The Escalating Obsession with Rarity

With the passing of Thanksgiving, we have more or less officially entered the holiday season. It can be an awkward time of year. But we also know it's a time when many fine beverages will be consumed and shared. Something to look forward to.

What folks will be drinking and sharing is another matter. As Aaron Goldfarb's a recent article in Punch suggests, tastes are increasingly driven by rarity and extreme presentations. We have reached the point where a beer isn't likely to be considered great unless it's rare and racy.

This aligns with what we've seen in recent years, as rare, high-priced beers have established a strong presence in beer shops and many premium grocery stores. Total beer inventories have been rising, but a lot of old standards we used to know and love are gone, displaced by specialty beers.

That trend is a good reflection of the actual beer world. Fans chase rare and crazy stuff and want to be seen drinking it. They aren't going to show up at a bottleshare or similar gathering packing something that's readily available and moderately priced. Perish the thought.

In effect, we've achieved stratification in beer. That may not have been inevitable, but it was the logical result of the growing popularity of craft beer and the rise of super fans in recent years. While the brewery count was exploding, so was the demand for special beers. Examples include barrel-aged, fruit-infused, wild and even ultra hoppy beers.

Meanwhile, many of yesterday's best beers are forgotten. Even if they're still good and highly drinkable, they're too common and made in breweries that are far too big. As Goldfarb says, "There’s nothing 'cool' about [those beers] —no remote brewery to travel to, no can release to line up for, no rarely-seen, iconoclastic brewer to idolize."

Retailers have contributed to what's happening and it's hard to blame them. If you're a retailer, your prime directive is to maximize return per square foot. It's easier to do that with high priced specialty beers than it is if you're selling mainstream craft beer in any form. Breweries have jumped on the bandwagon, as well, offering specialty beers via spendy fan clubs.

Festivals have piled on, too. They strive to offer as many one-off, arguably rare and often extreme beers as they can. Organizers fully realize potential patrons are more likely to attend and pay premium admission prices if they think they're getting something unique, as opposed to tastes of broken down standards.

I tend to look for historic parallels in these trends and there's a feasible one here. As I was reminded while watching the Soundbreaking series on OPB, 45 rpm singles became highly unfashionable once LPs became the artistic standard in the late 1960s. I think we're seeing something similar to that in craft beer, as speciality beers push old, uncool standards into the background.

The trend is supported by a lot of the data we're seeing, data that generally shows many older, larger breweries losing momentum while many newer, smaller breweries gain share. Some of that is probably more closely related to the image new places are selling than the beer, but never mind. Rare and arguably innovative is the current cool.

Where does this lead? I have no idea and I don't think anyone else does, either. Some say beer is simply becoming more like wine. Maybe so. But there's also a chance this is an unsustainable, generational fad that won't last. We shall see.

Lompoc Rolls With Changes at 20

Lompoc Brewing is turning 20. In case you aren't aware, Lompoc was one of the second wave of craft breweries that launched here in the mid-1990s. While some are no longer around, Lompoc has rolled with the punches and continues to carve out a successful path.

Jerry Fechter and Bryan Keilty

They'll be celebrating two decades in December with Zwanzig Fest, a week-long lineup of special events at Lompoc’s five pubs (Zwanzig means 20 in German). Several local brewers and writers, including yours truly, helped brew their anniversary beer, Zwanzig, a bitter Märzen ale.

Purests know authentic Märzen is a lager, not an ale. Never mind. This particular beer is a tip of the hat to Lompoc's first beer, Erst Ale. It will be pale orange in color with a mildly malty body. Eight hop additions ought to give it plenty of aroma, flavor and bitterness.

If craft beer newbies aren't particularly familiar with Lompoc, there's a reason. Which is that, despite operating out of several locations, they have been somewhat obscured by Portland's brewery explosion. When owner Jerry Fechter opened New Old Lompoc in late 1996, there were only a handful of competing breweries.

The story is fairly well-known and is briefly retold in Portland Beer. Fechter had worked at Old Lompoc Brewing in Northwest Portland for several years. The beers were decent, but he felt the food should be better. The lease was always an issue. When the owners negotiated a three-year renewal, Fechter saw an opening and inquired about buying the business during a round of golf.

Soon enough, the owners came back with a number. It was a number Fechter thought he could manage. But as he looked at what needed to be done to move in the direction he wanted, it became apparent that an investor would be needed. Enter legendary publican, Don Younger.

