Bart Watson

Who’s Getting Hurt by Flat Sales?

Data compiled by the Brewers Association show that the bigger craft breweries bore the brunt of last year’s slump.

Twenty-five of the top 50 craft breweries, as defined by the BA, didn’t grow in 2016; and more then one-third of BA-defined regional breweries had either flat or declining sales. The damage was heaviest at the top of the standings: four of the five biggest crafts—D.G. Yuengling & Sons, Boston Beer Company, Sierra Nevada Brewing Company, and Gambrinus Company—suffered a sales decline. The top five’s only gainer was New Belgium Brewing Company.

According to the BA’s Bart Watson, the regionals are getting squeezed by both ends of the industry. Anheuser-Busch Companies, whose acquisition of craft brands has stirred up controversy, is snapping up retail space at the expense of the regionals. Meanwhile, many retailers are focused on getting the products of small local breweries on their shelves, again to the regionals’ detriment.

There were some bright spots, however. Regionals that upped production in 2016 include Bell’s Brewery, Firestone Walker Brewing Company, and Rheingeist Brewery. Several others that no longer meet the BA’s definition of “craft”, such as Founders Brewing Company and Lagunitas Brewing Company, also posted gains for the year.

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The Friday Mash (Red Cross Edition)

On this day in 1863, a group of citizens of Geneva, Switzerland, founded an organization called the International Committee for Relief to the Wounded–now known as the International Committee of the Red Cross.

And now….The Mash!

We begin in England, where festival organizers in two of the country’s most famous beer cities, Norwich and Sheffield, are joining forces to promote their local products and attract beer tourists.

The Norwegian supermarket chain Rema 1000 is feeling the backlash after it took several local breweries’ products off the shelves. Some Rema customers switched to competitors’ stores.

Are you a DIYer who loves craft beer? You might like the Kinkajou Bottle Cutting and Candle Making Kit. You can give the candles to friends—and show off your collection to them.

“Pepper”, a robot from Japan’s SoftBank, has his first job: greeter at the Pyramid Taproom in Oakland International Airport. When not posing for selfies, he’s working on his speech-recognition skills.

A faith ministry in Nebraska has started a fund-raising campaign to buy out four stores that sell millions of cans of beer in a tiny village next to the alcoholism-plagued Pine Ridge Indian Reservation.

Heroica, a brewery in Brazil, is flavoring its Kuromatsu Kamikaze IPA with branches of bonsai trees, brought over by a Japanese family more than a century ago. Some bonsai trees are worth $20,000.

Finally, Bart Watson, the Brewers Association’s chief economist, told a gathering of brewing professionals that it’s still possible for a microbrewery to grow to regional status, but very few will succeed in doing so.

The Friday Mash (National Geographic Edition)

On this day in 1888, the National Geographic Society was formed. The Society’s logo, a bright yellow box, appears on National Geographic magazine, which is published in 40 languages around the world.

And now…The Mash!

We begin in Pennsylvania, where the beer police caught up with Travis John Miller, who was selling the contents of his beer cellar on Craigslist. Miller faces a misdemeanor charge of selling alcohol without a license.

Swedish brewer Fredrik Tunedal, who often came home from work covered in malt dust, has released a Shower Beer. Its flavor profile includes a soapy taste, which Tunedal calls “on-point” for his product.

Keurig Green Mountain has partnered with Anheuser-Busch InBev to develop a line of instant beers—and other instant adult beverages—that Keurig owners can make at home.

The CEO of Constellation Brands, which imports Corona and Modelo beer, said that he doesn’t expect President-elect Donald Trump’s trade policy to raise the price of Mexican brands.

Despite a dismal 5-7 record, the University of Texas finished #1 in the country—in beer sales, that is. By season’s end, Longhorns fans spent $5.26 on alcohol for every fan in attendance.

Bart Watson, the Brewers Association’s chief economist, disputes studies showing that beer sales have fallen in states where recreational marijuana is legal. Watson argues that pot is just one of many variables affecting sales.

Finally, in Adelaide, Australia, the woman-owned Sparkke Change Beverage Company is putting feminist messages on cans of its beer. It’s an effort to start conversations in the country’s male-dominated beer culture.

Why Brewpubs Are Giving Way to Micros

In 2005, when Maryanne and Paul toured the state researching Michigan Breweries, most of the establishments they visited were brewpubs. Now a solid majority are microbreweries. It turns out this is a national trend.

Sometime during 2013, the number of micros exceeded the number of brewpubs; and, since the middle of 2012, more than three-quarters of newly-opened establishments are micros. Bart Watson, chief economist at the Brewers Association, identifies three reasons why this is happening.

  • First, a number of states, such as South Carolina, have passed “pint laws” that allow breweries to breweries to sell full pints of their beer on-premise.
  • Second, the growing popularity of food trucks makes it possible for customers to enjoy something other than salty snacks at their local brewery.
  • Third, a brewery owner doesn’t have to enter the restaurant business, which eats up capital and poses additional challenges. Running a brewery is hard enough.

GABF Medals: Behind the Numbers

Breweries from western states, Colorado in particular, win a disproportionate number of Great American Beer Festival medals. Some observers believe western breweries win more medals because they make better beer. Others believe that their proximity to Denver gives them an advantage: it’s a lot easier to ship beer from Boulder than, say, New Jersey.

Bart Watson, the chief economist for the Brewers Association, offers a different explanation: Western breweries simply enter more beers. Watson calculated the number of expected medals per state, which is determined by both the number of beers entered and the categories in which they competed. (The second factor is important because it’s much harder to win a medal for an IPA than for a less-popular style such as dark lager.) He then compared the number of medals actually won to the expected number.

Watson discovered was that the actual medal count was very close to the expected number. From that, he drew two conclusions. First, no region of the country can claim it makes significantly better beer than others. And second, distance from Denver doesn’t keep states from winning medals; however, it does limit the number of entries. Which gets us back to the argument about proximity to Denver.

The Friday Mash (MSG Edition)

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.

Too Much of a Good Thing?

Some industry observers worry that the craft beer market might be getting saturated. Brad Tuttle of Time magazine cites two states where that could be happening. One is Vermont, which despite its small population, ranks 15th in overall craft-beer production and has the most craft breweries per capita in the U.S. However, the state’s beer production fell 2.5 percent from 2011 to 2012. The other is Indiana, where the number of craft breweries has tripled in just four years, and new brewers complain about the difficulty of getting their beers on tap at restaurants and bars.

On the other hand, Bart Watson, a staff economist for the Brewers Association, contends that there’s still plenty of room for growth. He points to Oregon, a mature craft beer market, where production still grew by 11 percent last year.

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