Category: MillerCoors

Looking Back, Looking Forward To A New Year Of Beer…

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End of the year predictions have become de rigueur in the beer world. I’m not much for prognostication, especially in an industry as diverse as the increasingly international world of craft beer. It’s better to reflect on where we’ve been over the past year to get a sense of what is to come. Reviewing the past year, I’m struck by how much American craft brewers remind me of students just completing their sophomore years of college. Having secured their footing, they understand how things work but remain unsure of what their futures hold; excited to experience the wider world but still nervous about making their mark.

2011 brought an awkward mix of maturity and growth for the American craft beer industry. It began with a seemingly revolving door of explosive sales numbers and ended with many breweries trying to figure out where to go next. This latter question continues to daunt breweries, both big and small. While most breweries continue to experience extensive growth opportunities, managing their budding popularity is proving difficult. While the prospects for expanding by double or even triple digit numbers exists, the costs of meeting such explosive demand are substantial and expensive. The prospect of incurring massive debt loads to feed stainless steel cravings is a stark concern even for many younger brewery owners. Such trepidations leave many breweries rethinking strategies and returning focus to their home markets.

After years of deploying their forces to battle fronts far from home, however, some craft brewers are returning to their native bases only to find a crop of newcomers setting up new encampments. The nano brewery trend continues to germinate, with many developing steadily from one and two barrel systems to seven, ten, and 15 barrel operations. If these players stabilize their products and can survive to grow to a profitable level, this new generation of craft brewers will inject both excitement and a touch of fear into more established operations.

Craft brewers weren’t the only winners in 2011. Both Anheuser-Busch InBev and MillerCoors scored substantial successes and in ways that leave craft brewers with much to ponder in 2012. A-B’s Shock Top and Coors’ Blue Moon continue their tear, wedging their way into many new craft beer channels. Whether the big brewer craft-style beers are true competition or mere door openers for craft brewers is a big, unanswered question open to great debate. What is undeniable, however, is that their success suggests a continuing shift in the American beer drinking palate. Whether the big brewers can branch out beyond their infighting over dominance of a single style (witbier) also remains unclear.

Besides uncertainty over their futures, craft industry players are showing greater poise and better judgment in their decisions, both signs of a widening maturity. After years of substantial price creep, we’re starting to see signs that craft brewers and bar owners recognize there is a ceiling to what consumers either will or should be expected to pay. While some crafts and nanos continue to charge ridiculous prices for specialty bottles, and a niche of beer super nerds continue to line up at midnight or 3 a.m. for new releases, many markets, including New York City, have begun to level off and even become affordable. As crafts gain increased scale and local focus, prices will hopefully continue to stabilize and perhaps even improve for consumers.

Finally, with a few years of education behind them, craft brewers have developed greater appreciation for the larger world, maybe having spent some time abroad, and appear less bent on throwing wild, extreme beer ragers. As hundreds of new breweries open across the United States, a larger percentage seem satisfied to explore the nuances and challenges of brewing lager beer and lower alcohol session offerings, both very welcome departures from the excess of recent years. With their emergent wisdom and experience, I look forward to seeing what comes in the next school year.

-Article appeared in Issue 60 of BeerAdvocate Magazine.

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A Brew Masters Clarification and the Crazy Beer Week That Was…

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With many brewers, bar owners, and writers just settling in from a long week at the annual Craft Brewers Conference in San Francisco, the week was supposed to be relatively quiet. We of course now know that this past week was destined to be one of the craziest that craft beer has experienced in a long time. It started with the news that Anheuser-Busch InBev planned to fully purchase the Goose Island Beer Company. The consumer and industry hand-wringing that followed closely thereafter was as visceral as it was split.

The increasingly hostile debate was, however, abruptly cut short by a rumor from food writer and television show host Anthony Bourdain, who tweeted that the Discovery Channel program Brew Masters, which follows Sam Calagione and the staff at Dogfish Head Craft Ales, was facing internal pressures by a big brewery advertiser.

Immediately, craft beer enthusiasts lit up Twitter and the beer website forums with angry rants against big brewers, mainly Anheuser-Busch InBev, for their perceived interference with their favorite beer show. A few hours after Bourdain’s tweet was noted, I reported via Twitter while in attendance at the annual NERAX fest that the Discovery Channel had canceled Brew Masters.

I’ll be the first to admit that breaking such news via the 140 character limited forum of Twitter, and in the environs of a crowded beer festival, was less than ideal. So after a busy week and weekend, I now have the opportunity to correct some of my language. I initially had tweeted that Discovery had ‘canceled’ Brew Masters. I then followed it up with the text of an email I received from a Discovery Channel media source which stated that the show was not renewed. In a Delaware business journal, Dogfish Head’s Calagione told a reporter:

“It wasn’t canceled,” he said Friday as he returned from celebrations for Wilmington’s new Queen Theatre. He signed up for six episodes, and six episodes will run into the summer, Discovery Channel confirmed to him Friday. “What happens after that has not been determined,” he said.

