Wednesday, December 23, 2015

"If you can't beat them, buy them," craft brewery acquisitions, and ranting against a pet peeve

The super mega global guys over at ABInBev, owners of Budweiser and a jillion other huge, bland beer brands, have bought another craft brewery. This time, it's the folks at Breckenridge Brewery.

This is the latest in a series of acquisitions and partnerships by the major breweries, who are scooping up or getting partial ownership of craft breweries like Ballast Point, Lagunitas, and most notoriously, Goose Island (which has actually proved to be excellent for the brand despite legions clamoring for a boycott). It seems two weeks can't go by without hearing that another craft brewery has been acquired by one of the big boys.

Unsurprisingly, this news did not sit well with people in the craft community. As happens with any one of these acquisitions, message boards and discussion forums were on fire. Breckenridge has never really been seen as one of the elite craft breweries—they're solid, but you're not going to trade away your soul for one—but the response when InBev buys another brewery is never positive. It's often seen as something just short of the end of the world. Such was the case with this news.

As expected, one of the most common refrains when the news came out was, "If you can't beat them, buy them."

And that makes me want to beat my head against a wall.

I've been drinking craft for so long (since the mid 1990s), and so many of the people around do the same (almost everyone in my circle of friends), it would be easy to assume that everyone has long since converted to craft beer and that the big brewers are running scared. The wider craft beer community certainly seems to think so.

But despite the perception we get in our insular little world, nothing could be further from the truth.

The fact of the matter is, despite craft beer's EXPLOSIVE growth in recent years, they are still a pimple on the ass of the big brewers. An annoying pimple the big brewers would like to pop, perhaps, but a pimple nonetheless.

Sorry, cheerleaders. I've been shouted down before for pointing this out, but the numbers don't lie. The fact that you and your friends all drink good beer doesn't mean jack. Craft beer isn't beating the big boys. It actually isn't even close. As a brand, Bud remains dominant to the point of absurdity. Bud Light alone sells SIX TIMES as much as every single craft beer combined.

Read that again. You can take every single craft beer brewed by every single craft brewer in America, put them all together, and you'd still only amount to 1/6 of what Bud Light alone sells. Throw in the core Budweiser and the two sell eight times as much as all the craft beer in America combined.

Total Domestic Beer Sales, courtesy of The Atlantic. For context, all of craft combined sold 55 million cases.

And that doesn't even begin to touch Busch Light, Coors Light, Coors, Miller, Miller Lite, and so on.

So yeah, the whole idea of "if you can't beat them, buy them" is ridiculous. Craft beer is getting beaten. Trounced, actually. The only "craft" beer to even sniff at those levels is Yuengling, and they do it by producing a beer that is just a macro lager dressed up in craft scene-acceptable packaging.

Yes yes yes, craft is growing super fast while the big boys are stagnant, and that is not an insignificant fact nor is it one lost on the big brewers, but the big guys have such a gigantic lead that it would take decades to even up the score.

Don't expect to see it happen any time soon. Also keep in mind that the mega enthusiasm of those new to craft beer is often overwhelmingly huge, but that enthusiasm often fades with time; people grow older, they fall into old standbys or spend their money differently, and before they realize what has happened they go from trying a few hundred different beers a year to a handful.

Craft beer is a concern to the big brewers, yes, but we in the craft community often overstate the case to a tremendous degree. The big brewers are not running scared from that excellent little craft brewery you like.

You know what the real threat to the big brewers is? It's not craft breweries, it's spirits and wine.

Americans are actually drinking less beer than they used to—around 8 million barrels less than in 2008, according to Gatza. Meanwhile, wine consumption has grown steadily since the early 1990s and spirits are making huge strides in the booze industry (especially flavored spirits).

In fact, story after story after story after story after story after story after story and even studies conducted for the craft beer industry show that beer has been losing ground to wine and spirits for some time now.

Experts in the industry say “Never before has the battle for share of glass been so intense.”
Makes us look juvenile and obnoxious
Craft beer is growing, but beer overall is not—and that's bad for the entire beer industry, not just for the big boys.

The fact is, the growth of craft beer is good for the big brewers, or is at least neutral, because it means people are at least still drinking beer. People moving away from beer to spirits and wine means the entire beer market shrinks, which in turn means beer makers have to convince people to come back to beer if they want their business. That's bad.

If people just switch from one beer brand to another, however, that's better. Then at least you're fighting for an audience that already drinks beer. That means they still have a chance at capturing their dollars in one way or another. The big brewers would rather have people in front of a row of tap handles, no matter what those tap handles are, than in front of a row of wine bottles.

If people switch to wine or spirits, on the other hand, that's a customer they can no longer reach as easily. (This is exactly why you see so many of those beer cocktails on the market. You may wonder who buys them, but the fact is they sell like CRAZY. Folks like Bud want to at least keep people attached to their brand as they migrate away from beer.)

So yeah, of course the big brewers would like to see growth instead of being stagnant—that goes without saying for any business—but buying up craft breweries has only a small amount to do with that. Breweries like Breckenridge produce as much beer in a year as Budweiser spills in a day. These acquisitions aren't offering big gains to their bottom line. They're not turning around the company's fortunes. They would literally have to buy 100 Breckenridges for Breckenridge to slide into the top 10 beer brands despite Breckenridge being one of the top 50 craft brewers in America.