"I had enjoyed beers with Don," Fechter recalls, "but I didn't really know him. A guy at Belmont Station, then next to the Horse Brass on Southeast Belmont, told me Don might be interested in my project. He spoke to Don. The next day, my phone rang. It was Younger."

The call led to a couple months of drinking and discussion, trying to figure out how a partnership might work. Eventually, they hammered out an agreement. Younger became a partner in the business, but stayed mostly in the background while Fechter managed day-to-day operations.

"We knew the food needed to be better," Fechter recalls. "That meant a hood and an improved kitchen. We also realized there was unutilized space in back where we could put a patio. So we built a nice patio, which was busy and a hidden gem in Northwest Portland for many years.

By the time Younger passed away in 2011, he and Fechter had opened additional locations...the Fifth Quadrant, Sidebar and Hedge House. Fechter had also partnered with publican Jim Parker on Oaks Bottom Public House. Today, Fechter operates those locations, as well as Lompoc Tavern, which replaced the original Lompoc pub on Northwest 23rd after it was demolished.

The pub and beer business is a more challenging enterprise these days. You can't get by with a few standard beers and an occasional seasonal. You need seasonals and specialty beers all the time to keep up with all the new places coming online. Head brewer Bryan Keilty is constantly working to develop unique recipes and approaches.

"We know relevance is a challenge with so many new breweries opening," Keilty says. "The attraction of new places isn't new and it doesn't bother us. It just means we need to stay on top of our menu and work to build and maintain a solid beer lineup. That's our focus."

Packaged product is another matter. Lompoc has a handful of bottled beers in distribution via Maletis Beverage. That was strictly 22 oz bombers until last summer, when they launched C-Note and Pampelmousse IPA in 12 oz six-packs. Cans of something may be on the way.

"The strategy with bottles is marketing, getting our name in front of consumers," Fechter says. "That's the main reason we do packaged product. When we saw bomber sales slowing, we launched six-packs. The next step might be cans, but distribution will never be a big part of what we do."

Fechter's thinking is well-informed. He knows the best margin on his beer is in his pubs. Why play the distribution game where the profit per bottle, gallon or keg is small? With retail space getting crowded, some regional and national craft brands are getting squeezed. Meanwhile, a lot of smaller breweries are doing fine. Small and local is a good place to be.

After 20 years in an increasingly competitive business, it's clear enough that Fechter and his team have figured out how to successfully navigate changing times. Congrats on the milestone, folks. See you at Zwanzig Fest.

The Myth of Poor Craft Growth

As I mentioned in last week's piece, and as many who follow the industry know, it's not been a stellar year for beer. We've been seeing some pretty low growth numbers since before summer and there's no clear evidence that things have improved. But it's not all gloom and doom.

Oregon Barrel Volume Growth

A big part of what's happening in the overall industry is that light beer is imploding. Bud Light sales were down 4% for Q3 (July-September). Bud Light is just one of many premium and sub-premium brands losing steam. That lost volume is a huge drag on the industry as a whole. Thus, the funk.

The craft segment is also underperforming, with single digit growth on the year. That wouldn't cause alarm if growth in recent years hadn't been in high double digits. When you're accustomed to year-over-year growth numbers like that, slower growth causes concern and, in some quarters, panic.

Despite the sluggish growth year, things probably aren't as dire for craft beer as some of us have been led to believe. We may be approaching saturation in some areas, but the overall health of the industry is pretty good.

The above chart shows some Oregon breweries that are doing quite well here. As with the negative numbers chart below, these are August 2015 to August 2016 OLCC numbers, provided by a helpful assistant who does quarterly spreadsheets. My disclaimer, as always, is that OLCC numbers are hopelessly incomplete and useful only as a guide to trends.

The list is comprised mostly of newer breweries formed within the last 10 years. These are brands that have flourished in recent times. Their beers have won awards and fans. Even 10 Barrel, which has unfair advantages over independent craft brewers, has produced some notable beers and continues to attract a following despite its ownership situation.

Now look at the chart below. These are the breweries showing the largest negative numbers over the same period. Three of the five are older, established breweries. The developing trend in Oregon is that younger, vibrant brands are taking share from long-established ones. Why? Likely because consumers, when they have a choice, prefer beer made in newer, typically smaller breweries.

