The Emerging Role of Food in Craft Beer

Portland is virtually overflowing with craft breweries...more than 60 at last count. To go with those places, there are a growing number of tap houses and related businesses that offer great selections of beer. Given that background, differentiating yourself from the competition is becoming increasingly important.

There are varying ways to do this. You see places positioning themselves as sports bars or bike bars or some combination of both. Others lean on the more traditional pub atmosphere without bells and whistles to attract patrons. One of the emerging differentiation points is food.

A recent addition to those taking the food angle is the BTU Brasserie on Northeast Sandy, a hop and skip from my house. The BTU combines a small craft brewery with Chinese cuisine. They've been open for a couple of months, but have only been brewing for a month or so.

There was a review of the BTU Brasserie in Willamette Week last week. Written by my old buddy, Martin Cizmar, the review gave the BTU decent marks for food, failing marks for beer. As he noted, they have only two of their beers on and breweries often have quality issues early on. Fair enough.

I can't comment on the BTU beer or food. I stopped by to take a few photos and confirm the beer situation. Once they get fully up to speed with their brewing, I'll stop by and try to get a bead on the place. If you're headed over there, be advised they have a short, but solid list of guest taps to go with their house beers.

Returning to the concept of pairing good or better food with craft beer, it isn't a brand new idea. We've already seen it implemented at Breakside's Dekum location, which has a terrific menu. There's also the Tabor Tavern on Burnside, which offers upscale pub food. There are others.

Even the idea of combining a brewery with Chinese food isn't new. There appear to be a number of places around the country offering such cuisine via food carts or in-house kitchens. One such place was featured in a fairly recent BeerAdvocate article, which I am unable to find as I write this.

You might say pub food has experienced a sort of renaissance in recent times. Early brewpubs had spartan food offerings at best. Most served a mishmash of grubby British pub fare before gravitating to menus dominated by fried food. That approach continued on for years. But change is in the wind.

With more beer-centric places opening around town, we are likely to see increasing effort put into developing food offerings that help attract patrons. The focus will be on quality and variety. Places with one-dimensional menus heavy on fried food are going to look rather antiquated at some point.

I suspect it isn't just economics driving these changes. We now have restaurant people opening pubs and taprooms. They know food and consider it a priority. That runs counter to the way things were done in the old days, when pubs were run by folks who were passionate about beer, but had little knowledge of or interest in food.

Some changes truly are for the best.

New Beer Policies Hit Some College Football Stadiums

Beer in college football stadiums? It once seemed like a far-fetched idea. Yet, with the season about to start, there's been a lot of chatter about schools that are serving beer or preparing to serve beer inside their football stadiums. There are arguments on both sides, but I think this is generally a decent idea.

I started going to football games when people still wore suits and ties to games. The dark ages. My first game was at Kezar Stadium in San Francisco. Later, there were lots of high school, college and pro games. You could only get a beer at the pro games. That's changing finally.

According to recent reports, 21 schools around the country will sell beer to fans in their stadiums this year. Just a few years ago, less than half that many schools had such policies. Of course, there are still holdouts. The entire Southeastern Conference and the California State University system have policies banning alcohol from general seating areas in stadiums.

By the way, the NCAA doesn't dictate alcohol policy, leaving decisions up to schools and conferences. Which is odd when you think about it because you can't buy a beer at any NCAA championship event. While most bowl games sell beer, you can't buy a beer at any March Madness venue. Verboten!

The move by some schools to allow beer in their football stadiums (and basketball arenas in some cases) is driven partly by revenue hunger. Fans have been tailgating before and after games for decades. Schools watched them enter stadiums hopelessly tanked and wondered if there might be a way to create a better experience while making a little money.

Moving beer inside stadiums proved to be a viable option. When they did this at West Virginia several years ago, people laughed and said it would be a disaster. This was, after all, a place that had serious problems with drunken, misbehaving fans. Instead of a disaster, alcohol-related incidents dropped sharply. And beer sales produced more than $500,000 a year in revenue.

There are those who argue that selling alcohol inside college stadiums sets a bad example for impressionable kids, who may wind up thinking the only way to have fun is to drink. They say that's not the message colleges and universities should be conveying.

The thing is, this is already the message being conveyed. Does anyone think kids aren't around during pre-game tailgating? Is there someone who thinks the kiddies aren't seeing everything that goes on?

Honestly, the real problem with pre-game partying in all its forms is that fans tend to drink way too much, knowing they won't be able to get a beer once they enter the stadium. So you wind up with people who are too drunk to behave. And they don't.

The rationale for serving beer inside stadiums is to keep fans from guzzling that last beer or two or three before coming in. There's also the fact that alcohol consumption can be more easily monitored inside the stadium than in the parking lot.

Look, I've attended games at all the Northwest schools. I've seen some horrible behavior by fans who were hammered well before they came through the gates. I think selling beer inside stadiums might help encourage a semblance of moderation outside. That can't be a bad thing.

A final note on the revenue concept...there's a secondary angle. While schools certainly hope to make a few bucks on beer, they also realize they're competing against high-def TV for fans. Some schools that have initiated beer sales at games have seen attendance go up. What some are calling an "enhanced fan experience" actually attracts people to games and keeps them there. What a concept.

There's no word on what kind of beer fans are apt to find in stadiums. My guess is most venues will serve predominantly light lagers. Not the best. But you gotta start somewhere.

The OBF at 27: Evolving with the Times

It's pretty much an accepted fact that the Oregon Brewers Festival is the crown jewel of Oregon Craft Beer Month and the granddaddy of all Oregon beer festivals. Yet I am beginning to wonder if the OBF and other events held during the wacky outdoor season aren't losing some of their luster in the face of relentless competition.

When the post-event press materials for the 2014 OBF arrive, they will almost certainly document a drop in attendance (announced attendance last year was 85,000). Numbers were down Wednesday and Thursday, and Friday seemed much less crowded than usual. I doubt they made those losses up on the weekend. Less than perfect weather the first two days was obviously an issue, but not the only one.

Here's the thing: This event was once a novelty. You could go to Waterfront Park and, in one place, taste beers you might not find anywhere in town. Even if you could find them, you wouldn't be drinking them in a festive, outdoor space. I vividly remember my first OBF, walking the grounds and marveling at the beer and the venue.

