The Ominous Lesson Behind The Old Dominion Pub Closure…

I know that things have been pretty quiet, what with no posts this almost finished month. I’ve been traveling quite a bit, including several weeks in Seattle and Alaska (including interviews with Geoff Larson and Dick Cantwell). And my return has been filled with legal catch-up. And so it was the news today that Old Dominion Brewing has closed its on-site pub that punctures the silence.

I’ve written quite a bit about Old Dominion and its pub over the years as I’ve long enjoyed the place. I had one of my first tripels here about a decade ago and can remember the experience. I’ve returned many times since then and have shared the trepidation felt by other Old Dominion fans over the brewery’s roller coaster last year-and-a-half. In the beginning, the changes experienced after the sale by Jerry Bailey and investors to Coastal Brewing (51/49 split of Fordham Brewing and Anheuser-Busch) were actually smaller than expected. The pub closed for a while and underwent some needed cosmetic changes. Staff were required to wear uniforms, loud live music was added, and Anheuser-Busch’s product line appeared in the bar. I was even impressed during a visit this summer to see how the brewing staff, which is made up of many new faces, exuded a sense of excitement over future projects (including special weekday releases, small batch offerings, and perhaps the longest lagered Octoberfest in the world).

Long time regulars, however, never really got over the changes, however small they might have been. Attendance at the pub slowed to a crawl and the writing was on the wall. The departure in July of Scott Zetterstrom, Coastal’s vice-president of Brewing Operations who had a long history with Old Dominion, was a sign portending recent events that many of us missed.

So it was with mild surprise but not shock that I learned of the closing this morning. I think at this point the real question for Old Dominion fans is what will become of the brands and the brewery in the future. As Coastal runs another brewery in Dover, Delaware*–one that is large enough with expansion to cover all the company’s brands–the inefficiencies of running two small facilities will inevitably lead to a consolidation of production. As the company’s corporate parents are located in Annapolis, and the pub is now closed, it’s not difficult to see where things are headed. I don’t know how long Old Dominion’s lease on the property runs (a sufficiently long time I would venture from Coastal’s attempt to salvage the pub) but I wouldn’t expect Old Dominion’s Ashburn brewery to remain open any longer than Coastal can control.

Beyond the physical brewery, the future of the Old Dominion brands is another questionable issue. Reports on the availability of the brewery’s products following the Coastal acquisition have been mixed. Old Dominion has always had distribution problems and a real inability to grow, despite substantial, industry-wide success in the craft segment. According to statistics provided by the Brewers Association, Old Dominion produced 24,306 barrels in 2003, 26,827 in 2004, 27,517 in 2005, 22,421 in 2006, and an anemic 19,000 in 2007, a 34-percentage drop in the last two years of production despite double-digit growth among its craft competitors.

Coastal itself may have some issues to deal with as well. As I write about in the next issue of BeerAdvocate Magazine and elsewhere on this site, craft beer partners of Anheuser-Busch have to be concerned about the effect the merger with InBev will have on their operations and place in the corporate pecking order. In a business sphere where the corporate parent is producing several hundred million barrels of beer per year, how much interest do you think the company, especially one with InBev’s track record towards small breweries, will have for a measly 19,000 barrels? Or even for one with 88,000 barrels (Goose Island), 253,000 barrels (Widmer), or 206,000 barrels (Redhook)?

We now live in an era where craft consolidations, either within the niche or outside of it, will become the rule rather than the exception. From the biggest breweries to the smallest nano-outfits, corporate and estate transitions will require greater discussion and consideration in the near future. Change is coming; Old Dominion is just an early warning.

*Correction: The article originally referenced Annapolis, Maryland, instead of the Dover, Delaware brewery.

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A Bronze Medal In Beer Writing…

Combine my recent foray into regular online posting, a full-time job, and a recent two-week vacation to Japan and you end up with the first posts in over a month. I use this site primarily as a place for previously published articles and as a medium for shorter pieces that don’t make it into print. Along these lines, I hope to have a few articles published here on the beer-related Japan adventures, of which there were a very memorable few. Suffice it to say, Yo-Ho Brewing and the Baird Brewery pretty much sustained me while traveling.

While away I received an unusual critique of a recent article I wrote. Some readers may know that I write the monthly ‘Defending Beer’ column in Beer Advocate Magazine. I use the column as a way to offer critical thoughts on the industry that I believe we don’t see enough of in beer writing. The column has generated some positive and a lot of less-than-glowing responses. Of the price creep article, one retailer wondered whether I even lived in the real world.

I recently wrote an article on judging beer and how consumers can critically view the myriad awards brewers tout on their bottles and six-packs. Putting aside the content (pick up the May 2007 issue of Beer Advocate Magazine or see the article to be posted here in a month or two), I briefly focused on one particular private tasting group, excerpted here:

Consumers also need to be discerning about contests sponsored by private organizations. Of these events, perhaps the best known is the World Beer Championships run by the Beverage Testing Institute in Chicago. BTI’s medal-based competition is run a bit differently from other events, with less weight placed on style adherence and more on a brewer’s creativity within a certain category. In a laudable twist, the institute’s respectable panel of judges tastes products throughout the year instead of packing all beer judging into less than a week of sessions.

The way an organization awards medals can also be a telling aspect of how consumers should value the honor when choosing a beer. The BTI contest employs the familiar 100-point scale to score beers and awards platinum (96-100), gold (90-95), silver (86-89), and bronze medals (80-84). Beers that fall below 80 points receive a ‘not recommended’ finding. Of the 1650 beers in BTI’s database, only 53 have been rated below 80 points and would fail to snag at least a bronze medal. The BTI event reminds me of a little of a correspondence school where you mail a check for fifty bucks and they send you back a medical degree.

So upon my return from Japan, I received a package from BTI in the mail. The contents revealed a letter from Jerald O’Kennard, Director of BTI and the World Beer Championships. In the letter, O’Kennard congratulated me on my article and announced that BTI had awarded me a bronze medal for my “bronzy efforts in journalism.” I’ve attached a photo of my award. O’Kennard assured me “an invoice for $50 will be sent to you shortly.” Kudos to the folks at BTI for having a sense of humor in letting me know they hated my column.

BTI Bronze Medal

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