Oregon Barrel Volume Decline

The same trend appears to be gaining traction around the country. Small, local breweries are opening everywhere..the craft brewery count is now around 4,500. A lot of the new kids are taking share from established craft breweries, as well as from big beer. We are seeing this trend documented in IRI losses for older craft brands and big beer.

So why are craft growth numbers sluggish this year? Probably because small brewery volumes aren't being fully captured in IRI stats. Why? Because an increasing amount of beer is being sold in breweries or at growler fill stations, pubs, beer beers and others places outside IRI view. It will take improved data collection to see the full extent of what's happening.

For now, don't get too caught up in the notion that craft growth is faltering. A saturation point is coming. But we're not there, yet.

Looking for Scapegoats in a Flat Growth Year

In a year when beer volumes are flat or declining across the board, everyone is looking for answers. But particularly Anheuser-Busch, which is spending millions on advertising and craft brewery buyouts in an effort to stem a rising tide of losses. Unsuccessfully.

AB, which today announced that it is acquiring Texas-based Karbach Brewing, earlier reported that Bud Light had the worst quarter of the year, with sales down nearly 4%. Overall AB shipments were down 2.5% for Q3. These are significant hits.

AB isn't alone. Many brands are taking a beating this year, including some craft brands. In Oregon, a year-to-year comparison of OLCC stats shows significant declines for several well-known breweries (see chart below). The Craft Brew Alliance, whose numbers strangely aren't part of OLCC stats, just reported that Widmer and Redhook are both down over 20 percent for the third quarter. Yikes!

But never mind what's happening in craft beer. The craft marketplace is getting increasingly crowded and complicated. That's a separate discussion. Anyway, what's happening to big beer is far more interesting and entertaining. Because, aside from buying up craft breweries, their game plan hasn't changed that much. And it isn't working.

One of AB's biggest bets this and every year is the NFL. The reality of our times, which features DVRs and plentiful viewing options, is that live sports programming is the last vestige of TV advertising. And the NFL has been the king of live sports for decades. Anheuser-Busch has been tapping that lifeline with ad dollars for years, and continues to do so.

This year, AB's "Official Beer Sponsor" arrangement allowed it to release team-themed Bud Light cans for 28 of the 32 teams. You've seen these things in stores, of course. Here in the Northwest, we're mostly seeing Seahawks cans. Elsewhere, cans are similarly market-appropriate.

OLCC Stats

August 2015-August 2016 (taxable barrels)

But the cans campaign isn't panning out. In fact, it's apparently working in reverse because Bud Light is in virtual free fall right now. That naturally conjures up questions about why. When you spend big bucks on sponsorships and marketing campaigns, you expect results.

It turns out NFL ratings, like Bud Light numbers, are in the tank. Overall NFL ratings are down 12 percent for the season.  Ratings for Monday Night Football, sporting a new play-by-play guy thanks to the exit of Mike Tirico, are down 24 percent. ESPN, which aires MNF, lost more than 600,000 subscribers in October, its worst month on record.

What's up with ratings? It depends on who you ask. Some suspects are poor play, crappy games, too many ads, player antics, election year noise, national anthem protests, etc. The most persuasive argument for me is that younger fans who play fantasy football track player stats on their smartphones don't get their NFL fix the traditional way...and don't show up in ratings.

Exactly how lower NFL ratings and beer consumption are related is unclear. If folks of beer drinking age aren't watching games on the tube, there may be some correlation between slumping ratings and the decline in Bud Light sales. But everyone needs to stop and recall that a number of established brands with no connection to the NFL are facing challenges this year.

In a flat year, it's tough to see what's driving things. AB's team can campaign may get better traction through the end of the year. It was just getting underway in Q3. Bud Light numbers and NFL ratings may also bounce back as we enter the holidays and the stretch run of the season.

So there's no need to look for scapegoats, yet. We'll get there.

Folks Celebrate Fifty Amazing Years Together

I held my one and only bar job 41 years ago. It was a summer gig at the Rathskeller Inn in Coeur d'Alene after my freshman year of college. I've written about that experience and some of the characters I worked with there here.

On their wedding day (middle)

It wasn't a job I sought. My mom got me the job. Actually, she got me two jobs that summer. The first was a part-time groundskeeper gig at a golf course. When it became clear that the golf course was a poor fit, she found me a second job at the Rathskeller. "Bartending isn't a bad skill to have in this economy," she told me. Still holds true, I think.