As I have now learned from talking with people more familiar with the parlance of the television trade, Brew Masters was not ‘canceled’ but was instead not renewed. This ostensibly means that the final sixth episode of the program will foreseeably be aired at some point in the future. I expect that any confusion, to the extent there was any, was clarified by my posting the text of the email I received from the Discovery Channel on the show’s non-renewal.

Now, with this said, the future of Brew Masters appears to be in dispute depending upon whom you speak with. Calagione and Dogfish believe it may come back in some form. The executives at Discovery Channel, however, were clear. Laurie Goldberg, the Executive Vice President for Public Relations for TLC and Discovery Networks told me in an email on Wednesday:

BrewMasters was launched with a lot of marketing support and garnered widespread media coverage, but unfortunately the series did not find a large enough audience so it was not renewed.

In the Delaware business journal article, Calagione acknowledges that the network was “underwhelmed as far as the numbers,” but noted that the program did as well as many other regular Discovery offerings.

Whether the show was canceled due to less than favorable ratings as Discovery suggests, but Calagione disputes in the Delaware journal article, or due to concern or interference (depending upon your point of view) from an advertiser remains to be flushed out. Despite the near complete absence of facts regarding the decision not to renew the program, loyal craft beer enthusiasts, perhaps still infuriated by the Goose Island news, have been exceedingly quick to lay the blame for the demise of Brew Masters squarely on the doorstep on Anheuser-Busch InBev. I haven’t been able to find anyone who has been able to recall whether Anheuser-Busch InBev even advertisers on the network, let alone on the program. But the script already seems to be written for ABI despite any supporting evidence.

What we do know, beyond not much at all, is that MillersCoors advertised its popular Blue Moon product line on the program. So if MillerCoors was the corporate voice behind the hazy Bourdain-veiled threats to Discovery, this begets the question of why the company chose to advertise on the program in the first place, if such programming was otherwise objectionable. And why would it decide to pull its ads after the near-full run of the program?

Whatever the final reasons, which by contractual obligation we’ll likely never know, it seems a bit of a jump for consumers to conclude that Bourdain’s minimal, 140 character Molotov cocktail should be believed, let alone being able to assign blame to a particular brewery. The whole affair has simply provided those so inclined with the opportunity to slag the larger breweries and to revel in the safe insularity of their respective passions. It has also been a loss to level-headed craft beer fans, consumers who have never seen how a craft brewery operates, and for craft brewers and Dogfish Head in particular.

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Why Big Brewers Are Bad For Craft Beer: The Brew Masters Controversy…

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Of course, a day or so after I stick my neck out for the big brewers saying they may have turned a corner, writer and television host Anthony Bourdain sent out a couple of bombshell tweets in which he seems to suggest that the Discovery Channel is either holding back or canceling production of the popular beer show Brew Masters due to pressure from its advertisers, namely the big brewers. Now I disdain reporting based solely on quixotic 140 character stabs but these were pretty disturbing allegations. Now MillerCoors has of course heavily invested in advertising on the program for its Blue Moon product, so it would be a curious thing for that company to be involved. But, as I noted, we have next to no information either way. So, of course, the blog and twitterspheres are up in arms, accepting the tweets as gospel, assuming Anheuser Busch InBev is behind the conspiracy, and telling me how wrong I’ve been. As with the Goose Island story, I’ll wait until we have some more information (which I am trying to get now) until we cast all our anti-big beer stones. I will say, however, that if the allegations prove true, it’s a pretty major form of dirty play by the big guys and I expect an absolutely massive backlash to follow, perhaps even from regular, everyday Bud guys and gals.

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What Will The Big Brewers Do About Craft Beer?

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America’s largest commercial breweries have long had a love-hate relationship with craft beer. Often run by families with long brewing pedigrees, the macro brewers took serious offense at suggestions that their beers-pictures of consistency and efficiency-were somehow inferior to those produced by the bands of ragtag, scraggly haired, tattooed wannabes. The big brewers didn’t view the newcomers so much as competitors, but curious interlopers riding a brief fad.

In response to the early rise of craft brewers, Anheuser-Busch developed and released a series of half-hearted, faux-craft brands that tried to co-opt craft’s cool while simultaneously portraying the trend as cartoonish. Over at SABMiller, CEO Graham Mackay flippantly gave Fortune Magazine as late as 2007 his thoughts on craft beer. “I think it’s going to fade. It’s inevitable.”

With the explosive and long-sustained success of craft beer over the past decade, even through the terrible economy of the last two years, Mackay’s comical statements likely signify the last time a big brewery CEO doubted craft beer’s staying power. The only question remains, where do the nation’s biggest breweries go from here?

Having purchased substantial stakes in several craft breweries, from Redhook to Old Dominion, A-B InBev’s future in the better beer segment remains an open question. With the company’s primary focus on developing its core brands and its massive outstanding debt, it seems unlikely that future purchases and partnerships will occur. Add in the company’s dedication to premium brand building, and not to cultivating smaller craft brands, and the situation leaves a decided air of uncertainty hovering over companies such as Goose Island and Widmer. Within its own portfolio, A-B’s more flavorful beers also appear to be on the outside compared to Stella and its bland brethren.