That experience is no longer a novelty here. On any given summer day in Portland, you can choose from numerous establishments that offer a multitude of unique beers on tap and outdoor seating to boot. And no lines. I don't think it's a stretch to say a growing number of people have discovered that these places offer a plausible alternative to the OBF and other summer festivals.

Don't get me wrong, I'm not grinding on the OBF, which remains a great event. In fact, one can easily argue its success is in many ways responsible for the excellent watering holes around Portland. The OBF and spin-offs of its ilk helped spread the gospel of craft beer. The result is the vibrant beer scene we have.

The reality of escalating competition is not lost on OBF organizers. Moving to a glass tasting vessel last year was part of giving festival goers a better experience (the glass will be gone next year, replaced by a Lexan cup to satisfy the city, I'm told). Adding days to spread the crowd came out of the same thinking. This year's addition of Dutch brewers gave the event an international flavor for the first time. And so on.

Given what's happening in the background, expect organizers to seek additional ways to reinvent the event in coming years. What that means is uncertain, but the tried and true formula used for 27 years will have to evolve to keep the event as relevant as it has been. Spectacular growth is creating interesting challenges in craft beer. There are worse problems to have.

Putting the Sting on Craft Beer in Hawaii

Poipu, Kauai - Setting foot outside the People's Craft Beer Republic of Portland can be a sketchy business. Our beer choices are virtually unlimited. Then you swoop into some foreign land or state and find the pickings mighty slim. Such is the case in much of Hawaii.

If you want to be blown away by a lousy selection of beer, I suggest Stinger Ray's Tropical Bar and Grill at the Honolulu airport. Honestly, I've been in this place before...many times. I may not have been as picky in those days. A couple of Kona beers might have been enough to appease me. Not now.

I realize this is an airport bar mostly full of tourists in transit to outer islands or the mainland. Fine. But the draft list here is abominable. And never mind the prices...highway robbery! The choices: Shock Top, Boston Lager, Kona Longboard, Goose Island IPA, Stella and Bud Light. Nothing worthwhile in bottles, either.

I sucked it up and ordered the Goose IPA. Not terrible...or great. Goose beers started showing up in Hawaii a few trips ago, not long after Anheuser-Busch bought them out. I remember seeing Goose Island handles in a brewpub on Kauai and being astonished. Today, the standard line-up in many island bars is Kona, Goose, Bud, Shock Top, etc. Shabby stuff.

There are two major beer distributors in Hawaii...Paradise (MillerCoors) and Anheuser-Busch of Hawaii. Looking at that dreadful Stinger Ray's tap list, it occurred to me that the AB people are winning the tap handle battle. All but Boston Lager are AB brands. The formation of Maui-Stone Distributing (story here) is altering the craft beer landscape for visitors and residents of Maui, but the timing for the rest of the islands is uncertain for now.

Seeing all that Shock Top and Goose IPA made me briefly wonder if perhaps AB's el-cheapo keg program (mentioned here a few weeks back) might be in play in Hawaii. My sources can't say. I seriously doubt it. AB is losing market share and tap handles like crazy in the Northwest. That's why they introduced the cheap kegs. No reason to do that here...they're doing fine.

Speaking of that program, I've heard some rumors of it backfiring. It works like this: AB goes into a bar and gets them to replace a craft handle with Shock Top. Seems like a win. Days later, the rep of the lost handle comes in and gets the bar manager to replace an AB brand (Kona or Widmer are likely suspects) with a full-priced craft brand. Wherever this is happening, AB is effectively trading a profitable handle for a loss leader...not the best financial bargain.

The other thing that's apt to happen longterm is brand equity damage to Shock Top and Goose. AB hoped to alleviate this by limiting fire sale discounting to kegs, while packaged pricing didn't change. The problem is, how do you get bars to pay $110 for kegs of Shock Top and Goose Island when they've been paying half that? The answer is, you don't. Or you have a hard time.

Oh well. Time to catch some rays and drink a decent beer.

Delusional in Denver: Pete Coors and Craft Beer

There are some things about the craft beer movement that seem to be completely lost on the kings of macro. Pete Coors, the 67-year-old head of MillerCoors, revealed his disconnect from reality in a recent conversation with the Denver Post.

Mr. Coors seems to completely miss the point that a paradigm shift in tastes has occurred, a shift that is working against yellow beer. Instead, he cites a litany of delusional reasons for the declining fortunes of macro beer.

For starters, Mr. Coors suggests that pesky bar owners are to blame. These turncoats have become "enamored" with craft beer and are removing macro tap handles and replacing them with craft handles. Macro beer then lives in bottles behind the bar.

With respect to bar owners, most of them were slow to embrace the craft beer concept. When they did, it was because that's what their customers demanded. You provide craft beer to your customers or you don't have any customers...or enough to stay in business. Simple.

Of course you're going to replace macro handles with craft beer. That's what your customers want and it's far better to have a product that moves on tap. Relegating macro to bottle status is a smart move. In a growing number of craft-centric cities, macro tap handles are becoming an endangered species.

Give Mr. Coors credit for inventiveness. He points to research conducted by MillerCoors that suggests people stick around longer and spend more in establishments where light beer is served. There's a clever algorithm and app that helps explain it all for these businesses, he says. Real handy.

Again, the problem you run into if you're serving primarily macro beer is customers . The algorithm may be perfectly workable, but it misses the point that consumers seeking a better product aren't going to frequent establishments that don't serve it. They'll go elsewhere. Nice try, though.

Mr. Coors has a puff of reality when he talks about Millennials, the generation driving much of the present growth in craft beer. They don't own houses or drive cars, Coors says, but they will spend good money things they value...craft beer being one of those things. There's an element of truth there.

The fact is, MillerCoors and Anheuser-Busch are in a bind with the Millennial crowd. The kids prefer craft beer at least partly because they perceive it as being less corporate. MillerCoors and AB would like to win this crowd over, but they seem unable imagine an effective way to do it.

It may well be that Pete Coors and his ilk are frozen in another era, a time when macro dominated. His favorite beer, he says, is Coors Banquet Brand, which he's been drinking for decades. Banquet beer made Coors a force well before the iconic 70s flick, Smokey and the Bandit, made it legendary. You could only get it in some states, so people hoarded and smuggled it.

Oddly enough, Coors tried to restore some luster to the Banquet brand in 2012, when Mr. Coors and his son embarked on a nationwide promotional tour. The timing was a little off. Craft beer was relentlessly gobbling up macro market share at the time, and has been ever since. Some dogs, even tried and true ones, just don't hunt in this market.

