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Showing posts with label beer business musings. Show all posts
Showing posts with label beer business musings. Show all posts

Sunday, March 16, 2014

Let's End the Guesswork on Fresh Beer

Given the wild growth we're seeing in the craft beer industry, it's rather embarrassing in my mind that there is no industry standard with regard to product freshness. A lot of breweries simply toss their beer out into the market without any indication of when it was packaged or how long it ought to be good.

The Gold standard
Andy Crouch's recent column in BeerAdvocate reminded me of this stupefying fact. The main issue Crouch addresses in his column is the relative worthlessness of best-by dates on packaged beer. Such dates are less than useful because there is no industry standard for what they mean. Some breweries say their beer is good for six months or a year. Seriously?

Look, we all know all beer doesn't have a "fresh requirement." Some beers, particularly darker, heavier styles, can improve with a bit (or a lot) of cellaring. But lighter beers and hoppier beers are virtually always better when you drink them fresh. These beers detest light and travel, and they do not age well in any scenario.

The best way to know you're getting freshness in a packaged beer is to see the bottling (or canning) date on the label or container. Armed with that information you, the consumer, can make an informed decision on whether you wish to purchase the product. An IPA or pale bottled six or eight months ago ought to send your hand reaching for something else...something packaged more recently.

A 12 oz bottle of Workhorse
Looking around the Oregon landscape, I'm amazed at how few breweries put "bottled-on" dating on their beer. I surveyed the shelves at my neighborhood Freddy's and found many cases where there is nothing at all on bottles (or cans) to help consumers...or breweries use the less meaningful "best-by" dating.

One brewery that does use "bottled-on" dating is Laurelwood. Beer brewed at the Sandy Blvd. location and packaged by Green Bottling  has dates screened onto bottles. Workhorse and Free Range Red brewed and bottled by the Craft Brew Alliance in Woodinville, Wash gets standard CBA dating on all bottles.

"We want 'bottled-on" dates on our bottles," Laurelwood owner Mike DeKalb told me. "We''re committed to ensuring that our customers get our beer at its best. We ask retailers and distributors to maintain appropriate rotation and we have a buy back (or dump) program with most of our distributors."

Another great example
There's some additional expense involved in putting dates on bottles, but it's minimal. Laurelwood pays an additional $75 when Green Bottling puts dates on bottles during a run, typically several pallets of beer. So the cost per bottle is low. Everyone ought to be doing this.

The best labeling example I came across was on a bottle of Sticky Hands from Block 15 in Corvallis. Underneath a very clear "bottled-on" date, Block 15 advises the consumer that the beer is "Bottled Fresh~Best by Yesterday." A little humor is always good. I bought this bottle only a couple of days after it was bottled and drank it a day later with excellent results.

Honestly, I'm mystified that Oregon's craft brewers (indeed, craft brewers everywhere) haven't gotten together and established a standard for freshness. And let's not stop there. Let's put dating in a standard place so consumers don't have to search to it. Doing this will have virtually no impact on profit and it's a huge plus for consumers.

Can someone please tell me why this can't or shouldn't happen? The industry is mature enough and flush enough to get moving on this. It's time to end the guesswork on fresh beer.

Wednesday, January 8, 2014

Wheels Keep Turning: Morgan Distributing Sells to AB

In what may be seen as an effort to bolster its failing brands in Oregon, Anheuser-Busch has purchased Morgan Distributing, one of the state's largest independent distributors. The news was first reported in St. Louis and became known in industry circles on Wednesday.

If you're wondering what prompted the move, consider what's been happening to AB in Oregon. Their brands have been trending downward since 2008, losing 14 percent share along the way. The purchase of Morgan means they will effectively sell some 70 percent of their in-state volume via distributors they own. 

Morgan had evidently been for sale for a while. It seems Maletis, AB's other Portland distributor, was also vying to acquire Morgan. In the end, AB decided it would rather own Morgan than have it owned by Maletis. Terms of the sale have not been made public. The deal leaves Oregon with only four independent AB distributors, including Maletis. 

Morgan distribution areas

A little history. Morgan Distributing has been around since 1959. It was founded as a family business dedicated to providing professional beer and beverage distribution services in the area. They aligned themselves closely with Anheuser Busch in 2000. Prior to that time, Morgan was a multi-brand distributor. They purchased several AB distribution territories to expand their reach in ensuing years.

Morgan does not have an extensive craft portfolio. The Craft Brew Alliance (Widmer, Kona, Redhook, Omission) brands are part of of their AB portfolio. They also distribute Silver Moon (Bend), Three Creeks (Sisters), Gilgamesh (Salem), Uinta (Salt Lake City) and a few others. A hot new addition is The Commons (Portland).


In the wake of the buyout, Morgan's craft partners will all have the option of jumping ship. This will be a little less interesting than it would be if Morgan had a large craft portfolio. Nonetheless, it will be educational to see where the craft brands go, if they go. The Commons is just coming on board and may choose another path.

Why did AB buy Morgan? Speculation is cheap. AB clearly did not purchase Morgan for its craft brands. That would have been stupid and they aren't stupid. More likely, this as a sort of rear action designed to maintain the position of AB products by keeping craft brands out. The deal definitely enhances their ability to push their own products in Morgan's territories.

Wondering how this can be legal? So did I. How can a gigantic beer company own distributors when we have three-tier laws on the books? Well, beer laws vary from state-to-state. In Oregon, our laws allowing self-distribution, which have helped many craft brewers, also enable a behemoth like AB to own distributors. As noted, that's not the case in every state, but it is the law here. 

So the wheels of business keep on turning. We'll have to wait and see what it means for consumers...or victims, if you prefer.