With craft beer continuing to grow in dollar and market share, the big guys can’t be expected to sit back and watch their brands get ridiculed and become culturally irrelevant. After nearly two decades of flat out denying that consumers would switch from interchangeable beer widgets to characterful ales and lagers, macro brewers face some very difficult choices. Do they focus on foreign markets and continue to follow the old playbook in the United States? With the slow growth of craft beer from Scandinavia to Italy and Brazil, this seems like a poor response. Buying a stake in or taking over aging craft brewers also hasn’t panned out for the big guys as savvy beer consumers tend to hold such alliances against them. And when not taken seriously, their own organic products have tended to be resounding failures.

For its part, Coors appears to be the only big brewer to have not taken the upstart flavorful beer segment for granted, having developed and supported the now category leading Blue Moon brand despite some uncertainty along the way. And while some beer geeks may slam down their pints in anger when Blue Moon advertises on the Discovery Channel’s Brew Masters show, the new MillerCoors has doubled down on the better beer segment with its recent formation of the Tenth and Blake brewing outfit. The division’s new president, Tom Cardella, recently admitted to a Milwaukee newspaper that “[y]ou are seeing a tremendous amount of consumers gravitating to craft beer. Consumers are being more discerning about beer.”

A watershed moment in the history of craft brewing, it’s time for the macro brewers to acknowledge the new role flavorful beer plays in this nation, the strength of its future prospects, and help raise the bar for beer in America. Instead of trying to demean, ignore, or dismiss characterful beer, A-B InBev and MillerCoors should endeavor to help usher in the next era of great American beer. Because one thing remains clear for the big guys in the midst of all this uncertainty: those meddling craft brewers aren’t going anywhere.

–Article appeared in Issue 48 of BeerAdvocate Magazine.

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Craft Beer, All Growed Up…

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All grown up and ready to don his crown, the prince busily makes plans for the future. All hail the new king of beer. If you read the beer press lately, you’d be forgiven for thinking that craft beer has conquered all. The Brewers Association’s recently released half-year numbers demonstrate that despite the economic downturn, craft beer sales continue to boom by double-digits, to the enduring shame of macro beer producers. Without question, no other brewing industry segment can touch craft’s fire.

But before we start the next round of mutual back-slapping and pint raising, America’s smaller brewers should stop and consider the decidedly unsettled course of American beer’s future. We have lived through the Age of Extreme and experienced the Era of Collaboration, reveling in years of unparalleled success. Yet the toughest times lie ahead as craft brewers move from the lighthearted teenage growing years to the increasingly responsible adult decades.

For one, succession issues will continue to pose challenges for brewers small and big. As brewers continue to merge or purchase their craft brethren (and competitors), brands and brewing histories may become diluted or lost. In the wake of the recent transitions of Anchor, Magic Hat, Old Dominion, and others, consumers are learning the painful truth that beer is a business and craft brewing is not some fun hobbyist project. Your favorite beer of today may become a fond memory tomorrow in someone else’s brand portfolio.

Growth also brings its own challenges and has already contributed to some serious identity crises in the industry. After years of predicting the event, the Boston Beer Company appears poised (if not already there) to exceed the magic two million barrel mark that the Brewers Association uses to define the size limits for craft brewers. While many recoil at the suggestion of disinviting Sam Adams from the craft beer party, the truth is that many craft brewers are far from small operations. How the industry defines itself, while caring for its pioneering elders will continue as a rolling boil.

Beyond trying to define “craft”, the industry’s success also challenges the consumer’s understanding of what the whole industry stands for. As growing pains set in, brewers find themselves stretched increasingly thin. Due to demand and quick sales, brewers send beer to markets thousands of miles from home, sometimes while their local patrons can’t find their favorites. To date, only a handful of brewers (craft or not) have chosen to brew their beers in distant breweries to satisfy new markets, but this trend will rise. But if Goose Island brews its Honker’s Ale or 312 in New Hampshire, is it really still Goose Island? Many consumers don’t think so.

Craft brewers also have to contend with the increasing interest of macro brewers in their profitable and growing market segment. As I predicted several years ago, Blue Moon has become the nation’s best selling craft/faux-craft beer. It’s a sales juggernaut that shows no signs of slowing, especially with MillerCoors’ creation of the new Tenth and Blake Beer Company spinoff. Expect the big guys to be more aggressive as they spend more time playing in the craft beer sandbox.

Finally, craft brewers need to get their own houses in order. In the very first issue of BeerAdvocate Magazine, I took craft brewers to task for refusing to put bottling or brewing dates on their packaging. While we have seen some progress in recent years, freshness dating continues to be a problem that many of the industry’s biggest players refuse to adequately address. While I personally love Bell’s Two Hearted Ale and included it in Great American Craft Beer, I shouldn’t have to go to the brewery’s website and enter a batch code to find out when it was made. A few stale bottles have caused me to rethink buying this longtime favorite and many others from craft brewers that should know better.

–Article appeared in Issue 48 of BeerAdvocate Magazine.

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