At some point, you wonder if the large brewing companies aren't merely relics of another era, built to tap a mass audience with a marginal product and unable to adapt to change. Efforts to defend and revive dying brands seem like poorly formed strategies at a time when consumer tastes have fundamentally shifted, apparently for good. Time will tell.

Oregon Craft Beer: Statistics and Damn Lies

Like it or not statistics and damn lies are part of the craft industry. Maybe the damn lies part of it isn't a big thing, but paying attention to stats has become part of the game as the industry matures. Mark Twain would be proud.

Some of the more interesting stats on Oregon beer are out there for pubic consumption on the OLCC site. There you can look at monthly reports documenting production numbers for the state's breweries. The reports are a few months behind. February 2014 was just published.

It's the Year-To-Date comparisons that tend to interest me. That's what we're looking at here. Who's showing a significant increase or decrease. To get that view, you have to pull up reports a year apart. Looking at the side-by-side numbers can be daunting. Visuals are a lot easier. So I created some charts.

Figure A

The first chart looks at percentage change in production among the top 20 or so breweries in the state. This is a meaningful visual in some sense because it tells us what's happening at the top, where most of the volume lives. It's a big part of the overall picture.

You have to be somewhat careful because some of these numbers can be deceiving. Why? Because they're relative. For instance, Worthy's spike looks huge. But the 208 percent increase represents just 510 barrels. By contrast, the CBA's 25 percent drop represents 3,721 barrels. Enough said.

Another thing to keep in mind as you look at this chart is I eliminated breweries with small changes for the sake of easy viewing. Deschutes production dropped by roughy 2 percent, representing 215 barrels. I didn't include them. I also didn't include Rogue, down 1.14 percent, or Full Sail, up 1.66 percent. These to me are insignificant numbers.

The takeaways? Worthy and Breakside obviously show big growth. Breakside opened a production brewery in 2013; Worthy was just ramping up production. They're both gaining production momentum now. As noted, keep in mind that these numbers are relative. Worthy and Breakside aren't the biggest winners when it comes to increased production volume (see below).

I have no idea what happened with the CBA or Bridgeport. Ninkasi's drop may be related to efforts to increase capacity. Laurelwood's drop makes sense because they have shifted a lot of production to Redhook's facility in Woodinville, Wash. They're still brewing Workhorse, Free Range Red and others for 22 oz bottle distribution, but the heavy lifting has mostly shifted.

I should mention a couple of notable exclusions. Pelican, Good Life, Baker City and Ecliptic show no numbers of February 2013 so nothing to compute growth. Ecliptic wasn't yet open. Pelican and Baker City have shifted to production breweries that didn't exist a year ago. I do not know what happened with Good Life...a missed report, perhaps. Their production is up significantly since early 2013.

Figure B

This may well be the more meaningful chart due to the fact that it shows actual volume increase or decrease. I only paid attention to the biggest changes to keep it simple, so you're only looking at breweries where there has been significant up or down movement. 

I probably should have left out the CBA; that one data point skews the grid dramatically. Hop Valley shows up as a loser here because they shifted to a production brewery and downscaled production at their pub. Ninkasi, Bridgeport and Laurelwood I've mentioned. 

In terms of the shops showing growth, I suspect Boneyard would have shown a greater increase, but they're maxed out where they are. Worthy and Breakside, as noted above, are what they are. Fort George is moving up quickly, Portland Brewing is a big surprise. They must be contract brewing something. Perhaps someone will chime in about that. Pelican, Good Life, Baker City and Ecliptic surely would have shown up here had there been 2013 data to compare.

A final caveat here is that volume doesn't necessarily equate with profitability. Producing a product that makes a good profit involves more than just brewing a great beer. There are branding and marketing issues that play into that. Some breweries make more money by keeping production and distribution down. Food for thought.

Figure C

This last chart was a sort of afterthought. There are a number of smaller breweries out there that are growing rapidly. I thought it would interesting to look at them in context of each other. As in the first chart, we're talking about percentage increase, not volume.

To be considered, breweries had to have at least 100 barrels of YTD production in February 2014. I did that to eliminate places that brewed, say, five barrels a year ago and are now brewing 10 or 20. That growth is significant for them, but insignificant in the larger scheme of things. Breweries also had to show 20 percent growth or more.

There's nothing that surprising here. Pfriem is a rising star, for sure. The Commons, as well. Gigantic has been solid since it launched in 2012. Base Camp is a bit of a surprise, but they're apparently doing just fine. I should mention that Rusty Truck, Sky High and Sasquatch snuck into the mix at or just above the required 100 barrels of YTD production in February. 

Relevance

These charts are offered strictly for comparison and information. They do not tell much more than a partial story. Craft beer in Oregon is in a constant state of flux and the numbers for these breweries will likely shift around fluidly as the year moves along. 

I'll try to remember to update these charts in five or six months, when the picture for the year is a little sharper. Well, maybe it will be.

Update: A few people have contacted me pointing out that OLCC numbers reflect beer produced and sold in Oregon. Keep that in mind as you view these charts. I can certainly think of breweries who are selling a lot of beer outside Oregon, production that does not show up here.

Anheuser-Busch's Latest Counteroffensive: Pricing

As craft beer continues to see growth, it's hardly a secret where the increased market share is coming from. Big beer's so-called premium brands continue to take a beating. As documented here and elsewhere, they aren't taking this situation laying down by any means. They want your money.

Indeed, big beer is working against the growth of craft beer in all kinds of creative and not-so-creative ways. They've gone in and manipulated laws in some states...or they've used loopholes in laws to their advantage. They're fighting against growlers in some states. In others, like Oregon, they're buying up distributors.

Then there's brand confusion, where big beer creates fake craft brands, which they then promote as the real thing via spendy marketing campaigns. The beers don't fool knowledgeable craft beer fans, but they do create enough brand confusion to reel in some new drinkers.

Now there's news that Anheuser-Busch, big beer's biggest bully, is launching a new counteroffensive based on price. The story was first reported in the Beer Business Daily the other day. I don't subscribe...too expensive. But I've received several messages from industry sources filling me in on what's happening.

It seems AB distributors in parts of Oregon and Washington (the reach of the campaign is uncertain) have issued updated price lists containing massive price drops on the Shock Top and Goose Island brands. Kegs that were previously selling to retailers for about $110 per half barrel will now be priced at $56. That's not a misprint. No word on pricing for packaged versions of those beers.