(Insanely, it would take over 1,000 of these breweries to match Bud Light. There are not 1,000 breweries of this size in America. There aren't even 60 of them.)

Rather, these acquisitions are about diversifying in a market that increasingly demands diversity. It's about having something to offer bars and restaurants other than Bud and Bud Light. It's about becoming a little more flexible in the face of a market that demands it. It's about not being tied to just one thing. And it's about planting some seeds for the future.

Buying an interest in these craft breweries doesn't mean they're being beaten in the marketplace. They're not. The numbers are beyond dispute. Despite all our hardcore proselyting for craft beer—I've been annoying my friends with that shit for 20 years now—the big brewers like Bud still dominate the market to a crushing extent.

So yeah, no. "If you can't beat then, buy them" is a stupid phrase that completely ignores the actual landscape of beer in America in lieu of the one we in our insular little craft world like to image, and it drives me up a wall.

Though perhaps it's not nearly as stupid as wasting this much time on an insignificant pet peeve.

Please shoot me.

Saturday, December 5, 2015

5 Beers that Should be on your Holiday Dinner Table

'Tis the season to stuff your face with lots and lots of food and feel guilty about it the next day, but then stuff your face some more because man, there are gatherings and get togethers and parties to attend, so you eat some more, and then some more, and when will this cycle of eat and guilt, eat and guilt end?

And hey, you can't stuff your face without some beer. Well, you can, but why would you want to?

Yeah. So to accompany this wonderful time of year, here are five beers to consider adding to your holiday dinner table. I'd say that my criteria included the ability to pair with well with food, availability, and so on, but mostly my criteria was "this is a column that didn't get used in the magazine I write for, so let's get some use out of it on my blog."

You know, for the cynical among us keeping score.

Dogfish Head Fort

A table full of food calls for a beer ideal for pairing with all that food, especially fare like turkey, stuffing, greens, and cranberry. Dogfish Head’s Fort fits the bill. Boasting as much in common with wine as it does with beer, this insanely huge fruit beer demands a cautious approach but rewards a well-chosen pairing. Coming in at 18 percent ABV – yes, you read that right – Fort greets your nose with an almost wine-like fruitiness. Your first sip will reveal intense fruit, hints of Belgian funk, and then a wash of alcohol heat. It’s a fantastic way to accent a hearty salad, fine cheeses, and cheesecake (though honestly, who the hell actually likes cheesecake?).

Firestone Walker XIX

The 14th anniversary edition
Some beers are like a holiday in a bottle, a once-a-year break from the norm that makes all the others around it pale by comparison. For nine years, Firestone Walker’s anniversary blends have been one of those holidays in a bottle. Anniversary beers are nothing new, but few do them like Firestone. This year, a group of California’s most talented wine blenders gathered at the brewery to help develop XIX (19). Made up by blending Parabola (bourbon barrel stout), Stickee Monkee (barrel-aged quad), Bravo (barrel-aged imperial brown), and Velvet Merkin (barrel-aged oatmeal stout), this highly complex brew boasts up front vanilla, bourbon, and oak. This is the beer you have with a cigar during a break in your holiday meal, or that you open to impress your stodgy old uncle.

Solemn Oath / The Bruery Conquest

The Bruery is well-known thanks to creative concoctions like Autumn Maple and Tart of Darkness. The Chicago area’s Solemn Oath is less well known, largely because they are not yet distributed outside their immediate area, but beers like Conquest are a sure sign you’ll know their name soon enough. This collaboration beer is a Belgian-style golden ale made with cocoa nibs, coconut, vanilla, and cinnamon. In other words, perfect to enjoy alongside some pie at the end of your long, family-filled holiday day. Bright carbonation, zesty spices and grainy malts dominate, with the additional flavors there to accent the whole rather than to take over. The result is eminently drinkable; it’s subtle enough to enjoy over conversation but features layers enough for finicky drinkers to unpeel. (My great thanks to my friend Cary for helping me get my hands on this beer.) 

Victory Vital IPA

Not all beers in your holiday lineup need be potent, complex monsters. In fact, it’s best that they are not. You’ll need something to start your day, and it’s hard to go wrong with a vibrant, aromatic IPA. Vital IPA is the latest in Victory’s growing lineup of hoppy beers (check out Dirtwolf and the Moving Parts series . This highly fragrant pale ale will wake you up with its aromas of spice, grapefruit, and hints of pine. The crisp, almost pilsner-like malts help it drink clean, with a nice wash of bitterness in the finish to clear the palate. ‘Tis the season for big, dark beer overload, making an IPA like this one a nice change of pace.

Deschutes the Abyss

The Abyss, 2010
At one time, those of us living on the East Coast considered the Abyss something of a white whale, a big, elusive brew we had to chase halfway across the world for a sip. Good beers have a way of making their way east, though, which means you can finally tip your glass and give thanks with this once hard-to-find beer. Made with molasses, licorice, and vanilla bean, with a portion aged in a variety of wine and spirits barrels, this is the sort of complex, knock-you-out brew you enjoy as a nightcap split between a few friends. With luscious dark chocolate, sweet licorice, pleasant bourbon heat, and absurd smoothness for a beer that clocks in at 11 percent ABV, it’s widely praised as one of the best stouts on the market for a reason.