Let me back up. I did not grow up in Coeur d'Alene. I grew up 100 or so miles away in Clarkston, Wash. My parents divorced when I was in fourth grade and my mom moved to North Idaho. I visited Coeur d'Alene off and on as a kid, mostly during summers and other school breaks.

Possibly because it wasn't where I lived, my times in Coeur d'Alene were often a hoot. My mom had married, Lyle, a jovial gent who enjoyed good times in the great outdoors. In those early days, he took me on countless fishing trips and related adventures around the area.

One such adventure came at Fernan Lake, east of downtown Coeur d'Alene and rumored to be full of largemouth bass. We got not a single bite for an afternoon of fishing. As we were taking our little boat out of the water, Lyle handed me the small outboard motor. The rubber sleeve on the handle slipped off and the motor plunged into the lake. "Shit!" we yelled in unison. Momentarily, Lyle dove in and managed to retrieve the motor. Which had been borrowed. Fortunately, it apparently worked fine when the owner next used it.

Lyle and I became avid spear fishermen. We learned Scuba diving the summer after I graduated from high school. Later, on a trip to Kauai, we entered a dive shop and inquired about renting spearfishing gear. No dice. After Lyle became a triathlete, we sometimes cycled together. No ride was more exciting than the time we rounded a corner in a semi-remote area and witnessed some locals sighting in a tripod-mounted machine gun. It was nearly deer season in North Idaho, I guessed.

Somewhere along the way, the folks purchased Dry Rot, a World War II-era cabin cruiser (think SS Minnow) with a top speed of about 7 mph and whose main amenity appeared to be an on-board toilet. But never mind. We putted around the lake on summer evenings, drinking adult pops (I may have fudged the 19-year-old drinking age), listening to 8-Track tapes and enjoying the scenery. We once rescued some poor souls whose motor had conked out long after dark.

For many years, the folks operated Lyle's Salon and School of Hair Design in Coeur d'Alene. The place was a beehive. They worked long hours six days a week. While Lyle taught students in the school and worked in the salon, mom ran the business and managed the financials. Later, they opened several branch operations. I have no idea how they did it while also making time for their own two kids and countless other activities.

While Lyle stayed in the hair business and continues to work a light schedule to this day, mom moved to healthcare some 35 years ago. She had been working on a degree at Northwestern when she met my dad back in the day, and a good many of those credits transferred. After completing her training and certifications, she worked in Coeur d'Alene and Spokane hospitals until she retired a few years ago. Nothing she couldn't do.

The folks lived in a bunch of cool abodes. For a number of years, they occupied a spectacular home with a pool and numerous amenities near Fernan Lake. As things slowed down and they needed less space and upkeep, they downsized to a gated community condo a minute or two from Lyle's shop in Coeur d'Alene. More recently, they moved to a similar situation in nearby Liberty Lake, Wash., which is where they remain today.

Needless to say, there's been a lot of water under the bridge since my mom got me that first and only bar job back in 1975. My wife and I shared a number of vacations with the folks...Kauai, Whistler, Seattle, Sunriver, come instantly to mind. A lot of beer, wine and adult beverages were consumed on those junkets, trust me. Things have slowed down in recent years, mostly because we and they aren't quite as spry or mobile as we once were. But the memories live on.

This probably isn't the best place to mention any of this. But these folks who have meant so much to me for so many years celebrate 50 years of marriage this weekend. I'll be traveling to the 509 to honor that stupendous number and the adventures sandwiched within it.

Cheers to 50 fine years, folks! Amazing.

Craft Beer's Big Squeeze

You look out on the craft beer landscape and you wonder where it's headed. The number of new breweries continues to rise, apparently unabated. We see big beer in the form of Anheuser-Busch, MillerCoors and others buying up or investing in craft breweries. What's the prognosis?

Seeing through the fog is be a tough assignment. To a great extent, the exorbitant amount of money flowing into the industry has helped create an aura of invincibility, the idea that the high growth of recent years is sustainable into the foreseeable future.

In actual fact, beer sales in the United States have been declining for years. Even as the population has grown, beer has lost ground. Overall beer sales dipped again last year, says the Brewers Association, even as craft brewers recorded double-digit gains.

Positive craft beer vibes have made it relatively easy to open new breweries. Unlike the old days, when breweries were seen as high risk investments, cash is plentiful today. In an industry where the average brewer often makes a skimpy living, opening your own brewery is an attractive and viable option. That's why we have more than 4,600 breweries, with another 2,200 planned.