Inquiring minds may ask what AB is up to. Well, it appears they will attempt to use loss leader pricing to gain control of tap handles wherever possible. The low hanging fruit likely includes meat markets where the clientele often likes to drink a lot on the cheap. Buffalo Wild Wings and Blitz come instantly to mind, but they aren't alone. These joints could offer $3 pints of Shock Top or Goose Island around the clock and still make money.

What we clearly won't see is Shock Top or Goose Island taking over any handles at aficionado spots like Belmont Station, Saraveza or BeerMongers. Fat chance. The buyers in those bars would rather have their blood drained by vampires than serve charlatan craft brands to customers. It's not gonna happen...though I do like the juxtaposition of vampires and Anheuser-Busch.

Then there's the distributor angle. How could a distributor offer pricing like this? Even with backdoor subsidies in the form of reduced prices, discounts on shipping or increased advertising support, this kind of pricing would put independent distributors in a bind. Of course, many, possibly most of the distributors offering this pricing are wholly owned by Anheuser-Busch. They have to sell this sludge no matter what. So much for the three-tier system.

There is definitely some consternation on the part of MillerCoors distributors, who are independently owned and generally more interested in growing craft brands than in collapsing them, like AB. They wonder what predatory pricing on Shock Top and Goose Island will do to gateway brands like Blue Moon and Third Shift. They don't want a price war. But maybe that's what they have for now.

Look, the obvious goal of AB's initiative is to gobble up as many tap handles in as many places as possible. It's a rear guard action. These handles are apt to be in joints frequented by a lot of gateway drinkers. Hardcore craft bars aren't good targets. Once they have the business, prices of Shock Top and Goose Island will gradually increase.

It's a cynical strategy. What did you expect? It's your money they're after. That's what they've always been after. All that's changed is they've lost control of the narrative.

Rooney's Rainier Ads Foreshadowed Changing Times

The passing of Mickey Rooney the other day took me back to the 1970s, when he was frontman for one of the most creative ad campaigns ever launched in the beer industry. Forget the beer for just a moment. As a high school and college student, the ads made me want to like Rainier. But I couldn't manage it.

You recall the ads, of course. In several, Rooney is the leader of a team of hunters chasing Mountain Fresh Rainiers in vaguely mountainous Northwest settings. The group comes close, but never quite manages to corral or "pop the top" of a wild Rainier. Probably just as well.

The Rooney ads were part of Rainier's campaign to bolster its brand. For many years, Rainier ads graced TV, print and radio. They featured goofy, but highly memorable characters and themes. There was the running of the Rainiers. a parody of the running of the bulls in Spain. Long before Budweiser used talking frogs, Rainier used them to croak, "Rain-Neer, Rain-Neer." And who can forget the motorcycle that revs "Raaaaaiiiiinnnnn-neeeeeeeeerr-beeeeeeeeeeer," as it passes?

Rainier spent a lot of money on these ad campaigns. Inquiring minds may wonder why. It's pretty simple. All the regional brands, which in the Northwest included Rainier, Olympia, Lucky Lager and Blitz-Weinhard, were under siege by the national brands by 1960s. It was sink or swim by the early 1970s. Rainier was trying to swim.

You may wonder what could have happened to put the regional brands in such peril. For those who still read and want to know more, I suggest The U.S. Brewing Industry: Data and Economic Analysis, by Victor and Carol Tremblay. You may find it in your local library...or you can buy it on Amazon for a few bucks.

The basic facts are these: In the aftermath of Prohibition and World War II, the national brands, represented by Miller, Budweiser, Schiltz, Pabst, had gained significant advantages in production, distribution and brand recognition. Those advantages provided cash flows that enabled them to spend freely on advertising, particularly TV advertising. Television, you may recall, was entering its golden age about this time. A wacky fact I ran across last year: In 1952, the big four national brewers accounted for 84 percent of network advertising revenue. That's a shocking stat, no matter how you cut it.

By the early 1970s, the regional brands were on the run, faced with dramatically declining market share. They fought back by launching regional ad campaigns, of which Rainier's was arguably the most creative. Across the board, these campaigns bought the regionals some time. Not much more.

Portland oldtimers will recall that Blitz-Weinhard took a slightly different tact. Its launch of Henry Weinhard's Private Reserve in 1976, combined with a folksy ad campaign, was an effort to maintain market share in the face of onrushing national brands. One might argue, as I have argued, that Private Reserve was a precursor to the coming craft revolution.

Despite the efforts of the Madmen who created the ads that featured Mickey Rooney and others, it all went bad for Rainier. The company, which started brewing in Seattle in 1878, operated in California when state prohibition came in 1916, then returned in 1935, was sold to G. Heileman Brewing Company in 1977. It changed hands a few more times before landing with Pabst, which closed the brewery in 1999. Blitz-Weinhard suffered a similar fate, if you're keeping track.

You can still find Rainier. It's produced in a factory brewery outside Los Angeles. The creative, funny ads featuring Rooney and others, like similar ads fielded by many regional brands in the 1970s, served mostly as a sort of bridge to a period dominated by consolidation and mega brands. Today, craft brewers are moving us the other way, toward a return to mostly local and regional beer. Better times.

Cheers to Mickey Rooney for some great laughs. RIP

Hop Bombs and Blindspots

I sometimes wonder how much our current fixation on hoppy beers is impacting the relevance of competing styles. This question occurred to me after I read Jeff Alworth's recent piece on the importance of appreciating different styles. Relevant stuff.

Then there was my recent visit to Central Oregon. At one point I was sitting in a brewpub enjoying a pint. An older gent walked in and sat down in the vacant seat next to me. He looked at the board and asked if they had anything malty. "Not really," I said. In fact, the only remotely malty beer they were pouring was a black ale. It was not mega-hoppy by my standards, but it was hoppy enough to shock the palate of this gent after a taste. They had nothing for him.

That scenario may not be the norm, but it got me wondering about the current beer landscape. If you walk into a store, taproom or brewery, you are likely to find plenty of hoppy beers on the playlist. That's no accident. These businesses are catering to the masses...and mostly the masses want hoppy beers. That reality means darker styles, in particular, get less attention.

It hasn't always been this way. If you rewind to the early days of craft brewing, brewers typically offered a fairly balanced mix of hoppy ales and stouts. That's how they differentiated themselves from macro sludge. Don't kid yourself, though. The hoppy beers of yesteryear were nothing like the robust IPAs, IIPAs and IIIPAs of today. Night and day difference.

