets selling beer: 279 six-packs.
  • Anheuser-Busch InBev and SAB Miller’s combined share of the U.S. beer market: 70 percent.
  • A-B and SAB’s combined revenue from the U.S. beer market: $250 million a year.
  • The State of Beer in China

    This summer, the financial pages have run stories about the woes surrounding China’s economy. But Patti Waldmier, a correspondent for the Financial Times, observes that middle-class Chinese are still spending on high-end items, including local craft beer. What makes craft’s success even more amazing is that small breweries exist in a gray area of Chinese law.

    Many Chinese consider their beer choice an expression of national pride. They prefer beer made from local ingredients and brewed for local palates. For example, a Nanjing brewer named Gao Yan has combined his master’s degree in chemistry with the know-how of traditional Chinese medicine. His best-selling is jasmine tea lager, and has also brewed beer using sweet potatoes, purple rice, chili peppers, and sweet osmanthus flowers.

    The Friday Mash (Tiffany’s Edition)

    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.

    Brewers Association on A-B InBev and SABMiller

    Yesterday, it was reported that Anheuser-Busch InBev is working to acquire SABMiller. Paul Gatza, the head of the Brewers Association, issued a statement about the proposed deal.

    If acquisition goes through, Gatza believes the federal government would order the combined business to divest itself of Miller brands in the United States. The brands, which are profitable, could be bought by MolsonCoors, or possibly Constellation Brands, Heineken, or Carlsberg. The acquisition would also have an effect on the ten-year joint venture between Miller and Coors, which runs until 2018. It’s unclear what will happen to the Leinenkugel family of beers, currently owned by Miller.

    Gatza believes the takeover would have little impact on what American craft breweries will produce, or their acceptance by the nation’s beer drinkers. He also believes beer distribution won’t change much. He’s less sure of what effect the takeover will have on the wave of mergers and acquisitions in the craft brewing industry, or whether consumers will view craft beer as less of a reflection of the brewers’ “personal passion.” About this he says, “Time will tell all.”

    Bell’s Brewery Turns 30

    Bell’s Brewery, the largest and oldest craft brewery in Michigan, celebrated its 30th anniversary last weekend. Larry Bell, the brewery’s founder, opened a homebrew supply business in 1983 and went commercial two years later. Bell made his beer in 15-gallon soup pots and sold it to the public in “cubitainers,” plastic four-liter containers with their own own spigot that could be refilled at the brewery.

    Bell, along with fellow Michigan brewing pioneer Tom Burns, successfully lobbied state lawmakers for legislation that permitted breweries to sell beer by the pint. The new law made it possible for small breweries without access to distribution to survive and grow.

    Today, Bell’s is the nation’s eighth-largest craft brewery, with 318,000 barrels last year. The brewery is undergoing a $50 million expansion that will up its capacity to one million barrels a year.

    Bell’s original location also played a role in reviving downtown Kalamazoo. Now called Bell’s Eccentric Cafe, it’s a full-service restaurant that still brews beer, and continues to attract beer tourists.

    The Friday Mash (Charlie Hustle Edition)

    Thirty years ago today, Pete Rose, the Cincinnati Reds’ player-manager, broke Ty Cobb’s record for most career hits with his 4,192nd hit. Rose would play one more season, his 24th in Major League Baseball, before retiring.

    And now….The Mash! 

    We begin in Reno, Nevada, where restaurant owner Bill Wall won this year’s Best in the West Nugget Rib Cook-off. Wall says his secret to success is “just a lot of cold beers and a little bourbon.”

    Texas’ alcohol regulators have ruled that bars and grocery stores can’t sell “crowlers” of beer to go. The 32-ounce containers are cans, and state law provides that only brewers can sell canned beer.

    NFL Hall of Famer Mike Ditka has built an empire selling everything from steaks to children’s clothes. Now he’s teaming up with South Loop Brewing Company to produce Witka beer, a witbier to be served in his restaurant chain.

    Windhoek, the capital of Namibia, is one of Africa’s leading beer destinations. The country’s first European settlers were Germans, and the Reinheitsgebot is still honored there.

    Researchers at the University of Wisconsin have pinpointed the origin of Saccharomyces eubayanus, aka lager yeast. In 15th century Bavaria, ale yeasts used by the monks “intermarried” with other strains and eventually created a stabilized hybrid.

    Wild hops grow in Park City, Utah. The hop plants, descendants of those brought to the town by immigrants, will be used by Wasatch Brewery in a special-release beer.

    Finally, why did the Kroger Company pay $26 million for 19 cases of Miller Lite beer? The answer is Ohio’s liquor code, which requires retailers to have an “agency contract” with the state. Kroger and other chains are paying top dollar to acquire those contracts from smaller stores.

    Heineken to Acquire a Stake in Lagunitas

    Another European brewery has agreed to acquire a stake in American craft brewery. This time, the European company is Heineken NV, and the American company is Lagunitas Brewing Company, the country’s fifth-largest craft brewery. The deal, under which Heineken will take a 50-percent stake in Lagunitas, will close by year’s end.

    Tony Magee, Lagunitas’ founder, explained why he agreed to the acquisition. He cited his age (“55, going on 80”) and his desire to distribute Lagunitas world-wide with a partner he could trust. Magee stressed that he wouldn’t have sold an interest to either Anheuser-Busch InBev or Miller Coors, and that he had initiated talks with Heineken. He will also continue to head the company after the deal is completed.

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