Largely as a result of the escalating brewery count, more and more Americans have been exposed to good local beers. And enough folks like that beer that they've moved away from macro lagers, which aren't local and aren't very good if you want something with flavor and character.

Big beer watched this situation develop with a scowl. With macro sales in free fall and craft numbers exploding, they eventually shifted their focus to acquiring craft breweries. They might have chosen to make better beer, but that was outside their wheelhouse. Acquisitions are more their style.

Today, we are confronted by a situation in which established craft breweries are being squeezed from above and below. Smaller breweries are converting beer fans to local product, stealing share from big beer and from large craft breweries. Big beer is fighting back by buying craft breweries and using advantages in distribution and efficiency to take share mostly from large craft breweries.

We're seeing evidence of this in IRI reports showing significant share losses for established breweries, including Sierra Nevada and others. Then there was the announcement that Stone Brewing, one of craft's best-known brands, is laying off 5% of its employees. Even the layoffs at the CBA's Woodinville facility are related to pressures in the market.

There are those who think we've reached overcapacity...too many breweries producing too much beer for a shrinking market. There's probably some truth to that nationally, where giant craft breweries and those acquired by big beer are producing a glut of beer.

But overcapacity isn't much of an issue for small brewers in underserved areas, and there are still plenty of places like that. That's why new breweries continue to open and why more are planned, though maybe it's not such a good idea to open in saturated markets like Portland.

The pressure on established brewers is going to increase. Many who once bought Sierra Nevada, Deschutes and others are being converted to local brands. At the other end of the spectrum, big beer is implementing strategies designed to leach share from established, independent brands.

Where this leads, we don't quite know. But craft beer's big squeeze is on.

Consolidation 101 at Woodinville Brewery

If you follow happenings in and around the beer industry, you likely know the Craft Brew Alliance recently laid off about half of the production staff at its Woodinville brewery. It's an unfortunate development, but also related to the CBA's evolution.

Earlier this year, the CBA entered into a contract brewing arrangement with Pabst at the old Redhook brewery. Pabst, which planned to brew Rainier Pale Mountain Ale and some other brands in Woodinville, has an option to purchase the brewery within three years.

Back up a bit. The need to lease the brewery was activated for good reason. First, expansion (to 750,000 barrels/year) and modernization of the Portland facility means more CBA brands will be brewed there. Second, an expanded deal with Anheuser-Busch means some CBA beers, up to 300,000 barrels a year, will be brewed at AB factory breweries.

The plan was for Pabst to soak up production capacity as the CBA shifted its own production to Portland and elsewhere. The Woodinville brewery, somewhat antiquated with a capacity of about 250,000 barrels a year, continues to produce a few CBA brands, including all Redhook and Widmer 22 oz bombers. But those numbers are declining.

And Pabst has failed to fill the capacity vacated by departing CBA brands. Reports say the brewery was running at 30 percent of capacity. That's what forced the layoffs. This was obviously not a desired outcome for the CBA, which hoped Pabst would do well and eventually purchase the old brewery. It's stock price has dipped slightly in recent weeks in response.

Inquiring minds may wonder why Pabst, which owns a number of "heritage" brands, has failed to use more of the available production capacity in Woodinville. The answer is simple. Except for Mountain Ale and Not Your Daddy's Root Beer, most Pabst brands are brewed at MillerCoors plants. That's apparently something Pabst can't or won't change in the near term.

Mountain Ale, released last spring, is based on a pre-prohibition ale. It's darker than you might expect, but a serviceable beer that's roughly on par with lower end craft brands. If Mountain Ale isn't moving as Pabst hoped, perhaps they should consider the price...currently $11.99 (on sale) at my local Fred Meyer. That's for a six-pack of 16 oz bottles. Neither the 16 oz bottles nor the price make sense to me, but never mind.

For its part, the CBA brass, shareholders and Woodinville employees are hoping things turn around for Pabst. Because if Pabst doesn't morph into an eligible buyer, the CBA has limited options with a property whose size and efficiency are problematic. The most likely scenario if nothing changes is closure, in which case the jobs and investment there will simply be lost.

This chain of events was set in motion by consolidation. The CBA initiated the arrangement with Pabst in anticipation of an impending deal with Anheuser-Busch, as well as its own expansion. The big idea is consolidation of CBA production in larger, more efficient breweries. Once that happened, the Woodinville brewery was expendable and subject to closure or sale.