It's pretty clear that hoppier styles have won over the hearts and minds of most modern beer fans. At least for now. Your average brewpub, taproom or store is likely to have multiple hoppy choices for every stout or porter. Go out and do the research if you need to.

I have to admit being part of the growing IPA craze going back many years. I was homebrewing and drinking mega-hoppy beers by the late 1990s. I shifted my attention to a wider range of styles that includes lighter and darker styles as part of widening my beer perspective in recent times. Not everyone feels the need.

The quintessential question is this: Are darker styles being driven into extinction or will there be a backlash to the blindspot that's formed in the shadow of IPA's popularity? Will we ever return to a time when an oldtimer can walk into a pub or brewery and be pleased with the non-hoppy choices?

Something to ruminate about, if nothing else.

Got Growler Trouble? Bud Man to the Rescue

Like much of the old south, Florida has some archaic laws on the books. One of the more amusing laws pertains to beer growlers. I've talked about this here before. In Florida, you can walk into a brewery and leave with a gallon or quart growler. Half gallon growlers, the industry standard, are illegal.

Florida's growing craft beer industry wants to fix the law, which evidently dates to the post-Prohibition era. They see the current growler law as an obstacle to growth in the industry, which some observers say might eventually support 500 craft brewers. Growth is in the wind.

Craft brewers have supported two bills, one (HB 283) that would legalize half gallon growlers and another (HB 387) that would allow beer tastings at outside venues like grocery stores and related establishments. The need for bills like this makes you realize how retrograde Florida laws are when it comes to beer. But never mind.

Big beer is proving only too happy to help out. Thanks to the fact that the state is awash in political contributions from Anheuser-Busch, Republican lawmakers have introduced a bill (HB 1329) that would legalize half gallon growlers. Naturally, the bill contains a number of stipulations that would cripple the craft industry. Were you expecting something else?

House Bill 1329, which is to be debated today, would put new regulations on growlers and restrict craft breweries in other ways. Remember, craft beer is largely made up of small local businesses. Big beer is essentially attempting to preserve its position by pushing through laws that make it harder for small craft brewers to operate.

Some have pointed out that this is an odd position for Republican representatives. Publicly, they clamor for less regulation and talk nonstop about free market principles. Yet here they are supporting legislation that will hurt small, locally-owned business in favor of big business.

Lawmakers evidently don't much worry about what Floridians or anyone else thinks. Want proof? Consider the comments of Don Gaetz, Republican president of the Florida Senate. When asked about growler laws, Gaetz brazenly told the Tampa Bay Tribune he will support whatever his beer distributor friend and major donor asks him to support.

"I'm with the beer distributors in my district," Gaetz said."That's a very important issue because one of my very best friends is an Anheuser-Busch distributor...this time he's talking about growlers."

Gaetz certainly isn't alone. Contributions aren't just driving the views of Republicans. Anheuser-Busch has bought representation on both sides of the political aisle with more than $1 million in donations over the years. It's a fairly sad state of affairs.

House Bill 1329 may or may not come to a vote. Anheuser-Busch is obviously hoping to push it through, to the detriment of Florida craft brewers. Meanwhile, MillerCoors distributors support legalization of half gallon growlers with no additional strings attached. We'll see what happens.

Does Low Pay Help Drive Craft Brewery Growth?

It's hard to argue with success. And the craft beer industry is creating a lot of waves with its success. The Brewers Association's (unofficial) numbers for 2013 were released a short while ago and they show about what you'd expect. Growth across the board.

You can read the details here, but a few things really pop. Craft beer dollar share of the overall beer market hit $14.3 billion, up from $11.9 billion last year. Volume was up, too. We now have more than 2,700 craft breweries, including 413 that opened last year. There are many more on the way.

All of this gets some folks thinking about where this might be headed. Could we be getting close to some kind of saturation point? At what point are there too many craft breweries? I don't have any answers, if you're wondering. I tend to take the position that there's still plenty of room for small output brewpubs. I'm not so sure about production breweries, but I'll leave it at that.

I'm not the only one wondering about the state of the craft beer industry. The Oregon Employment Department recently released a report in which the author, Damon Rundberg, a regional economist who works out of the Bend office, rhetorically asks if the state might be "over-beered." The ongoing expansion, he says, suggests the answer is "no."

Beer fans need to read this report. It's full of all kinds of interesting factoids. For instance, there were 188 breweries operating in the state last summer. Portland and Bend have the most breweries. However, Hood River County, with a brewery for every 3,226 residents, has the most per capita. As Spock might say, "fascinating."

There are some rather enlightening employment stats in the report. More than 5,000 folks earned a living in craft beer as of last summer. That's less than 1 percent of the total private sector jobs in the state, but the brewing industry is growing rapidly and was up 10 percent from 2012. That's far better than the 2.7 percent in the private sector as a whole.

One of the things I had been wondering about recently was compensation. My sense for some time has been that craft beer is not a very lucrative venture for most who work in it. This isn't a new concept to me. I worked in the fitness and music industries for many years. Neither paid very well. I could talk about the publishing business, but never mind.

The Employment Department report is revealing. The majority of jobs in Oregon craft beer are in brewpubs, where the median pay was $12.61 an hour last year. Brewery workers make a little more...$16.24 an hour. Not surprisingly, average industry pay for 2013 was just over $28,000. That compares to $44,000 in the private sector at large, according to the report.

These are obviously some fairly shoddy numbers. To some extent, they are driven by the restaurant aspect of brewpubs, which employ a lot of part-time, often younger workers. Production breweries offer slightly better pay because jobs there are officially considered manufacturing. Still, not very good.

What does this mean? It means that craft beer is typical of a lot of industries in that most of the financial benefits go to the people who own or run the businesses. Average workers aren't in on the success, aren't making a decent living and never will as long as they stay in these jobs.

Of course, there is a proven way out. Once you've paid your dues and learned your way around, you open your own brewery or brewpub. This has happened countless times in Portland, in Oregon and around the country. It's old hat. People see opportunity and they jump. Part of the reason is it doesn't cost a zillion bucks to get started.

So if you want to fully account for the rampant growth in craft beer, it may be worthwhile to factor in the industry's shoddy pay scale as a force that encourages employees to go out on their own. At some point, that option may dry up. For now, it appears to be as good as gold.

