MillerCoors

Jim Koch Sounds the Alarm

Boston Beer Company jump-started America’s craft beer movement and made its founder, Jim Koch, a billionaire. But in a recent op-ed in the New York Times, Koch warns craft’s run might be coming to an end.

Koch calls industry consolidation the number-one culprit. In 2008, federal antitrust regulators not only approved the MillerCoors joint venture, but they also gave the green light to InBev’s acquisition of Anheuser-Busch. That left two brewing giants in control of 90 percent of America’s domestic beer protection. Making matters worse, the federal government allowed the big brewers to buy craft breweries—and then fail to disclose that they were the new owners.

Those mega-mergers resulted in higher beer prices and pink slips for American workers, as well as consolidation among distributors. Today, in most markets, more than 90 percent of all beer is controlled by distributors who depend on either A-B InBev or MillerCoors for most of their volume. Those distributors have considerable power regarding promotion, shelf space, and marketing support for the brands they handle—and they have an incentive to give preferential treatment to craft brands the big brewers now own.

According to Koch, the key to saving American craft beer is stricter antitrust enforcement. He names China and South Africa as countries whose regulators imposed strict conditions on big brewery mergers to protect their domestic economies.

The Friday Mash (“Long Live the King” Edition)

On this day in 1603, James VI of Scotland becomes James I of England and Ireland upon the death of Queen Elizabeth I. The kingdoms of Scotland and England remained sovereign states, with their own parliaments, but both were ruled by James in personal union.

And now….The Mash!

We begin in Vancouver where last week, the Railtown Pub advertised its St. Patrick’s Day celebration with a Guinness glass filled to the brim and literally losing its head. That caught the attention of the Irish Independent newspaper, which called the pour “sacrilegious”.

Now that the Chicago White Sox’s partnership with MillerCoors has expired, the ballclub has formed a new partnership with Constellation Brands, which will open “Casa Modelo” at the ballpark.

While on spring break in The Bahamas, a frat boy used the teeth of a beached shark to puncture a beer can so he could “shotgun” it. His video of the stunt prompted a swift—and angry—backlash on social media.

Portland, Oregon, is about to get a beer bar devoted to session beers. Its name, naturally enough, is Sessionable. The bar will pour 30 beers, all with ABVs ranging from 2.5 to 5 percent.

Neil Patrick Harris, who the spokesperson for Heineken beer, says that he has a Heineken Light tap in his bar at home. He adds that unlimited beer at home “is as awesome as it sounds”.

According to a recent survey, one out of four beer drinkers said they would switch to marijuana if it became legal in their state. If they do switch, brewers will suffer $2 billion per year in lost sales.

Finally, MLive.com asked eight brewery owners in the Grand Rapids, Michigan, area whether the craft beer industry is in a bubble. They don’t think so, but some admit that the market is getting tougher for new entries.

Zima is Making a Comeback

Zima, the butt of numerous jokes by beer aficionados, is coming back to the American market after a nine-plus-year absence. The clear malt beverage, launched by Coors Brewing in 1993, sold more than 1 million barrels its first year. However, the brand never caught on with its target audience—young males—and was discontinued in the U.S. in 2008.

MillerCoors decided to resurrect Zima after its line of Henry’s Hard Soda proved successful last year. Ironically, the biggest fans of Henry’s are the very generation to which Coors marketed Zima in the first place.

Zima’s top competitors include Bud Light Lime-a-Rita, Mike’s Hard Lemonade, Not Your Father’s Root Beer, and Seagrams’ line of hard sodas.