Give the CBA credit. They took a flyer on Pabst, hoping (perhaps praying) things would work out and that the brewery would eventually be purchased and the jobs there transitioned to Pabst. They almost certainly knew or should have known that the chances of that happening were sketchy. But there was at least a chance.

This is how consolidation works, folks. When brewers get so large that they move production to huge, largely automated factory breweries, jobs at smaller, less efficient facilities are lost. What's happening at Woodinville is Consolidation 101.

Hop Valley: Another Distribution Trainwreck

Brewery buyouts tend to create a splash of media attention when they happen. Most of that attention centers on how the acquired brands will boost market share and profitability. The point that's often missed is how messy these things can be on the distribution side.

One of the memorable trainwrecks in this regard was Anheuser-Busch's acquisition of 10 Barrel a couple of years back. The boys at AB wanted to align 10 Barrel with AB-owned Western in Portland. But the franchise rights here were owned by Maletis, an independent AB house.

Maletis was reluctant to offload the rights to 10 Barrel. And thanks to Oregon's stiff franchise laws, they were under no obligation to transfer the rights without appropriate compensation. That led to comical posturing on the part of Anheuser-Busch, which preferred sticks to carrots. The rights were eventually transferred, apparently via the transfer of brands, not cash.

Now we've got another trainwreck in the making, and Maletis is once again involved. This time, the conflict is with MillerCoors, which recently bought Hop Valley Brewing. The MC folks want to align Hop Valley with Columbia Distributing in the Portland area. Columbia, a MC house, distributes Hop Valley throughout Oregon and Washington. But not in Portland, where Maletis owns those rights.

As was the case with 10 Barrel, Maletis has been reluctant to discuss turning the Hop Valley rights over to Columbia. This is especially ironic given what happened when Seattle's Elysian was acquired by AB in early 2015. Columbia, which owned Elysian's rights, sold them to Maletis and AB-owned Western. Now Maletis balks with Hop Valley.

There are reasons for everything, of course. Maletis will eventually turn over the Hop Valley rights. But they'll have to be fairly compensated. The rub is that Hop Valley has been growing wildly since launching a production brewery about two years ago. It is currently the fourth ranked brewery in Oregon, according to admittedly sketchy OLCC stats.

It isn't hard to understand why Maletis is driving a hard bargain with Hop Valley. Elysian isn't part of OLCC stats. If they were, those stats would show that Elysian's numbers are well below Hop Valley's. In the case of Elysian, Columbia wasn't giving up something of huge monetary value, which is what Maletis will be doing when it transfers Hop Valley's rights.

One of my industry contacts says Columbia may have to write a check and trade a brand or brands to acquire Hop Valley's rights. I suspect he's right. But this trainwreck is yet another example of the issues that are coming into play more and more often as big beer lurches into craft space.

The Unique Odyssey of Mt.Tabor Brewing

Every brewery has a story. Just like any business. Of course, some of the stories are more interesting than others. For Mt. Tabor Brewing, which just opened a production brewery and tasting room in Southeast Portland, it's been quite a ride.

The first edition of the brewery, launched by friends Eric Surface and Brian Maher, was located in Maher's garage. Subsequently, they moved to an industrial space in Montavilla in 2010. A year later, they lost that spot. That led to Version 3 in downtown Vancouver, opened in October 2011. Now there's Version 4 in Portland.

"When we moved to Vancouver, the brewery was really nothing more than a hobby that supported itself," Surface says "But we quickly outgrew the limited space there. My vision had always been that our production facility should be in Portland and we actually made that happen more quickly than I imagined when we moved to Vancouver."

In fact, plans for Portland were moving forward well before their lease in downtown Vancouver ended last May. Two years ago, Surface and several partners leased 6,000 sq ft of space in the Buckman neighborhood. Since then, they've been navigating the construction and permit process involved in getting the doors open, which happened a week ago.

Another twist in the road involves their head brewer. When the previous brewer left to pursue another opportunity, Surface needed a replacement. A lot of industry heads spun Exorcist-style when they learned Ben Dobler, a 20-year Widmer veteran, had opted to leave a good job in an established company to roll the dice with Mt. Tabor as head brewer.

"I saw things changing at the CBA," says Dobler, who worked in new product development for most of his last 10 years there. "They wanted me to create inexpensive beers that could be sold at a premium price. The stress was mental, not physical. But the uncertainty of what's happening with the CBA and whether I'd still have a job in a couple of years made me uncomfortable."

