Founders Brewing Company

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.

Craft Pilsner Comes of Age

From the beginning of the craft beer movement, pilsener has been a pariah style because of its association with light lager beer that dominated the American market. Brewers reacted to pilsener by making ales, the hoppier the better.

Today, pilsener accounts for a lowly 1 percent of the craft beer market. That, however, is about to change. In the past year, top-tier breweries such as Founders Brewing Company and regional players such as Captain Lawrence Brewing Company have added the style to their lineup.

The new pilseners are inspired by European classics, but many have a distinct American accent. For example, Founders’ PC Pils is brewed with Centennial, Cascade, and Chinook hops rather than floral European varieties. For American drinkers accustomed to hoppy beers, that eases the transition to pilsener.

Pilsener also responds to increased demand for beers that carry a lighter alcoholic punch than American IPAs. There are times—such as on the beach or while golfing—that call for an alternative. And Pilseners are low-maintenance; their appeal is to those who simply want to enjoy a beer, not analyze and review it in depth.

Win an Exclusive Tour of Founders’ Caves

It’s Founders Brewing Company’s version of the Golden Ticket. The brewery is offering tasting tours of its underground barrel-aging caves to ten lucky people. The caves, located in former gypsum mines 85 feet below the surface, are where Kentucky Breakfast Stout and other strong beers are aged. They’re normally closed to the public.

To win a tour, which also includes two nights’ lodging in Grand Rapids, a meet-and-greet dinner with the Founders team, and guaranteed entry to the brewery’s annual Black Party, one first has to join Founders’ “Cadre” enthusiast team. Then the entrant must describe his or her “dream” barrel-aged beer, including ingredients, a name, and label artwork. And did I mention that the package includes a chance to taste KBS?

Entries are due February 24.

Beer…By the Numbers

  • Change in seasonal beer sales in the U.S. from 2013 to 2014: Up 13.1 percent.
  • Change from in seasonal beer sales 2015 to 2016: Down 5.4 percent.
  • UK pub closings in 2015-16: 480.
  • Change from the year before: Down 7 percent.
  • UK brewery openings in 2015: 134.
  • Change from the year before: Up 8 percent.
  • Annual growth rate in UK craft beer sales: 40 percent.
  • Oregon’s brewery count in 2016: 218.
  • Its brewery count ten years ago: 76.
  • Barrels of Modelo Especial shipped in the U.S. in 2015: 5.4 million.
  • Increase over 2010 shipments: 135.3 percent (the nation’s fastest growing brand).
  • Japanese tax on a 350-ml can of regular beer: 77 yen (81 U.S. cents).
  • Japanese tax on a 350-ml can of “happoshu” (a lower-malt content beer): 47 yen (40 U.S. cents)
  • Unique beers served by Founders Brewing Company last year: 95.
  • Live acts that performed on Founders’ stage last year: 250.
  • The Friday Mash (Mac Edition)

    Thirty-two years ago today, Apple Corporation introduced the Macintosh, which popularized the mouse and the graphical user interface. The introduction came in the form of the famous “1984” television commercial during Super Bowl XVIII.

    And now….The Mash!

    We begin in Michigan, where Founders Brewing Company, having filed the necessary paperwork, can once again sell Breakfast Stout with a baby on the label.

    In the UK, health officials now recommend that men drink no more than six pints of beer per week. They also warn that drinking any amount of alcohol can cause health problems.

    Paste magazine introduces you to seven “ridiculous, but kind of awesome” beer gadgets. They include a CO-2 injection system for growlers and a bottle that imparts an oak taste.

    New laws in a number of states have encouraged “farm-to-keg” breweries, which make and serve beer using ingredients grown on site. These breweries operate much like wineries.

    Did you get a drone for Christmas? AC Shilton of Outside magazine explains how can you train your new toy to fetch and deliver your beer.

    In Australia, Quentin Tarantino was presented with a six-pack of Victoria Bitter in cans specially designed to honor him. He was joined onstage by actors Kurt Russell and Samuel L. Jackson.

    Finally, the Craft Brewers Alliance plans to distribute Kona beer in Brazil. It cited “the great synergies between Hawaiian and Brazilian culture, with their amazing beaches and strong water lifestyles.”

    The Rise of Session Craft Beer

    For decades, some craft brewers have waged an “arms race,” competing to brew the beer with the most IBUs, the most unusual ingredients, and especially, the highest alcohol content.

    As Nick Panchamé, head brewer at Right Brain Brewery in Traverse City, Michigan, put it, ”When craft beer started, people didn’t want anything that looked like macro brews.”

    More recently, however, Right Brain has released two successful session-strength beers.

    Right Brain follows in the footsteps of another Michigan brewery, Founders Brewing Company, whose All Day IPA has become its largest-selling beer. Founders’ CEO Mike Stevens said, “We never intended to fill a void. By accident we seemed to time it right.” Stevens said that the beer was in development three years, and that he had no intention of “dumbing down” his products.

    Another Michigan brewmaster, Tony Hansen of Short’s Brewing Company, said his company came to the realization that “big and bold beers aren’t perfect for every occasion.” Hansen added that session beers “will be kind of a gateway beer” for those looking to break away from national-brand beers.