Surprise! An Area Where Oregon Should Follow Idaho's Lead

The state of Idaho and progressive policy aren't generally mentioned in the same breath. I mean, this is a state that typically ranks at or very near the bottom of the pack in spending on education and social spending generally. They've had a string of wacky Republican governors. The state is a company store.

So I was surprised to learn the Idaho House has passed a bill that will prevent breweries from owning any interest in beer wholesaling or retailing operations. House Bill 524 passed by a 63-6 vote and is moving to the Senate. No word on its prospects there.

If HB 524 is passed into law, it will effectively block the types of acquisitions we've seen in Oregon, where Anheuser-Busch has come in and bought several distributors. The most recent example is the buyout of Morgan Distributing, discussed here a short while back. 

The folks behind HB 524 are attempting to block similar acquisitions in Idaho. The idea is to protect the growing craft brewing industry there...and jobs. They want to make sure big beer can't come in, buy up the state's beer distributors and put craft brewers at a competitive disadvantage.

This seems like a no-brainer to me, but sensible rationale hasn't stopped some people from opposing it. One of the counter arguments is that, by protecting the three-tier system, legislators are interfering with "free market" principles. Seriously? 

Look, the reality is you cannot have any semblance of a free market if you let beer behemoths come in and buy up distributors. If you do that, you put small breweries at a disadvantage because access to retail outlets will go through big beer. Protecting free market principles means you must pass legislation that preserves the integrity of the three-tier system.

If you don't believe it, just wait and see what Morgan Distributing's (to be called Western Beverage, evidently) product list looks like. On the beer side, the list will be dominated by AB products. Craft beer doesn't fit with their objectives. They want to sell their crap. Period.

If Oregon had a clue, it would start working on something like what Idaho is trying to pass. Otherwise, we will soon face a situation in which Anheuser-Busch has more control of market access than it should. And if you believe self-distribution offers a way out of that mess, you may need to schedule some sessions with your shrink.

Big Beer Launches Subpremium Defense for '14

There's an old adage in big beer, which goes something like this: Whenever things aren't going the way you want, simply shift direction and start spending on something different. If it goes against what you were doing last year or for the past few years, never mind. It's all good.

For anyone interested in stupefying beer industry stories, I recommend Silver Bullets: A Soldiers Story of How Coors Bombed in the Beer Wars (Robert Burgess, 1993) and Beer Blast: The Inside Story of the Brewing Industry's Bizarre Battles for Your Money (Philip Van Munching, 1997). Gut busters. 

In case you haven't heard, big beer is shifting its attention back in the direction of low end products this year. Yep. After several years of working diligently to compete with craft brands for the hearts and livers of beer drinkers, Anheuser-Busch and MillerCoors both plan to push subpremium brands heavily in 2014. 

Don't worry if you're a fan of Bud Light Platinum, Redd's Apple Ale, Blue Moon or another one of big beer's superpremium brews. They'll still be out there and they'll still be supported. But industry big shots just realized they haven't been paying enough attention to blue collar consumers, described by MillerCoors CEO Tom Long as "the most loyal drinkers of beer." 

Tom has a point. Media spending to keep Americans guzzling shitty beer took a dive in 2012, to about $7 million. It exceeded $22 million in 2011. All the while, AB and MillerCoors were busy spending large money chasing higher end customers...and increasing prices on subpremium brands. Great marketing plan in a down economy, huh?

Now they realize the error. The subpremium segment is in decline and will probably continue on that path. But it still accounts for roughly 18 percent of beer dollar sales, according to SymphonyIRI. That's a substantial chunk of the beer market to ignore. Big beer doesn't make as much profit on subpremium brands, but they make up for that in volume. 

By largely ignoring the subpremium segment while raising prices, MillerCoors and AB alienated many longtime economy drinkers. Some of these folks drifted into the arms of Pabst, Old Milwaukee and other regionally and locally targeted brands. Ye gods!

In response to the risk, AB and MillerCoors are rolling out new packaging, updated ad campaigns and promotions for 2014. It's the usual suspects...Natural Light, Keystone Light, Busch and Miller High Life. That last one seems a little out of place, but it makes good sense if you consider the target market, which I'll get to.

Let's face it. Young drinkers, particularly college students, are a big target. Why? Because big beer believes young tastes are not yet formed and they are willing to try different kinds of beer. Natty Light is popular on many college campuses and AB intends to keep it that way with new stubby, "Fatty Natty" bottles. MillerCoors will target colleges with Keystone Light and hipsters with Hamm's. 

Miller High Life, once widely known as The Champaign of Bottled Beers, definitely fits an older, blue collar audience. MillerCoors is teaming up with Harley Davidson on a promotional campaign for High Life. That makes some sense. Baby boomers love their Harleys. How the campaign will be received by MADD and the anti-drunk driving crowd is an open question. Inquiring minds wonder.

To bolster its longtime, low end standard, Busch, AB is launching the "Here's to Earning It"campaign. It's a variation on the work-reward theme embodied in Busch's now obsolete "Head for the Mountains"campaign. The updated version will feature eight working class men and women from around the country. The Marlboro man has nothing on working class heroes who love Busch beer.

Big beer won't say what they will to spend to protect their share of the subpremium market this year. Certainly less than the $22 million spent in 2011. Expect to see more store displays, web video, ads in newspapers and select magazines, probably some billboards. TV is on the table, but big beer is reluctant to spend lavishly on low tier products. We'll see.

This effort to bolster the subpremium segment is apt to have no impact at all on the growth of craft beer.   In fact, defending the subpremiums is a sort of rear action. Big beer realizes its premium brands are being cannabalized by the growth of craft. Protecting the subpremium category is a way for them to stay in the game...until they can buy up or partner with more craft breweries.

The Emerging Gentrification of Craft Beer

There's nothing new about stratification in the beer industry. It dates as least as far back as the 1950s, when heavy advertising split macro brews into premium and popularly-priced brands. The beers weren't much different. What was different was how much and how premium brands were advertised.

Premium (as well as super premium) macro categories have been decimated by the rise of craft beer. Brands like Michelob, Budweiser and other standards are in virtual free fall. Popular brands aren't doing any better. This has been well-documented in many places. The macros sell a lot of light beer these days and that's about it.

In actual fact,  we've arrived at the point where craft beer is itself undergoing stratification...or gentrification, if you will. This transformation is nothing like what happened with the macro brands. It is not driven by advertising. The craft beer industry was not built on TV or in magazines.