Dobler and Surface knew each other from their days at Mountain View High School in Vancouver, classes of '92 and '93, respectively. They had stayed in touch over the years through mutual friends and had occasionally spoken. Would Dobler leave a cush job at Widmer to join a startup working 60 grueling hours a week?

"I had no idea if he'd be interested," Surface says. But we have similar tastes in beer and similar interests outside brewing. He seemed like a natural fit for our program and the expansion I envisioned with the move back to Portland. I figured there was no harm in asking so I sent him a text message."

Dobler, somewhat bored at Widmer, saw potential at Mt. Tabor and thought it represented a stimulating opportunity. "I'm going to brew quality beer my way," he said. "The beer list will reflect my preference for balanced, drinkable, low ABV beers. I'm not a fan of alcohol bombs where patrons have to be carted out after more than a pint."

The Portland location features a 15 bbl brewhouse with three 20 bbl fermenters. They could brew up to 120 barrels a month with the current setup, and expect to produce around 500 barrels this year. The taproom, managed by veteran Nicole Kasten, will be open Friday and Saturday for the time being. Soon enough, Surface expects to add Sunday and Thursday.

Kasten, Surface, Dobler

Growth will happen primarily via draft distribution for now, Surface said. Mt. Tabor beers are distributed by Running Man in Portland and by Stein in Vancouver. They will consider packaging options once draft volume edges closer to capacity. Their space has considerable room for expansion, when the time is right.

The beers on the core list are solid and all are under 7% ABV. But there isn't a single niche or zinger on the list, which seems odd. Normally, you walk into a Portland brewery and see at least one standout, flagship beer. Not here. In the heart of the craziest craft beer market in the country, these guys expect to attract a following with quality and drinkability. We shall see.

Despite the heavy recent focus on Portland, Vancouver has not been entirely abandoned. Surface and partners have leased space in the Felida area and will open a brewpub and pizza joint there by the end of the year, if all goes well. That location, in an underserved residential area not far from Surface's house, should do especially well.

Mt. Tabor's strange, twisting journey continues.

Editor's Note: On October 15, two weeks after this story was published, Ben Dobler and Nicole Kasten announced they are leaving Mt. Tabor Brewing. No reasons were given to the public. Mt. Tabor's strange odyssey continues.

Image is Everything for Michelob Ultra

Those who follow or attempt to follow craft beer tend to see it as a monolithic movement that will eventually envelop the country and the world. That mindset more or less assumes that light beer is irrelevant and dead. An arrogant mistake.

Because light beer is far from dead. It remains a dominant force in the industry and, it turns out, is home to one of the fastest growing brands in the business: Michelob Ultra.

Let me back up. Michelob Ultra is part of the super premium segment, which is dominated by Anheuser-Busch brands and includes garbage like Bud Light Lime, Bud Light Platinum, Landshark and others. Super Premiums did well in the late summer according to IRI scans, showing the second best dollar growth trends behind imports.

And Michelob Ultra is king of the super premiums, owning the greatest share, five times larger than second place Bud Light Lime. Through early September, Michelob Ultra was up nearly 25 percent in dollars for the year. Not bad for a brand that was written off by craft fans long ago.

You may recall that Michelob Ultra isn't new. Launched during the low-carb diet craze back in 2000, it appealed to folks trying to lose weight by cutting loose calories, of which beer is a fantastic source. Ultra didn't do badly in those bygone days. But it was seen mainly as a diet beer, a motif that has never worked well in beer. That's why "light beer" was invented.

Since 2011, Michelob Ultra has been growing steadily. This has nothing at all to do with the beer, which is, contrary to ads suggesting otherwise, a pretty tasteless drink. What's changed is how the beer is marketed, who is targeted and how much money is being spent. As we know, image counts for a lot if you have money spread the word.

It is undoubtedly true that the availability of reduced calorie foods and beverages has been increasing. That category reportedly accounted for 99 percent of the sales growth for the major food companies between 2007 and 2012. Michelob Ultra is a near perfect fit for the category, a fact not lost on the marketing kids at Anheuser-Busch.

What they noticed is that fans of lower calorie, healthier foods and drinks are spread throughout the various demographic groups. In that scenario, you don't want to limit your ad imagery to older or younger drinkers. The active, healthy lifestyle used to promote Michelob Ultra targets a wide swath of people who don't want to be slowed down by "heavy" food and drink.