    An Oral History of Beer Label Design

    As the craft beer industry grows more crowded, it becomes increasingly important for breweries to distinguish themselves from the competition. One way of doing so, aside from the beer itself, is the look and feel of the beer’s packaging. Chris Wright of GearPatrol.com sought out a number of leading figures in the craft community, and asked them about the design of their beer labels.

    Wright’s panel of experts includes Brooklyn Brewery’s Milton Glazer, who founded New York magazine and designed the iconic “I (Heart) NY” logo in the 1970s; Flying Dog Ales’ Erin Weston, who works closely with Hunter S. Thompson’s illustrator Ralph Steadman; and Dogfish Head Brewery’s Sam Calagione, who really needs no introduction. Ten other designers, representing such well-known brands as Founders, Ommegang, and Sly Fox, also contributed to this fascinating oral history.

    The designers come from various walks of life; and, as expected, many of them are home brewers. They explained to Wright what they wanted their labels to convey, such as psychedelia or fond memories of the beach. Perhaps the best comment came from Calagione, who told Wright that label design has become a challenge. He said, “It’s getting harder to find fun, provocative on-brand names these days with 1.5 new breweries opening every day and only half a million words in the English language.”

    Beer…By the Numbers

  • Bangkok’s brewery count in 2014: 20.
  • Its brewery count in 2013: 4.
  • West Virginia’s craft brewery count: 7.
  • Craft brewing’s impact on West Virginia’s economy: $118 million (46th in the nation).
  • Arrests at Oktoberfest 2014: 720 (39 fewer than at Oktoberfest 2013).
  • Lost objects at Oktoberfest 2014: 3,346 (including 2 wedding rings, a mobile cat carrier, and a German Federal Cross of Merit 2nd-class medal).
  • Founders Brewing Company’s production in 2014: 190,000 barrels.
  • Founders’ projected capacity after expansion is completed: 900,000 barrels.
  • Alcoholic content of All Day IPA, Founders’ largest-selling beer: 4.7 percent by volume.
  • Lagunitas Brewing Company’s production in 2014: almost 600,000 barrels.
  • Increase in Lagunitas’ production over the year before: 60 percent (it opened a second brewery in Chicago).
  • Dos Equis’ sales in 2013: 1.57 million barrels.
  • Increase in Dos Equis’ sales between 2008 and 2013: 116.6 percent (number-one in the nation in sales growth).
  • Most expensive beer in the National Basketball Association: 60 cents an ounce (Quicken Loans Arena, Cleveland).
  • Cheapest beer in the NBA: 33 cents an ounce (Chesapeake Arena, Oklahoma City, and Phillips Arena, Atlanta).
  • Why Founders Sold to a Spanish Brewery

    The craft beer community was abuzz this week with news that Founders Brewing Company sold a 30-percent stake to Spain’s Mahou San Miguel Group.

    Why did Founders do this? The answer came in a story in Wednesday’s MLive.com. Founders’ CEO Mike Stevens told the publication that there were two reasons for the deal. First, by providing an international distribution chain, it ensures that Founders will be around for years to come.

    More importantly, Stevens said, the deal was far better than the alternatives: getting acquired by one of the world’s brewing giants or falling into the hands of private-equity investors.

    Stevens offered the best Worts of Wisdom of the entire year with this comment:

    “We were looking for someone who truly understood the soul this brand,” he said. “I don’t think you’ll find that among a bunch of bankers and in the private equity world. Priority No. 1 for people like that is a return — profits.

    The Friday Mash (Intel Inside Edition)

    On this day in 1968, Intel Corporation—Intel is short for “Integrated Electronics”—was founded in Mountain View, California. Today, it is one of the world’s largest and emiconductor chip manufacturers. Chances are, your personal computer has “Intel inside.”

    And now….The Mash!

    Appropriately, we begin in California’s Silicon Valley. Levi’s Stadium, the new home of the San Francisco 49ers, will offer fans a wide selection of local micros to choose from.

    Cigar City Brewing Company has signed an agreement to pour its beers aboard Carnival Cruise Lines’ ships. Carnival also offers its own private label draft beer, ThirstyFrog Red.

    This was bound to happen. Oregon’s Full Sail Brewery has sued Atlanta-based Sessions Law Firm, alleging that the law firm copied its trademark for Session Premium Lager.

    Kirin, once the undisputed number-one brand in Japan, has dropped to second place behind Asahi. The chief reason for Kirin’s downfall was not entering the fast-growing premium beer market.

    Grand Rapids’ Founders Brewing Company made BrandInnovators.com’s list of Top 10 American-Made Brands to Watch. Founders is joined on that list by Sonoma Cider Company.

    Rumor has it that Anheuser-Busch InBev will merge with SABMiller. The combined company would own 80 percent of the world’s leading brands and control 30 percent of the world’s beer market.

    Finally, Brasserie Cantillon is aging its beers inside a bomb shelter. No, the brewery isn’t expecting another invasion. It simply ran out of space; and fortunately, the city of Brussels found them a new subterranean location.

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