Beer…By the Numbers

  • Asia’s per capita beer consumption in 2016: 57 liters.
  • India’s per capita beer consumption in 2016: 4.7 liters.
  • India’s microbrewery count in 2016: 80.
  • Its microbrewery count in 2008: 2.
  • Boston Beer Company’s net revenue in 2016: $687 million (down 8 percent from 2015).
  • Boston Beer Company’s share price on January 27, 2017: $153.85.
  • Its share price two years ago: $320.83.
  • Lagunitas Brewing Company’s current annual production at its Chicago brewery: 405,000 barrels.
  • Its projected annual production after planned expansion: 1.2 million barrels.
  • Goose Island Beer Company’s annual production (estimated): 480,000 barrels.
  • Chicago breweries’ combined annual production (estimated): 1.115 million barrels.
  • MillerCoors’s sales in Wisconsin, 2012-16: 38.2 million barrels (biggest seller in Wisconsin).
  • Mark Anthony Brewing Company’s (Mike’s Hard Lemonade) sales in Wisconsin, 2012-16: 3.3 million barrels (second-biggest seller in Wisconsin).
  • Alcoholic strength of Founders Centennial IPA: 7.2 percent ABV.
  • Alcoholic strength of Founders All Day IPA: 4.7 percent ABV.
  • Pabst’s Unusual Business Model

    Pabst Brewing Company has 2 percent of the American beer market, which puts it in a class with Boston Beer Company and D.G. Yuengling & Son. But under Eugene Kashper, Pabst’s busimess model is much different than that of Boston Beer and Yuengling.

    Jason Notte of Forbes magazine, who recently interviewed Kashper, writes that Pabst’s CEO is “also digging into corners of the beer industry where the competition hadn’t tread and using its strengths in marketing, production and scale to take on the big brewers on a much smaller budget”.

    Kashper told Notte that his portfolio was “kind of in a sweet spot between big beer and craft” because his legacy brands not only have a following, but also own a library of recipes for craft-like beers that he can sell for less than the going price of craft. Kashper’s success stories include Stroh’s Bohemian, Old Style Oktoberfest, and Rainier Mountain Ale, all of which have strong regional ties.

    In addition, Pabst has entered into partnerships with craft and import brewers to enable it to penetrate those segments of the market. Those partnerships emphasize the strength of Pabst’s distribution and grassroots marketing, which Kashper hopes will give it a fighting chance against brewing giants Anheuser-Busch and MillerCoors.

    The Friday Mash (Night at the Opera Edition)

    Fifty years ago today, the Metropolitan Opera House opened at Lincoln Square in Manhattan. The opening-night performance was the world premiere of Antony and Cleopatra by Samuel Barber.

    And now…The Mash!

    We begin on ESPN College GameDay, where Sam Crowder held up a sign last Saturday asking Vemmo users to send him beer money. Within hours, more than 2,000 people contributed.

    BBC correspondent Stephen Evans hopped a flight to make a beer run…all the way to Beijing. His Chinese friends had made a trip to the border to acquire “forbidden” Taedonggang beer, which is brewed in North Korea.

    Here’s a solution to a problem you didn’t know you had. It’s a beer mug that won’t block your view of the TV when you’re drinking.

    Pork roll aka Taylor ham, a New Jersey breakfast favorite, is now a beer ingredient. Flying Fish Brewing Company has released Exit 7 Pork Roll Porter as part of its “Exit Series”.

    Tampa’s Cigar City Brewing has rolled out a beer honoring the stereotypical “Florida Man”. The label for this beer, a double IPA, depicts a man wrestling an alligator—and winning.

    Beer is more expensive than ever at NFL stadiums, but there’s one consolation: you can now buy craft beer from breweries that Anheuser-Busch InBev and MillerCoors recently acquired.

    Finally, Nebraska liquor regulators have banned homebrewers from beer festivals. Because homebrewers aren’t licensed, there’s no assurance that they meet health and sanitation standards.