Gentrification is an interesting concept, I think. It typically refers to shifts that happen in urban communities when wealthy residents take up residence and displace poorer ones. In a beer terms, gentrification is the growing presence of increasingly expensive products, exclusive events or access and special services.

This trend is happening for several reasons and it has consequences for some, which I'll get to. But first some examples of what I'm talking about.

Not that long ago, you could walk into your favorite bottleshop and be pressed to find more than a few $10 bottles of beer. Try that today. You'll have no trouble finding bottles priced at $10 or more. In fact, you'll find plenty of $20 bottles, largely unheard of a few years ago. This reality is supported by Brewers Association numbers, which show that craft beer dollar growth exceeded volume growth by 2 percent in 2011 and 2012. Any bets on 2013?

Another form of gentrification is VIP access at brewery events and festivals. It's similar to flying: There's first class and coach. Take a look around. Most of our local festivals offer some form of VIP entry, in which the badge holder gets access to exclusive beers, a chance to mingle with brewers, beer and food pairings or something similar. For a price.

Then there are the new beer clubs. There have been beer clubs for many years, but they mainly offered standard issue craft beer. The newer clubs are much more focused on exclusive beers and related items. For a couple hundred bucks, you get yearly access to barrel-aged beers that will never be sold at retail, invitations to special events, brewery schwag and more.

Many will argue the trend is merely a sign of a maturing industry. It's quite nice that craft breweries can now sell their best beer at a wine prices. That never would have been possible in the early years, when one of the biggest hurdles for craft brewers was that their beer cost a bit more than the macros. My how things have changed. Today, frenzied fans will pay seemingly any price for access to special beers.

Of course, some people are being left behind. The price is too high. Beer is historically a drink of the common man. But the growing demand for specialty beers and special access is pushing the market in that direction, squeezing out cheaper products as well as those less able to deal with escalating prices. This situation has existed in wine for years, but is quite new to beer.

You might say what's happening with craft beer reflects our time and place. We live in a society that is increasingly stratified, where those with money lead a different existence from those who aren't as well off. The gentrification of craft beer is just a small part of that. But it is part of it. Where will it lead? Stay tuned.

Growling About California's Growler Law

Most Oregonians don't pay a lot of attention to beer laws in other states. Why bother? We have some of the most flexible laws in the country when it comes to craft beer. Laws in other states often seem stupefying by comparison when we hear about them.

California is a fine example of that. And it isn't even part of the old Confederacy.

Growlers from my collection

There's a short piece in the September issue of Beeradvocate that discusses what's happened with growler laws in California. It's terrific stuff if you have a sense of humor. And don't live in California.

The California Department of Alcohol Beverage Control has decided that breweries may fill generic growlers or branded growlers from other breweries as long as the contents are then appropriately labeled and there is no inaccurate information visible on the container.

The generic

Think about that for a moment. It essentially means you cannot take a branded growler into another brewery and have it filled. Why? Because even if the contents are somehow labeled by the providing brewery, there would still be inaccurate information in the form of opposing branding on the container.

I have no idea what happens if a brewery happens to violate this law...if it's wrist slap or something more serious. But the result of the law is clear enough: breweries are inclined to fill non-branded growlers. That way, they avoid the possibility of contradictory information on the container..

That's not the end of it, either. Some breweries have chosen to take this arrangement a step further by saying they will fill only their own growlers. Such is the case with Russian River Brewing, which issued a statement pointing to the superior quality of their growler on several counts and the need to fill only that container. This contradicted the brewery's previous position, but never mind.

The champion

Look, I'm not exactly sure who this law is supposed to protect. It can't be consumers of the beer, who typically know what they're buying, and are now faced with needing to have a collection of non-branded growlers or growlers specific to breweries they frequent. Maybe the glass industry is the winner here.

With respect to Russian River, I can almost sympathize. They don't want to bother with the labeling issue. Filling only Russian River growlers avoids that problem completely. I get it. But I don't understand the garbage about having a superior growler. All growlers have their issues with ease of filling, seal, sanitation, etc. There is no such thing as a perfect growler, new or used.

I won't even take a position on the pluses and minuses of dispensing beer in growlers. The various issues connected with that have been well-reviewed in the past. Sometimes getting beer to go in a growler makes good sense. Sometimes not. Growlers can definitely affect the quality of the beer.

Mixing brands not possible in California

To close the loop on this story, consider what California's law would mean in Oregon. I routinely take growlers from Boneyard and Lucky Labrador to Laurelwood for fills. My Laurelwood growlers have been filled at numerous places. That could not happen in California. The law makes it problematic. What a mess.

Risk in the "Post-Craft Era"

My recent trip to central Oregon and then Jeff Alworth's post on the dangerous number of breweries there got me thinking about state of craft beer. When you add up what's been happening in Bend and around the state and country, I think you have to conclude the very nature of craft beer has fundamentally changed. The question is, what does that mean?

Already targeting markets outside Bend

If you think back to the beginnings of the craft era, virtually all of the breweries started off small and catered to a local clientele. This was in keeping with what beer had been about for most of the pre-Prohibition period in the United States. Cities and towns had breweries that served locals. There were national brands that shipped beer to remote markets as early as the 1870s, but beer was mostly a local affair. Craft beer followed that model early on.

In fact, one of the reasons craft beer caught on is that it was locally brewed in small batches. This was true of craft breweries everywhere. The thing is, the early craft brewers couldn't afford to advertise to get customers. Their marketing plan was going out to taverns and bars where locals were cheerfully sipping industrial lager and getting them to try craft beer.

One of the reasons people were willing to give craft beer a shot is it was local. There were underlying reasons for this, which I won't get into here. The point is, people were willing to try beers that were more expensive, new and completely different largely because they were local.

Good Life has lots of room to expand

Obviously, the local approach was not the only angle. It was not the approach Full Sail (initially Hood River Brewing) took. Full Sail was the first Oregon craft brewery to bottle and was highly focused on sales outside its local market from the beginning. But most Oregon breweries didn't start that way; most focused on local customers.

Things have shifted today. More and more breweries are producing a lot of beer and working to sell it in markets outside their local area. This is possible in large part because of what has happened to craft beer in recent years. It is has become a respected commodity. Today's beer fans are more interested in beer that is unique and good than beer that is local. And they know what good beer is. Thus, you can have a brewery like San Diego's Ballast Point or Tillamook's De Garde enter the Portland market and do very well because the beer is good.