They have backed up that thinking by spending more to promote the Ultra brand, though what they're spending pales next to what they spend on Budweiser and Bud Light, brands that are tanking badly. They've managed to create an image that appeals to active, educated, and perhaps more affluent and mature folks. In short, things many of us would like to be.

The Michelob Ultra growth train shows no sign of slowing, which proves you don't have to have a great product if you can devise and execute a smart and effective advertising campaign. More than anything else, that's what Anheuser-Busch has done with Ultra. Kudos to them. They aren't stupid, by any means.

In fact, Michelob Ultra is likely to gain traction as millennials get fat and begin to seek low calorie alternatives to their 7% IPA. Could craft brewers enter the fray? Certainly, they could produce light beers to compete with crap like Ultra. What they don't have is the money to support a national ad campaign, upon which the success of Ultra is largely based.

Sometimes image really is everything.

Winesong Contrasts Beer and Wine Crowds

Last week was a blur. It included a drive to Mendocino and weekend adventures at a wine festival. There's plenty of beer to be had in California, and I did manage to visit North Coast Brewing in Fort Bragg. But the trip was all about wine. And eating too much.

The festival is Winesong, which has been in existence since 1984. It's a benefit for the Mendocino Coast Hospital Foundation, engaged in fundraising and community activities that help support vital equipment acquisition and services at Mendocino Coast District Hospital.

What was I doing at Winesong? Good question. I'm not normally a wine snob. But my wife prefers wine and her late father attended Winesong regularly for many years. She had been to the event once, 25 years ago, and wanted to try it on again. I was mostly along for the ride, although I do enjoy wine when not being a beer snot.

Winesong is essentially three separate events: a Pinot Noir tasting; a Grand Tasting and a Charity Auction. We attended the Pinot Noir tasting Friday afternoon and the Grand Tasting on Saturday. The Charity Auction, which happens right after the Grand Tasting, wasn't on our radar screen.

These wine people know their stuff. The Pinot event, attended by a few hundred fans of the style, featured some fantastic wines, as well as food. The Grand Tasting, attended by (in my estimation) several thousand fans of wine and food, featured a variety of wines and expansive food options. as well as music in an incredible botanical garden setting.

I didn't expect these wine events to mimic the style and form of the beer festivals I've come to know. And they didn't. Winesong tickets are far more expensive than what most of us pay for a typical beer event. Of course, they include all the wine you can drink (they will cut off the sloshed) and, in the case of the Grand Tasting, all the food you can stomach.

Beyond the differences in cost and offerings, there was more. I assumed the crowds would be different than a beer crowd, and they were. But there were differences I hadn't expected.

The folks attending the Pinot tasting arrived mostly in expensive European automobiles. It was a decidedly older crowd, way older than what you find at your average beer festival. A lot of these folks have been coming to this slice of Winesong for a while. They knew the ropes.

The Grand Tasting crowd was much more diverse and not as gentrified. Many of the folks from the Pinot tasting were there, but the crowd had a youthful twist. It was good to see young faces similar to the ones I see in beer indulging in wine. Gave me comfort.

As I was thinking about the crowd, comparing it to a beer festival, I realized the biggest difference was the demographic mix. There was a good mix of men and women of all ages at Winesong. Specifically, there were middle-aged women, a demographic that's virtually nonexistent at beer events. These women like their wine and food. Beer is not their thing.

As for styles, the wines being poured were straightforward. There was Chardonnay, Cabernet Sauvignon, Pinot Noir, sparkling wines, etc. Wine simply hasn't been taken over by the wildly imaginative approaches seen in brewing, as brewers driven by the eclectic tastes of young drinkers do all kinds of crazy stuff to create unique beers that routinely pummel style guidelines.

When I was interviewing Dick and Nancy Ponzi for my book, one of the significant questions I asked them was, given the phenomenal success of Bridgeport Brewing, why they decided to sell to Gambrinus in 1995. Of course, they're smart folks and didn't want to give a blunt answer. So they developed an explanation with supple edges.

Essentially, the Ponzi's sold Bridgeport because they tired of the beer business, where people were always asking for hats, shirts and other schwag. They realized they would have to invest substantially in marketing and education if they wanted to build the brand further. The decided they preferred the wine business, where they didn't have to do so much handholding.

After attending Winesong, I may finally have a more complete understanding of where the Ponzi's were coming from.