    Beer…By the Numbers

  • U.S. brewery count halfway through 2016: 4,656.
  • Increase over last year: 917.
  • Approximate number of breweries in planning: 2,200.
  • Corey Bellemore’s record-breaking time in the Beer Mile, set July 29: 4 minutes, 34.4 seconds.
  • Bellemore’s previous world record, set the day before: 4 minutes, 4 minutes, 39.6 seconds.
  • MillerCoors’s water-used-to-beer-brewed ratio in 2015: 3.29 to 1.
  • MillerCoors’s water-used-to-beer-brewed goal for 2020: 3 to 1.
  • Calories in a 12-ounce bottle of Molson XXX: 212.
  • Calories in a 12-ounce bottle of Budweiser Select 55: 55, of course.
  • U.S. craft beer exports to Belgium in 2015: 1,560 barrels.
  • U.S. beer imports from Belgium in 2015: 1.61 million barrels.
  • Westvleteren 12’s average score on RateBeer.com: 4.43 (highest on the site).
  • Natural Light’s average score on RateBeer.com: 1.06 (lowest on the site).
  • Number of beers poured at this year’s International Berlin Beer Festival: 2,400.
  • Countries represented at this year’s International Berlin Beer Festival: 87.
  • The Friday Mash (“Be Prepared” Edition)

    On this date in 1907, Sir Robert Baden-Powell set up the Brownsea Island Scout camp on the south coast of England. That nine-day event—we assume that no beer was served to campers—was the foundation of the Scouting movement.

    And now…The Mash!

    We begin in Scotland, where the Innis & Gunn brewery has released a “Vintage” beer that is meant to be aged. One bottle has been put inside a time capsule, which is not to be opened until 2116.

    Old Style beer will return to its La Crosse, Wisconsin, birthplace. The brewery will make an Oktoberfest-style version of the 114-year-old brand for the city’s annual Oktoberfest U.S.A.

    After winning his third Tour de France, Britain’s Chris Froome celebrated in style. In the Tour’s final stage, he handed out bottles of beer to his teammates.

    According to the libertarian magazine Reason, state beer laws continued “a slow creep in the right direction.” However, many bad laws remain on the books.

    The Smithsonian has posted a want ad for a beer historian/scholar. This three-year position, funded by the Brewers Association, will pay $64,650 plus benefits.

    Some breweries try too hard to be original, and wind up giving their beers awful names. Thrillist.com calls out some of the worst offenders.

    Finally, Jim Vorel of Atlanta magazine criticizes Terrapin Brewing Company for selling a majority interest to MillerCoors—and then keeping mum about the transaction on social media.

    Judge Rejects BA’s Definition of “Craft Beer”

    Last week, U.S. District Judge Gonzalo Curiel rejected, at least for the time being, the Brewers Association’s definition of craft beer: production under 6 million barrels a year, less than 25-percent controlled by a big brewer, and using “only traditional or innovative brewing ingredients.”

    G. Clay Whittaker of The Daily Beast argues that Judge Curiel has in effect given every brewer in America the green light to describe its beer as “craft.” (Which is ironic considering that Anheuser-Busch InBev, during Super Bowl 49, ran an ad making fun of the entire segment.)

    Judge Curiel gave the plaintiff, Evan Parent, the opportunity to amend his complaint, which might eventually lead to a legal definition of what craft beer is. Then again, the phrase “craft beer” could go the way of “the Champagne of bottled beers,” an advertising slogan that expresses a meaningless opinion about the product.

    Beer….By the Numbers

  • U.S. brewery count as of June 30, 2015: 3,739.
  • Increase over the year before: 699.
  • Full- and part-time workers employed by U.S. breweries: 115,469.
  • Premium beer’s share of A-B InBev’s U.S. sales: 63 percent.
  • Craft beer’s share of Anheuser-Busch InBev’s U.S. sales: 2 percent.
  • Shock Top’s share of A-B InBev’s U.S. craft beer sales: 50 percent.
  • A-B InBev’s share of the U.S. beer market: 45 percent.
  • MillerCoors’s share of the U.S. beer market: 26 percent.
  • Craft beer’s share of the U.S. beer market: 11 percent.
  • Beer drinkers arrested for DUI in Napa County, California, in 2014: 361.
  • Wine drinkers arrested for DUI in Napa County in 2014: 114.
  • Tap handles at the Raleigh (North Carolina) Beer Garden: 366 (believed to be the world’s most).
  • Locally-brewed beers on tap at the Raleigh Beer Garden: 144.
  • Percent of the price of beer attributable to taxes in Mississippi: 60 (highest in the nation).
  • Percent attributable to taxes in Montana and Oregon: 32 (lowest in the nation).
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