Aggressive plans outside Bend

We are clearly living in a changed world. Someone used the phrase "post-craft era" on Facebook. I think that's exactly right. The rules that applied in 1985 and 1995 don't readily apply today because craft beer is an established entity held in reasonably high esteem. This has enabled breweries to focus more on getting a quality product out to a wide range of markets and less on building a local following.

It seems to me Bend exemplifies the "post-craft era." With something like 20 breweries and counting, Bend has more breweries than the local population can realistically support..and don't bother assuming transient tourists are a big factor in overall consumption. Places like Deschutes, 10 Barrel, Good Life, Crux and Boneyard sell a lot of beer outside Bend. Which is great. And the reality is, they have to.

The problem with Bend in the "post-craft era" is this: There are a growing number of breweries from all over competing for customers outside their local markets. We can agree the craft beer market is growing and that Bend makes a good product. But at some point we are going to reach the point where regional markets become saturated and there won't be room for everyone who wants to be there.

What then?

It seems to me breweries concentrated in areas with relatively small local populations are at risk in that scenario. For them, there may be little to fall back on. Bend may be the ultimate example of a place where significant risk exists, though it is likely not alone.

The Big Game: Ravens, 49ers, Budweiser

Bud Light is the official beer of the NFL. You won't be able to keep that out of your mind as you watch the game on Sunday. Why? Because Anheuser Busch/InBev will spend enough money to make sure you don't.

You may recall last year, when the good folks at AB/InBev launched the Bud Light Platinum brand. At 6% ABV, Bud Light Platinum certainly didn't belong in the light category. But when the rest of your portfolio is in free fall, you stick with what does move and what still moves is Bud Light. Thus, Bud Light Platinum.

I've tasted BLP. I don't think it's a terrible beer. But I always thought the marketing was a mess. People looking for light beer aren't generally looking for a beer with 6% alcohol. To prove that boatloads of money can overcome bad marketing, AB/InBev spent millions to launch the brand.

And it worked. BL Platinum was fairly successful with younger drinkers who had moved on from light beer to the hard stuff. Some were sucked in. Here in Portland, BL Platinum bombed nicely. You don't see much of it on store shelves. Craft beer is king here. Anything with an Anheuser-Busch label tends to meet stiff resistance. We're odd that way.

Nonetheless, the Bud Light Platinum campaign reveals where Anheuser-Busch is headed as it attempts to hold onto market share. They're going after younger beer drinkers who, even if they may be disenchanted with light beer, have yet to fully discover craft beer. The thinking is that these are people who can be swayed with slick advertising and a slick product.

Super Bowl ads
According to Ad Age Media News, CBS (with easily the worst coverage of the NFL-affiliated networks, in my view) has sold out its Super Bowl ad inventory. Go figure. At $3.7 to $3.8 million per 30 second spot! As usual, AB/InBev is the biggest spender, having purchased three 30-second ads and three 60-second ads. They don't mess around.

The first ad you see after the game starts will be for Bud Black Crown. You may recall Budweiser's "Zip Code" series, where their breweries in different parts of the country brewed specialty beers. The beer brewed in Los Angeles, known as 91406, is being rebranded as Black Crown and is headed for national release in a few weeks. A second ad for Black Crown will run in the third quarter.

Perfect for the Kardashians

Another new product gets a 30-second spot in the third quarter. The beer is Beck's Sapphire, brewed in the United States...with German Saphir hops they claim. Don't be confused by the name...this is a pilsner. Like Bud Light Platinum, which came in trendy blue bottle, Sapphire relies on its own special bottle...a black one. The bottle evidently took two years to develop. No word on how long it took to refine the recipe for this stuff. If you have to ask, you probably don't want to know.

These beers have lots in common. Both are higher in alcohol than existing precursors: Sapphire (6%) vs. standard Becks (5%) and Black Crown (6%) vs. regular Bud (about 5%). They also cost more. As with Bud Light Platinum, AB/InBev is going after younger drinkers with a hipper and higher in alcohol message.

All about the bottle

We'll also get a couple of new Bud Light ads, set to run in 60-second spots during the second and third quarters. These ads have been fairly entertaining at times over the years and I suspect the news ones will fit that bill. Finally, they're pulling out the warm and fuzzy card with an ad devoted to Budweiser's Clydesdale horses...there's a new foal and they want your help naming it.

Setting aside all that, the overarching theme here is money. Lots of it. If you can't win people over with products that stand on their own merit, advertising is the answer. AB/InBev has money to burn and they're going to burn a chunk of it (about $17 million) in an effort to convince Super Bowl viewers that they are a vibrant, relevant brand. Read into that whatever you want.

Name that baby horse

The fact is, the macro brands are all about image and style. That's been their theme for decades and they aren't moving away from it. They produce a middling product and leverage the hell out of it with advertising. That was a viable strategy until recent times, when they started losing market share to craft brands and other segments (wine, spirits, ciders).

AB/InBev's response to this challenge has actually put a new twist on the old strategy. First, they produce fake craft beer and spend lavishly to win over (primarily) young drinkers. Second, they gobble up respectable brands and hollow them out by shifting production to giant factories and using cheaper ingredients. I've talked about this before and it is well-known in beer circles.

You really have to wonder what would happen if these guys ever got truly serious about making good beer. It isn't likely because they are far more about marketing than they are about good product. Nonetheless, you have to wonder.

The game
The Super Bowl game is largely a sideshow for mega marketing campaigns. That's not the way the game started out, but that's what it has become. Modern American culture is driven by money and excess, so you see game tickets going for $850 (seats still available!) and TV ads selling for exorbitant prices.

Of course, some people do care about the actual game. I've been a 49ers fan since I was a small kid and lived in the Bay Area, so I'll be rooting for them and against the Ravens. I like the whole Harbaugh vs. Harbaugh thing, but I really do not care for Ray Lewis and the Ravens.

This will likely be a close game. San Francisco is favored by 3.5 right now. The Ravens are getting a lot of respect coming off road playoff wins against Denver and New England. I don't think they've seen the likes of the 49ers, who have a solid defense, a solid running game, solid receivers and a quarterback who can throw and run. Pumpernickel is the wild card in this game. I don't see how Baltimore can account for him. Of course, I may be wrong. We'll see.

San Francisco 31, Baltimore 27.